George Phillips, Plaintiff In Error v. John Preston, Defendant In Error

• Decision Date: 01 January 1847
• Citation: 5 How. 278,12 L.Ed. 152,46 U.S. 278
• Parties: GEORGE W. PHILLIPS, PLAINTIFF IN ERROR, v. JOHN S. PRESTON, DEFENDANT IN ERROR
• Court: U.S. Supreme Court

46 U.S. 278

5 How. 278

12 L.Ed. 152

GEORGE W. PHILLIPS, PLAINTIFF IN ERROR, v. JOHN S. PRESTON, DEFENDANT IN ERROR.

January Term, 1847

THIS case was brought up, by writ of error, from the Circuit Court of the United States for the Eastern District of Louisiana.

It was a claim advanced by Preston, the first indorser upon certain promissory notes, that Phillips, the second indorser, should pay one half thereof, by virtue of a special agreement between them.

The facts in the case were these.

On the 15th of March, 1836, Sosthain Allain sold to Robert R. Barrow sundry pieces of property in Louisiana, for the sum of $110,700, payable as follows, viz.:——

1837, March 1, $16,921 27

1838, March 1, 18,028 26

1839, March 1, 19,135 25

1840, March 1, $20,242 20

1841, March 1, 21,349 23

1842, March 1, 22,456 22

1843, March 1, 23,563 21

For the security of the notes given for the above payments, the property was mortgaged.

On the 17th of March, 1837, Barrow sold the above property (with a slight addition) to Samuel John Carr, for $141,695.68, payable as follows:——

Cash,...................... $16,921 27

1838, March 1,............... 18,028 26

1839, March 1,............... 19,135 25

1840, March 1,............... 20,242 24

1841, March 1,............... 21,349 23

1842, March 1,............... 22,456 22

1843, March 1,............... 23,563 21

------------

$141,695 68

The act of sale, which was signed by Barrow and Carr, and executed before Louis T. Caire, a notary public, contained, amongst other things, the following provisions, viz.:——

1. After reciting the cash payment, it proceeded thus:——'And in payment of the balance, the said purchaser handed over to me, the undersigned notary, six promissory notes, bearing even date herewith, subscribed by him, to the order [of] John S. Preston, indorsed by him, the said John S. Preston, domiciliated in the parish of Ascension, as first indorser, and by George W. Phillips, domiciliated in the parish of Assumption, as second indorser, it being understood that, although each of the indorsers is responsible for the whole amount of said notes, they are between themselves equally responsible; said notes have been made payable at the domicile of the Union Bank of Louisiana, and their amount and terms of payment are as follows, viz.' (then followed an enumeration of the notes as above).

2. An agreement that the property should stand mortgaged.

3. An agreement that the last-mentioned notes should be substituted, if possible, for those given by Barrow to Allain, and if it

should not be possible to do so, then that payments made upon the last set of notes should be applied to the first set, as they became due.

The notes given by Carr to Barrow were indorsed by John S. Preston, as the first indorser, and by George W. Phillips, as the second indorser.

On the 1st of March, 1838, the first note became due, and was not paid by Carr. But it appeared by the record not to have been protested until the 30th of March, 1839.

On the 1st of March, 1839, another note became due, which appears to have been protested in proper time.

On the 5th of April, 1839, Barrow filed a petition in the District Court of the Fourth Judicial District of the State of Louisiana (a State court), representing the above-mentioned facts, and stating further, that he had made the necessary payments and arrangements with Allain, respecting the notes due in 1837, 1838, 1839, and praying for a sale of the property.

On the 1st of March, 1840, another note fell due, which was not paid, and was protested.

On the 15th of August, 1840, the property was sold in block by the sheriff to Isaac T. Preston, for his brother, John S. Preston, for the sum of $67,500, the purchaser assuming the payment of the notes due in 1841, 1842, and 1843.

On the 20th of August, 1840, the sheriff executed a deed for the property to John S. Preston.

On the 17th of February, 1841, Preston, calling himself a citizen of South Carolina, filed a petition in the Circuit Court of the United States against Phillips, a citizen of Louisiana, alleging that, by virtue of the agreement between them, Phillips was bound to pay to him the one half of all that he had paid, being $28,702.87, with legal interest on $9,014.13 from the 4th day of March, 1838, and like interest on $9,567.62 1/2 from the 4th day of March, 1839. And on $10,121, from the 4th day of March, 1840, with half the costs of protests.

