Packard v. Richardson

17 Mass. 121
Massachusetts Supreme Judicial Court·Decided March 15, 1821·Published·Cited by 3 cases

Opinion

Parker, C. J.,

delivered the opinion of the Court.

The case presents two questions of importance, neither of which has received a judicial determination in our courts. The arguments upon them have been exceedingly ingenious as well as able, leaving nothing untouched in point of authority or general reasoning, which has relation to the subject.

The first question relates to the rejection of Mr. Fiske, as a witness, he having signed the note as agent to the Stony Brook Manufacturing Company, and being called upon to prove that the consideration of the note was usurious.

The case of Churchill vs. Suter settled for us the question, which seemed to have been undetermined in England, as to the admissibility of a party to the note, although not interested in the event of the suit, to prove the note void on account of illegality in the consideration. The principle, on which that case rests, approves itself to the mind *of every fair man, viz., that [ * 127 ] it is inconsistent with fair dealing, as well as contrary to the policy of the law, that he, who has uttered a note or other negotiable instrument as true and genuine, and given the sanction of his name to it, should afterwards contradict his own assertions, and defeat, by his evidence, the contract which he had established by his signature. This has been a standard case in our courts, and is referred to upon the exchange, and in the course of business, as furnishing a clear and intelligible rule, by which the character and value of negotiable paper in the market may in some good measure be ascertained (15).

Nothing has been done since to shake the authority of this rule. The case of Fox & Al., Administrators, vs. Whitney (16), recognizes and affirms the principle. The witness offered and admitted, it is true, had been a party to the note; but the note never having been negotiated, the question was between the original parties, or their representatives.

The question before us is, whether the case at bar comes within [104] the principle of Churchill vs. Suter; and we think it clearly does The witness, although not answerable on the note by reason of his signature, was the party who gave it currency, and put it in circulation. He must be considered as having declared by his signature, that the note was good and valid at the time it was made, for aught he knew to the contrary; and he ought not to be allowed after-wards to say that his declaration was false, and that the note is void, on account of facts known to him at the time it was signed. Corporations, who promise only by agents, ought not to be privileged ; and they would be, if they might defeat their obligations by the testimony of those whom they employ to represent them in negotiable instruments.

The other question presented by this case is of a more embar rassing nature; not so much on account of any intrinsic difficulty in construing the statute out of which the question [ * 128 ] arises, as from an unwillingness to differ from the * high authorities, who have adopted a construction, which, after mature deliberation, we think is not warranted by the statute itself, or any practical exposition which has been given to it since it was enacted, until the case of Wain vs. Warlters was decided, in the year 1804.

The case, as stated in the declaration, and as it was made out in proof, would admit of our avoiding the naked question presented by the report. For the plaintiff having made an attachment of property belonging to the company, and having relinquished that attachment upon receiving the guaranty of the defendants; according to most of the authorities, the promise would not be within the statute; there- being a new consideration, between the new contracting parties, sufficient to maintain the promise without writing. But as the question is now fairly presented to us, and has been ably argued, and as it often arises at nisi prius, we think it best to give our reasons for deciding that a promise to pay the debt of another, in writing, and signed by the party intending to be bound, is a sufficient compliance with the statute; without any recital in the writing of the consideration upon which the promise is founded.

The original promise is by the Stony Brook Manufacturing Company, by a note payable on demand. After the making of the note, and after it was endorsed to the present plaintiff, the defendants severally signed their names on the back, and over their signatures were written these words:—“We acknowledge ourselves holden as surety for the payment of the within note.” The consideration existing was, that these defendants were members of the company which made the note; and that a suit, which had been commenced, was stopped by the plaintiff, at their request. But this [105] consideration was proved by parole, and the writing acknowledges no consideration whatever.

It is somewhat remark rble that a statute, which has so important a bearing upon contracts in daily use, should have remained without the construction recently given to it, from the time of its enactment, which was in the 29 Car. *2, to the year 1804, [ * 129 ] when the case of Wain vs. Warlters was decided. That it did so remain will appear from the circumstance, that neither the counsel in arguing that case, nor the Court in deciding it, refer to any preexisting case in support of their doctrine ; a doctrine which, when announced, excited much surprise both in England and in this country.

Our provincial act was passed in the year 1692, and continued in force until the year 1788, when it was superseded by the statute of the commonwealth, which, as well as the provincial act, is similar in substance, and, except in one instance where the sense is not altered, is copied verbatim from the English statute. So that we have had the statute in operation more than a century, within which period innumerable collateral engagements have been made; and it has never, until within a few years, as far as we can ascertain, been doubted that, if one man, for a sufficient consideration, deliberately signed his name to a promise to pay the debt of another, he would be bound by it, although no consideration whatever was mentioned in the writing which he signed.

Although some consideration must exist to give validity to such a promise, it is generally of a nature not to be disputed; and if disputed, has been proved by parole testimony. The consideration need not be for the benefit of the party making the promise, and it seldom is for his benefit; forbearance to sue, or the Surceasing of a suit, being most frequently the consideration of such undertakings, and these being altogether for the benefit of the original debtor. This being the case, it would seldom, if ever, enter into the imaginations of the parties to such a contract, that, unless the motives and considerations, which led to it, were put down in writing, the engagement was void.

Having made these preliminary remarks, I shall proceed to consider the statute, and what is its most obvious construction, without reference to decided cases; and then *take [ * 130 ] a view of the decisions which have been had upon it, both in England and in this country.

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Packard v. Richardson, 17 Mass. 121 (Mass. 1821).

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