President of Producers' Bank v. Farnum

Metcalf, J.

In this action the indorsees of a note sued Holbrook, the maker, and Farnum, the indorser, jointly, as authorized by the practice act of 1852 and the Gen. Sts, c. 129, § 4. But no service was made upon Holbrook, and the action is prosecuted against Farnum only, who rests his defence on a discharge obtained by him under the insolvent laws of this commonwealth. The plaintiffs deny, first, the validity of this discharge, and secondly, that it is a bar to this action, though it should be held to be valid.

1. The objection to the validity of the discharge is, that as the assets of Farnum did not pay fifty per cent, of the claims proved against his estate, he was not entitled to a discharge, for the reason that a majority in number and value of his creditors, who had proved their claims, did not assent thereto in writing, within six months after the date of the assignment of his property, according to the provisions of St. 1848, c. 304, § 9, which was in force when the discharge was granted. It appears, however, that such majority of his creditors, who proved their claims, did seasonably give a written assent to his discharge, if those are to be included who wrote their assent thereto on the back of their claims before they were presented for allowance. And the court are of opinion that an assent to a discharge, though written before the claim is proved, will take effect when the claim is proved, if it be not previously withdrawn, and that it cannot afterwards be withdrawn, without the consent of the court oi insolvency.

*12There can be no doubt that the assent of Mead to the discharge was a legal assent thai; the debtor should be discharged from his (Mead’s) personal claim, to wit, to the amount of $10,100.

If any law, in force when the discharge was granted, required that the assent of creditors should be filed, the filing of the claim proved, with the assent written on the back of it, was a sufficient filing of the assent. It could not have been filed in any other way.

2. Both the maker and the payee of the note in suit were citizens of this state when the note was given and when it fell due; and the payee who indorsed it is still such citizen. He indorsed it, in Rhode Island, to the plaintiffs, a banking company incorporated and doing business in that state. And it is settled that a discharge under our insolvent laws is not a bar to an action against the insolvent party on a contract made by him with a citizen of another state, unless such citizen proves his claim under the proceedings in insolvency. Savoye v. Marsh, 10 Met. 594, and numerous subsequent cases. But, in this commonwealth, an exception to this settled doctrine has been made in favor of the maker of a note expressly made payable in this state, whether it be given to a citizen of another state; Scribner v. Fisher, 2 Gray, 43; or to a citizen of this state who indorses it, before maturity, to a citizen of another state. Burrall v. Rice, 5 Gray, 539. And Farnum, who is now sued as indorser, contends that his discharge in insolvency is a bar to this action, because, by the decision last cited, a discharge of Holbrook, the maker, under our insolvent laws, would be a bar to an action by the plaintiffs against him. We cannot adopt this view of the law but are of opinion that the indorser’s discharge' cannot avail him as a bar to the present action. The legal effect of his indorsement of the note in blank was an undertaking — a promise implied by law — to pay the note to the indorsees, on the failure of the maker to pay it at the Granite Bank in Boston, upon receiving due notice of such failure. That promise was unrestricted as to the place of payment, and bound him to pav the note to the indorsees or other holders, either in or out of the *13state, wherever they might please to enforce payment. The common learning on this point is thus expressed by Bayley, J.: “ Where a person contracts generally to pay a sum of money, he is liable to the creditor everywhere.” 14 East, 509. See also McKim v. Willis, 1 Allen, 512; Aymar v. Sheldon, 12 Wend. 439; and Hatcher v. McMorine, 4 Dev. 122. This case, therefore, must be governed by the decisions in Savoye v. Marsh and other cases before referred to. Those were cases in which individual citizens of other states were parties ; but corporations established and doing business in other states may be treated as citizens of such states. Louisville, &c. Railroad Co. v. Letson, 2 How. (U. S.) 497.

The plaintiffs will take judgment against Farnum.