author: Swift, Ch. J. Gob id, J. Peters, J.

text:
    Tomlinson against Ward :
    in error.
    To authorize the appointment of a receiver, in a suit in chancery, the bill must lay a foundation for it, by stating- the facts, which shew its necessity or propriety.
    In the appointment of a receiver, the court will require him to give security for the faithful discharge of the trust
    In a suit in chancery between partners for an account, the court has a discretionary power to appoint distributors to divide the joint property; and it ⅛ not necessary, that by the terms of the decree appointing them, they should be required to act under oath, or to make a return of their doings.

      A. and B. being partners, A. without the consent of B. borrowed money at an extra rate of interest, on the credit of the company, to pay his private debts, and credited the company with the money so applied and the legal interest only. Held, that the excess of interest thus paid by, beyond the amount credited to, the company, was a proper charge against A.

      A. one of two partners, having a private claim against F., applied, in opposition to the will of B. the other partner, in discharge of that claim, funds received by A. in satisfaction of a company debt against V-, and then suffered the latter debt to become barred by the statute of limitations, and lost. Held, that the debt thus lost was a proper charge against..?.
    The allowance of costs, in chancery proceedings* is within the discretionary power of the court, and constitutes no ground of error; especially, where such allowance is in favour of the prevailing party.
    THIS was a bill in chancery, brought by Ward against Tomlinson, stating, that they were partners in trade, without limitation of time; that the co-partnership commenced in November 1797, and ended in July 1816; that the parties dealt largely in merchandize, &c. praying for an account before a committee, the appointment of persons to distribute the property, and a receiver to collect the debts. As to the appointment of a receiver, the plaintiff stated, in general terms, that he was, on principles of equity, entitled to the interposition of the court, to appoint some meet person to be a receiver of all the co-partnership effects, and to hold the same to await the final order of the court.
    A committee were appointed, who took an account, and ma(je their report, and afterwards, a second report j which, after a remonstrance against them by the defendant, were accepted.

      Hartford,

    June, 1818.
    Among other things, the committee found, that the com-panv, for several vears after they commenced business, had ⅜ two stores, one in New-Haven, the otiier in Nero-York ; that the plaintiff took charge of the, former, and the defendant of the latter; that, without any express agreement, the general course adopted at both stores, was, to receive and credit the private funds of the defendant, and to pay, and charge to him, when paid, his private debts; that the demand for these debts, during the first and second years, exceeded the means furnished to discharge them, by the defendant, and the cash funds at the command of the company, and induced the defendant, without the knowledge or consent of the plaintiff, to draw money, in some instances, for that object, in the name of the company, from brokers, at a much higher rate of interest than the debt would carry, when thus paid and charged to him. As this course was not warranted by any express or implied agreement, the committee considered the excess of interest thus paid by the company, amounting to 450 dollars, as a proper charge against the defendant, which they accordingly allowed, with interest.
    The defendant having remonstrated against one of the charges against him, allowed by the committee in their first report, they re-examined that part of the case, and, in their second report, stated the following facts, with their opinion thereon. In the year 1797, Elisha Frost and Dutton <§• Frost were largely indebted to the defendant; and to secure that debt, Frost, on the 28th of February 1798, procured a note, signed by himself, Curtis Young and others, for the sum of 7000 dollars, payable to the defendant, and credited to him on the defendant’s books, which exceeded the amount then due from him to the defendant. Soon after the co-partnership of Tomlinson <Sf Ward commenced, large sums were advanced by them to Frost, in goods, money and notes, to be repaid in provisions : and for greater security, a Setter of credit was procured, by Frost, from Victory Tomlinson and Ozias Tyler, on which advancements were made, and charged to them, to the amount of 765/. 19s. 1 Gd. Frost, also, received large advancements on his own account. Soon after-wards, Victory Tomlinson procured and delivered, partly by hims-eH' and partly through Frost, provisions and other arti cles, sufficient to pay the debt charged jointly against him, Tyler and Frost, which he expected would be so applied» The provisions delivered by, and credited to Victory Tomlin-son, in the winter of 1798, amounting to 34L 8s. 0d. were, in j-((j i799s transferred from his account to the account of Frost ; to whom ail the provisions were credited. On adjusting the nett proceeds of the provisions and other articles credited to Frost, on the Sd of July 1799, his credit exceeded the debt due from him individually above 1S00L, a sum more than sufficient to discharge the debt due from him, Victory Tomlinson and Tyler ; and, on that Ray, he was charged with an indorsement of 800Í. on the note of 7000 dollars, given by himself, Curtis Young and others, to the defendant. It appeared, also, from the books, that, on such adjustment, a deduction was made of 52,1. 14s. 6d. for pork delivered the preceding year from Derby, as had of Victory Tomlinson, included in these sales, but to be accounted for with the remainder of that parcel. But the committee did not find the amount of provisions so received from Victory Tomlinson $ nor how they were accounted for, or applied ; or that any other provisions were received, or sold, on account of Victory Tomlinson, and credited to Frost. On these facts, the committee were of opinion, that said sum of 52l. 14s. 6d. ought to apply in part payment of the debt from Victory Tomlinson, Tyler -and Frost, and that part of the surplus credit to Frost, ought to have been applied to discharge the balance of that debt. And because it was, contrary to the remonstrances of the plaintiff, applied, by the defendant, to his individual benefit, and the debt against Victory Tomlinson, Tyler and Frost suffered to become barred by the statute of limitations, and lost, Victory Tomlinson being then a man of large property ; the committee were of opinion, that such balance, after deducting therefrom the sum of 521. 14s. 6d., was a proper charge against the defendant.
    From both reports there appeared to be a balance of 21,491 dollars, 11 cents, due from the defendant to the plaintiff; and a decree was accordingly passed for that sum, wdth costs of suit, taxed at 694 dollars, 36 cents. To reverse that judgment the present writ of error was brought.

      Sherman and Staples, for the plaintiff in error,
    contended, that the judgment ought to be reversed, 1. Because the court appointed a receiver, there being no foundation laid for such appointment, by the allegations of the bill, or the finding of the committee. Upon first principles, every man has a right to the possession and management of his own property; and the court will never take it out of his hands, by the appointment of a receiver, especially in a case of co-partnership, where there is a confidence between the parties, unless a clear case of fraud or insolvency be stated and proved. Here, there is no imputation of either.
    2. Because the authority given to the receiver is not properly guarded and limited, no security being required or taken for his fidelity, and no time fixed for rendering his account,

    3. Because the distributors appointed are not required to be under oath, nor to make any return of their doings.
    4. Because the committee, in their report, have charged the plaintiff in error 450 dollars extra interest, which, up n the facts found, ought to be charged to the company.
    5. Because the committee and the court have committed an error, in charging over to the plaintiff in error, the debts due from Victory Tomlinson, Tyler and Frost to the company,
    6. Because costs of suit were taxed and allowed against‘ the plaintiff in error, without any allegation in the bill of a previous demand having been made for an account, or a settlement.

      Baggett and JV. Smith, for the defendant in error.

       The record of the appointment was in these words: “ And the court also appoints R. S Bakhtin, Esq. to receive and collect the debts due to said co-partnership, and the avails thereof pay oyer, in equal moieties, to ss:d 7⅛> linson and. to said Wartl?

   Swift, Ch. J.

It appears, that Tomlinson, the plaintiff in error, borrowed money, on the credit of the company, to pay his private debts ; and then, without, the consent oí Ward, took money at an extra rate of interest to meet the payments ; which extra interest was charged to the company. I am of opinion, that he had no right to do this ; and that such extra interest was justly and properly charged to him.

In regard to the debt due -from -Victory Tomlinson, Tyler and Frost, it appears that the- defendant, (now plaintiff in error) remonstrated against tiic acceptance of the report of ⅛⅜» committee, because they bad charged it against him on the ground, that he liad suffered it tobe outlawed: but in the second report of the committee, it is explicitly stated, that it was allowed, because the defendant had misapplied the provisions delivered to the company in payment ol' this debt, to the payment of a private debt due from frost to him, and then suffered it to be barred by the statute of limitations. This was no ground for setting aside the report of the committee, and the court did right in accepting it.

It was a proper exercise of the discretionary power of the court to appoint distributors to divide the joint property between the parties.

Courts of equity have undoubtedly a power to appoint receivers in proper cases : but the facts should be stated in the bill, which shew' the necessity or propriety of the appointment,. so that the other party may answer them. A receiver ought to give security for the faithful discharge of the trust. As no facts were stated in the bill, and no security given by the receiver, I am of opinion, that this part of the decree be reversed ; and that the same be affirmed on every other point.

EdMond, Smith, BeainaRD and Hosmeii, Js. were of the same opinion.

Gob id, J.

I concur in the opinion, that that part of the decree, which relates to the appointment of a receiver, ought to be reversed. Such an appointment, in cases of this sort, is, by no means, a matter of course: if it were, great inconvenience and injustice would often ensue. A partner, however solvent, and without any imputation upon his integrity, ór competency, might be dispossessed of his property, for an indefinite period, to the great derangement of his affairs, and even to his own ruin. The rule, therefore, is, that where either of the original partners is defendant in the bill, and no particular disqualification is shown against him, the confidence, reposed in him, precludes the appointment of a receiver. Philips v. Atkinson, 2 Bro. Ch. Ca. 272. Read v. Bowers, 4 Bro. Ch. Ca. 441. In the present case, no disqualification, on the part of the plaintiff in error, appears ; and tSic finding, upon which the whole decree is founded, being special, none certainly can be presumed.

