Hatcher v. McMorine, 14 N.C. 228, 3 Dev. 228 (1831)

Dec. 1831 · Supreme Court of North Carolina

14 N.C. 228, 3 Dev. 228

Charles Hatcher v. John McMorine.

Where A and B were indorsers of a bill drawn for the accommodation of C, and A being’ the first indorser paid it, and afterwards received the note of C, indorsed by 3, for one half the amount, it was held, that this note was not given for the accommodation of A, and that he might recover on BTs indorsement.

The case of Daniel v- McRae, (2 Hawks 590,) approved by I-Iekdek.-sox, Chief-Justice.

This was an action of debt, brought upon the defendant’s indorsement of a single bond made by Asa and' Isaiah Roger son, for $500, payable to the defendant; and on nil debet pleaded, the cause was tried before Martin, Judge, at Pasquotank, on the last circuit, when the case was, that Asa Bogerson had drawn a bill upon' Garrison and Ford, of Norfolk, for glOOO, payable to the plaintiff who indorsed it to the defendant, by whom it was indorsed to the office of the Bank of the United States at Norfolk. At its maturity this bill was protested, and the drawer and acceptor having become insolvent, the plaintiff took it up. One witness stated, that the bond which the defendant had indorsed, and on which the suit ■ was brought, was executed for the benefit and accommodation of the plaintiff, to enable him to receive its amount from the bank, and when received it was to be applied to the-payment of one half of the bill of exchange; and a letter' of the plaintiff was .produced by the defendant, in which he said, “ I have paid an indorsement of yours for glOOO, “ I have agreed to waive it for half, $500, at sixty days “ for Asa Roger son’s note, with your indorsement.”

His Honor charged the jury, that the plaintiff as the first indorser of the bill was liable for the whole amount of it, and if the bond in question was made and indorsed for his accommodation in order to raise funds for its payment, he could not recover on the indorsement.

A verdict was returned for the defendant, and the plaintiff appealed.

Eogg, for the plaintiff.

Kinney, contra.

HewdersoN, Chief-Justice

This case may be deter-mined without the aid of the principle established in the / case of Daniel v. McRae, (2 Hawks 590,) to-wit: that in bills or notes for the accommodation of the drawer orí maker, prior and posterior indorsers stand in equal dc-{ gree as co-sureties, without any express contract to that’effect, if at the time of their respective indorsements they knew that it was accommodation paper, for the benefit of the drawer or maker, and that nothing was paid for or upon the indorsement. For. this case states, that Ro-gerson, the maker of the note, had before that time drawn a bill on Garrison and Ford, for §1000, in favor of Hatch-er, which they had accepted, and which Hatcher had indorsed to McMorine, and McMorine to another ; and finally it was discounted at bank. That the drawer and-exceptors became insolvent, and that Hatcher, the first indorser, paid the bill. If this was a real transaction, Hatcher had a right to call on Rogerson for the §1000. And if the note now in suit was drawn by Rogerson, although it might have been indorsed by McMorine solely for Rogerson''s benefit, McMorine is bound to Hatcher. Because Rogerson whom he authorized to receive value for it, has in fact-received it, as he paid it to Hatcher in part discharge of the money, which the latter had paid on the hill. Rogerson s receipt of value for the note is McMorine" s rcceiptof value, because Rogerson received it by Ids authority. This Is our daily experience with the banks upon accommodation paper. Therefore, in the absence of all proof on the subject, except that Hatcher paid the $ 1000 on the bill, the plaintiff has a clear right on this note and indorsement. Does Hatcher’s letter to McMo-rine, which McMorine produces, and therefore makes evidence, vary the case. I think it makes it stronger for ' the plaintiff. That letter proves, I think, that Hatcher and McMorine were Rogerson's accommodation indorsers on the bill; it requires McMorine to pay him one half, and offers to take Rogerson’s note (who was bound for the whole ) with McMorine's indorsement for $ 500. For what ? For McMorine’s part of the § 1000, which he (Hatcher ) had paid on the bill, and of which it seems, from the letter, he held McMorine bound for one half; and McMorine’s accession to the proposition, and his offering the letter in evidence, are very strong evidence that the fact is so. This superadds an obligation prior to and independent of the indorsement, on which he is sued. There is nothing then, but the testimony of the-witness, who sweai’s that the note in question was given for Hatcher’s accommodation, upon which to rest the de-fence. But how for Hatcher’s accommodation ? The witness himself tells us, that Hatcher might get it discounted at the bank, and thereby raise or get money to pay the bill”. He must mean, to reimburse Hatcher for the money paid on the bill, as the case states* that Hatcher had before that time paid thé bill. Then according to the witnesses’ own account, it was not for Hatcher’s accommodation. The parties may have called it so; but in reality from the witness’ account, it was to pay Hat-cher part of what was due to him from Rogerson, and according to the letter, and I think the acquiescence in the proposition contained in it, due to Hatcher by McMoriné also, as co-surety on the bill. If the bill of exchange had been for Hatcher’s accommodation, it cuts up the plaintiff’s case. For then this note and indorsement have no value, no consideration to rest on. I thought I might have misunderstood the case, and examined it again, to see -what the witness said was for Hatcher’s accommodation. But I find the case is explicit. It is the bond- on which this suit is brought.

The judge therefore, as I conceive, mistook the point of the case as to prior and posterior indorsers. It depended not on that solely, but on the question, whether the bill for glOOO was for Hatcher’s benefit and accommodation. If it Avas, the plaintiff is entitled to recoArer.

I should have been glad to revieAv the decision in Daniel v. McRae; as I am aware, that it has not given very general satisfaction ; and the Supreme Court of the United States has decided a case in direct opposition to it, which I have seen and examined. But the reasoning is very far from satisfying me, that they arc right, or that Daniel v. McRae is wrong.

Per Curiam. — JudgmeNT reversed.