Brady v. Brady

73 A. 567, 110 Md. 656

• Court: Court of Appeals of Maryland
• Decided: June 28, 1909
• Status: Published

Opinion

Thomas, J.,

delivered the opinion of the Court.

On the 22nd of December, 1893, the appellee and the late Judge James Revell executed and delivered to the Farmers’ Rational Bank, of Annapolis, the following promissory note:

($500). Annapolis, Md., Dec. 22, 1893.

On. demand, we jointly and severally promise to pay to the Farmers’ Rational Bank, or order, Five Hundred Dollars, value received.

J. Roland Brady,

Jas. Revell.

Judge Revell died in March, 1908, and after his death this note was found among his private papers, in his safe deposit box in said bank, endorsed as follows:

In red ink at the top of the note.

J. R. Brady Demand

Dec. 22, 1893.

In black ink.

Eote..............................'...............$500.00

Interest, Nor. 6, ’96............................... 86.25

$586.25

Paid Eov. 6, ’96, by J. E........................... 100.00

$186.25

Interest to Mch. 10, ’97,........................... 10.01

$196.29

Paid Mch. 10, ’97, by J. E......................... 60.51

$135.78

28th Sept., ’98, Int. pd. to Sept. 10, ’98....,.. .$39.21

18th Mch., ’99, Int. pd. to Mch. 10, ’99......., 13.08

5th Apr., 1900, Int. pd. to Mch. 10, 1900...... 26.16

•Sept. 27, 1900, Int. pd. to Sept. 10, 1900...... 13.08

Mch. 27, 1901, Int. pd. to Mch. 10, 1901...... 13.08

Peby. 28, 1902, Int. pd. to Mch. 10, 1902...... 26.16

Sept. 28, 1903, Int. pd. to Sept. 10, 1903....... 39.22

Mch. 29, 1901, Int. pd. to Mch. 10, 1901...... 13.07

Sept. 26, 1901, Int. pd. to Sept. 10, 1901....... 13.07

Int. to Í5th May, 1905............................. 17.65

$153.13

Int. to Mch. 10, 1901..'............................ 13.07

Int. to Sept. 10, 1903.............................. 39.22

On the face of the note was written:

“Partners’ Eat. Bank.

Paid May 15, 1905,

Annapolis, Md.

Paid in full by Jas. Eevell, 15 May, 1905.

L. D. Gassaway, Teller.”

On the 2nd day of May, 1908, the administrators of Judge Eevell brought suit to recover from the appellee, J. Eoland Brady, the amounts paid by their intestate on account of said note, claiming that he signed the note as surety for the appellee.

The narr. contains the common counts in assumpsit, and a special count, charging the payment of the note and interest by Judge Eevell, on the 15th day of May, 1905, as surety.

The case was tried on issues joined on the pleas of never indebted as alleged and never promised as alleged, and on the replication to the plea of limitations, and during the trial three exceptions were reserved, the first and second to rulings ■of the Court on the evidence, and the third to the granting, at the conclusion of plaintiffs’ testimony, of the defendant’s prayer taking the case from the jury.

As the prayer does not refer to the pleadings, in passing on that exception we have only the evidence to consider, and it is not necessary to determine whether under the ■ pleadings in the case the evidence was legally sufficient to entitle the plaintiffs to recover.

The only witness in the case was Mr. Gfassaway, cashier of the bank, who testified that he had been cashier of the bank for six years, and had been connected with the bank for twenty or twenty-five years; that Judge Eevell was at the time of his death a director of the bank; that the signatures to the note were the signatures of the appellee and Judge Eevell; that the note was in the handwriting of Judge Eevell, and that “the memoranda and the receipts on the back of the note” were in the handwriting of former employees of the bank, made in the course of their official duties; that the last two receipts wer'e in his handwriting; that the initials “J. E.” after the word paid, on the back of the note, “stood for, he supposed, James Eevell,” and that the last payment on the note was made to him by Judge Eevell on the 15th of May, 1905; that he was one of the appraisers of Judge Eevell’s estate, and found the note among his private papers, in his safe deposit box in the bank. The note and endorsements thereon were then offered in evidence, and the witness, when asked “to whom the money was paid when the said note was discounted,” replied: “From the usual course