In this view of the first error assigned, there is no occasion for considering the second. For, if upon the facts dis--■losed, no receiver ought to have been appointed ; the mode, in which the appointment has been made, cannot affect the judgment to be given here.

In the third assignment, the power of the court below, to appoint distributors, is not questioned : but it. is objected, first, that, by the terms of the decree, they are not required to act under oath ; and secondly, that they are not directed to make return of their doings. If an oatli were admitted to be necessary, the first branch of the exception could not prevail. For the objection is not taken to any proceedings of the distributors ; but to the form, in wdfich their powers are conferred : and that form is the same, as has obtained, in all analogous cases. In assigning auditors, in the action of account, it is never directed, by the court, either in the English practice, or our own, that they act under oath ; and the same observation applies to our mode of appointing referees, in actions at law, and committees upon bills in equity. To allow the objection, would, therefore, be virtually to impeach the established form, in which similar appointments have always been made. In the instances, just mentioned, auditors, referees and committees are left, precisely as the distributors, in the present instance, have been, to conform to the law, without any particular direction from the court. If the law requires them to act under oath, it surely cannot be presumed, that they will act without oath, And if they deviate, in this respect, from the course, which the law prescribes ; the objection must be taken, if at all, in a different stage of the proceedings. Whether an oath, in this particular instance, is necessary, or not, we cannot, therefore, now, judicially determine. I acknowledge, for myself, however, that I am, at present, unapprized of any law, or usage, of the state, requiring it. And I do not know, that our courts of justice, have ever framed, or sanctioned, an oath, unless some authority could be found for it, either in statute-law, or precedent. To the second branch of ¡he exception, (that the distributors are not directed to make return of their doings.) it has been justly replied, at the bar, that it is always in the pow er of the court below, to enforce a return ; And if any unnecessary delay occurs, on the part of the distributors ; an order, for that purpose, may, at any time, be made.

In relation to the charge of 450 dollars, allowed against the plaintiff in error, for extra interest, and the allowance of which is the subject of the fourth error assigned, I am unable to discover any plausible ground of exception. That allowance is clearly warranted, by the fact, that the company has been obliged to pay the same rate of interest, and at least, to the same amount, for the sole benefit of the plaintiff in error.

Under the fifth error assigned, some confusion has been introduced into the argument, by the different views, which have been taken by the counsel, of the finding of the committee. It has been contended, that the company have sustained no loss, in consequence of the course, pursued by the plaintiff in error, in relation to their accounts with Frost, and with Victory Tomlinson; because credit was given to the company, on their own books against Frost, equal to the amount, endorsed upon the note, which the plaintiff in error held against Frost: and it is added, that this sum was never charged over, by the plaintiff in error, to the company. It would have been extraordinary, indeed, if it had been so charged over: such a charge would have subjected the company to a double loss of the amount, charged to Frost. For the debt, apparently due to him, upon the company books, was altogether fictitious ; it having been raised, by giving him a credit, which ought to have been given to Victory Tomlinson. Of what use, then, was the diminution of this ideal credit, to the company ? Clearly of none at all. On tin contrary, it is impossible for the court not to see, that the operation in question, was, in effect, an application of partnership-funds, to the use of the plaintiff in error — or, in other words, of property received by the company, in pay inent of a debt against Victory Tomlinson, to a debt due from Frost to the plaintiff in error. The charging to Frost, on the company-books, and the indorsing upon his note to the plaintiff in error, of a sum which ought to have been passed to the credit of Victory Tomlinson, in payment of the company’s debt against him, were essentially, without any charge of that sum to the company, an appropriation of partnership funds, to the same amount, to the private debt, w hich the plaintiff in error held against Frost. And this unauthorized appropriation has resulted in the entire loss» to the company» of the debt due to them, from Victory Tomlinson. The whole proceeding, (to express it in a few words») is this : The plaintiff in error has misapplied, to a debt, due from Frost, to himself, funds received in satisfaction of a company debt against Victory Tomlinson; and in consequence of this misapplication, the latter debt is entirely lost. But he now resists the claim of his partner, to be indemnified for this loss, by endeavouring to convert that misapplication of the partnership funds, into payment of a company debt to Frost, to whom no debt was due. But further : if the debt originally due to the company, from Victory Tomlinson were not barred ; he might still compel an application to his credit, of the property, delivered to the company, for that purpose, or subject them, for the value of the property : so that, even upon this supposition, the loss to the company would, upon the principles of the plaintiff in error, be the same ; since they would be charged, in the one form or the other, with property which has been appropriated to the individual benefit of the plaintiff in error.

The last error assigned is urged, only as a ground of objection to the costs allowed, by the court below. In our chancery proceedings, the allowance of costs is, in strictness, discretionary; though, in practice, our rule is, generally, much the same, as at law. The question, therefore, is not stricti juris: and I see no sufficient reason, in this case, for rejecting the allowance.

I» therefore, concur in the opinion, that the decree, except so much of it, as relates to the appointment of a receiver, ought to be affirmed.

Peters, J.

I concur in the opinion of the Chief Justice, affirming this decree upon the merits, and reversing it as to the receiver ; but not for any defect in the bill.

The appointment of a receiver is a matter of discretion, and may be made on motion, as well as for reasons stated in the bill. 2 Har. Chan. Prac. 107. Jones v. Pugh, 8 Ves. jun. 71. Coke v. Gwyn & al. 3 Atk. 690. Whenever it appears from the bill, the answer, or testimony at the hearing, that a receiver is necessary, the court will appoint one; hit never without surety. In this case, no surety was reuní-red, or given. “ 1,” therefore, as a Lord Chancellor once said, “ entirely disapprove of going out of the course tl,e court, which requires security by the receiver, and two sureties, in a recognizance.”

Trummult, and Chapman, Js. gave no opinion, the former being related to one of the parties, and the latter having been absent when the case was argued.

Judgment reversed as to the appointment of a receiver, and affirmed as to the residue.

         Jlardwicke, 3 Jltk, 23?.


source: Caselaw Access Project

author: Swift, Ch. J, Tbtjmbun, J. Gout.», J.

license: Public Domain

text:
    Bulkley and others against Landon and others.
    Where the declaration staled a promise, that in con. fideration the plaintiff •would endorse a note signed by a third person, the defend-dant would hold himself liable thereon in the same man. «eras though he had signed it with his proper name, and the evidence was of a prgmise in Considera, tion of the plaintifPs having in• darned such note; it was held, that the evidence did not conduce to prove the declaration.
    THIS was an action of assumpsit against John R. Landon,. Aaron Smith and David Smith, surviving partners of the late firm of Smith, Taylor & Co., consisting of the present defendants and David Taylor, now deceased. The declaration contained four counts.
    The first was upon a promissory note, alleging it to have been executed by the defendants, (* by the name of David Taylor, for and in behalf of said firm of Smith, Taylor A Co.”
    The second count was also upon the note, alleging that the defendants, in and by a certain writing or note, dated, &c. executed by David Taylor, for and in behalf of the defendants, (the defendants with said Taylor being merchants in company under the firm of Smith, Taylor Sc Co.) promised the plaintiffs to pay them, &c,
    The third count was as follows : That the defendants, at the city of New-York, on or about the first day of September 1814, became indebted to the plaintiffs in the sum of 4000 dollars, for so much money paid, laid out and expended to and for the use of the defendants, at their special instance and request; for that the plaintiffs aver, that at the city of ¿V%w-Torfc, on or about the 19th day of August 1814, the defendants were then copartners in trade, carrying on business as merchants in company with the aforesaid DaviiL Taylor, then in full life, and for that purpose k» pt a store or founting-house in the. city of New*Fork, and did business nmier the name of Smith, Taylor & Co. ; that while flic defendants were so as aforesaid copartners in trade with said Taylor, viz. on tiie 19th day of August 1814, the said Taylor made and executed, for the use and benefit of said firm, a certain note, dated said i9t.h day ot August 1814, payable to the plaintiffs, or their order, thereby promising to pay to the order of the plaintiffs, sixty days after date, for value received, 3653 dollars, 88 cents ; which note the defendants, by said David Taylor, then in full life, but since deceased, requested the plaintiffs then and there to indorse, and guarantee the payment thereof ; that to induce the plaintiffs to indorse said note, with others of the same date, payable to the plaintiffs, at different periods, and for different sums, the defendants made and executed a certain writing, dated the 29th day ot August, therein and thereby agreeing and stipulating, that said note, with others winch the plaintiffs then and there indorsed, was to be considered the note of said company, and stipulating, that, in consideration that the plaintiffs would indorse said note, they, the defendants, would hold themselves liable in the same manner as though they had signed the same with the proper signature of said company ; which writing, so executed, was delivered to the plaintiff's, in consideration of their indorsing said note ; and when the same became due, the defendants utterly failed of paying the same, although called upon for payment, and said note was protested for non-payment, and the same hath never been paid by the defendants, or said Taylor, but the plaintiffs were compelled to pay, and did pay, said note to the holders thereof, with the costs of protest, and all expenses thereon ; of all which the defendants have had due notice j whereby the defendants have become indebted to the plaintiffs in the sum of 4000 dollars for the amount paid on said note, and the interest and expenses thereon ; and the defendants after wards, to wit, at, &c. in consideration of the premises, assumed,” &c.

