23 Vt. 160 | Vt. | 1851
The opinion o'f the court was delivered by
So far as we' know, or can learn from the English books upon the subject, this kind of paper, which comes up in the present case, for the mere purpose of obtaining bank discounts,, is not much known in Westminster Hall. It seems to be mostly an invention of a Cisatlantic origin. For this reason, probably, we find almost nothing in the English books, which affords much aid in determining the case.
What is said,; in Story on Prom', Notes, § 292, and in Cony v. Scott, 3 B. & Ad. 619, only shows, at most, that an accommodation
So, too, in the present case, although B. & H. Boynton might have appeared as the last indorsers, any of the prior parties, who signed for their accommodation, might clearly go against them. And it seems very clear to us, that parol proof is competent to be received, to show the circumstances under which the plaintiff and defendant signed this bill. And unless there is some settled rule of law, which the defendants are bound to know, and which the court must presume the parties acted upon in signing this paper, by which successive indorsers, for accommodation merely, are understood to have a right to indemnity against all prior indorsers, then the case should be decided upon the natural import of the transaction, as it occurred, which is, that the plaintiff signed as an additional surety for B. & H. Boynton. In regard to the admission of evidence, to show the import of a blank signature upon negotiable paper, as between the immediate parties, we do not desire to say more, than to refer to the cases already decided in this state, and which we think clearly applicable to the present case. Washb. Dig. 674. Sanford
There are many cases in the books, where one has signed as surety after other sureties had signed, where he has been held not liable to contribution; ..That must always be the case, where it is so agreed between him and the other sureties, either expressly or by reasonable implication. And some of the New York cases allow of such a construction upon slight evidence, if we recollect correctly. In Harris v. Warner, 13 Wend. 400, where the last surety upon a note signed " as surety for the above names,” he was held not liable to contribute to a prior surety. And in Longley v. Griggs, 10 Pick. 121, one who guaranteed the sufficiency of a note signed by sureties was held not liable to contribution, But the case of Flint v. Day would seem to require the consent of the other sureties to such an arrangement, in order to give a surety a right to go for the whole debt against a prior surety. Lapham v. Barnes, 2 Vt. 213. But some of the cases seem to hold, that if the last surety limit his liability to the default of the principal and all the other sureties, he has a claim for full indemnify against them all jointly. Craythorne v. Swinburne, 14 Ves. 160, and other cases cited in the note to Deering v. Earl of Winchelsea, in White & Tudor’s Leading Cases in: Equity.
‘' The present transaction, in its natural import, was nothing more than B. ■& H. Boynton obtaining a discount at the Bank of Burlington, and applying the money to pay a debt they owed the plaintiff, by his signing for them, together with the defendants, both signing at the request of the principals, and ¡without any communication, withy each- other., ' The case, in its facts, is identical with that of Flint v. Day, except that Day signed without any express request from any one, and expressly declared at the time that he did it upon the credit and' for the honor of Flint. I have thought for many years, that that case might,, with great propriety, have been ruled for the defendant upon the facts.
But that is not claimed in the present case.^' But it is claimed, / that the decisions of the courts show such an inclination in that direction, that it should be regarded as law, that successive indorsements, made at the same time, before the paper ever goes into circulation, and for the purpose of giving it its first start, so to speak, and all for the accommodation of the drawer, are to fee regarded in the same light as if they had been made in the due course of busi- ! ness, the bill actually passing, from hand to hand, for value ; — that ; is, in the same light as to the rights of these several indorsers among ! themselves. Now, since it is admitted,.that a different rule does ob- j tain in some of the states, and no such rule has ever been adopted-) in this state, or at common law, it would be wonderful, if all the : parties to this bill so understood the matter among themselves, at the . time of its discount; for it is, after all, mere paper for discount at the bank.
But it must be admitted, we think, that had the plaintiff taken the bill and paid the money for it, when the bank refused to discount it, and indorsed it in order to obtain the money upon it, he could, upon being compelled to take it up, have gone against the defendants for the full amount. That was the legal import of the defendants’ undertaking. And the bank refusing to take it, and the plaintiff knowing, the defendants were mere accommodation indorsers, it would not have precluded him from the common rights of an indorser, had he taken the bill and passed it in the ordinary way. This' must be regarded as undeniable, I think, upon common principles,
It is admitted, that the case of Douglass v. Waddle, 1 Ham. 413, 9 Ohio R., is an authority, or a decision, in favor of holding the plaintiff and defendants as co-sureties.
