Schley v. Merritt

• Decision Date: 18 February 1873
• Citation: 37 Md. 352
• Parties: MARY E. SCHLEY, Executrix of James Higgins v. WILLIAM K. MERRITT and George A. Merritt, Trading as William K. Merritt & Co.
• Court: Maryland Court of Appeals

37 Md. 352

MARY E. SCHLEY, Executrix of James Higgins v. WILLIAM K. MERRITT and George A. Merritt, Trading as William K. Merritt & Co.

Court of Appeals of Maryland

February 18, 1873

Appeal from the Court of Common Pleas of Baltimore City.

This was an action brought by the appellees against the appellant on a promissory note drawn by George W. P. Smith, for $229.39, dated Baltimore, the 4th of October, 1869, and payable six months after date, to the order of James Higgins the appellant's testator, and by him indorsed.

First Exception.--The plaintiffs to sustain the issues on their part, offered in evidence the note sued on, and the protest and proved the making and indorsement of the note, the death of Higgins at Barnum's Hotel, in the City of Baltimore in the latter part of March, 1870, and that the defendant qualified as executrix in September of the same year, in the Orphans' Court of Anne Arundel County. The plaintiffs offered evidence tending to show that the deceased was at the time of his death a resident of the City of Baltimore, and had been for many years previous to his death; and then offered to prove by Smith, the maker of the note, that Higgins at the time he endorsed the note, was indebted to him (Smith) in the sum of $250, and that he (Smith) owed the plaintiffs the sum mentioned in the note, and it not being convenient for Higgins to pay the money he owed him, it was agreed between said Smith and Higgins, that he (Higgins) should endorse this note to be given to the plaintiffs, and Higgins promised him (Smith) that he would pay the said note at maturity, and that he (Smith) need give himself no trouble about it. The defendant objected, and insisted that Smith was not a competent witness to prove said facts, but the court (Garey, J.,) overruled the objection, and permitted the witness to give the evidence to the jury. The defendant excepted.

Second Exception.--The plaintiffs further proved by George W. P Smith, that a short time before the note sued on became due, he called upon Higgins and informed him that said note would soon be due, and he (Smith) expected him (Higgins) to pay it, and Higgins replied that he need give himself no further trouble about it, that he would pay it before it was due; and offered in evidence by George E. Sangston, that he was the notary who protested the note, and that he gave the notice of protest and non-payment as stated in the protest; that at the time he knew that Higgins was dead--that he had heard that he died at Barnum's Hotel; that he believed that Higgins was a resident of Baltimore City at the time of his death; that he had seen his name on a sign at No. 5 St. Paul street; that Higgins had an office at that place for business; that he was a chemist and mineralogist; that said place was about a hundred yards from the office of witness. The defendant offered a variety of evidence, tending to show that the deceased was a resident and citizen of Anne Arundel County at the time of his death, and that he always claimed a right to vote in said county, and that he had stated on various occasions that he did vote in said county at popular elections.

Thereupon the plaintiffs offered two prayers, the first of which is given in the opinion of this court, and the second is as follows:

2nd. If the jury find that the note offered in evidence was made by George W. P. Smith, and that James Higgins, the deceased, endorsed the same as offered in evidence, and that before the note became due, Higgins died, and no letters of administration were granted on his estate until long after said note was due; and if the jury shall further find that the said James Higgins, at the time of his death, and long before, lived at Barnum's Hotel, in the City of Baltimore, and had an office for business in said city, and had for a long time been habitually in the City of Baltimore, in and about his said place of business, and in other places; and if they shall further find that George E. Sangston, notary public, having a knowledge of these facts and believing that the residence of said Higgins was in Baltimore City when said note became due, made demand for payment, and gave notice of protest, as stated in the protest offered in evidence, the plaintiffs are entitled to recover.

And the defendant prayed the court to give the jury the following instructions:

1. That there is in this case, no sufficient evidence of notice to the defendant of the presentment and non-payment of the note sued on.

2. That if the jury shall find from the evidence that the note sued on in this case, was passed by the maker to the plaintiffs on account of a debt due by him to them, then there is no excuse shown for the want of notice to the defendant, and the plaintiffs cannot recover.

3. That if the jury shall find from the evidence, that the office of the notary who made the protest, was a short distance (not more than a few hundred yards) from the office occupied and used by James Higgins, deceased, at the time of his death, then the notice of protest is insufficient, and the plaintiffs cannot recover.

4. That there is no sufficient evidence in this case to show diligence on the part of the notary in making inquiry as to the residence of the deceased, and that it was necessary to leave or send a notice of presentment and non-payment to the last place of residence or business of the deceased, and directed to him, and for want of such notice so sent, the plaintiffs cannot recover.

The court granted the plaintiffs' first prayer, and rejected their second, and granted the first prayer of the defendant, and rejected the rest. The defendant excepted to the rejection of their second, third and fourth prayers, and to the granting of the plaintiffs' first prayer. And the verdict and judgment being for the plaintiffs, the defendant appealed.

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

Alex. B. Hagner and William H. Tuck, for the appellant.

But for the Act of 1864, ch. 109, Smith was incompetent, on the ground of interest, because, if he could succeed in fastening this claim upon Higgins, as the party primarily liable on a note made for his accommodation, the executrix of Higgins could never recover the amount from Smith, after paying the judgment to the appellees. If, as between Smith and Higgins, the latter agreed that he would pay the note, as a credit on his indebtedness to Smith, there would be no ground on which Higgins could recover it back. And if the appellees had recovered judgment against Smith, the latter, as soon as Higgins paid their judgment, might claim to have the judgment against himself entered "satisfied," and not for the use of Higgins, which might have been done, if Higgins had been merely liable as endorser for Smith's accommodation.

And if there is no judgment against Smith, and the appellant is made to pay the claim to the appellees, she can only proceed against Smith, by offering the record in evidence, from which it would appear that Higgins was himself the real debtor, as between him and Smith. Hence, the witness had a direct interest in the result of the suit.

Where the holder sues the endorser, and does not sue the maker, the endorser can only recover against the maker for the amount of the judgment paid by him, by suing the maker himself for money paid, and offering the judgment in evidence; for the note being merged in the suit against the endorser, or at least out of his control, he could not sue as holder of the note by endorsement from the appellees. If, then, the appellant is made to pay this debt, and should seek to recover from Smith, the maker of the note, the very evidence which she must offer, would show that a jury had found that Higgins was himself the real debtor, as between Smith and himself, and that she had no ground of action to recover the money back. Hence, Smith had a direct interest in the result of the suit against the appellant. It is for this reason that an endorser is not a competent witness for the holder of a note in a suit against the maker or prior endorser, for if made to pay himself, he would be entitled to an assignment of the judgment against all prior parties to the note. Owens v. Collinson, 3 G. & J. 25; Funk v. Kincaid, 5 Md. 404. Under the Act of 1868, ch. 116, Smith was clearly incompetent as a witness. Miller v. Motter, 35 Md. 432.

The court erred in granting the plaintiffs' first prayer. The alleged agreement was not made with the plaintiffs, and they were not entitled to recover upon it. Price v. Easton, 24 E. C. L. 96.

The alleged indebtedness from Higgins to Smith, was not extinguished. The plaintiffs had not agreed to release Smith, and Smith had not released Higgins. If Higgins, by parol, agreed to pay Smith's debt to the plaintiffs, the agreement was void under the...