39 Barb. 42 | N.Y. Sup. Ct. | 1863
By the Court,
If the code of procedure has not abrogated or interfered with what is commonly known as the commercial law, or law merchant, as it has been understood in this country, the question to be decided is, strictly and only, a question of law. Assuming, for the present, that the “law merchant” remains unchanged; what then is the legal effect to one who writes his name, without any thing more, upon the back of a promissory note not negotiable, which is thereupon transferred to the payee named in the note, and who at the time of the delivery thereof to him parts with the full consideration mentioned in it, upon the credit of the note ? That, I think, is this case fairly stated. It seems to me the law itself in such case determines the character and effect of the contract as between the parties, and that we may therefore start with the legal presumption that each of the parties equally well understood what liability
Each signer of the note, then, is presumed to have known that the object of having his name appear upon it, was to give strength and responsibility to the paper for the purpose of obtaining the desired credit. This presumption is confirmed by the circumstances attending its inception, for though paroi evidence may not be admitted to alter or contradict a written instrument, evidence of extrinsic circumstances may be given in aid of a construction consistent with, or in support of the terms of the contract. So evidence of the consideration of a note between the parties to it, and of the purpose for which it was made. (3 Kern. 559. 1 Barb. S. C. Rep. 635. 3 id. 79. 18 N. Y. Rep. 367.)
It is admitted that upon the credit of the paper so exe
The proper definition of “indorsement” or “endorsement,” in the commercial sense, is' “the writing of one’s name upon or across the back of a bill of exchange, promissory note or check, by which the property is assigned or transferred.” Literally, “to write on the back,” but in practice the plan of writing is not essential, it is a good indorsement if made upon the face, (Story on Notes, § 121,) or even on a separate piece of paper. (Chitty on Bills, 141.) This effect, that is, a transfer, is not wrought upon a note not negotiable, by a signature across the back of it. The title, or property, does not pass by merely writing the name thus upon it. It is not, therefore, properly and legally an “indorsement,” when applied to the latter kind of paper. The note is not thereby transferred. (Per Bockee, senator, in Hall v. Newcomb, 7 Hill, 422. Burrill’s Law Lie. title “ Indorser.”)
Hot being such an indorser as to pass the title, it is clear, that strictly by the law merchant, the defendant is not liable as such. But did not the defendant, therefore, make any contract with the payee by so affixing his name to the mote ?' Though it is not negotiable, the instrument is still by the law merchant a promissory note, which is defined to be “a written engagement by one person to pay another person therein named absolutely and unconditionally a certain sum of money at a time specified therein.” Story on Promissory Hotes, § 1, defines, and our statute declares, (1 R. S. 768,)
If the legal presumptions are as we have said, then he must of necessity have signed the note to the payee, in one of these relations. This relation, I am equally clear, cannot be that of a “guarantorunless we revive the exploded doctrine that the party payee, or owner, is authorized to write a guaranty over the blank signature of the party attempted to be charged. Such a doctrine is not now in favor with the courts; it is denied by counsel here in this case to be the law. It could not be. often available to a party unless it be carried to such an extent as to repeal the statute of frauds by judicial construction, or more properly by judicial legislation.
If it shall be held that the party possesses the power to write a guaranty over a signature, he should be held also to have the right to express the consideration therein; otherwise the statute would defeat his contract, when it is so written; or he must be permitted to prove a consideration by paroi evidence, thus carrying the power of making the new agreement to such an extent as to mean something else than what upon its face it purports to mean. This is a doctrine fraught with such dangers and difficulties, is attended with such confusion in practice, such uncertainty in its limit, and' opens a door to mischief so wide, that the modern cases have substantially overruled the whole of it. (Brewster v. Silence, 4 Seld. 207, 214. Hall v. Newcomb, 7 Hill, 416. Brown v. Curtis, 2 Comst. 225.)
It seems to me, therefore, that the defendant George 0. Waning is not liable as “guarantorthat this is not the
Perhaps one of the strongest cases in the books against the defendant, is Moies v. Bird, (11 Mass. R. 436.) One Benjamin Bird was indebted to Moies, the plaintiff, for the part consideration of a farm, and gave him a note payable to his (plaintiff's) order, and the plaintiff and drawer of the note, (Benjamin Bird) then applied to two brothers of the latter, Wm. and Abm. Bird, to indorse the note. Wm. Bird refused, and Abm. said, “ it was not a negotiable note, and he would write his name to make the plaintiff easy, but would . not be accountable for a farthing on the note,” The argu-:. ment of Oh. J. Parker, in that case, accords with my views as here expressed. He said, “ It is manifest that the defendant intended to make himself liable in some form; at least such is the intent to be presumed even against his declaration at the time of signing.” “ Had the note been made payable
(Signed) Grant & Wattles.”
On the back of the note, was written in the usual manner of indorsement:
“ Daniel Carr.
William Grant.”
It was held that Daniel Carr and William Grant, though signing in the form of indorsers, and the contract expressing that they were surety, were liable, not as guarantors merely, but as joint promissors with Grant & Wattles. In this state, we have the case of Griswold v. Slocum, (10 Barb. 402,) and the case of Lake v. McVean, (MS. opinion,) decided in this 4th district, at general term, per Rosekrans, J. to the same effect. “ If one before the delivery of a promissory note not negotiable, subscribes his name to it without explanation, whether upon the face or back of the note, and the note be then delivered to one who upon the credit of the note advances his money upon it, he who so subscribes becomes liable to pay the note absolutely.” (Chitty on Bills, 177.) In the case of Gibson v. Minot, (1 H. Black. 585,) Hotham,
Such, as I understand it, is the law merchant; and such holding covers this case, and what is better, as seems to me, it is the good sense construction based upon a principle that the title is immediate,' and that the contract appears from the terms of the instrument itself; that but two parties are named, the promissors and the promisee. The drawers chose to give the form they did to the instrument to secure a credit. The defendant George 0. Warring accepted the form of the promise, and Richards parted with his money upon the credit of it. If the defendant is to be held to stand in any other character than that of drawer or joint promissor, it must he a character to be presumed against the express language of the contract he has signed. The rule is, that every expression in a contract is to he so construed, as to give it effect if possible. (Chit. on Cont. 70. 4 Seld. 446.) And “ presumptions to sustain an instrument are to be favored—presumptions to destroy it, never.”
