Coddington v. . Davis

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The Plaintiff in error, the defendant below, was the endorser of a note made by Thomas Coddington for $10,000. Thomas Coddington failed, and on the 23d January, 1840, made an assignment to Davis, one of the firm of Davis, Brooks Co., the endorsees and holders of the note and the plaintiffs below. On the 28th of January, and prior to the maturity of the note, the defendant with full knowledge of the above facts, wrote the following letter:

"Messrs. DAVIS, BROOKS Co. — GENTS: Please not protest T.B. Coddington's note due 2d February, for ten thousand dollars, and I will waive the necessity of the protest thereof; and oblige respect'ly, c.,

SAMUEL CODDINGTON."

The construction of this letter is the first important question presented in the cause.

The term protest in a strict technical sense is not applicable to promissory notes. The word, however, as I apprehend, has by general usage acquired a more extensive signification, and in a case like the present includes all those acts which by law are necessary to charge an endorser. When among men of business a note is said to be protested, something more is understood than an official declaration of a notary. The expression would be used indifferently to indicate a series of acts necessary to convert a conditional into an absolute liability, whether those acts were performed by a mere clerk or a public officer. It is obvious that the word was used in its popular acceptation by the defendant below. He requests the endorsees "not to protest the note, and that he would waive the necessity of the protest thereof."

The protest to which the endorser alluded was something "necessary" to be done, something also for the benefit of the endorser, for he assumed to waive it. It could not therefore be a memorandum, or declaration made by a notary, because neither of them were required. Nor could he have intended to waive that which whether performed or omitted, his right would in no manner be affected. The only things necessary on the part of the endorsees was a demand of payment of the maker, and notice to the endorser. By waiving the necessity of protest the defendant dispensed with both, or his communication is destitute of all meaning.

It was argued indeed that the defendant might have referred to the notarial certificate authorised by statute. But this certificate is made prima facie evidence of a demand and notice in favor of the endorsees. It is for their benefit. The defendant in making such reference must have supposed that the certificate was necessary evidence, because he waives thenecessity of a protest, which according to the argument is equivalent to dispensing with the necessity of a notarialcertificate. Now to every fair mind, waiver of proof necessary to establish a particular fact, is equivalent to an agreement to admit it. Whether therefore the defendant by waiving the necessity of a protest, intended to dispense with demand and notice, or with the evidence of them the result would be the same, and in either case he is concluded by his own stipulation from raising the objection taken upon the trial. I agree with the learned Judge who delivered the opinion of the Supreme Court, that the circumstances attending the written stipulation of the defendant confirm this view; but I prefer to rest my opinion upon the letter alone, as furnishing prima facie evidence of an intent by the endorser to waive demand of payment and notice to which he was otherwise entitled.

Another important point is made by the defendant, that the written statement signed by the plaintiffs and others, dated 8th February, 1840, was a valid discharge by the plaintiff of Thomas Coddington the maker of the note from all liability thereon, and consequently of the endorser. On the 23d of January, 1840, Thomas Coddington executed his assignment to Davis, and directed his assignee to pay and discharge the debts owing by the assignor contained in the schedule marked A. in equal proportions. In this schedule we find:

SAMUEL CODDINGTON, for endorsement, $10,000 " " " 1,854 " " Balance of account, 2,178

Taking the schedule in connection with the assignment, it will be perceived, that the debts to the defendant for endorsements and for private account, are placed upon the same footing as debts owing by the assignor to the defendant, and both are directed to be paid absolutely. It is obvious therefore that the $10,000 endorsement, which is admitted to be the note in question, was understood by the parties to the assignment to be the debt of the defendant and treated accordingly. This was on the 23d January: on the 24th, the defendant in writing, directed Davis as assignee to pay to the order of Davis, Brooks Co., allmonies that should be received by him as assignee on hisaccount, to the extent of $10,000 value received.