On the 26th of February, 1841, the counsel of Phillips filed an exception, being a plea to the jurisdiction of the court, upon the ground that Barrow was the assignor of the notes to Preston, and that Barrow, being a citizen of the same State with Phillips, was incapable of suing him in the United States court.

On the 20th of April, 1841, the court overruled this exception, and Phillips filed an answer, denying 'all and singular the allegations contained in the plaintiff's petition, and particularly that he ever promised or undertook to be responsible on the notes described in said petition, in any other capacity except as second indorser and after and in default of the plaintiff, or that the said notes ever were duly protested, and notice given to this defendant.'

In April, 1841, the cause came up for hearing. On the trial the following testimony was filed.

Testimony taken by Consent, this April 23d, 1841.

John S. Preston v. George W. Phillips.

The testimony of Robert R. Barrow, a witness for the plaintiff, who, being duly sworn, deposeth and saith, being asked by the plaintiff what he knows in relation to an agreement between John S. Preston and George W. Phillips, in relation to their indorsement of certain notes given by Samuel J. Carr to him, on payment of a plantation and slaves in Point Coupee, purchased from him by said Carr, about the 17th of March, 1837.

(The counsel of the defendant, Seth Barton, Esq., objecting to the above question, and reserving all legal exceptions.)

The witness says, that he was present at the time the notes were signed, about the 17th March, 1837. Samuel J. Carr, the plaintiff, and defendant, with deponent, met by appointment at the time of the sale, at Caire's office, before whom the act was passed; the act was already prepared when the aforesaid parties met, it having been prepared by the notary, under the directions of witness and said Carr; the notes were also drawn up and ready to be signed, under Carr and witness's directions and instructions; the notes were then handed to the plaintiff to indorse; when about to sign, Mr. Preston observed that he thought those notes were to have been drawn to the order of Phillips, the defendant. Mr. Carr replied, that he did not know that it would make any difference. And thereupon Colonel Preston turned round, and, addressing himself to Colonel Phillips, the defendant, said he supposed it made no difference, and said he wished it particularly understood between them, that in case Carr should fail to pay the notes, and the indorsers compelled to pay them, that he (Phillips) and Preston should be equally bound, and share alike in the loss, and that he, Preston, wished it so stated in the act. After this conversation, Colonel Preston turned to Mr. Caire, the notary, and remarked, that he wished it noted in the act, that the indorsers should be bound alike on failure of Carr. The notary then put down on paper the exact words that Colonel Preston dictated; all the parties were near each other, and participating more or less in the conversation. After this, Colonel Preston and Colonel Phillips indorsed the notes and handed them over to the notary; Colonel Preston indorsed first, and Colonel Phillips next; and instructions were given to the notary, Caire, to draw up a new act, inserting the clause aforesaid, as regards the equal liability of the indorsers; and then, to identify the notes with the act, the clause was added in the new act, and witness, when his attention was called to it by Mr. Caire, objected to its insertion, because, as he then thought, it made the indorsers liable to him for only their half. Mr. Caire called upon an attorney at law, whose name witness does not remember, to explain it, and thereupon witness was satisfied that it did not affect him, but only

related to the respective liabilities of the indorsers. The act was not signed at the time the notes were given, but was signed at a different time on that day, or the day next, but he cannot remember. Witness recollects the conversation very distinctly, as it was impressed on his mind at the time, and has frequently thought of it since.

Being shown the copy of the act annexed to the petition, and the clause at the top of the page, says, they are the same referred to by him. The three notes marked A, B, and C, filed with this deposition, are part of the consideration of the sale; Colonel Preston took up three of the notes, A, B, and C, and paid them after protest, interest and all charges, which payment was made before this suit was instituted. The tract of land in West Feliciana, mortgaged to secure the payment of these notes, was seized and sold to pay prior mortgages of said Carr, and consequently there was nothing to come from that land to pay this debt of Carr's, for the plantation sold as aforesaid; this tract was woodland; Colonel Preston has paid the notes which have matured, and has assumed the balance due, he having purchased in the property mortgaged, to secure the payment of the notes aforesaid.

The defendant, by S. Barton, his attorney, objects to the whole of the foregoing deposition of the witness, as illegal and incompetent; and specially to all such parts of it as are hearsay or secondary proof; and specially, also, to all such parts of it as go to vary, or contradict, or explain the written testimony to which the witness refers; and particularly such parts as tend to prove any thing against or beyond the authentic act of sale, on file in...