I have no doubt these views of the law can be maintained as being the inherent principle, “ ipso jure,” of the contract between the parties to which we may add, that the laivj presumes the defendant promised in a legal form. This is more sensible than a resort to any legal fiction, Or to the principle, that such a holding can only be sustained in order to,
This note is the very simplest form of a contract that can be devised ; the defendant George 0. Warring puts his name to it as a contract, written in words, “We promise to pay,” &c.; his name is given as security for money to be loaned before the money is parted with; the note is then delivered to thq payee, and the money paid upon the strength of the contract. The law prescribes no place in particular upon the note, for the signature. It is good if written anywhere upon it with intent to be held liable. Though it is quite usual, that the makers sign notes at the bottom, they are good if signed elsewhere. (Taylor v. Dobbins, 1 Strange, 399, 18.) So it is usual to indorse notes by writing the name on the bach, yet it has been held that an indorsement on the face was good. (Edw. on Bills, 267. Saunderson v. Jackson, 3 Esp. 180. Venight v. Crochford, 1 id. 190.) In this way no violence is done to sense: the law enforces what must be presumed to be the intent, the payment of the money to the person justly entitled.
There is another point strongly urged by the defendant’s counsel which is new, and I feel bound therefore to give it a moment’s consideration, viz: that the only reason for the distinction which has heretofore existed in the law between notes negotiable and those not negotiable, has been swept away by the provisions of the code, and does not now exist; that the supposed reason was, that non-negotiable paper must always be sued in the name of the payee; that by the code, the actual owner of paper may now sue in his own name; (Code, § 111;) and, that the distinction having no ground of principle now to stand upon, ceases to be the law.
It is impossible, at this day, to say with certainty what were the reasons; whether that assigned was one, or whether other reasons did not exist for the distinction, which is found in the law, between these two kinds of notes, negotiable and
Lord Holt, down to that period, which was the second year of Queen Anne’s reign, denied the negotiability of promissory notes, and in that case it was proved that promissory notes had been then in use about thirty years. But even in England^ the distinction between bills of exchange and promissory notes existed, until it was found necessary to put them upon an equal footing by an act of parliament, 3 and 4 Ann, ch. 9. This act of parliament was substantially copied in the laws of this state, 27th of March, 1794, (Green. ed. of N. Y. Statutes, vol. 3, p. 140,) thereby adopting “ the custom of. merchants ” as applicable to promissory notes.
This custom was also adopted as common law into most of the other states of the Union, with the great body of'the English common law, substantially as it existed in England, and except in so far as the peculiarities of ppr condition have
It requires no argument to prove that it ought to be as uniform as it is universal, and that every variation or special “ lex loci” of this law of commerce, would inflict innumerable evils, and create serious embarrassments in all transactions affected by such change. I am not able to say from its uncertain origin, equally uncertain history, and more uncertain letter, that there may not be other good reasons than that named for the distinction referred to, and should not therefore feel justified without far greater research than I have been able to give it, to strike so radical a blow by construction at this feature of a law so common to all civilized commercial nations, as that now insisted on. By the law merchant, every transfer of a bill, whether by delivery when payable to bearer, by indorsement when payable to order, or otherwise, was called an assignment.
In Gibson v. Minot, (supra,) Lord Chief Baron Eyre said, “ It is by force of the custom of merchants, that a bill of exchange is assignable at all. Of necessity, the custom must direct how it shall be assigned.” In speaking of the usefulness of bills of exchange as perfected by the law merchant, he says : “ The wit of man cannot devise any thing better calculated for circulation. The value of the writing, the assignable quality of it, and the particular mode of assigning it, are created, and determined in the original frame and constitution of the instrument itself, and the party to whom such a bill is tendered, has only to read it, need look no further, and has nothing to do with any private history that may belong to it. The policy which introduced this simple instrument demands that the simplicity of it should be protected.” It was held in that case, that a note payable to a fictitious person which came to a bona fide holder, and which of course could not be indorsed on account of the fictitious payee, might be treated by the holder as against the real signers, as if it was made payable to bearer.
Rosejrans, Potter, Bockes and James, Justices.]
Upon the whole, I have come to the conclusion, that by the law of this case, George 0. Warring was not an indorser; tho the was not a guarantor, but was a joint promissor with the other defendants; and that" the precise locality of his signature upon the note was immaterial. This' construction makes it a plain, simple and intelligible contract, easily understood, has the basis of good sense to support it, and needs no strained construction nor aids of fiction to sustain it. What else was the end and object of the defendant's signature but a liability to pay in some form the sum promised ? If there be a slight informality in the execution of the contract, he is not allowed to come into court and set up his own informality as a defense. The law will conclude he intended to waive this informality. Such a conclusion it appears to me is most conformable to the principles of natural justice, and establishes a policy that ought to operate on all commercial transactions. Bargains should be enforced, undertakings executed, and promises to pay performed; and the' rule, that a man’s own acts shall be taken most strongly against himself, applies with all its force in favor of the party who in confidence of its integrity has parted with his money upon the strength of it. “ Ratio legis, est anima legis.” The plaintiff was therefore, I think, entitled to judgment for the amount of the note, and the judgment should be affirmed.