of business, I would say it was paid to J. Eoland Brady,” and in reply to tbe question, “Wby do -you say it was paid to tbe defendant, J. Eoland Br'ady?” said: “Because it is and bas always been tbe custom of tbe bank since I bave' been connected with it to pay tbe money to tbe person whose name appears first on tbe note, and I find J. Eoland Brady, tbe defendant’s name, is signed first on tbe note which I bold in my band.” He further testified that tbe note did not show, and that be did not have any knowledge of any payment by tbe defendant on account of tbe note or interest, and that the' account of tbe defendant in tbe bank’s ledgers shows that tbe following deposits were made between Dec. 21 j 1893, and February 4, 1894:

1893 -

Dec. 23 C $35.98

Dee. 26 0 5.00

1894 -

Jan. 8 0 12.00

Jan. 9 C 16.00

Jan. 23 C 30.00

Jan. 26 C 5.00

Feb. 6 O' 3.50

And also “showed tbe following withdrawals:”

1893-

Dec. 23 $ 5.00

Dec. 26 22'.98

1894-

Jan. 2.50

Jan. 1.50

Jan. 9 1.00

Jan. 10 2.50

Jan. 10 10.00

Feb. 3 1.96

• On cross-examination tbe witness testified as follows:

Q. “In your examination in chief you said 'according to tbe custom of tbe bank, tbe money was paid to J. Eoland Brady. ’ ” A. “Yes.” Q. “But as a matter of fact you do sometimes pay the money to persons other than first signers ?” A. “Yes, sometimes; hut it is not usual, as.I said it is not the custom of the bank to do so.” Q. “Did you not sometimes pay to Judge Eevell the money although his name appeared second on the note ? ” A. “We may have done so.” Q. “Then you cannot say from your own knowledge that the defendant received the money from the bank?” A. “No, not from my own knowledge, but from the usual course of business, I would say that he did.”

The rule as stated in 2 Ency. of Evidence, 462, is that: “Two or more persons signing their names to a note as makers, are presumed to be equally bound as such, and the debt evidenced thereby is presumed to have been created for the equal benefit of the joint makers, in the absence of a contrary showing.” See also 7 Gyc., 653, and 10 Ency. of Evidence, 51.

On the face of the note in this case the appellee and Judge Eevell are joint makers, and the burden was on the plaintiffs to show that the deceased signed the note as surety for the defendant. 2 Ency. of Evidence, 462 and note 46; Keyset v. Warfield, 100 Md. 72; Keyset v. Warfield, 103 Md. 161.

“The order in which makers sign a note does not, of itself, raise a presumption of suretyship,” (2 Ency. of Evidence, 462; 27 Am. & Eng, Ency. of Law, 438), and if it was the custom of the bank to pay the amount loaned on a note to the first signer on the note, without any regard to the relations of the makers, then the fact that the money was paid to J. Boland Brady would not tend to show that he received it as principal.

We do not find in the Beeord evidence legally sufficient to overcome the presumption that the signers of the note were joint makers, and as the case was tried on the theory that the deceased signed the note as surety, it was, no doubt, on that ground that the Court below granted the defendant’s prayer.

' But it does not follow because of the failure of the plaintiffs to show that the relation of the parties was that of principal and surety, that they were not entitled to recover on the evidence in the case, and that the case should have been withdrawn from the jury.