      Hartford,

    June, 1818.
    The fourth count was general indebitatus assumpsit for money paid, laid out and expended, at the special instance and request of the defendants, to and for their use.
    The cause was tried at JV%w-//«rcn, atan adjourned term in April 1818, before Syvj'tft'U. J. and Baldwin and Goddard, Js.
    On the trial, the plaintiffs admitted, that no recovery could be had on either (if the two first counts, but offered, in proof of the third count, a writing under the hands of the defendants in these words: “ New-Fork, August 27 th, 1814. Messrs. Bulkley, Someryndike & Co. — .Gentlemen, In consideration of your having indorsed the under-mentioned notes, drawn by David Taylor in your favour, we hereby hold ourselves accountable to you for them in the same manner as though said notes were drawn by us. [Signed.] Smith, Taylor & Co.” It was agreed that the note stated in the declaration was one of such “ under-mentioned notes.” The defendants, contended, that this writing did not, and could not, in point of law, prove, or conduce to prove the allegations contained in the third count. But the court decided, and so instructed the jury, that the evidence in question did tend to prove, that the indorsements of the plaintiffs were made at the request of the defendants.
    In the course of the trial, the plaintiffs offered evidence tending to prove, and claimed that they had proved, that the goods for which the notes were given, were purchased by David Taylor, on his own separate account. The court charged the jury, that if they found that the goods purchased went to the benefit of the defendants, or that the money paid by the plaintiffs on their indorsement was paid to extinguish the proper debt and duty of the defendants, at their request j the plaintiffs were entitled to recover on the fourth count.
    The jury found a verdict for the plaintiffs ; and the defendants moved for a new trial, on the ground that the jury were misdirected. This motion was reserved in the usual manner.

      Daggett and JV*. Smith, in support of the motion,
    insisted, that the variance between the third count and the writing offered in evidence was material and fatal. They cited Bristow v. Wright & al. Doug. 665. 1 Chitt. Plead. 303. Peake’s Ev. 197.

      Staples and W. W. Ellsworth, contra,
    contended that the writing was proper evidence to prove part of the allegation in question j and conduced also to raise a presumption of a previous request. Parol evidence might be adduced to prove the rest, or to shew that the writing and indorsing were all one transaction. Suppose the writing had been thus : « In consideration, that, at am special instance, you have indorsed,” See, this would have proved the whole count. And that the defendants made such previous request may be proved by parol, though not mentioned in the writing*

      Daggett, in reply. If the evidence offered is not relevant in any manner of itself, though by some other evidence it may be made relevant, it cannot be received by the court, unless it is offered in connection with such further evidence ; and this must constitute a part of the case.
   Swift, Ch. J,

The question arises upon the third count in the declaration. That alleges, that the defendants were indebted to the plaintiffs in the sum of 4000 dollars, for money laid out and expended, at their request; for that the defendants requested the plaintiffs to indorse for them a certain note, and to induce them to do it, executed to them a certain writing ; that the plaintiffs indorsed the note, and were compelled to pay it, by the failure of the defendants to do it* The writing received in evidence was as follows : “ New-York, August 27, 1814. Messrs. Bulkley, Someryndike Sc Co. — -In consideration of your having indorsed the undermentioned notes, drawn by David Taylor, in your favour, we hereby hold ourselves accountable to you for them in the same manner as though said notes were drawn by us.

[Signed.] Smith, Taylor Sc Co.”

And it w as agreed, that the note indorsed by the plaintiffs was one of these notes. The court instructed the jury, that the testimony conduced to prove that the plaintiffs indorsed the notes at the request of the defendants. The question is, whether this direction was correct.

It will be agreed, that wherever testimony per se conduces to prove any fact put in issue, it is admissible, though it does not prove the whole issue ; but wherever the testimony does not per se conduce to prove any fact put in issue, then It is not admissible, unless accompanied with other testimony to shew it to be relevant.

No questions respecting variance arise ; for the action is not grounded on the writing, but it is offered in evidence to prove the issue ; and the question is, whether the money w as paid for the benefit, and at the request of the defendants, That the writing conduced to prove the allegations in the third count, it seems to me can admit of no doubt. Here is a written contract, for a good consideration, expressed in; the contract itself. The indorsement of the notes, from i.iic terms of the contract, must he understood to be. for tie benefit, or at the request, of the defendants. luden!, thr defendants, by the contract, have recognized the fact ; and they are not at liberty to deny it. This engagement to hold themselves accountable is equivalent to a previous request.

lint it is said, that it ⅛ manifest from the writing iisell, that the indorsement was not made at the request of the defendants. It is difficult to imagine how this can be math out. The expression, “ in consideration of having indorsed, ⅛fc. ice hold ourselves accountable,” &c. most certainly does not demonstrate, that the notes were not indorsed at the request of the defendants. The fair import is, that it was done at their request | for why should they make the indorse» ment the basis of a written promise to indemnify them, if it had not been made at their request, or, at least, for their benefit ? On the ground assumed this is a singular transaction. The defendants have agreed to indemnify the plaintiffs for indorsing certain notes, without their request, and in which they have no interest. It is idle to pretend, that parties could have acted in this manner ; and it is strange that such a supposition should be adopted to discharge them from a written obligation.

It is further said, it appears from the expression having indorsed, that the consideration was past: that the contract, therefore, was without consideration, and void. It is true, the expression having indorsed shews the notes must have, been indorsed prior to the execution of the writing ,• but is it gravely to be pretended, this shews the consideration was not existing at the time, and was, therefore, past and void ? In most executory contracts, the consideration must precede their execution ; but it was never before supposed that this was a past consideration. Though the act was previously dotie, yet the duty or obligation exists at the time, and constitutes a valid consideration. What was the natural course of the business in this case, as appears from the writing ? The plaintiffs first indorsed the note to create the consideration, and then the defendants, in consideration thereof, engaged to be accountable. The consideration here, as in all similar cases, must have been existing at the time of the contract, though the act was-previously done. Bin according* to the argument in this case, because it appears from the writing that the indorsement was first made, it proves that the consideration was past, and the contract a nullity, This would destroy nearly every contract that is made. Take the case of a note : For value received, I p romise to pay. The expression value received as strongly imports a past consideration as having indorsed ; and it may as well be said, that the consideration of every note is past, and the note void, as that the consideration of this contract is past, and the contract void.

In the construction of contracts, it is a general rule, that every thing is to be taken most strongly against the party promising. But here we are called upon to make presumptions against the plain import of the words, in favour of the promissor, in order to discharge him from a written agreement.

There is another point in the case not noticed in the argument, which it appears to me must be conclusive. It is stated in the motion, that the plaintiffs offered evidence tending to prove, and claimed that they had proved* that the goods purchased for which the notes were given went to the benefit of the defendants, and that the money paid in consequence of indorsing the note, was paid at their request, and for their benefit. Though this evidence in the charge was applied to the fourth count, it was equally applicable to the third ; and was not excluded from being so applied by the charge ; for it is not stated in the motion, that the writing was the only evidence adduced to prove that count. This fact most clearly shews the relevancy of the writing offered in evidence ; for if the goods for which the note was given were for the defendants, then the note, though given by David Taylor only, was for the proper debt and duty of the defendants, and the indorsement must have been for their use and benefit, and certainly constituted a good consideration for the written agreement offered in evidence, the object of which was to bind them to indemnify the plaintiffs for indorsing the notes. That writing, then, taken in connection with the other testimony before the jury, most clearly conduced to prove the material allegations in the third count. The amount of the testimony was, that the plaintiffs liad indorsed a note given for the proper debt and duty of the defendants, and the defendants, in consideration thereof, promised to indemnify them. And even if the plaintiffs first indorsed at the request of David Taylor, yet when the defendants assumed the debt, the liability of the plaintiffs to pay the debt of the defendants was a consideration for a promise to indemnify them.

I think a new trial ought not to be granted.

In this opinion Smith, Bkainabd and Petebs, Js. concurred.

Tbtjmbun, J.

In this declaration, the third count, on which the questions of law arise, is brought on a certain promissory writing alleged to have been executed by the defendants. It avers, that to induce the plaintiffs to indorse the note of said Taylor, the defendants made and executed a certain writing, dated the 27th day of Jhigust 1814, therein and thereby agreeing and stipulating, that in consideration that the plaintiffs would indorse said note, the defendants would hold themselves liable on the same, in the same manner as though they had signed the same with the proper signature of their company : that this writing was executed and delivered to the plaintiffs, in consideration of their indorsing said note; and that thereupon the plaintiffs did indorse it, &c. To support this averment the plaintiffs produced the following note, signed Smith, Taylor & Co.: “ New-York, August 27th, 1814. Messrs. Bulkley, Somerindyke & Co.—Gentlemen, In consideration of your having indorsed the undermentioned notes drawn by David Taylor, in your favour, we hereby hold ourselves accountable to you for them in the same manner as though said notes were drawn by us.” It is evident, that this could not have been admitted by the court, as the writing on which the plaintiffs counted : It is agreed, that this writing is of itself void, and a nudum pactum on the face of it. The promise it contains is grounded on a past consideration, which could lay no moral or equitable obligation on the defendants. It is essentially different from the promise laid — as variant as the past tenses, from the future, in grammar, or the eternity aparte ante from that a parte post, of the schoolmen. It is an absolute promise to pay, in consideration that the plaintiffs had indorsed, and the promise laid is a promise to pay on condition that the plain-tits would indorse, the note of said Taylor. As the plaintiffs have declared on a promise in writing, it was incumbent on them to produce a writing containing a promise substantially the same, in every material part, as that laid in the count. This variance is, in my opinion, fatal.

