Carnwright v. Gray

• Decision Date: 02 June 1891
• Parties: CARNWRIGHT v. GRAY et al.
• Court: New York Court of Appeals Court of Appeals

127 N.Y. 92

27 N.E. 835

CARNWRIGHT

v.GRAY et al.

Court of Appeals of New York, Second Division.

June 2, 1891.

Appeal from a judgment of the general term of the third judicial department, which affirmed a judgment entered upon a verdict. The action was brought to recover upon a written instrument, of which the following is a copy: ‘Quarryville, September 2, 1871. Thirty days after death I promise to pay to Cornelius Carnwright fifteen hundred dollars, with interest. SAMUEL P. FRELIGN.’ The plaintiff gave no evidence of the transaction out of which the instrument arose, and none of the actual consideration thereof, but, having offered testimony tending to prove the genuineness of the maker's signature, put the note in evidence, and rested his case.

FOLLETT, C. J., and VANN, J., dissenting.

Peter Cantine and John J. Linson, for appellants.

F. L. Westbrook and J. Newton Fiero, for respondent.

BROWN, J., ( after stating the facts as above.)

When the plaintiff rested his case, and again at the close of the testimony, the defendants moved to dismiss the complaint upon the ground that no proof had been given that the instrument sued upon had any consideration. These motions were denied, and the court instructed the jury that the instrument was a promissory note, and imported a consideration, and that the burden rested upon the defendants to show that it was without a consideration. The exceptions to these rulings present the principal question argued upon this appeal. The statute of this state in reference to promissory notes provides as follows, (1 Rev. St. 768:) ‘Section 1. All notes in writing, made and signed by any person, whereby he shall promise to pay to any other person, or his order, or to the order of any other person, or unto the bearer, any sum of money therein mentioned, shall be due and payable as therein expressed; and shall have the same effect, and be negotiable in like manner, as inland bills of exchange, according to the custom of merchants.’ ‘Sec. 4. The payees and indorsees of every such note payable to them or their order, and the holders of every such note payable to bearer, may maintain actions for the sums of money therein mentioned against the makers and indorsers of the same, respectively, in like manner as in cases of inland bills of exchange, and not otherwise.’ Our statute is a substantial re-enactment of the statute of Anne, (3 & 4 Anne, c. 9,) which provided that ‘all notes signed by a person promising to pay to another, his, her, or their order, or to bearer,’ should be construed to be by virtue thereof due and payable to any such person to whom the same is made payable, etc. This statute was held by the courts of England to include within its terms a non-negotiable note. Smith v. Kendall, 6 Term R. [127 N.Y. 97]123; Burchell v. Slocock, 2 Ld. Raym. 1545; 3 Kent, Comm. 77. In the case first cited Lord KENYON said: ‘A note may be made payable to A. or bearer, A. or order, or to A. only.’ Similar decisions were made by the courts of this state under our own statute. Downing v. Backenstoes, 3 Caines, 137; President v. Hurtin, 9 Johns. 217;Kimball v. Huntington, 10 Wend. 675;Hall v. Farmer, 5 Denio, 484. In Downing v. Backenstoes a non-negotiable note was declared on as within the statute and the defendant demurred on the ground that the declaration did not allege the transaction and consideration upon which the note was given. The court gave judgment for the plaintiff, saying: ‘The very point was settled in Green v. Long, April term, 1798, in conformity to the adjudications in Westminster hall.’ In President v. Hurtin it was said: ‘The note set forth is a good promissory note within the statute, though it has no words ‘bearer or order.’ This is the established English law, and the same rule is recognized by this court.' In Kimball v. Huntington the action was upon a duebill in this form: ‘Due Kimball & Kenston three hundred and twenty-five dollars, payable on demand.’ Judge NELSON said: ‘The instrument is a promissory note within the statute. Neither the acknowledgment of value received nor negotiable words are essential to bring it within the statute.’ See, also Carver v. Hayes, 47 Me. 257; Franklin v. March, 16 N. H. 364. No authority is cited in the courts of this state or of England holding that a non-negotiable note is not within the terms of the laws cited, and we are of the opinion that the language of our statute includes a note payable to a person without words of negotiability. The instrument sued upon being, therefore, a promissory note within the statute of this state, it follows that it imports a consideration. By the express terms of the statute the sum of money therein mentioned is declared to be ‘due and payable, as therein expressed.’ That it is ‘due and payable’ according to its terms is the legal conclusion which the court must draw from the instrument itself. A valid contract is thus declared to exist, and of course a consideration must be implied. Hence ‘value received’ need not appear on the face of the note, as those words express only what the law implies. Hatch v. Trayes, 11 Adol. & E. 702; Hall v. Farmer, 5 Denio, 484. The effect of laws which make promissory notes negotiable, or which authorize actions of debt upon them, though non-negotiable, is to take them out of the common-law rule which requires that every contract must be shown by the party who sues upon it to be supported by a consideration, and enables the holder to maintain an action thereon without alleging or proving a consideration. In other words, a consideration is implied from the character of the instrument. Peasley v. Boatwright, 2 Leigh, 195; Hatch v. Trayes, supra. The English statute was enacted to settle the controversy that prevailed, whether, under the customs of merchants, promissory notes were negotiable. They were thereby declared to be assignable or indorsable over in the same manner as inland bills of exchange were according to the customs of...