Woods v. Woods

Colt, J.

The plaintiff, for the accommodation of the firm of Woods & Wallace, indorsed a note for $5000, signed by them and the defendant Parkinson on the face, and by the defendant Tarbell on the back, and made payable to the plaintiff’s order. This note was discounted by the bank, and was paid when due by two notes of $2500 each, payable to the plaintiff’s order and indorsed by him and others, the note in suit being then delivered to the plaintiff. There was no question at the trial but that the note in suit had been paid; the question was by whom. The plaintiff contended that it was paid by him. The defendants contended that the payment was by Robert P. Woods, one of the defendants, and one of the firm of Woods & Wallace,- *146 and that it was made from the avails of the two $2500 notes-There was some conflict in the evidence upon this point. The real character of. the transaction depends largely upon the intent of the parties, to be ascertained by the jury from all the evidence in the case. If the payment was by Robert P. Woods, then the parties to the original $5000 note are discharged; if by the plaintiff, he may as payee enforce his claim in this suit against all the makers. We think there was evidence in the case which would justify a finding either way. " But the judge ruled that there was no question for the jury, and ordered a verdict for the plaintiff against all the defendants.

New trial granted.

At the second trial of the case in the Superior Court, before Aldrich, J., the plaintiff put in the same evidence as at the previous trial; and also put in evidence tending to show that the note in suit had been paid by him by the two notes of $2500 each, and the subsequent payment by him of these notes. The plaintiff did not, however, contend that he advanced or paid any money on the note in suit; but that he was an accommodation indorser for all the other parties to the note, and put in evidence tending to prove this.

The defendants’ evidence was in substance the same as that put in by them at the former trial; and, for the purpose of raising the question of the liability of Tarbell as a joint promisor, the defendants proposed to ask him the following questions: “ Did you receive any money on the note in suit ? For what purpose was this note made? Did you receive anything on account of this note ? ” The judge refused to allow these questions to be put.

For the purpose of showing that Parkinson and Tarbell were, at most, only accommodation indorsers of the note in suit, the defendants proposed to ask Wallace the following questions: “ Was any money passed on the note in suit by or between any of the parties to it ? Was any money passed on this note before it was discounted at the bank?” There was no evidence to show that the plaintiff knew that Parkinson and Tarbell were accommodation makers for Robert P. Woods and Wallace, and the judge refused to allow the questions to be put.

*147 The defendants requested the judge to instruct the jury as follows: “ 1. If any of the joint promisors on the note in suit, about the time it became due, gave his note as promisor to the plaintiff as payee, with indorsers thereon, for the sole purpose of having it discounted at a bank to raise money to take up the note in suit, and the note was accordingly discounted and the proceeds applied towards taking up the note in suit, then the note in suit would be so far paid, and the plaintiff cannot recover on said note in this action without an allowance towards the payment thereof of the money so raised and applied. 2. If Robert P. Woods, one of the promisors, made the two notes for $2500 each payable to the plaintiff, and they were made for the purpose of raising money to take up the note in suit, and were discounted at a bank and the proceeds applied to the taking up of the note in suit, that would be a payment of so much of the note in suit as was so applied, in the absence of any agreement between the parties varying their obligations as they appear on the said notes. 3. If the note in suit was made solely for the purpose of raising money, by having it discounted at a bank, i<. take up a previous note, then the note would not be a binding contract between the parties until so discounted by the bank, and the order of time in which the parties put their names on the back of the note would be of no importance in construing the obligations of the parties; and if Tarbell’s name was put on the back of the note before the name of Henry A. Woods, the payee, yet if, when it was completed and presented to the bank for discount and actually discounted, the payee’s and Tarbell’s names were both on the back of the note, Tarbell can only be held as an indorser on the note, and not as a promisor. 4. If an accommodation note is made, without any consideration bétween the parties, for the purpose of raising money at a bank to take up a previous note, any person who shall put his name on the back, before the payee indorses his name thereon, must be held as an indorser, provided, when the note was received and discounted by the bank, the payee’s name was then indorsed thereon. 5. Such a note is to be construed, not in the order of time in which the parties put their names thereto, but the liabilities of the several parties on the note are to be determined by the note as it existed when discounted and made a valid con *148 tract by the passing of the consideration, provided the note was made solely for the purpose of raising money by a discount thereof at a bank. 6. If the note of one joint promisor for the amount of the old note, on time, with other indorsers, is taken for the old note, the law presumes that such new note is a payment of the old note, in the absence of any agreement to the contrary. 7. If Robert P. Woods made the two $2500 notes for the sole and only purpose of raising money with which to pay the note in suit, and procured them to be indorsed by Alfred Page, and then delivered them to Henry A. Woods, who was made payee, and he then indorsed them for the same purpose, and used the money obtained on the two notes for the purpose of taking up the note in suit, the note in suit was so far paid by Robert, in the absence of any contrary agreement, notwithstanding Henry may have supposed, while the note was in his hands, he could collect its full amount.’)