By this act the defendant not only assented to the assignment, but as it appears to me, distinctly recognised the relation in which he was placed by that instrument as creditor to the assignor to the amount of the $10,000 unconditionally, and of course liable for the same amount to the plaintiffs. He directed the payment of a sum equal to the note, not only out of the fund set apart in the assignment for that purpose, but out of the proceeds of the property exclusively applicable to the discharge of a debt due to him individually, for a balance of account. In a word, he recognized this as a debt due from Thomas Coddington to himself, by claiming under the assignment by which it was so declared, and as a debt due from him to theplaintiffs by a voluntary application of his private funds to its payment. In conformity with this view of his rights and liability, we find him on the 28th day of January, the date of his letter to Brooks, Davis Co., waiving the necessity of protest, and thus converting a conditional into an absolute liability upon his part, for the payment of this note to the plaintiff.

Under these circumstances the discharge of February 8, 1840, was executed by Davis in behalf of Davis, Brooks Co., and by some others of the creditors of T. Coddington.

This instrument, which is without seal, recites in substance, that T. Coddington was indebted or liable to the subscribers, and that he had made an assignment to Davis for the benefit of the subscribers and other creditors, and in consideration of one dollar, of said assignment, and of a promise to pay any balance that might not be received under the same, in seven years — the subscribers did release and discharge and forever acquit the said T. Coddington, from all claims, demands, liabilities, engagements, judgments, and other responsibilities then existing against him, beyond what they might realize on said claims, c., from said assignment; "We," the instrument proceeds, "receiving and assenting to the conditions of said assignment, and comingin under the same, for a full and perfect discharge of our said claims. The said Coddington, in consideration of the above, giving to us his written engagement to pay the balance," c.

It is apparent that this discharge refers to and absolutely adopts the assignment, with all its conditions, and provisions as its basis. One of these conditions was, that the defendant should be paid out of the fund, as a preferred creditor, the amount of this note as a debt due to him. To this the parties to the discharge expressly assented. When, therefore, it was recited in that instrument that Thomas Coddington was indebted or liable to Davis, Brooks Co., for certain debts, and that the former had made an assignment for the benefit of the latter as creditors, the parties could not have referred to this demand which they had agreed to describe and had actually inventoried as the debt of another.

It may be granted that independent of the assignment, the plaintiffs as to this note were the principal creditors of Thomas Coddington. But we must seek the intention of the parties in their writings, not in the relation previously existing. When therefore the assignment, as we have a right to infer, purposely omits Brooks, Davis Co., and substitutes the defendant as thecreditor to whom this debt was owing; the discharge upon authority as well as the plainest principles of justice should be restricted to the relations established by the instrument to which it refers and expressly adopts. (Tayler vs. Homersham, 4 Maule 1 Selwyn 422; 23 Com. Law R. 50, 7 Com. Law 205, 1 Cowen 123, 126.)

The engagement entered into by Thomas Coddington at the time of the execution of the release confirms this view. By that he promised to pay Brooks, Davis Co., whatever they might not realize from his assignment, on account of his indebtedness tothem. This debt of $10,000 had been inventoried as due to S. Coddington. To suffer Brooks, Davis Co. to share equally with the creditors of the second class, upon the ground that this debt was due to them also, would be virtually a fraud upon those creditors, upon the assignor, and those who executed the discharge with Brooks, Davis Co. These creditors with justice could say to the plaintiffs, that with their concurrence the assignor had appropriated property for the payment of this debt to the defendant. You have elected to claim through him, to which he has assented, and you are bound by your election.

It is unnecessary therefore to consider the objection of a want of consideration, c., raised to this discharge. Viewing it as legally binding upon the parties, it does not extend to this demand, and cannot have the effect either to discharge or extend the time of payment of the note in question. The judgment of the Supreme Court should be affirmed.

BRONSON, J. also delivered an opinion in favor of affirmance; and JEWETT, Ch. J., JONES and WRIGHT, Js., concurred.