Building & Loan Society v. Leeds

18 A. 82, 50 N.J.L. 399, 1888 N.J. LEXIS 22

• Court: Supreme Court of New Jersey
• Decided: March 15, 1888
• Status: Published

Opinions

The opinion of the court was delivered by

Beasley, Chief Justice.

The only question in this case is whether a note, not negotiable, signed on its back by three persons, prior to its passing to the payee, is evidence, per se, of a contract by such endorsers. At the trial it was held that the note, standing alone, did not evidence what the agreement between these parties was, and consequently, with respect to these three endorsers, the plaintiff was non-suited.

Over sixteen years ago this court, in the case of Chaddock v. Van Ness, 6 Vroom 517, decided that the signature of a third person on the back of a negotiable note, before it was put in circulation by the maker, neither expressed nor implied, by its own intrinsic signification, any contract whatever on the part of such endorsers. The endorsement in that case was treated as a signature in blank, over which could be written the real engagement of the party endorsing, which was to be proved by parol evidence. Parol evidence was held to be admissible to show what the agreement between the parties was, a result which could not have been sanctioned except on the ground that the writing itself did not manifest an agreement. If the note and the endorsement proved an agreement it followed as a matter of course that parol evidence to show the mind of the parties would have been inadmissible.

Nor was this decision a novelty in the jurisprudence of this state, for as far back as 1856 the Supreme Court had promulged a similar adjudication in the case of Watkins v. Kirkpatrick, 2 Dutcher 84, the same principle haviug been previousl}r asserted in the case of Crozier & Moore v. Chambers, Spencer 256. And it was this long prevalence of the doctrine that had a considerable and perhaps a decisive effect when the question finally arose in this court in the case referred to. Speaking as a member of this court on that occasion, I can say that it did, not then seem to me that the principle established was either politic, or the logical deduction! from the facts in proof. It seemed to me then, as now, that, when a third person signs a note before it has been put in' circulation by the maker, whether such signature be on its back or face, the writing should be construed as exhibiting his contract, which would have the effect of placing him as. one of the makers of the instrument. This is the view taken by the courts of Massachusetts, and it- has the signal advantage of reducing the transaction to the stable form of a definite-written contract, instead of, as in the present case, compelling-the person who has taken the paper and loaned his money upon it, to prove the real character of the affair by oral testimony, and generally by means of interested and hostile witnesses. But on the occasion referred to it seemed to me that the usage in question, and which had grown up under the-sanction of the courts, was so firmly established that it could not properly be abrogated by judicial authority. That doctrine was then approved of by this court, and since then it lias, not seemed to me that the matter thus far was open to further-discussion.

Taking, then, this as an established premise, the only inquiry is whether the endorsement made in the present instance, being on a note not negotiable, affords a ground for discrimination. Such a differentiation has been made in some instances by various courts, but upon reflection I am satisfied that the distinction thus drawn is too subtle to be safely acted upon. At best it would take out of the rule a very limited, class of cases, and would, consequently, have but a scant effect.. Legal regulations affecting contracts and property should be-plain and well defined, and it is obvious that exceptive cases have inevitably a marked tendency to perplex and confuse the-rule.

On the doctrine of stare decisis, I think this judgment, should be affirmed.