The court, in their charge to the jury, instructed them, that this writing did tend to prove that said indorsement of the plaintiffs was made at the request of the defendants.” I cannot bring my mind to assent to the correctness of this part of the charge. The writing must speak for itselfj and it certainly gives no hint of any such request. How, then, can a jury have a right by law to presume from it, that such a request existed. Legal presumptions are grounded only on proof of such circumstances as necessarily, or usually, accompany the fact to be presumed. But this whole transaction is so unusual in its nature, and so different from the course of mercantile business, that the unknown circumstances, which may have attended or occasioned it, are matters not of presumption, but mere conjecture and uncertainty. From the different and distant places at which the defendants resided, it cannot be supposed probable, that they were all present in the city of New-Fork at the time the plaintiffs indorsed Taylor’s note. It is plain, that Taylor, though a partner, did not think himself warranted to use the name of the company in this transaction, as he signed the note with his separate name only. The signature of Smith, Taylor & Co. to the writing, must have been executed by the acting partner in JVew-Fork, who appears to have been the said David Smith. But unless he had a special power, from that firm, to act for and bind the company by a request to the plaintiffs to indorse the several note of Taylor, his request, if proved, would be of no validity against the defendants ; as no such power is given merely by his becoming one of the copartners, nor is such an act within the general business of the partnership.

The other ground for recovery claimed by the plaintiffs, is wholly distinct, and has no bearing on the present question.

For these reasons, I am of opinion, that a new trial ought to be granted.

Edmond, IIosmek and Chapman, Js. were of the same opinion.

Gout.», J.

The third count, upon which the question is raised, is a special one, stating that D. Taylor, a late trade?' in company with the defendants, made his sole promissory note, for the use and benefit of the company, payable to the plaintiffs : that the defendants, to induce the plaintiffs to indorse the note, agreed in writing, that it should be considered as the note of the company: that, in consideration,-that the plaintiffs would indorse it, they, the defendants, would hold themselves liable upon it, as though it had been made under the signature of the company : that the plaintiffs, thereupon did indorse it, and have been compelled to pay the contents, with costs and charges, to the holder — and concluding in in-debitatus assumpsit, for the amount so paid, as money paid, laid out and expended, for the use of the defendants. The writing, shown in evidence, is an agreement, signed by the Company, that, in consideration of the plaintiffs’ having before indorsed the note, they, the company, would hold themselves accountable, &c. Now, does this writing conduce to prove any material part of the preceding statement 2 l am clearly of opinion that it does not; and therefore, that the jury were misdirected.

If it was necessary for the plaintiffs to prove any part of the statement, relating to the written agreement; the writing produced was irrelevant for that purpose, on the ground of variance. The date excepted, there is no one part of that agreement, which does not vary materially, from the description of it in the third count. The plaintiffs allege, that, to indtice them to indorse Taylor's note, and in consideration that they would (i. e, would thereafter,) indorse it, the defendants agreed, &c, But the consideration, and the only one, expressed in the writing, is, that the plaintiffs had before indorsed the note. In this particular, the variance is one of the most important, that can be imagined, in the description of a contract: it goes to confound, entirely, all distinction between past and present considerations. The third count further states, that the defendants agreed, in writing, that the note “ was to be considered as the note of the company.” But as to this alleged agreement, the writing itself is entirely silent. Here, then, the plaintiffs have stated, as a constituent part of the written contract, an entire, substantive élause, not contained in it. But the objections, on the score of variance, do not terminate even here. It is alleged, that the « defendants made and executed” the writing in question, and agreed that *-' they would hold themselves liable” upon íhe note : whereas the writing produced is signed “ Smith, Taylor & Co.” and purports to be the agreement, not of these defendants, individually, but of all the late partners, as a company. In these last allegations, therefore, there is a palpable variance, not only as to the terms of the agreement, but also* as to the persons contracting : so that the writing, shown in evidence, could not conduce to prove any agree - ment whatever, between the present parties. For though, where a suit, founded upon an instrument, is brought against a part only of those, by whom it was executed, advantage cannot regularly be taken of the omission of the others, except by plea in abatement j yet, this rule applies only to the, non-joinder of necessary parties. But in this case there is no non-joinder: this last exception, like the former, proceeds, exclusively, upon the ground of variance — .of which no advantage could have been taken, in any way, by plea in abatement; since the written agreement is not the foundation of the action.

The different allegations, to which I have adverted, when taken together, and compared with the writing, present, perhaps, the clearest and strongest case of variance, I have ever met with. But as the action is not brought upon the written agreement, the variance is said not to be essential. This, conclusion, by no means, follows, as a matter of course, and if it did, the plaintiffs would not be aided by it. The mere circumstance, that a writing, set out in a declaration, is not the ground of action, does not dispense with the necessity of proving it, strictly, as laid. The cases of Smith v. Savage, 2 Black. Rep. 1104. Bristow v. Wright, Doug. 665. Cudlip v. Rundle, ib. 668. cited, and Shute v. Hornsey, ib., have placed the rule beyond debate, that a record, or written instrument, when alleged in pleading, must be proved precisely as set out, unless the statement of it is so entirely impertinent, that the whole of it might be struck out, without injury to the pleading. And I confess, I am inclined to consider the averments, in the third count, which relate to the writing in question, as being of this description. For if they had been entirely omitted, that count would have been a general indebitatus assumpsit, for money paid, laid out and expended, and, upon the face of it, good. And considering it in this point of view, the variances, however great, must, indeed, be laid out of the case. But other oh-jections, equally fatal to the verdict, will still occur: so that it will be immaterial, in the result, whether those averments, either in whole, or in part, were necessary, or not. Thus much is certain : they were either material, immaterial, or impertinent. If material, they certainly ought to have been strictly proved ,• and upon this supposition, no one can doubt, that the exceptions, on the ground of variance, are fatal. If they were immaterial, as contradistinguished from impertinent — i. e. if they were unnecessarily particular, but could not have been dispensed with, in tato, without violating the count; it is equally clear, from the cases, just cited, that the rule, and, of course, the result, are the same.

Let us take, then, the only remaining supposition, via. that all that part of the third count, which relates to the written agreement, is impertinent: In other words, suppose all that part to be erased. The third count will then be — • exactly what the fourth now is — a general indebitatus as-sumpsit, for money paid, laid out, and expended. Is the writing, then, relevant to prove, under such a general count, that the money, advanced by the plaintiffs, was paid for the use of the defendants, or at their express or implied request f The liability of the plaintiffs, upon Taylor’s note, and the payment, w hich they have been compelled to make, to the holder of it, grew out of their indorsement. And the writing, surely, cannot furnish the slightest presumption, that the indorsement was made, at the instance of the defendants, unless the terms of it afford evidence, that the note was made for their benefit. The simple question, therefore, is, whether the fact of one person’s guaranteeing the payment of an obligation, given by another, is evidence, in law, that the obligation was given for the benefit of the party, giving the guaranty ? This is really the whole question. For the words, <s as though the said notes were drawn by us,” were plainly used, as a mere form of guaranty< — to express the nature and extent of the undertaking. Every presumption, therefore, arising out of the transaction, is directly against the inference, which the plaintiffs claim from it. That inference must be founded upon the assumption, that your engaging to pay, or to secure the payment of, my obligation, is, per se, presumptive evidence, that the debt thus secured, is yours. But the transaction, I repeat, is so far from raising such a presumption, that the true conclusion is directly the reverse af it. And, in the present case, there is nothing to rebut this conclusion. The relation in which V, Taylor stood to the defendants, furnishes no presumption either way. The question, therefore, is a matter of mere legal inference, upon the face of the agreement.

But the direction of the court, upon the third count, is exceptionable, upon other grounds. In the first place, if a bare agreement by Ji. to be answerable, for the payment of an obligation, made by B., is evidence to a jury, that the obligation was given for the debt of Jl.; the second clause of the statute of frauds may, in all cases be evaded, and thus virtually repealed. For though, upon this supposition, JL's agreement, if unw ritten, or without consideration, would not be binding, asan express collateral undertaking; yet, as evidence of an original indebtedness, on bis part, it might, in every instance, and, in most cases, probably would, have the same effect, as if there vyere no such statute. And the agreement’s being in writing, in the present case, can, in no degree, obviate the objection. If this action were founded upon the agreement, as a special collateral promise to pay the debt of another ; the circumstance of its being written, might, so far as regards the objection, arising from that statute, be material. But as presumptive evidence of a distinct, ex~ trinsic, collateral fact — as, that Taylor's note was given for the benefit of the defendants, or of the company, or at their request — the statute could not apply to it. Its being written, or verbal, could, as to this purpose, make no difference. And if the agreement, contained in the writing in question, liad rested in parol; it would have warranted the same direction to the. jury, as it could warrant, by being written, as it is. According to the direction, in this case, therefore, every express parol agreement, to pay the debt of another, though not valid as such, under the statute, may still be effectual to subject the promissor, as evidence of an implied promise, inconsistent with the terms of the express undertaking. The necessary tendency of such a rule, to destroy the second clause of the statute of frauds, is very apparent.

