This was an action of assumpsit upon a promissory note. The pleas: general issue, statute of limitations, and specially that on 15 April, 1846, the defendants were garnisheed at the instance of one Pitt, and former judgment since the last continuance.
The note sued on was dated New York, 1 April, 1846, and was payable to one Taylor six months after date. The execution by the defendants as makers was admitted. The plaintiffs proved the endorsement by Taylor to Ingles, 8April, 1846, by Ingles to Adams and by Adams to the plaintiffs, who commenced this suit on 7 October, 1848.
The plaintiffs offered evidence to show that the endorsement by Taylor was for valuable consideration.
The defendants proved that on 15 April, 1846, one Pitt sued out an original attachment against Taylor as a nonresident debtor, and on the same day had the defendants garnisheed, who at May Term of the County Court of Edgecombe (117) admitted their indebtedness to Taylor by reason of said note, and such proceedings were had that, at November Term, final judgment was rendered in favor of Pitt against Taylor, and the debt now sued on was condemned in their hands for the payment thereof.
The defendants alleged "that the endorsement by Taylor to Ingles was fraudulent and without valuable consideration, and proposed to prove declarations of Ingles, that the note was received from Taylor as collateral security for a debt which Taylor owed him." This testimony was rejected.
The court charged that if the endorsement of Taylor on 8 April was bonafide and for valuable consideration the plaintiffs were entitled to recover, notwithstanding the defendants had been garnisheed on 15 April and final judgment rendered against them at the November Term of the County Court of Edgecombe.
A verdict was rendered for the plaintiffs, judgment, and appeal by the defendants. *Page 93 We see no error in rejecting the declarations of Ingles. If made after his endorsement, they were clearly inadmissible. It does not appear by the case when they were made, and it was incumbent upon the defendants to show that they were made before the endorsement and to have that fact stated in the case as a foundation for their exception.
The instruction, that if the note was endorsed by Taylor bonafide before the defendants were garnisheed the proceedings under the attachment of Pitt would not bar the recovery, is entirely correct. Taylor had the same right to transfer the note by endorsement, provided it was not colorable and for his own benefit, as he had to transfer any article of property before a lien had attached to it by the teste of an execution (118) or otherwise; and, admitting that a garnishment creates a lien upon all debts due to the original debtor from the time notice is served, in this case it had been transferred some days before and was no longer a debt due to Taylor.
It was the folly of the defendants to admit an indebtedness to Taylor at May court upon a negotiable note made one month before. The admission ought to have been qualified — they were only indebted to Taylor, provided the note had not been endorsed. It is true, they had no notice of the endorsement, but an endorsee is under no legal obligation to give notice to the maker, even when the endorsee and endorser are nonresidents. The endorsee is not to anticipate that an attachment will issue.
The defendants were guilty of still greater negligence in allowing a final judgment in November, which was after this action was commenced. An application should have been made to amend by withdrawing the admission of indebtedness to Taylor as soon as they were informed of the endorsement, and the amendment ought to have been allowed; truth required it, for as soon as the note was endorsed the defendants ceased to be the debtors of Taylor and became the debtors of the endorsee.
It may be that the defendants can be relieved against the judgment of Pitt by a writ of error coram nobis for error as to the fact of their indebtedness to Taylor, but this is a matter in which the plaintiffs have no concern; they are the owners of the note and have a right to collect it.
PER CURIAM. Judgment affirmed.
Cited: Ormond v. Moye, 33 N.C. 567; Shuler v. Bryson, 65 N.C. 203;Rice v. Jones, 103 N.C. 233. *Page 94
(119)