Upon the other side, Brown v. Mott, 7 Johns. 361, is relied upon ; and it seems to me to be very much the same case as the present. The court seem to beg the question, however, in the opinion, taking it for granted, that the plaintiff’s rights are the same, as if he had himself taken the bill and paid the value of it in the due course of business. They then ask, whether he could recover against a prior indorser, whom he knew to have indorsed for the accommodation of the drawer, which, in my judgment, is not the question, and is in fact no question at all. The question of co-suretyship does not seem to be raised in the case.
McDonald v. McGruder, 3 Pet. 470, seems in principle much the same case as the present; and Ch. J. Marshall discusses the question of co-suretyship, but seems to consider, that there should have 1, been some communication between the parties, to constitute that reIation under the circumstances. Ch. J. Marshall says, if such is the contract, the parties, although signing as successive indorsers, will be regarded as co-sureties; thus treating the obligation as resting in oral proof. But he considers, that, in the absence of proof, it is to be considered, that the second indorser has the same rights against the first, as if he took the bill in the due course of business. But that is the question; and we can see no good reason for that rule in this case more than in every other case, where the parties, for convenience, consent to change positions with each other, to enable the party accommodated to gain credit, — as is very common, where the real surety assumes the position of the debtor, and gives the principal debtor the benefit of appearing as a mere surety. We think it better to call things by their right names. Such indorsers are in fact mere sureties, and any number of them, who sign for the same object, without much regard to priority, perhaps, should be regarded as co-sureties. And none of the recent cases regard it as of any importance, that there should have been any communication between the sureties. All that is necessary is, that they should have
Church v. Barlow, 9 Pick. 547, seems to me to be the very case before the court, and was decided upon the ground, that such a note, or bill, is entitled to be treated, in all respects, as a business note, even between the successive indorsers, who signed at the same time, and before the note took effect virtually. And so also the case of McDonald v. McGruder, with this difference, that McGruder was all along upon Turner’s paper, until his co-indorser had left and the paper been protested, and then McDonald comes in as a second indorser, to obtain an accommodation for 'McGruder’s relief, — which last note was in the same manner renewed several times, McGruder always signing first. These circumstances tend very strongly to show an understanding, that McDonald should only stand as a guarantor of the sufficiency of all the prior parties. But here the relative position is reversed, and the one who takes the real benefit of the discount is the last indorser, and claims to recover the whole amount of a mere surety, who indorsed for mere accommodation, and derived no benefit whatever from the discount. If the defendants had been the second indorsers in this case, it would alter the case, in its equitable aspect, very materially.
And in none of the cases cited, which we have had an opportunity of examining, has the person ultimately benefitted by the discount stood as last indorser, and claimed and obtained indemnity against the prior mere accommodation indorsers, upon the ground only ofjjuxtaposition upon the paper. And without some communication between the parties, or some facts in the case, making a show of justice in the plaintiff’s claim, we think he can, at most, only claim to stand as cosurety. The case of Brown v. Mott is most like the present in regard to the equitable rights of the plaintiff. And while we admit, that one, who, under similar circumstances, takes a bill and advances the money in the due course of business, or passes it to the credit of the holder, may go against all the prior parties, and also that one who indorses a bill, after it is in circulation, for the honor of the . drawer, must be entitled to indemnity against the prior parties, as a general rule, perhaps, — yet it seems to us, that where different persons successively indorse paper of this
I should infer, from the note of cases in the United States’ Digest, that the rule contended for by the plaintiff has been adopted in most of the American states, where the question has arisen ; but under what circumstances it is impossible to say, without a full examination of the reported cases, which we have not seen. But all the cases, where the question has been raised, seem to recognize the rule, that oral evidence may be introduced to show the understanding of the parties, as to their liability to each other. The oijly difference between that rule and the one we here adopt is, that they regard the mere order of indorsement as imposing a prima facie obligation among themselves, the same as would have existed had the bill passed from hand to hand, in the common course of business; while we hold, that, as between accommodation indorsers, who all sign before the note, or bill, is put in circulation, and at the request of the person for whose benefit it is made, and to give him credit, the order of the indorsement raises no presumption of any obligation among themselves different from what grows out of the other facts in the case; in short, that it is of no importance either way.
It seems to us, too, that such a rule as that contended for by the
Judgment reversed and case remanded.