There is still another important result, involved in the question, and to which 1 have already barely adverted, under a former head of argument: if the direction of the court, upon the third count, is correct, a promise, upon a consideration completely past and executed, and therefore void ira law, may, nevertheless, and in every instance, become virtually binding, in the form, and under the name, of presumptive evidence ; that is, by being converted into evidence of a previous request — though that fact is so far from being a legitimate inference from the nature, or terms of such a promise, that it is manifestly repugnant to both. Tims, in . the present instance, a promise, in consideration, that the plaintiffs hud indorsed the note of a third person, has been construed into a presumption, that the indorsement was made in consequence of a prior request, by the promissors j or in other words, of a prior implied promise, on their part, to indemnify the indorsers. Now, what is there, in the nature of such an undertaking, that gives the least countenance to such a presumption ? There is, surely, no novelty in one’s guaranteeing a pre-existing contract, to which he was originally an entire stranger. And what is to be the effect of such a rule ? It will necessarily extend, in various ways, the legal liabilities of guarantees and sureties, of every kind, and, to all practical purposes, abolish the distinction between past and present considerations.

It has been suggested, for the purpose of obviating these objections, that the written agreement is an express adoption of the note, by the defendants, as their own. This proposition might be answered in various ways; hut its soundness may be tried by a very short and decisive process : would the writing support a count against the defendants, as makers of the note ? This is not pretended. Indeed, it is directly disclaimed, on the part of the plaintiffs, by the express abandonment of the two first counts. And if the argument would not subject the defendants, as makers of the note — as it confessedly would not; the proposition amounts, in effect, to nothing.

Whether, as has been observed in the argument, such sup-posable facts might exist, as would render the written agreement proper evidence, upon the third count, or upon either of the others, is of no importance. There are no such facts In the case. Of course, the writing, to be admissible, to any purpose, must import relevancy upon the face of it. In every view of the question, I think, there ought to be a new trial.

New trial to be granted.


author: SwirT, Cii. J. Goui'd, J.

text:
    The Derby Bank against Landon.
    Hartford,
    June, 1818.
    THIS was an action against flic defendant, as sheriff of the county of Litctifield, for the default of David Bird, one of his deputies, in relation to the collection and return of an execution in favour of the plaintiffs, against H'almm lewis. The date of the execution, as alleged in the declaration, was the 5th oí December, 1814, and the delivery to Bird, the 31st of that month.
    On the trial in the county court, on the general issue, the plaintiffs proved their declaration. The defendant, in his defence, claimed, that on the 33d of December, 1814, Use plaintiffs, by their attorney, 8. E. Dwight, Esq. agreed with Lewis, the debtor in the execution, that if lie would secure to the plaintiffs, by a mortgage of certain lands, the judgment on which the execution issued, together with certain promissory notes due from him to them, they would suspend the collection of the money due on such judgment, for the term of nine months ,* and that Lewis acceded to this proposition, and complied with the terms on his part. In proof of this agreement, and of performance on. the part of Lewis, the defendant offered in evidence a certain iportgage deed, executed by Lewis to the plaintiffs ; to the admission of which the plaintiffs objected, on the ground of irrelevancy. But the court overruled the objection, and admitted the evidence. In committing the cause to the jury, the court instructed them, that if they found such agreement was made, and security given in pursuance thereof, Bird, the officer, was justified in forbearing to levy and collect the execution ; and that the defendant had made out a good de-fence to the action. The jury found a verdict for the defendant accordingly. The plaintiffs, having filed a bill of exceptions to the decision of the court admitting the evidence, and to their charge to the jury, brought a writ of error in the superior court, assigning, w jth these, several other grounds of error. The questions of law arising on the record, were reserved for the advice of tire nine Judges,
    Where the creditor in an execution agreed with the debtor to suspend the collection of the money, for a time specified, and after-wards put the execution into the hands of an officer to be executed; It was held, in an action against the officer for neglecting to levy the execution during the stipulated term of suspension,that such agreement was no defence.

      Staples and Twining, for the plaintiffs.
    <JV*. Smith, for the defendant.
   SwirT, Cii. J.

It appears from the fads conceded in thi» case, that after the plaintiffs, by an agreement with Lewis, t!>c debtor in the execution, had taken a mortgage to secure the same, and had also agreed to suspend the levy of it, for n¡ne months, they put the same, it being in full life, into the hands of David Bird, a deputy of the defendant, to server according to law; that Bird failed to levy and collect the execution ; and he now relies on this agreement between the plaintiffs and the debtor, for his justification. I am of opinion, that this constitutes no defence. As between the plaintiffs and the debtor it was no bar to collect the execution, any more than an agreement to suspend the collection of a note, could be a bar to a suit on the note. It was no payment, satisfaction or discharge of the execution ; and the. debtor could have had no relief by audita querela. The execution was permitted, by the parties, to remain in force, and the debtor could never have had any remedy, but by an action for a violation of the agreement to suspend the collection of it. The charge of the court, then, that if the jury found the agreement, they must find for the defendant, was incorrect. As the judgment must be reversed on this ground, it is unnecessary to consider the other questions arising on the record.

Goui'd, J.

There is one point in the case, so clear, as to dispense with the consideration of any of the others. The agreement claimed to have been made between the attorney to the bank, and Lewis, the defendant in the execution, could, upon no principle, constitute a defence to the action. And if so, both the admission of the evidence to this point, and the direction of the court below, upon it, were erroneous. If such an agreement had been made, (as this, it is said, may have been,) even after the delivery of the execution to the sheriff’s deputy ; yet he being a stranger to the arrangement, and having no direction from the hank, to conform to it — ^should be at a loss to discover how he could avail himself of it. But it appears, from dates, that tiie delivery of the execution to the officer, was subsequent to the alleged agreement. And at all events, if the fact was otherwise, it was incumbent upon the defendant to show' it: otherwise, his defence cannot be complete, upon his own principles. Taking the supposed agreement, then, as we must, to lihve been prior to the delivery of the execution to the officer — the latter act, implying, as it did, a direction to the officer, to proceed, according to the exigency of the writ, was, ipso facto, a revocation of the agreement, or at least, a tacit refusal, on the part of the bank, to abide by it. And if any honourary, or legal compact with the execution-debtor has thus been violated j it is an affair between himself and flic bank. The officer has no concern with it. If there was an agreement made, binding in honour only ; a court of law cannot take cognizance of it. And if it was obligatory in law, the debtor might sue for any violation of it: but the question cannot be tried between these parties. Without occupying time, therefore, upon the other points in the case, 1 am clearly of opinion, upon this single, detached ground, that the judgment is erroneous.

'Hie other Judges were of the same opinion, except Chap-max, J. who gave no opinion, not having heard the arguments of counsel.

Judgment to be reversed.


author: Swift, Ch. J. Hosmee, J. Gouid, J.

text:
    Bishop against Dexter.
    THIS was action of assumpsit, by the indorsee of a note, claiming, through two intermediate indorsements, against the first indorser.
    The cause was tried at Mew-Haven, January term, 1818, before Trumbull, Baldwin and Hosmer, Js.
    The note in question was made by John S. Whittlesey, payable to Mormand Dexter, (the defendant) or order, six months from the'date, and dated September 28th, 1815. Af- ■ cr it fell due, via. on the 16th of Jlpril, 1816, and after a suit had been brought upon it, in the name of the payee, in which Whittlesey’s body was attached and committed to gaol, Dexter, for a valuable consideration, sold and indorsed it to Edward M. Converse. On the 19th of the same month, Converse indorsed it to one Judd; but no valuable consideration for the transfer was proved. On the 1st of Jlugusl following, Judd, for a valuable consideration, indorsed the note *° dames Bishop, the plaintiff, who liad no knowledge of the time when Dexter’s name was put on it, or of the fact of Whittlesey’s insolvency.

      The indorse-went of a bill or note over-due is equivalent to drawing a new bill payable at sight.

      ■''I- made a negotiable note payable in six months from date; after it was due, and wh ile a suit on it, in which the body of A, had been attached and committed to prison, was pending, B. the payee, indorsed it to C.; shortly afterwards, 0. indorsed it to I) ; and J). to E., who took it ignorant that the note was over-due when first: negotiated. Held* tliat E. could not recover against B. without shewing demand and notice within a reasonable time.

      Hartford,

    June, 1818.
    The defendant, offered evidence to prove an agreement between him and Converse, made at the time of the transfer, that the latter should take the note at his own risk. To the admission of this evidence the plaintiff objected 5 and the court ruled it out.
    It did not appear, that any holder of the note, after the indorsement by Dexter, had made demand of payment upon the maker, or had given notice of non-payment. The plaintiff claimed, that the facts of the case, excused the holders from making such demand, and giving such notice. This claim was resisted by the defendant. The court instructed the jury, that after the sale and delivery of the note to Bishop, it was to him as a new bill; and, to raise a cause of action against the defendant, it is necessary that Bishop should have made a demand of payment upon Whittlesey, and have given notice of non-payment, to the defendant, within a reasonable time. As no such demand was made, and no such notice given, the jury were directed to return a verdict for the defendant; which they accordingly did.
    The plaintiff moved for a new trial; and the questions of law arising on such motion were reserved in the usual manner.

      Sherman and Staples, in support of the motion,
    contended, 1. That it was not incumbent on Converse, the immediate indorsee of the defendant, to make demand, and give notice There could be no use in a demand by Converse ; for the suit, on the note which was pending at the time of the transfer to him, was of itself a constant demand. It would be equally useless to give notice to the defendant of non-payment; the default of the maker being already within the defendant’s knowledge.
    2, That admitting demand and notice to be requisite from the immediate indorsee of the payee, yet they were not necessary from the present plaintiff, who took the note without knowing that it was over-due when the defendant indorsed i(. Boehm & ah v. Sterling & al. 7 Term Rep. 433. 428. 430.

