Ives v. Bosley

• Decision Date: 28 February 1872
• Citation: 35 Md. 262
• Parties: WILLIAM M. IVES v. TALBOT BOSLEY.
• Court: Maryland Court of Appeals

35 Md. 262

WILLIAM M. IVES v. TALBOT BOSLEY.

Court of Appeals of Maryland

February 28, 1872

APPEAL from the Court of Common Pleas.

The nature of the case, together with the first exception taken by the defendant in the Court below, are sufficiently stated in the opinion of this Court.

Second Exception.--The testimony on both sides being closed, the plaintiff offered four prayers--the first, third and fourth of which were rejected; the second was granted. The objection to this prayer was abandoned at the argument.

The defendant offered five prayers--the first and second of which were granted; the following were rejected:

3. If the jury find from the evidence that the defendant placed his name on the back of the note sued on, as endorser, and that the plaintiff accepted him as security for the maker of said note, in the capacity of endorser on said note, then their verdict must be for the defendant, unless they find that payment of said note was duly demanded of the maker at maturity, and the same was not paid, and that due notice by protest was given to the defendant.

4. If the jury find from the evidence that the defendant placed his name upon the back of the note sued on, as endorser, then their verdict must be for the defendant, unless they find that payment of said note was duly demanded of the maker at maturity, and the same was not paid, and that due notice by protest was given to the defendant.

5. If the jury find from the evidence that the defendant placed his name on the back of the note sued on in this case, as security for Elisha J. Guyton, the maker of said note, and that at the maturity of said note the said Guyton offered to pay the same, and that the plaintiff did not accept the said payment, but did accept from the said Guyton the interest on said note, at eight per cent. per annum, and in consideration of the payment thereof, and of the payment of the same rate of interest for another year, agreed with the said Guyton that he should retain the money for which said promissory note had been given, for another year, then their verdict must be for the defendant.

The Court (GAREY, J.,) gave the following additional instruction to the jury:

If the jury shall find from the evidence that E. J. Guyton wished to obtain a loan from the plaintiff of one thousand dollars, and offered to give him a promissory note for the same, endorsed by a certain James S. Suter and Charles T. Guyton, and that said E. J. Guyton did not obtain said endorsements, but returned with the promissory note offered in evidence, with all the signatures now found thereon, including the name of the defendant, (if they find that the defendant had before that time signed his said name thereon;) and if they further find that said note was then passed to the plaintiff for an advance or loan, then made thereon, of one thousand dollars then the defendant is bound as a maker of said promissory note, and the plaintiff is entitled to recover.

The defendant excepted to the granting of the said instruction and to the rejection of his third, fourth and fifth prayers and to the granting of the second prayer of the plaintiff. Judgment for the plaintiff. The defendant appealed.

The cause was argued before BARTOL, C.J., BRENT, ALVEY and ROBINSON, J.

Thomas S. Baer and John T. McGlone, for the appellant.

The testimony of the defendant to show that he signed his name on the back of the note, as endorser, should have been allowed to go to the jury. The Court erred in excluding it.

The cases, almost without exception, concede that all the circumstances surrounding the making and endorsement of a note, similar to this, should be given in evidence to the jury, and especially the circumstances under which the name of the party sought to be charged, was endorsed upon the note. It was part of the transaction, a portion of the history of the negotiation, and necessary for a full understanding of the intentions of the parties. Story on Promissory Notes, sections 479, 480.

The cases in the American Courts where the defendant, signing a note under circumstances similar to those in this case, has been held liable as a joint maker or original promisor, seem, in the first instance, to have been cases where the note was not negotiable, and where on that account it would be impossible to hold the defendant as an endorser. The Courts, therefore, in order to give effect to the contract, and prevent it from utterly failing, have allowed the defendant to be declared against as a joint maker. But in case the note is negotiable in form, there is no difficulty in holding the defendant as an endorser, if the jury should find from the evidence that it was the intention of the parties that he should stand in that relation. "This principle," says Judge STORY, "is admitted by all the decisions, that the interpretation ought to be just such as carries into effect the true intention of the parties, which may be made out by parol proof of the facts and circumstances, which took place at the time of the transaction. If the party endorsing the note intended at the time to be bound only as a guarantor of the maker, he shall not be deemed to be a joint promisor. If he intended to be only a second endorser of the note, he shall not be held liable to the payee as a first endorser." If the contract be one of endorsement, then the intention of the parties must be that the endorser shall have notice of non-payment, in order to fix the responsibility of such endorsement. It would be contrary to the intentions of the parties, and an injury to the endorser to charge him as a joint maker.