D. S. Richardson, (W. H. Atwood with him,) for the defendants. T. H. Sweetser, (F. A. Worcester with him,) for the plaintiff.

But the judge declined so to rule; and directed the jury, with other full and appropriate instructions not excepted to, as follows : “ If Tarbell, not being the payee, wrote his name in blank on the back of the note in suit, before it was delivered to take effect as a promissory note, he would be liable as one of. the joint makers and original promisors, in the absence of all evidence that it was the intention of himself and Henry A. Woods, the payee, that he, Tarbell, should assume the liability only of an indorser. The two $2500 notes not having been signed by all the parties to the note in suit, the law does not presume, in the absence of any agreement to that effect between the plaintiff and the other parties to the note in suit, that he received the two $2500 notes in payment of the note in suit.”

The "jury returned a verdict for the plaintiff; and the defendants, alleged exceptions.

Lord, J. The bill of exceptions states that, beside the instructions reported and excepted to, “full and appropriate instructions not excepted to ” were given. It is therefore necessary to inquire only whether the instructions as reported were erroneous, and whether the defendants’ prayers for instruction were all, or any *149 of them, such as it was the right of the defendants to have given without modification or qualification. For if the prayers for instruction embraced within themselves sound principles of law, which the circumstances of this case required to be modified when applied to it, then such modifications and explanations must be presumed to have been given under those full and appropriate instructions to which no exception is taken.

As to the first instruction excepted to, it was clearly sufficiently favorable to the defendants; for, by the law of Massachusetts it has been too long settled, and too many times adjudged to be now questioned, that, before the St. of 1874, c. 404, if a party not the payee of a note signed his name upon the back of it before delivery to the payee, he thereby became an original promisor upon the note. Whether it would be competent for him by paroi to show that his contract was different from what it appeared to be by the writing, we need not inquire, for the ruling of the judge went only to the extent that prima facie he was a joint maker, and to that ruling the defendants certainly have no just cause of complaint.

The second instruction given was also sufficiently favorable to the defendants. Whether the taking of a note for the amount of a preexisting note is payment of the first note, is rather a question of fact than of law; and when a note is given signed by any other than the maker of the previous note, and the previous note is retained by the payee, as in.this case, it is very clear that the law does not raise a presumption that such note is payment, and although no agreement in relation to it is specifically proved, the question whether or not it was given and received in payment is one of those facts which the jury must decide.

All the prayers for instruction are subject to the criticism that they omit an important element which in any instructions was necessary to be considered in connection with the facts referred to. That element was that the present plaintiff was the person who paid this note at the bank, and who retained it as the owner of what he claimed to be a continuing liability. The circumstances of this case did not therefore demand that the instructions, or any one of them, as prayed for, should be unconditionally given, and the full and appropriate instructions which were given are to be presumed to be such as were neceo *150 sary to make them applicable to the facts of the present case. For example, when the prayers speak of the note having been made for the sole purpose of being discounted at the bank, they assume that such note could be made for such purpose only, and create but a single liability as between the parties to it. Whatever may he their relations to the bank, when such note is discounted, the relation of the parties to the note to each other, after its payment at maturity, is a proper subject of inquiry. If the evidence had shown that the original note was made for the accommodation and because of the indebtedness of Henry A. Woods, instead of tending to show that he was simply an accommodation indorser for all the other parties to the note, then he could maintain no action upon the note against any other parties thereto. It is quite clear, therefore, that it was the duty of the court to give the instructions called for by the evidence, and by the respective claims-of the parties under the evidence, and not merely to give abstract propositions of law, which upon one state of facts would be correct, but upon a different state of facts would be entirely erroneous. We cannot therefore say that, upon the condition of facts existing at the trial, it was error in the presiding judge to decline to give any one of the instructions asked for in the words asked for.

Nor do we see any error in the rejection of evidence. If the evidence had been offered generally, and had been admitted, there would probably have been no error in its admission; and if it had been offered for the purpose of showing that the defendants,' or any of them, were parties, whether as indorser or maker, for the accommodation of Henry A. Woods, it would have been competent and material, and, if satisfactorily proved, decisive. It was, however, all offered for specific purposes wholly immaterial, unless Henry A. Woods bore some other relation to the note than simply that of payee. Holding that relation to the note, the relations of the other parties to it, their rights and obligations inter sese, are wholly immaterial, and it was not error to reject evidence in relation to them. Exceptions overruled.