      N. Smith and Ingersoll, contra,
    remarked, that the plaintiff knew, that this note was over-due when he took it; and that being the case, he took it subject to every defence in favour of the first indorser, to which it was subject in the hands of the party from whom he received it; so that the only question on this part of the case is, whether demand and notice were necessary as between the first indorser and his immediate indorsee ? Now', where is the rule, or case or dictum to be found, that dispenses with demand and notice, because the bill is over-due when negotiated ? The law requires even more than ordinary vigilance from the holder of such a bill. Brown. v. Davis, 3 Term Rep. 82. Tinson v. Francis, 1 Camph. 19. Swift on Bills Ex. 301. Field v. Nickerson, 13 Mass. Rep. 131.
   Swift, Ch. J.

It appears, that Dexter, the defendant, indorsed to Converse a negotiable note against Whittlesey, after it was due, and had been put in suit; that Converse indorsed it to Judd, and Judd to Bishop the plaintiff; that after the indorsement by the defendant, no demand was ever made of Wrhittlesey the maker of the note, and no notice ever given to the defendant. The plaintiff claims, that he has a right to recover of the defendant on his indorsement, the note never having been paid by Whittlesey.

The indorsement of a bill or note after due is equivalent tr drawing a new bill payable at sight; and demand must be made by the indorsee of the drawer of the bill, or maker of the note, and notice given to the indorser, as iu cases of bills payable at sight. It appears, that no demand was ever made of -Whittlesey, by any of the indorsees of the note, and no notice ever given to the defendant of the non-payment : of course, he became discharged from any liability on his in-dorsement.

It lias been contended for the plaintiff, that when a note is indorsed by the payee after due, a subsequent indorsee, without knowledge that the first indorsement was made after the note was due, has a right to presume that a proper demand had been made, and notice given, when it fell due : and is not bound to make demand or give notice, to enable him to recover of the first indorser. But this is not onh repugnant to the principle that flic indorsement after due is equivalent to drawing n new bill, and must he proceeded with as such ; but would lead to the practice of the grossest frauds ; for the first indorsee might neglect to make demand* and give notice* by which the liability of his indorser would be discharged, and then, by a subsequent indorsement, he might create a new rigid, in bis indorsee to recover against the first indorser, after the note had been lost by his negligence.

It has been contended, that this note having been put in suit by the defendant, this was equivalent to a demand and notice ; for he knew the note would not be paid. But the indorsement put an end to the suit, as the property of the note vested in the indorsee. He was bound to proceed with it, in the same manner, as if it had not been sued. The circumstance, that the note had been put in suit, was not stronger evidence that it would not have been paid by the maker, if presented, than insolvency; and it is agreed, that this would not excuse demand and notice.

As this point is in favour of the defendant, and he is entitled to judgment, it is unnecessary to consider the other question.

Hosmee, J.

The charge to the jury, was entirely correct. It is not necessary, however, to enquire, whether the parol testimony offered to shew that Converse received the note to collect at his own risk, ought to have been admitted. But, as this question arises in the case, I will express my opinion upon it.

It is unquestionably clear, that if a person take a bill or negotiate a note, after it is due, he receives it on the credit of his indorser, subject to all the equities with which they are encumbered. Chitty 114. Swift’s Ev, 30. Brown v. Davies, 3 Term Rep. 81. Tinson v. Francis, 1 Campb. 19. Callaghan v. Sawyer, 5 Johns. Rep. 118. Boehm v. Sterling, 7 Term Rep. 423. Gold v. Eddy, 1 Mass. Term Rep. 1. Ayer v. Hutchins & al. 4 Mass. Term Rep. 370. Herrick v. Carman, 10 Johns. Rep. 224. But, this principle has no bearing on the point relative to the rejection of the parol testimony. Whittlesey had given a negotiable note to Deleter after it had become due ; Dexter having indorsed it in blank, transferred it to Converse ; and Converse, as the defendant offered to prove, received it to collect at his own risk. Posterior to this, the note was indorsed by Converse to Judd, and by Judd to the plaintiff, without any intimation, that the contract of Dexter was different from what it appeared to bo on the note itself. A blank indorsement is an absolute transfer. Swift's Ev. 542. It is an agreement: in writing, that if the indorsee, by the use of legal measures, cannot collect the note of the maker, the indorser, on reasonable notice, will pay it. As between the indorser and indorsee, parol testimony to contradict or vary this written engage - ment, cannot he admitted, 9, Swift’s Syst. 158. And if this be correct, it will not be contended, that it is admissible against those who derive a subsequent title. Even a written contract given to the indorser, separate from the note, is valid only between the parties. 2 Swift’s Syst. 158. Now, in the case before us, the. evidence rejected was not offered to evince an equity, but to contravene a contract in writing, In my judgment, it was inadmissible in every view. The case of Wilkinson & al. v. Nicklin & al. 2 Dall. 396. I consider as in point. The defendants offered to shew, that a bill indorsed by them in blank, and remitted to Cram~ moud k. Co., indorsed to the plaintiffs, was directed by them to be credited to their account. From its having been noted for non-acceptance, and other circumstances, they proposed to contend, that: the plaintiffs knew* the bill was their property. The defence was not admitted, “ 'Hiere is” (said Chase, J.) ‘too rule more perfectly established, there is none which ought to be held more sacred in commercial transactions, than that the blank indorsement of a bill of exchange passes all the interest in the bill, to every indorsee in succession, discharged from any obligation which might subsist between the original parties, but which does not appear upon the face ol the instrument itself.”

With respect to the necessity of demand on the maker by the indorsee, and reasonable notice to the indorser, there can exist no serious question. A bill may be negotiated after it has become due. Chi tty 113. The indorsement of it afterwards, is equivalent to the act of drawing a bill payable at sight. Chitty lis. The indorser isa new drawer, and has right to insist, that the same steps should be resorted to for the collection of it, as if he had been the drawer of ⅜⅛ bill originally. By drawing, he incurs the same legal obligation. Lloyd v. Keach, 2 Conn. Rep. 189. et vid. the cases there cited.

In the adjoining states at Massachusetts and Mew-Fork,, it has recently been determined, that a note indorsed after due, must be demanded of the maker, and notice of his neglect or refusal to pay, given to the indorserin a reasonable time. Field v. Nickerson, 13 Mass. Term Rep. 137. Berry v. Robinson, 9 Johns. Rep. 121. Agan v. M‘Manus, 11 Johns. Rep. 180. These decisions, conformed to undoubted principle, arc conclusive on the question,

Gouid, J.

Admitting, what, under the particular circumstances of the case, happens tobe of no importance, in the result — that the plaintiff, though he received the note, when it was over-due, might have entitled himself to a recovery against the defendant, notwithstanding the agreement, alleged to have been made by Converse ; yet the omission of a demand upon the maker, and of notice to the defendant, forms a fatal objection to the action. It may be observed, in the first place, that the understanding of the several indorsers and indorsees, as inferable from the nature of the transaction, must have been, that, to create a right of action, upon either of the indorsements, such demand should be made, and notice given, by the indorsee. For otherwise, the liability of each indorser would be primary and unconditional; and an action would lie against him, upon his indorsement, instantly upon its being made, without any act whatever, to be done by the indorsee, to consummate his right of recovery. And the defendant’s liability would, upon this supposition, be precisely the same, as if, instead of indorsing another’s note, lie had given his own, payable on demand.

Now, such a result, as this, would be evidently inconsistent with the views and intention of all parties ; and equally so with the nature, and legal effect, of the transaction. The indorsing of a note, is, in substance, the same thing, as the drawing of a bill of exchange : and there is nothing to take the present case out of the general rule ; which, as the note had already become payable, required the plaintiff to make demand of the maker, within a reasonable time. For though the, latter had suffered himself to be sued, it does not follow, that he would have refused payment, if demand had been duly made by the plaintiff. And as the maker was, in fact, as well as in form, the original debtor, and so regarded by all parties: the plaintiff must be taken to have purchased the note, with the understanding, (and so far as respects the liability of the indorsees,) upon the tacit condition, that lie was to resort, in the first instance, to the maker; and of muirse, to conform to the general rule, in relation to demand and notice. Besides, the manifest inexpediency of multiplying exceptions to established general rules, in the mercantile law, furnishes, in my judgment, a distinct, and strong objection to the motion. Such exceptions should be admitted only for the dearest and most decisive reasons : in as much, as they tend to complicate a class of transactions, in which all practicable simplicity is eminently important; and to create uncertainty, in a branch of the law, in which ft would be more mischievous, than in almost any other.

The other Judges were or the same opinion, except Chapman, J. who gave no opinion, having been absent when the case was argued.

New trial not to be granted.


author:
Swift, Ch. J. IIosmeR, J.
      Govzd, J.

text:
    Beach against W. S. and S. Hotchkiss.
    THIS was an action of indebitatus assumpsit for money had and received.
    The cause was tried at Neiv-IIavcn, at an adjourned term in April 1818, before Swift, Ch. J. and Baldwin and Goddard, Js.
    The plaintiff, the defendants, Gad Peck and Goodrich ⅜ Deforest, on the 30th of July 1813, were the joint owners, in equal proportions,' of a quantity of corn meal, and other articles suitable for the Wcst-Iiulia market, of the value of 3,200 dollars. By the consent of all concerned, the whole of this property was put into the hands of the defendants, and was, by them, in the month of August 1813, shipped to St. Bartholomew, consigned to Mr. Winfield, a merchant of that island, by whom it was received, sold and disposed of, and the proceeds vested in West-India produce, which was, ini me-diately afterwards, shipped and consigned to the defendants^ After being seized on its arrival in the United States, by the officers of the customs, for an alleged breach of the non-intercourse laws, it was restored, and delivered to the defendants, who proceeded to sell it, and received the avails thereof. The plaintiff claimed, that his proportion of the avails amounted to 1803 dollars; and that sum the defend - ants had actually paid to Gad Feck for his share $ ail the rest of the avails remaining in the defendants’ hands. Upon these fact» the plaintiff contended, that he was entitled to recover his said share, in this action. The defendants contended, that this action could not be sustained ; but that the plaintiff’s only remedy, if he had any, was by action of account, or bill in chancery ; and that the court ought so to charge the jury. The court charged the jury, that the action was sustainable ; and the plaintiff accordingly obtained a verdict. The defendants moved for a new trial, on the ground of a mis-diyection ; which motion was reserved in the usual manner.