An examination of the cases will disclose that, wherever the defendant has been held liable as a joint maker, it has been either because it was supposed that the law could not charge him as an endorser, or where the evidence showed that he had entered into some special agreement incompatible with that character. There is no difficulty in this case in giving effect to the contract as one of endorsement. Story on Promissory Notes, secs. 473-481; Hall vs. Newcomb, 3 Hill, 233; Hall vs. Newcomb, 7 Hill, 416; Moore vs. Cross, 19 N. Y., 227; Hoffman & Rizer vs. Coombs, 9 Gill, 284; 1 Comstock, 321; 13 Smedes & M., 617.

The fifth prayer of the appellant should have been granted. Whatever might be the form in which the defendant should be declared against, he had a right to be treated as a surety, and he was entitled to any advantage belonging to that character; and if the creditor had done any act which could in law discharge a surety, he might prove that in his defence. The evidence in this case is that the money was offered to the appellee by the maker of the note when it was due, and that the appellee and Guyton, then entered into an agreement for the loan of the money for another year, at the same rate of interest. This was a binding agreement upon the appellee, and the appellant as surety was discharged from responsibility thereby. Baker vs. Briggs, 8 Pick., 122-130; Chute vs. Pattee, 37 Maine, 102; Wheat vs. Kendall, 6 N. H., 504; Bailey vs. Adams, 10 N. H., 162; Fowler vs. Brooks, 13 N. H., 240; Cooper vs. Gibbs & Gordon, 4 McLean, 401.

N. Rufus Gill, for the appellee.

The appellant undertook to show by parol testimony the circumstances under which he signed the note upon which this suit was brought, and to contradict the relation which upon the face of the note he bears to the transaction. This evidence was properly rejected by the Court below, both because the appellee was not present at the time, and therefore not bound by any condition or restriction imposed, and because it was not competent for the appellant to explain away or qualify his undertaking in writing, by parol. Yates vs. Donaldson, 5 Md., 389; Fentom vs. Pocock, 5 Taunt., 192; Curstairs vs. Rolleston, 5 Taunt., 551; Story on Promissory Notes, sec. 418; Byles on Bills, (4 Amer. Ed.,) 310, (192;) Nash vs. Skinner, 12 Vermont, 219.

It having been shown that the name of the appellant was written upon the back of the note in question before it was delivered to the appellee, the conclusion of the law attached--that he was an original promissor, and parol evidence was not admissible to exclude that conclusion. Essex Co. vs. Edmands, &c., 12 Gray, 273.

Is the appellant to be held as a joint maker, or liable only as endorser after due protest? The testimony in the case shows clearly that Bosley refused to make the loan of the $1,000 sought by Guyton, until the note in question, with the signature of the appellant upon it, was presented to him. The signing by the appellant was therefore the condition precedent upon which the loan was made, and to him alone credit was given. The law presumes, under the circumstances of the case, that Ives put his name upon the note for the purpose of giving it credit, by becoming liable to pay in some capacity and on some terms. He cannot be an endorser, for he is not payee, and there can be no endorser until the payee has endorsed and negotiated the note. He was therefore a principal in the transaction, and so accepted and considered by Bosley at the time he received the note and made the loan. If an endorser only, Bosley, as the first endorser, (if he had negotiated the note,) would have been liable to him, and thus the whole purpose of Ives' signature, as shown by the evidence, would have been defeated, and Bosley made to assume a liability which he could never have thought of. Violett & Dempsey vs Sullivan, 6 Gill, 181; Rey vs. Simpson, 22 How., (U. S.,) 341; Mories vs. Bird, 11 Mass., 435; Baker vs. Block, 30 Mo., 225; Story on Promissory Notes, (6 Ed.,) 635, note 2; Essex Co. vs. Edmands, 12 Gray, 273; Childs vs. Wyman, 44 Me., 433; Quinn vs. Sterne, 26 Ga., 223; Edwards on Proms. Notes, and B. of...