Hubbly v. Brown & Nichols. — 16 Johns. 70

Majority

p. 70

Hubbly against Brown and Nichols.

Headnote

in an action against the^mmlssor/^note" the maker of competentwitness, as he is indifferent be-, tks,e“ 6 and may succeed, Jo °thl losing amount°of the note; unless it d*asefl3for the accommodation in which casej fs8regarded as wouid,tyif Ihe v°redr against tkíd to charge the maker, not only with the amount of the note, but also, with the costs which he had been- compelled to pay, his liability for costs, renders him interested to defeat the action, and, he is, therefore, not a competent witness-for the endorser.

If the beneficial holder of anote agrees, on-receiving a .premium for the delay,-to waits stipulated time, without suing the maker, he thereby .discharges the endorser.

THIS was .an action of assumpsit against the defendants, us endorsers of a promissory note, far 500 dollars, drawn by Rufus Clapp, dated the 9th of May, 1816, payable to the orcier Df the defendants, ninety days after date, at the office 0f the Utica Insurance Company, and ^endorsed by the -de_ v ^ , fendants, atm JB. M. Malcolm, j.he pause wag taied before Mr. J. Platt, at the Oneida circuit, in June, 1818. At the trial, the endorsement of Malcolm, which had previously been -in Manic, was filled up to -the ¡plaintiff, who proved, that when the note became due, demand of payraent Was made of the maker, at the place where it was PaJa^ej an^ that due n°tice of ucm-payment was.givpo to the defendants. The defendants .produced Clapp, the maker of the note, as a witness, who testified, that on the 11th of August, 1817, he called on Malcolm, one of the endorsers^ and requested him to extend the credit, and to -accept a new note for 90 days.. Malcolm declined taking a new notei and said that he preferred keeping the old one, as he

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had already given regular notice to the endorsers, hut he agreed, for a stipulated premium, which was paid him, to wait, without suing, 90 days longer, and as evidence of such agreement, wrote a memorandum in the pocket-book of the witness, as follows: “ 500 dollars, 13th of November, 1817.”

The competency of this witness, and his testimony, were objected to, but were admitted by the Judge. A verdict was found for the plaintiff, for the amount of the note, subject to the opinion of the Court; with leave for the plaintiff to have judgment of nonsuit entered against him, if the Court should be of opinion, that he was not entitled to recover.

Talcot, for the plaintiff.

Clapp was interested, and, therefore, an incompetent witness. The maker of a promissory note, is not an admissible witness, in an action by an endorsee against the endorser, to prove any thing which may defeat the action. (Chilly on Bills, 50. 53. Townsend V. Bush, 1 Conn. Rep. N. S. 268. 276. 278.) The maker of a note is interested to defeat the action against the endorser, so as to compel the holder to bring an action against the maker, in which.he cah set up the defence of usury, which he could not do, in a suit against him by an endorser, Who having been compelled to pay the money, brings an action against the maker to recover the amount. In Pierce V. Butler, ( 14 Mass. Rep. 303 .) it was lately decided in the Supreme Court of Massachusetts, that the maker of a promissory note was not a competent witness for the endorser, in an action against him by the endorsee. In Jones v. Brooke, (4 Taunt. 464.) it was decided, that the drawer of an accommodation bill, being hound to indemnify the acceptor against all the consequences of his acceptance, was not a competent witness, in an action against the acceptor, to prove, that the holder took the bill on a usurious consideration.

The verdict, if obtained, might be used as evidence against the maker in an action by the endorser. This shows that the witness is interested.

Again; it does not appear, that Malcolm was the rea holder, or had any control over the note.

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Foot, contra, contended, that there .was sufficient evidence on the part of the defendant, to afford the presumption, at least, that Malcolm was the holder: Nothing appears to the contrary. The agreement, then,- between the holder and maker, not to sue for 90 days, discharges the endorser. (Pain v. Packard, 13 Johns. Rep. 174 .) The plaintiff was bound to show, that the note was endorsed to him before the protest for. non-payment. There is no ground whatever, for the suggestion of usury, or that the.note was usurious in its inception. The maker is competent to prove facts arising after the note is negotiated, and after protest for non-payment.

The questions in this case are, 1. Whether Rufus Clapp was a competent witness for the defendants, without a. release ? 2. What is the effect of his testimony .if competent ?

The case is silent as to the fact, whether this was an accommodation note, or not; if it was, then,- on the authority of the case of Jones v. Brooke, (4 Term Rep. 466.) the objection to the witness was well founded; because., if the defendants were rendered liable in this, action, they, would have a remedy over against the maker, of the note, not only for the principal and interest, but for the costs; and persons liable to the costs of an action, have an immediate interest in the event, and are, therefore, not competent,. (Philips' Ev. 45. 1 Binney, 444. 11 Johns. Rep. 57 .) As the case stands, we cannot intend this to be an accommodation note. It is difficult, then, to see what interest Clapp had ; he was answerable on his note, whether the plaintiff succeeded in the suit or failed ; and in either event, no additional burthen was thrown on him. In the case of Skelding Haight v. Warren, ( 15 Johns. Rep. 275 .) though-the point was not elaborately discussed, we held, that the maker of a note stood indifferent between the parties, who were similarly situated with the parties here.

If Malcolm is to be viewed as the beneficial.holder of. the note, at the time he received. a consideration, for waiting 90 days longer without suing, then, it appears to me, the defendants were discharged. The evidence warranted the

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conclusion, that Malcolm, owned the note; he had possession of it, and undertook to control its payment. If the fact was otherwise, it was extremely easy for the plaintiff to prove it. He might show when he acquired an interest in the note, or otherwise rebut the presumption, that Malcolm was the real owner of it. This case does not involve the consideration of the point on which the Court of Chancery, and this Court have entertained, seemingly, a contrary doctrine. The Chancellor admits, that the doctrine is, that the surety is bound by the terms of his contract; and if the creditor, by agreement with the principal debtor, without the concurrence of the surety, varies these terms by enlarging the time of performance, the surety is discharged, for he is in-, jured, and his risk is increased. ( 2 Johns. Ch. Rep. 560 , 561.) We have regarded the endorser as in the nature of a surety, and the maker of a note as the principal debtor. In the case of English v, Darley, (2 Bos. & Pull. 61.) the very point was decided, and Lord Eldon’s opinion is very full in illustrating the principles on which the decision is placed.

Judgment of nonsuit.