      An action of assumpsit will not lie, between partners, for a balance due upon their partnership-ac-count,unless the account has been previously liquidated, and a balance struck.
    concerned,⅛ a mercantile Where A., B.,C.mA D. were jointly adventure of which Jl. had the sole management, and .1. afterwards paid to B. a certain sum as his share; it was held, ⅛ an action brought by C. for his share, that such payment to A was not equivalent to a liquidation of the partnership-account, nor did it prove that the same sum had been ascertained as the balance due to each of the concerned.
    No action at law will lie for the settlement of a partnership-account, where the number of partners exceeds two ¡ the only remedy, in such case, being by bill in chancery.

      Hartford,
    June, 1818.
    . V. Smith mid Denison, in support of the motion,
    remarked ihat the persons concerned in this adventure were, quoad hoc, copartners \ and contended, that this action will not lie in favour of one partner against his copartner, for, any claim' arising out of the business of the copartnership, unless there-has been a balance struck and agreed upon. 1 Chitt. Plead* 26. Ozeas v- Johnson, 1 Binn. 191. S. C. 4 Dali. 434, Niven y. Spickerman al. 12 Johns. Rep. 401. Casey Sf al. v. Brush <§* al- 2 Caines 293. De Witt v. Stamford, 1 Roof 270. Whitman v. Wadsworth, 2 Root 267. Money received by one partner, is not “ had and received” for the use of any other partner alone, hut for the use of all. If there he two partners only, one of them may bring an action of ac count against the other $ but if there be more than two, a bill in chancery is necessary, in order to settle the concerns of the company in one suit. In all cages where property is received to sell and merchandize with for another, the remedy is in one of these forms. A jury is not the proper forum to adjust and settle such concerns. Wilkins v. Wilkins, 1 Show. 71. S. C. Carth. 89. Spur raw ay v. Rogers* 12 Mod. 517. Hartup v. Wardlove, 2 Show. 301. Assump-sit may be brought on a promise to account, for a breach of that promise; but in that case, the court will not permit the jury to enquire into the state of the accounts between the parties, hut will confine them to the damages sustained by the breach of the promise. Garth. 89. Bull. JV*. F. 147, 8. 1 Bac. Mr. 37. The present defendants have made no promise to the plaintiff to account; mucli less to pay him a specific sum. The plaintiff’s share of the adventure has never been ascertained. The rights of these parties are not to be concluded by any settlement with Gad Peck.

    Staples, contra,
    remarked, that the amount of the plaintiff’s share must now be considered as ascertained and settled. The plaintiff claimed, that it was 1803 dollars; and adduced evidence to support his claim. It was in view of this fact, supposing it, for the purpose of the charge, to be proved to the satisfaction of the jury, (of which they were eventually to be the judges,) that the court told them the action was sustainable. If the jury had found the fact otherwise, they would, of course, have given a verdict for the defendants.
    As all the partners had an equal interest in this concern, and the business was brought to a close, it was necessary only to ascertain the share of one, in order to effect a complete adjustment. The case, then, stands on the footing of an account settled, and a balance struck. There is no longer occasion for the interposition of chancery. The confidence, w hich the law presumes between partners, and which is the foundation of the action of account, is at an end. He referred to Wetmare ⅜ al. v. Baker ⅜ al. 9 Johns. Rep. 307. Wilkinson v. Frasier, 4 Esp. 182. Biigham v. Eveleth, 9 Mass. Rep. 538. and commented on most of the cases cited on the other side.
   Swift, Ch. J.

In this case, it appears, that the plaintiff, xhe defendants, Gad Peck and Goodrich Deforest were the joint owners of certain property, which they delivered to the defendants, as their agents, to be shipped to the West-Indies, to sell the same, and pay over the nett proceeds to the respective owners. This was a limited copartnership ; and as there were more than two partners, the only remedy is a bill in equity, where the accounts of all can be properly adjusted : and no action at law will lie in favour of either of the partners, against the defendants, as their agents, to recover their proportion of the nett proceeds, until the accounts ¾⅜⅝⅜ been settled by the parties, and the balance due to each ascertained. The payment of a certain sum to Gad Peck, as his share, is not equivalent to a settlement of the accounts j and is no evidence that the same sum had been ascertained as the balance due to each of the concerned.

IIosmeR, J.

The parties to this action, with three other persons, were jointly interested in a voyage. In this transaction they were co-partners. The avails came into the hands of the defendants, who stated the account, ascertained the balances due to each person concerned, and actually paid one of them his share. The plaintiff has brought aft action of assumpsit to recover the sum due to him. This suit cannot be sustained. Between co-partners, the action must be account, unless there, has been a settlement between them, and a balance struck, or an express promise to pay. Wetmore v. Baker & al. 9 Johns. Rep. 307. Ozeas v. Johnson, 1 Binn. 191. S. C. 4 Dall. 434. Smith v. Barrow, 2 Term Rep. 478, by Buller, J. Moravia v. Levy, 2 Term Rep. 483. in nota. Hartup v. Wardlove, 2 Show. 308. Dewitt v. Staniford, 1 Root 270. Whitman v. Wadsworth, 2 Root 267. Casey & al. v. Brush & al. 2 Caines 293. Niven v. Spickerman & al. 12 Johns. Rep. 402. Murray v. Bogert & al. 14 Johns. Rep. 322. Collins v. Phelps, 3 Day 506. It cannot, with any propriety, be argued, that the balance, in this case, has been ascertained and struck between the parties. The payment to Peck of a sitare, supposed to belong to him, is no evidence of a promise, that the defendant would pay the sum he had considered as due to the plaintiff. The settlement, if there was one, must bave been obligatory on the plaintiff; but of this there is no pretence. No act has taken place, which precludes the defendant from insisting, that the statement made by him was founded in mistake; and that it is of no effect, because it cannot bind the plaintiff, and therefore, obliges neither party. I do not assert there is an absolute necessity, that the account should be signed, to vender it a stated account; but, at least, there must be something equivalent. Perhaps, if the defendant had made out copies of the account as stated by him, and having been delivered by the parties, they had long retained them, with-t cut manifesting any objection, this might have a.mounted to a sufficient adjustment. Wittes v. Jernegan, 2 Aik. 252. But, in this case, no such fact exists. When the case is critically examined, it presents this result: that originally, the transaction authorized an action of account only; and that no settlement has been liad ; no balance struck; no promise made.

Courts, by reason of a mode of practice, which rendered the action of account tedious and expensive, have greatly leaned against it. The difficulty, however, was not intrinsic, but adventitious. The evils predicated of this action, have been surmounted, by the simplicity of our practice; and it is neither more objectionable, on the ground of expense, or protracted litigation, than any other action. Between co-partners and tenants in common, it is, for the most part, the only suit in which justice can be administered. The parties are admitted to their oaths j and this is often indispensable to the fair adjustment of their accounts. For the examination of a long and intricate account, a jury is a tribunal very incompetent. For these reasons it is, that co-partners have right to the appointment of auditors, before whom they can produce their accounts and vouchers, be heard on oath, and be indulged with a minute and patient examination of their mutual claims. lie who would deprive his co-partner of this privihge, should be prepared, beyond all reasonable exception, to establish a definite demand, from which it is unquestionable, that entire justice will be administered. This the plaintiff has not done.

Govzd, J.

The question, in this case, lies within a narrow compass. For two reasons, either of which is, in my judgment, decisive, the action cannot be supported. The plaintiff’s demand arises out of a partnership concern between himself, the defendant, and two other parties. For as to the adventure, of the avails of which the plaintiff claims a recovery of his share, all the parties concerned were strictly j partners. But, in the first place, an action of assumpsit will j not lie, between partners, for a balance due upon their partnership-account, unless the account has been previously liqui ■; dated, and a balance struck. But between these parties, there has been no such liquidation. The settlement bet ween i lie defendant and another of the partners, is a fact, as foreign :o the merits of this ease, as any other supposabie transartion, between other parties. These reasons alone are conclusive, against the present action.