When one joint maker of a note is required to pay the whole amount due on the note he is entitled to recover contribution from his co-maker on the count for money paid, etc. 1 Poe's P. & P., sec. 113. As we have said, on the face of the note the deceased and the appellee were joint makers. It was found after Judge Eeveli/s death among his private papers, and from the note and the receipts thereon and the testimony of Mr. Gassaway it appears that Judge Eevelt, paid the balance due on the note May 15th, 1905. Ordinarily if a note is found among the maker’s papers after his death it will be presumed to have been paid. 8 Cyc., 247.

In the ease of Heald v. Davis, 11 Gush. 318, where the only evidence offered in support of the plea of set-off was the production by the defendant of the note, the execution of which was admitted, the Court said: “We do not question the correctness of the rule as stated in the cases of McGee v. Prouty, 9 Met. 547, and Baring v. Clark, 19 Pick. 220, that when a promissory note or bill of exchange has been negotiated, and afterward comes into possession of one of the parties liable to pay it, such possession is prima facie evidence of payment by him. But this rule of law doés not apply to a possession by one of two joint promisors in an action by him to recover of the other one-half the amount thereof. In the former case, the possession is only to be accounted for, in the absence of evidence in relation to it, by the fact of payment, by the party holding it. Hot so, as between co-promisors. The possession by one of them is prima facie evidence of payment of the note by them, or one of them; but inasmuch as the possession could not be by each individually, it would be found with one, although both had contributed equally to the payment. In other words, the possession by one does not, as against his co-promisor, raise that inference of exclusive pay ment by tbe holder that would arise where the note was held by an indorser, or a surety, or a sole promisor.” That case is cited and relied on in the case of Bates v. Gain, 70 Vt. 144, where the note was produced by the defendant, “without other evidence as to the fact or manner of payment,” and in the case of Craig v. Craig, 3 Rawle, 472 (24 Am. Dec. 390), the Court held in a suit by one obligor against his co-obligor for contribution, that the nalced fact that the plaintiff was in possession of the bond was not sufficient to show that he paid the whole debt.

On the other hand, in the case of Chandler v. Davis, 47 N. H. 462, the Court, in announcing the contrary view, said: “When a note or bill is found, after paymfent is due, in possession of a party, who was bound to pay it, this is prima facie evidence that it has been paid, and that it was paid by the party who has possession of it. 2 Greenl. Ev., sec. 527; Smith v. Smith, 15 N. H. 55. This is a very familiar rule of evidence applied in every day’s practice; and the reason of the rule is obvious, for, in the usual course of business, the note will be delivered on payment to the party that pays it. Brembridge v. Osborne, 1 Stark. 374. And there can be no presumption, till the fact is proved, that two or more persons, who owe a debt secured by a note, made up a common purse and paid it out of a joint fund. If such an arrangement were made we certainly should not expect the note to be left in the hands of one of them without something to show how the business was transacted; and, therefore, in such case, the presumption will be, till the contrary is shown, that the party to the note, who is found in possession of it, paid it, and the whole of it. Where one of two sureties sues the other for contribution, if he produce the note on trial, it is prima facie evidence that he paid the whole of it. In such case the two sureties are equally bound to pay the note, and I find it quite impossible to distinguish that case from this where two joint and several makers are equally bound to pay the debt. In both cases the natural inference is, that the note would be de l'ivered on payment to the party that paid it, and remain in his hands till the business was adjusted with the other.

“If there had been but one note in this ease, the general rule would apply, that possession of the note by the plaintiff’s intestate was prima facie evidence that he paid it. But the reason of the, rule applies still stronger to this case, for here were two notes of equal amount, which the two makers were equally bound to pay. If each paid his part, and for any reason it was found convenient to preserve the notes uncancelled, why was not one left in possession of the intestate and the other in that of the defendant? And this circumstance, that here were two notes of equal amount, which the two makers were equally bound to pay, distinguishes the present case from Heald v. Davis, 11 Cush. 318, cited for the defendant.' That case goes upon the assumption that, as both parties were equally bound tp pay, it must be presumed that both contributed equally to the payment, and that “inasmuch as possession could not be by both individually, it would be' found with one, although both had contributed equally to the payment;” a reason which evidently does not apply to this- case, where there were two notes of equal amount and there was no difficulty, if half was paid by each of the makers, in leaving one of the notes in the possession of each; Eo authority is cited for the decision in Heald v. Davis, and the'reason assigned for it is not such as would induce us to follow it without hesitation. It would apply equally well to the case where one of two sureties, who sued the other for contribution, produced the note, on which they were jointly and severally liable, as is in conflict with the general rule, which we take to be extremely well established, .that the production of a note by a party, who is bound to pay it, is prima facie evidence that it was paid by him. 1 Greenl. Ev., sec. 38; Baring v. Clark, 19 Pick; 220, 227; McGee vs. Prouty, 9 Met. 547, 551.”

