Lewis v. Harvey

• Decision Date: 31 March 1853
• Court: Missouri Supreme Court
• Parties: LEWIS & BROTHERS, Respondents, v. HARVEY & STEWART, Appellants.

18 Mo. 74

LEWIS & BROTHERS, Respondents,

v.HARVEY & STEWART, Appellants.

Supreme Court of Missouri.

March Term, 1853.

1. A party who writes his name on the back of a note, of which he is neither payee nor endorsee, in the absence of extrinsic evidence, is to be treated as a maker of the note, whether it be negotiable under our statute or not.

2. Parol evidence, however, is admissible to show that he did not sign, as maker, but as endorser, and that such was the understanding of the parties at the time.

Appeal from St. Louis Court of Common Pleas.

This was an action brought by Benjamin W. Lewis and others, composing the firm of Lewis & Brothers, against Harvey & Stewart, upon two promissory notes made by John Wilkerson, and described in the petition as payable to the plaintiffs, ““for value received, without defalcation.” The petition states that the defendants wrote their names on the back of the notes before they were delivered to the plaintiffs, thereby rendering themselves liable as joint makers.

The defendants answered that they endorsed the notes at the request of George W. Hanna, whose name appeared on the back of the notes above their own, and who acted as the agent of John Wilkerson; that they had been in the habit of endorsing notes for the accommodation of Wilkerson, and when these notes were presented to them, they saw that they were payable to the plaintiffs and supposed that the plaintiffs would endorse them, so that they (the defendants), would be subsequent indorsers; that they intended to become the indorsers of said notes according to the ordinary and usual custom of indorsing mercantile paper, and according to the position their names would have occupied, had said plaintiffs indorsed the notes as excepted; that they were not privy to the consideration of the notes; and that the making of the notes and the endorsement thereof were not contemporaneous acts, but that the indorsement was long subsequent to the making of the notes by John Wilkerson, who was not in the State at the time the notes bear date. The defendants denied that they were joint makers of the notes, or that they intended to become such when they indorsed them.

This answer was stricken out on motion, and judgment rendered for the plaintiffs, from which the defendants appealed.

Thomas B. Hudson, for appellants.

The answer contained a sufficient defence to the alleged cause of action. The case of Powell v. Thomas, (7 Mo. 440,) does not sustain the judgment of the court below. The matters presented by the answer in this case were not urged in that. The decision in that case seems to have been based upon the supposition that the making and indorsement of the note were contemporaneous acts, and that the indorser was privy to the consideration-- both of which were negatived by the answer in this case. (4 Pick. 385-6-7; Ib. 312 and cases cited; 5 Vt. 161.)

Glover & Richardson, for respondents.

Where a person not a party to a note signs his name on the back thereof, without any words to express the nature of his undertaking, he is considered a joint promissor. (Powell v. Thomas, 7 Mo. 440; Flint v. Day, 9 Vt. 345; Nash v. Skinner, 12 Vt. 219; Martin v. Boyd, 11 N. H. 385; Moies v. Bird, 11 Mass. 440; Sumner v. Gay, 4 Pick. 311; Baker v. Briggs, 8 Pick. 122; Chaffer v. Jones, 19 Pick. 261; Austin v. Boyd, 24 Pick. 64; Samson v. Thornton, 3 Met. 279; 2 McMullan, [S. C.] 313.) The conflict of the authorities is in reference to negotiable notes, or where the indorsement is made after the delivery of the note and the completion of the contract. In this case, the notes were not negotiable, and an analysis of the pleadings will show that no question can be raised as to the time of the indorsements. The answer does not deny the allegation of the petition that the defendants indorsed the notes before they were delivered to the plaintiffs. All that the answer sets up is, that the notes were signed by Wilkerson before the indorsement by defendants. But if they were indorsed before they were delivered to the plaintiffs, the indorsers will be charged as joint makers, no matter when they were signed or even dated. (3 Met. 279; 9 Vt. 343; 11 Mass. 440.) If the defendants could not be charged as original promissors, their indorsements would be of no service to the payees, for the indorsements could add no security to them, if they were required to put their names on the back as prior indorsers. The defendants admit that they indorsed the notes for the accommodation of Wilkerson, and they could only serve their friend in this instance, by becoming his securities. A person who signs his name as security may be sued as a joint and original promissor. (5 Mass. 358; 6 ib. 519; 7 ib. 518.)

GAMBLE, Judge, delivered the opinion of the court.

The promissory notes described in the petition want the words “negotiable and payable,” which, under our statute, are necessary to make them negotiable with the like effect as inland bills of exchange. They are signed by Wilkerson, made payable to the plaintiffs, and on the back of each the names of the defendants are written by the signature of Harvey & Stewart, which is the style of their firm. The petition charges them as makers of the notes.

1. In this country there has been a very great diversity of opinion in relation to the contract which the law implies, from the fact that an individual writes his name on the back of a negotiable note which is already complete, in having a maker and payee. But there does not appear to be the same difference in relation to notes which are not negotiable. The decisions in most of the States in which the liability of such party to a note not negotiable has been considered, appear to agree that he is liable as an original promisor, and in this State the question was decided in Powell v. Thomas, (7 Mo. 440,) and such was held to be the meaning and effect of his contract. In that case, the opinion was expressed that the same rule applied to parties who bore the same relation to negotiable notes. It has been said, that this was but an obitur dictum, as the note, in that case, was not negotiable; but it will be seen that the reason for considering the question in relation to such signature upon a negotiable note was, that a case of that description was then before the court, and as that case is not reported, the opinion in Powell v. Thomas must be regarded as designed to be the decision of the other case in which the note was negotiable.

It may be doubtful whether the distinction made in the New York cases between notes negotiable and those which are not negotiable, applies in this state. In New York, their negotiable notes are those payable to order or to bearer, which, by the English law, are negotiable. Other notes cannot be assigned so as to give the assignee a right of action in his own name, unless the assignor be dead and there is no executor or administrator, or, if there be one, that he refuses to bring the action in his name. (2 Rev. Laws, 274, sec. 5.) It seems that only in such cases are assignees recognized in courts of law. As on such notes in that state an indorsement has not the effect of transferring the right of action to the assignee, to be enforced in his own name, it appears that the courts have held that the name of a third party on the back of such note must be held to be different from the endorsement of negotiable paper, and subjects such party to liability, either as maker or guarantor. As he cannot occupy the position of indorser on negotiable paper, he must be held to have contracted in some other character. In this state, all notes whether negotiable at common law or not, and whether in the form that makes them negotiable, under the statute, as inland bills of exchange, or not, are assignable, so that the assignee may maintain an action thereon in his own name, and an assignor of a note not negotiable, although his contract is not that of an indorser of a note negotiable, incurs a liability to the assignee which is regnlated by the statute. The name of a third person then, upon the back of a note which is here assignable, although not a negotiable note under the statute, may be the means of his liability as assignor, although that liability differs from that of an indorser on negotiable paper. Without stopping, however, to inquire whether the decisions that have been made in New York would have recognized a distinction between negotiable paper and such as is assignable under our statute, if such had been assignable there, we will proceed to examine, briefly, the principles upon which the cases now...