But there is another consideration, equally decisive, that no action at law — not even the action of account, could be maintained, upon the facts stated in the motion. There were four distinct parties, interested as partners, in this adventure. But an action of account will not lie, (and much less will any other action at law,) for the settlement of company-accounts, where the number of partners exceeds two. This point was determined, by the superior court, several years ago, in the case of Boardman v. Seymour ; in which one of three partners in trade brought an action of account, against one of the others : And that determination has been since followed, in one or two other cases. The principle of these decisions is a very obvious and satisfactory one, viz. that where there are more than two partners, it is impossible to liquidate their partnership-account, in an action at law. If, for example, the number is but three ; two of them cannot join, as plaintiffs, against the other : because two cannot have a joint right of recovery against the third. And one of them cannot recover against the «other two, as co-defendants ; because there is no joint liability. Neither can one of the three recover against either of the others, singly : since the mutual claims of any two of them cannot be completely adjusted, without deciding upon those of the third. But a decision between two, would not be everf evidence, for, or against, the other ; nor can his rights be tried, in a suit, to which he is not a party. And even if it were possible, to adjust a final balance, as between two of three partners, without adverting to the state of the account, between themselves and the third ; still the entire concern could not be settled, in this manner, by less than three suits. And in a case, in which the number of partners is large, it would require, in this mode of proceeding, no inconsiderable skill, in the science of numbers, to ascertain, how many suits would be necessary, to liquidate the whole partnership-account. It is certain, that action might succeed action, almost interminably, before that end could be attained. Indeed, it would be practically unattainable. The only mode, in which a partnership-concern can be settled by suit, is that, in which all the partners can be made parties. And ?liis can be done, where there are more than two partners. enly in a court of equity. Before that court, aii the partners, however numerous, may be brought, by a single suit; and such an inquiry may there be liad, and such relief decreed, as may be necessary, to settle the whole concern. But by no other proceeding, known in our law, can this result be brought about. I am, therefore, clearly of opinion, that, upon the facts stated in the motion, the present action cannot be maintained.

The other Judges were of the same opinion, except Chap-max, J. who gave no opinion, having been absent when the case was argued.

New trial to be granted.


author: Swift, Ch. J. Hosmeb, J.

text:
    Bunnel against Pinto :
    in error.
    THIS was an action of book debt, brought by Bmnel against Pinto. The defendant pleaded in bar, that since the plaintiff’s account accrued, the parties mutually submitted their respective accounts to the award of Ward Mxvater and Horace Beach, with power to appoint an umpire, by a written submission, in these words ; “ We the subscribers, having a difficulty in settling our accounts, and being unwilling to have it decided by a course of law, have agreed, and do hereby agree, to leave our respective accounts with Ward Jlixua-ter and Horace Beach, and their decision thereon, in case they agree, we bind ourselves to abide by ; and in case they cannot agree, they shall have the privilege of calling on a third person, and the decision of the third, we agree to abide by. Nexv-Haven, Aih Novembers 1815. *
    [Signed.] Warham Bunnel.

      William Pinto.*3

    That the arbitrators, after having fully heard the parties, on the 19th of January, 1816, made and published their award in the premises, in conformity to the submission, by which they determined, that there was due from the defendant to the plaintiff, the sum of 66 dollars, 49 cents ; which award was as follows : “ The subscribers, having examined the accounts of Warham Bunnel and Jt iUiam Pinto, against' each other, find, and arc of opinion, that there is due from said Pinto to said Bunnel, the sum of 66 dollars, 49 cents.; but have not taken into the account, Bunnel’s account of disbursements against the brig Despatch, thinking that that ought to be presented by the master of the brig.

      Where j£- and li. made a submission of their respective account*, which were awarded upon, and the award was complied with ; and Ji. after-wards brought an action of book debt, claiming a right to recover for certain articles charged on book, which accrued before the submission, but which were not in fact awarded upon ; it was held, that the “ ac--h the award counts” embraced by the submission constituted an indivisible claim, to whi< iras a complete bar.

      Hartford,

    June, 1818.
    [Signed.] Wqrd Mwater.

      Horace Beach.”

    That the defendant, immediately thereafter, and before the commencement of the present action, paid and satisfied to the plaintiff, the amount specified in the award, which the plaintiff accepted.
    The plaintiff replied, that this action was brought to re cover certain charges on the plaintiff’s book, amounting to the sum of 40 dollars, in which the defendant was, at the dale of the submission, and still is, indebted to the plaintiff j which charges, though included in the submission, were not included in the award of the arbitrators, and were not considered, awarded upon, or finally decidéd by themj arid to recover certain other charges on book, amounting to 460 dollars, in which the defendant is, and at the date of the plaintiff’s writ, was, justly indebted to the plaintiff; which last mentioned charges, were included, neither in the submission, nor in the award.
    To this replication there was a demurrer; and the superior court adjudged it insufficient. To reverse that judg-mentj the present writ of error was brought.

      Staples and L, E. WaleSi for the plaintiff,
    Contended, \ 1.That the plea in bar is bad, as it does not expressly 1 aver, that the charges for which this action is brought, were t included in the submission. There is no sufficient averment, | that the submission and award, and this action, were for the | same matter, cause and thing. 1
    2. That the award, on the face of it, is not final. It ap- I pears, that the plaintiff exhibited a bill of disbursements for Í the brig Despatch; which the arbitrators did not take into I account — i. e. they neither allowed, nor disallowed it. I
    3. That the plaintiff may aver, as he has done in his rep- I lication, that the charges for which this action is brought, I «ere not included in tlie award, and were not considered or acted upon, by the arbitrators. Ravee v. Fanner, 4 Term Rep. 146. Golightly v. Jellieoe, Id. 147. n. Webster v. Lte, ) Mass. Rep. 834. Seddon ⅜ al. v. Tutop, 6 Term Rep. 607. Stevens v. Payne, 2 Root 83.

      Daggett and JV*. Smith, for the defendant.
    They cited Park v. Halsey, 2 Root 100. Wheeler v. Van Houlen, 12 Johns. Rep. 311. Smith v. Johnson, 15 East 213.
   Swift, Ch. J.

In this case, it appears, that the parties made a submission of their respective accounts, which were awarded upon. The plaintiff, in this action on book, claims, that he has a right to recover for certain articles charged on book, which accrued before the submission, but which were not actually laid before the arbitrators and awarded upon. It is clear, that the word <⅛ accounts” will include all book accounts, so that the question is, whether, when a man has made a submission which will comprehend book accounts, he can exhibit to the arbitrators a part of his books to be adjusted, and then, when an award is regularly made, bring an action of book debt to recover the articles omitted ? No case can be found to warrant this doctrine. A book account is an indivisible claim, as much as a promissory note ; and a party may as well pretend, that he kept back a part of his claim on a note, and then, after the award, bring a suit on the note, as he can in the case of a book account. If this should be allowed, men could never know whether their books were settled by arbitrament. One party might keep back a part of his account; and then, in an action to recover it, there would not only be a question whether he had a legal claim ; but also, whether it had been settled by the aw ard. This would be to make arbitrations an instrument, not to diminish, but to increase litigation. An award is as conclusive, on the matter included in the submission, as a judgment; and no one will say, that a second action can be brought on book, on pretence that the charges claimed were omitted in the former action.

The authorities produced by the plaintiff, relate to distinct claims or matters in demand, and are not applicable to the present question : but the case of Wheeler v. Van Houten, 12 Johns. Rep. 311. is directly in point, to shew that this actio» is not sustainable.

It has been insisted on, that there is no averment in the plea, that this action is for the same matter, cause and thing, as the submission. But it is alleged, that the submission was subsequent to the time when the account shewn on oyer accrued, which is equivalent $ for this necessarily includes the same matter, cause and thing, for which this action is brought.

As to that part of the award which respects Eunnel’s account for disbursements against the brig Despatch, it is a, direct decision of the arbitrators, to disallow and reject the claims, and notan exception of it from their award.

Hosmeb, J.

The validity of the defendant's plea depends on the question, whether a submission of the respective accounts of the parties, followed by an award of the arbitrators, is a bar to an item of account pre-existing the submission and award ?

The purpose of the parties in submitting, is, (o have a final determination of every matter comprehended within the submission. Great hardships might result from a restriction of the award to the matters actually brought before the arbitrators, if the reference comprehended other demands. They might be voluntarily withheld by the party ; and if this ■were a reason to consider them as not affected by the award, one important object of the submission w ould be defeated. In the present case, the parties submitting intended, that their account should be finally adjusted. If we were to hold, that the subject of the plaintiff’s suit existed in force, because it was not brought before the arbitrators, the main purpose of the submission would be frustrated. Such a determination would facilitate fraud, and sanction negligence.

The cases of Ravee v. Farmer, and Golightly v. Jellicoe, 4 Term Rep. 146, 147. do not sustain the ground assumed by the plaintiff! They merely decided, that a submission “ of all matters of difference,” does not comprise a matter not to difference, which was brought before the arbitrator. The expression of «* mailers in difference,” the court, probably, construed as synonimous with matters in actual controversy. Of this opinion was the Court in Webster v. Lee, 5 Mass. Rep. 334. anil the submission of all demands, they considered as co-extensive. But, none of these decisions apply to the present case, in which the submission was of all accounts ; comprehending, beyond all question, the subject matter of the plaintiff's action. The case of Seddon v. Tutop, 6 Term Rep. 607. has no bearing on the question before us. A person is not bound, in an action at law, to unife different causes of action; and if he has done it, he may support one count, and omit to give evidence in relation to another. But, if persons will blend in one submission, numerous and distinct causes of action, they have agreed that the award shall be conclusive upon them.

In the case of Wheeler v. Van Houten, 12 Johns. Rep. 311. it was determined, on a submission of all demands, that a demand, omitted by mistake to be brought before the arbitrators, was concluded by the award. To the same effect is the decision in Smith v. Johnson, 15 East 213. In this case, it was adjudged, that where all matters in difference are referred, the party, as to every matter included within the subject of such reference, ought to come prepared with hie whole case.” These determinations have my entire concurrence, and of consequence, in the decision complained of, I am of opinion, that there is no error.

The other Judges were of the same opinion, except Gouid, J. who gave no opinion, having been absent, on account of indisposition, when the case was argued.

Judgment affirmed.