"In the ease of Ingram v. Croft, 7 La. 82, the Court held thkt-the' “possession of a joint note by one of the drawers, with a receipt of payment by the holder or possessor en dorsed on it by tbe person entitled to receive it, is prima facie .evidence of the liability of” tbe other drawer to refund one-balf of tbe note;” and in tbe case of Dillenback v. Dygert, 97 N. Y. 303, the Court said: “We affirm this judgment upon the ground tbat the note, wbicb was paid by George W. Snell, although extinguished as such by the fact of its payment, remained in tbe bands of Snell, tbe evidence of a right to contribution against bis co-sureties, establishing both tbat they incurred tbe original obligation to contribute, and tbe fact of payment by Snell, wbicb made tbat obligation operative in bis favor.”

In the case of Keyser v. Warfield, 103 Md. 161, suit was brought by one joint maker of.two notes to recover contribution from the other, and tbe claim was resisted on the ground tbat tbe defendant signed tbe notes as guarantor and bad been discharged by tbe action of tbe bank. Tbe record shows tbat tbe plaintiff offered evidence tending to prove tbe genuineness of tbe signatures to tbe notes; tbat be paid tbe amount due on them, and tbat tbe defendant signed tbe notes as maker, and tbe Court held “tbat tbe plaintiff bad made out a prima facie case.”

In tbe case at bar, unlike tbe cases of Heald v. Davis and Bates v. Cain, we have, in addition to tbe fact tbat tbe note was found among tbe private papers of tbe deceased, tbe testimony of Mr. Gassaway to tbe effect tbat Judge Revell, on tbe 15th of May, 1905, paid tbe amount then due on tbe note, and we think tbe evidence was sufficient to establish tbe prima facie right of tbe plaintiffs to recover from the defendant one-balf of tbe amount paid by Judge Revell on account of tbe note and interest witlrn three years prior to tbe bringing of the suit, and tbat tbe case should not, therefore, have been taken from the jury.

At tbe time of tbe payment of tbe note, on tbe 15th of May, 1905, tbe Statute of Limitations bad not attached because of tbe previous payments on tbe note (Burgeon v. Bixler, 55 Md. 392; Hooper v. Hooper, 81 Md. 155), and when one joint maker of a note pays tbe debt before it is barred by statute the statute begins to run as against his right to contribution from the other joint maker from the date of such payment. 9 Cyc. 802; Hooper v. Hooper, supra; Davis v. Humphreys, 6. M. and W. 164.

We find no error in the rulings of the Court in the other 'bills of exception. In the first exception the witness was asked to give his opinion as to the ability of the defendant to pay the note from its date to the date of the last payment, and in the second exception he was asked what knowledge he had of the “financial condition” of Judge Eevell between the date of the note and the date of its payment, and the Court properly refused to allow the questions to be answered. ■ It is said in 1 Wigmore on Evidence, sec. 89, that lack of money or other resources is relevant to show improbability of the making of a loan or payment, but that the possession of money is not admissible “as making probable the payment or loaning of money.”

It follows from what we have said that, because of the error in granting of defendant’s prayer, we must reverse the judgment below and grant a new trial.

Judgment reversed, with costs, and new trial awarded.