Ward v. Tyler , 52 Pa. 393 ( 1866 )

The opinion of the court was delivered, October 17th 1866, by

Agnew, J.

Was William Jessup a competent witness? This is the question raised by the 1st and 2d assignments of error. To understand it we must state the facts. Meylert & Ward were sued as drawers of two notes, $1108.80 and $1509.95, to the Lackawanna Railroad Co., endorsed by Jessup to Tyler, and by Tyler to the Pittsfield Bank. Jessup was the endorser also of a draft of the Lackawanna Railroad Co. on Meylert, their treasurer, payable to Tyler, their general agent, subsequently endorsed by Meylert individually to Tyler individually, and by him to the Pittsfield Bank.

The bank brought suit against Tyler in Massachusetts, and recovered a single judgment for the sum of these three instruments, and collected by execution outof Tyler’s property $3018.50, applied to the debt. The bank also brought suit in Pennsylvania against Jessup, and recovered a single judgment against him for the total sum of these three instruments. On this judgment the bank collected, by sale on execution, the balance of the judgment, after crediting the sum paid by Tyler’s property in Massachusetts. Thus when the bank was paid off, Tyler’s interest in the notes and draft was to the extent of his payment on their account, viz., $3018.50, and on the surrender of the paper to him by the bank, he was the trustee for Jessup to the extent of the balance which Jessup had paid to the bank. Therefore, when Tyler brought this suit against Meylert & Ward, the drawers of the two notes, he was a trustee of Jessup to the amount of Jessup’s interest in the notes. It is well-settled law that the holder of negotiable paper may sue on it in his own name, although but an agent or trustee for others: Brown v. Clark, 2 Harris 479; 2 Pars, on Notes and Bills 436. But Jessup’s interest in the two notes was only a proportional amount of his payment. That payment being made by operation of law, viz., a sale under execution, upon a judgment comprising a draft, for which Ward, and Meylert & Ward as a firm, were not liable, Jessup’s interest in the notes bore the same proportion to them as his payment bore to the whole judgment. Tyler gave no credit to Meylert & Ward for this proportional part coming to Jessup, while the charge of the court and the amount of the verdict show that none was given on the trial. It is clear, therefore, that this suit of Tyler against Meylert & Ward was brought and enforced by Tyler for the whole amount of the notes, and consequently, as the trustee of Jessup, to the extent of his proportional interest in the notes. After recovery aird collection, Tyler would be compelled to pay over to Jessup the proportion belonging to him, or on payment by Jessup of the proportion coming to Tyler, Jessup would be entitled to subrogation to the judgment of Tyler against Meylert & Ward: Robinson et al. v. Huntingdon Bank, 1 Penna. R. 395 ; Lloyd v. Barr, 1 Jones 41; Lenox v. Prout, 3 Wheat. 520.

Thus it will be seen that Jessup was the beneficial owner of a part of the notes, and on this part Tyler’s release did not operate. His release to Jessup discharged him from liability to the extent of the proportion of the notes coming to himself, but did not discharge Meylert & Ward, the drawers, from that part which belonged to Jessup. The suit still proceeded against them for the whole amount of the notes, and Jessup was still directly interested in Tyler’s recovery. The court below, therefore, erred in admitting Jessup’s depositions. No point was made in the court below as to the incompetency of Jessup as an endorser and assignee on the ground of policy, according to the doctrine of Post and Avery.

The 2d assignment of error is to the rejection of the record of the judgment of the Pittsfield Bank v. Meylert, who was impleaded with Ward, upon which Jessup became bail for Meylert for a s$ay of execution. This is rendered immaterial by what has been said already, Jessup being otherwise interested in the suit when his deposition was taken. We may say, however, it is difficult to see what difference the admission of the record would have made. Jessup was liable already to the bank as endorser of the notes, so that whether he paid the bank as endorser or as bail for a stay of execution, he would be entitled to the use of the notes and of the judgment against Meylert & Ward. It is argued, however, that the recovery of Tyler in this suit against Meylert & Ward would extinguish the judgment of the Pittsfield Bank against them on which Jessup is bail for the stay of execution, and, therefore, Jessup was interested in this recovery in order to extinguish his liability as bail. But according to the authorities already quoted, Tyler is entitled to .use the judgment of the Bank of Pittsfield by way of subrogation. The security of the judgment in this case would be only cumulative, and it might be still important for Tyler to resort to the judgment of the bank on account of its earlier lien. It is satisfaction only by Meylert & Ward which can operate to extinguish. Until satisfaction by them Jessup is liable to Tyler to the extent of his interest in the note in either way, and it would seem to be immaterial, therefore, to him whether he has to pay as endorser or as bail.

There is nothing in the 3d, 4th and 5th assignments of error which needs notice. They are not sustained.

The 6th, 7th, 8th and 10th assignments all involve the same question as- to the dissolution of the partnership and the authority of Meylert to sign the partnership name while the business of the firm remained unsettled. As a statement of the general principle, the charge of the court and the answers to the 1st, 3d and 5th points are sustained by the cases of Estate of Davis & Desauque, 5 Wh. 530 ; Houser v. Irvine, 3 W. & S. 346 ; Petrikin v. Collier, 1 Barr 247; Robinson v. Taylor, 4 Id. 242 ; and Brown v. Clark, 2 Harris 474-5. Substituting the word “business” for the word “ work,” the defendants had the benefit of the answers of the court to their 1st, 3d and 5th points, that the notes created no liability if given after the business of the partnership was fully completed. If the intention of the defendants was to have the opinion of the court upon the sufiBciency of the evidence to show the dissolution in fact previous to the making of the notes, and the insufficiency of the evidence to show that the notes were given in a partnership transaction, it was their duty so to have framed their point, and then to have furnished us with the whole evidence to enable us to review the instructions given. But none of the documents relating to the question of dissolution are printed. Even the extract from the minute-book, containing the alleged final settlement, is not before us. Under these circumstances, the court having stated the general principles of law correctly, we are unable to say that they were inaptly applied to the special facts in the case.

Nor can wre say there was error in the answer to the defendants’ 4th point, which asked the court to confine the recovery of Tyler to the proportion he had paid on the notes of Meylert & Ward. We have already shown that a legal holder of negotiable paper may sue thereupon though but a trustee for others. In this case Tyler had a beneficial interest of his own to recover as well as for the interest of Jessup, and was not bound to split up the action. Had Jessup’s portion been credited and had he been suing only for his own proportionate interest, then that interest would have been measured by his payment; his interest in the note bearing the same proportion to the payment which the notes bore to the whole judgment. This is manifest; Jessup having paid the whole balance of the judgment, this was necessarily a payment of the balance of the notes, beyond the payment of Tyler.

Upon the whole case we discover no substantial error except the admission of Jessup’s deposition, and for this the judgment is reversed, and a venire facias de novo awarded.