Farmers' Bank v. Vanmeter
| Citation | 25 Va. 553 |
| Parties | Farmers' Bank, & c. v. Vanmeter |
| Decision Date | 28 November 1826 |
| Court | Virginia Supreme Court |
Appeal from the Staunton Chancery Court. The case was this:
William Lane, drew three drafts on Bryan Hampson & Co. and prevailed on William Vanmeter, James Marshall, and W. H. Triplett to endorse the same, in the order in which their names are here set down. These drafts so endorsed, were discounted at the Bank, and they were presented to Bryan Hampson & Co., noted for non-acceptance, and protested for non-payment.
The Bank brought suits against the drawer and endorsers, and took judgment against Lane and Vanmeter by confession. Lane proved insolvent, and Vanmeter filed a bill to enjoin the said judgments. The Bank, Isaac Baker the Cashier, James M Marshall and William H. Triplett, were made defendants.
The bill states four grounds of relief: 1. That the drafts were drawn and endorsed, purely for the accommodation of Lane, and for the purpose of raising money by discounting them at Bank and therefore, all the endorsers are jointly bound to contribute their proportion in the event of Lane's insolvency. 2. That the Bank had made a fraudulent agreement with Marshall, one of the endorsers, to proceed against Vanmeter alone, upon the assurance of the said Marshall, that he would ultimately see the money paid, if it could not be obtained from Vanmeter. 3. That the judgments were entered by confession, without any authority given by Vanmeter for that purpose; and if they had not been so entered, he could have defeated the plaintiff at law. 4. That notice of protest was not given to Vanmeter or any of the endorsers.
The Cashier of the Bank answered, denying that the judgments were confessed without authority, & c.
Marshall averred in his answer that he had no suspicion, when he endorsed the bills, that it was not intended that they should be paid when at maturity, and that he was assured, that Lane had flour in Alexandria, or on the road, amply sufficient to discharge the said bills: that he would not have endorsed them, if he had not believed that they would be paid when due, inevitable accidents only excepted. As to the charge of collusion, he admits the statement in the bill, to be substantially true, and denies that there is any thing illegal in it.
The injunction was granted; and at a subsequent day, on a motion to dissolve, the Court over-ruled the motion, and the defendants appealed.
Order reversed and injunction dissolved.
Nicholas for the appellants.
No Counsel, for the appellee.
Nicholas having stated the case, was stopped by the Court, and informed that no argument was required on that side of the question.
The object of this suit was to enjoin three judgments recovered by Baker for the use of the Farmers' Bank, against the plaintiff and Lane. These judgments were entered as confessed by those defendants, and were so entered by some mistake; Vanmeter never having employed counsel, or authorized the confession of judgments.
There are several grounds for relief asserted by the appellee. The first is, that such judgments could not have been had, or if had, would have been erroneous and reversible, if they had not been entered as by confession; the actions being joint against the drawer and endorsers of an inland bill of exchange, not upon its face negotiable at any of the chartered Banks of Virginia. This objection to the form of the actions, and the fact that the judgments would have been erroneous and reversible, if they had not been entered by mistake, as confessed, can have no weight in a Court of Equity. There the rule is, that whosoever asks equity must do it, as a condition of relief; and a judgment at law, however obtained, no matter by what fraud, accident or surprise, is allowed to stand as a security for what is justly due, whether that be a part or the whole of the debt recovered. The enquiry in a Court of Equity is never, whether the judgment is erroneous or unduly obtained; but whether it be for a debt justly due or not. If Vanmeter was responsible for these debts, in actions brought against him individually, he cannot complain in a Court of Equity, that he is injured by judgments rendered against him jointly with another.
The next objection taken to these judgments, is on the merits. The plaintiff alleges that the three endorsers, himself, Marshall and Triplett, were joint sureties, by virtue of their endorsement of the bills drawn by Lane, and discounted at the Bank for Lane's accommodation: that each was bound to bear a due proportion of the loss, Lane being insolvent; and that the Bank, who is not charged with notice of that fact, had concluded with Marshall to throw the whole burthen upon him, by dismissing the suit as to Marshall, upon his agreeing to hold himself bound for the debts, and to pay them immediately, if Lane and Vanmeter should be unable to pay.
If all this were true, and the endorsers were mutually bound to each other for contribution, and the officers of the Bank had full knowledge of the facts, they would have been guilty of no fraud or wrong to the plaintiff, by making such an arrangement with Marshall, and carrying it into effect. The drawer and endorsers were severally liable to the Bank for the whole amount of the bills in solido. The Bank had a right to pursue any one or more, or all, in several actions; and to have coerced the payment of the whole from either of them. The legal or equitable rights of securities to contribution among themselves, can never affect the rights of the creditor, or bind him to proceed against each for his proportion of the debt: unless, indeed, were the obligations of the parties are in the form of a joint contract, in which case, all must be sued together, but either may be compelled by execution to pay the whole.
The remaining objection is also on the merits.
The bills were presented before they were due, and the drawee refused to accept; and Vanmeter alleges that no notice was given to him, he being the first endorser, either of the non-acceptance, or non-payment. This is probably true, and in the present stage of the cause, must be taken to be so. If he was entitled to notice, he was not liable to the claim of the Bank, and would be entitled to relief; for, he was precluded from making this defence at law, by the mistaken entry of judgments by confession.
The facts, upon which the question, whether Vanmeter was or was not entitled to notice, are stated by himself in his bill. He says, that the bills were drawn and endorsed for the accommodation of Lane, the drawer; and for the purpose of getting them discounted at the Bank; that no consideration, whatever, passed between the parties, or any of them; and that there was no expectation that they would be paid by the drawee.
It is a general rule, that the drawer or endorser of a bill of exchange, is discharged from responsibility, unless he has due notice of the dishonor of the bill, by non-acceptance or non-payment. This notice was required originally, for the purpose of enabling the party to take promptly such measures for his security, as might be in his power; and it seems to have been originally required of him, if he complained of the want of notice, to prove, that for the want of it, he had suffered some injury. The modern doctrine, however, is perfectly well settled, that the law implies an injury, from a want of due notice; and this presumption is so strong, that in order to repel it, proof is required to shew that it was impossible for the party to suffer any damage or inconvenience. Thus, in the case of a drawer; if the bill be drawn without funds in the hands of the drawee, and the drawer had no reason to expect that the bill would be accepted; this is considered as a case in which it is shewn that no possible prejudice can result to the drawer from the want of notice; since he knew, when he drew the bill, that it would devolve on him to take it up, as well without as with notice of its dishonor; and having no reason to expect the bill to be accepted, it cannot be supposed that he would make any arrangements for putting funds in the hands of the drawee to take it up. But,...
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