Chalmers, Jones & Co. v. M'Murdo

• Citation: 19 Va. 252
• Parties: Chalmers, Jones & Co. v. M'Murdo
• Decision Date: 27 November 1816
• Court: Virginia Supreme Court

19 Va. 252

Chalmers, Jones & Co. v. M'Murdo

Supreme Court of Virginia

November 27, 1816

[Syllabus Material]

The Appellee exhibited his Bill on the 29th May 1811, in the Supreme Court of Chancery for the Richmond District, against the Appellants, with Chepmel, La Serre & Co. John Bell surviving partner of John and William Bell, and Conway and Fortescue Whittle, defendants; setting forth, that the defendants, Conway and Fortescue Whittle, in payment of a Debt due to the plaintiff, endorsed to him two notes negotiable at the Office of Discount and Deposit of the Bank of Virginia at Petersburg, one for $ 1500, the other for $ 1063,55, executed by the defendants Chepmel, La Serre & Co. and endorsed by John and William Bell, and Chalmers, Jones &amp Co.; that, " on receipt of them, without notice of any equitable circumstances which any of the said parties, except the said John and William Bell, might have against any others," the plaintiff applied for payment, first at the Counting House of Chepmel, La Serre & Co., (the makers of the Notes,) but found that they had failed and left the country; next to John and William Bell, but they replied that Chalmers, Jones & Co., exclusively, ought to pay the said Notes, because they averred that the same were executed by Chepmel, La Serre & Co. as a payment from them to Conway and Fortescue Whittle, to whom they were indebted, and that, immediately after being so executed, they were endorsed by Chalmers, Jones & Co., and, with the endorsement of the latter on them, (and the said John and Wm. Bell had previously, on behalf of the said Whittles, insisted on a good endorser,) they were delivered to the said John and Wm. Bell, who, having long acted as the friends of the said Conway and Fortescue Whittle in Petersburg, and having the highest opinion of their credit and punctuality, as well as of their honor, did not except to the circumstance of the said Notes being made payable to themselves, but, indiscreetly, as they alleged, endorsed their names above those of Chalmers, Jones and Co., and remitted the said Notes to the said Whittles, on their positive promise that they would never consider the said John and William Bell, liable in consequence of such endorsement. Lastly, the plaintiffs applied to Chalmers, Jones and Co. who did not admit the statement of John and William Bell to be correct.

On the ground that Chepmel, La Serre & Co. might be sued in equity as absent defendants, and to avoid circuity of action, the plaintiff prayed the Court to fix the debt on the person in truth first responsible for it.

The Bill was regularly taken for confessed as to the defendants Chepmel, La Serre & Co. and Conway and Fortescue Whittle.

The defendant Bell answered, that John and Wm. Bell, being requested by Conway and Fortescue Whittle to collect a Debt due them from Chepmel, La Serre & Co., applied to the latter for the same; when it was agreed that the said debtors should give their negotiable notes, with one or more approved endorsers; and, accordingly, the next day, they sent the two Notes in question, with the endorsement of Chalmers, Jones and Co. thereupon, but made payable to John and Wm. Bell; that this defendant disapproved of their being made so payable, and sent them back, to be executed anew, and made payable to Chalmers, Jones & Co., by whom they might then be endorsed; but Chepmel, La Serre & Co. returned them afterwards to this defendant, assuring him " that they must be taken as they were, or that none could be obtained, for they could not procure any others, nor these in any other form:" that this defendant then received the Notes, and wrote the name of " John and Wm. Bell" over that of " Chalmers, Jones and Co." in order to make them negotiable, without consideration, and purely to oblige Conway and Fortescue Whittle; of which the said Whittles, being apprised, assured him that John and William Bell should never be held by them responsible, or words to that purport.

Chalmers, Jones & Co. also answered, and admitted that they were in point of time the first endorsers, but insisted that, in point of contract, and in the very nature of the transaction, John and William Bell, the payees, were obliged to be the first endorsers, and themselves only second endorsers; and, but for their knowing that John and William Bell must endorse before them, they would not have endorsed at all.

The Notes were the only exhibits, and no depositions were taken in the cause.

Chancellor Taylor, " being of opinion that, in a Court of Equity, a remote endorser of a Promissory Note may be made liable, in the first instance, under proper circumstances, to the...