De Lavallette v. Wendt.

1 Blackf. 353. The statute of limitations has no bearing upon the due-bill. Merritt v. Todd, 23 N. Y. 28; 3 Pars. on Con. 91.

Edward M. Shepard, for respondent.

HAND, J. (Omitting a formal matter.)

There was no error in allowing upon the twenty-five dollars a week (from 21st December, 1866, to 1st May, 1867, aggregating $464.28, interest from May 1, 1867, to the day of trial. At the close of the term for which the testator had hired the rooms, he was liable to the plaintiff for this sum, easily ascertainable and certain, because to be ascertained readily by mere computation. The amount received by the plaintiff for the rooms, during this period, was then fully known to her. The defendant knew that he was liable for the $150 a week for this period, less the former amount; and this he could have learned by inquiry from her or her tenant.

It is not a case, therefore, where the amount due was unliquidated and uncertain, in the sense to prevent the accruing of interst thereon. The agreement by the testator was to pay a fixed sum, all of which was payable on or before the 1st of May, 1867, except es reduced by the deduction of the sums received by the plaintiff fr the use of the rooms during the time. This balance, we think, con.es within the principle of the ruling in Van Rensselaer v. Jewett, 2 Comst. 135, as a sum for the non-payment of which, in pursuance of his contract, the defendant was, after May 1, 1867, in default, and liable to indemnify the plaintiff for such default, by the payment of interest. See Adams v. Ft. Plain Bank, 36 N. Y. 255. Whether the case was one where the jury might, in their discretion, allow interest, as damages for the default of the defendant, or one in which the plaintiff was entitled, as matter of law, absolutely to interest, is not, perhaps, necessary to decide, as the question was not distinctly raised. But we are inclined to think that the plaintiff was entitled absolutely to interest upon the sum due upon the 1st May, 1867. Dana v. Fiedler, 2 Kern. 40.

There could be no recovery by the defendant, or set-off in his favor, arising out of the instrument put in evidence by him, da ed November 3, 1866, for if it is to be regarded as a note or due-bill, payable on demand, the statute of limitations had completely barred it, at the time of the commencement of this action. Herrick v. Wolverton, 41 N. Y. 581, S. C. 1 Am. Rep. 461; Howland v. Edmonds,

De Lavallette v. Wendt.

24 id. 307; Mason v. Ins. Co. 13 Wend. 267; Newman v. Kettelle, 13 Pick. 418.

The judge's refusal of the ninth request to charge that the defendant was entitled to recover its amount was therefore correct. It iɛ insisted, however, that the judge erred, in leaving to the jury the question whether this instrument was a due-bill, or a receipt, and instructing them that their finding, upon this matter, would bear very strongly upon the issue submitted to them, upon conflicting evidence, as to what the contract sued upon by the plaintiff really was.

The point is not without difficulty, but we have come to the conclusion that the judge was right in holding this paper open to explanation as to its consideration and the circumstances under which it was given. It is not, on its face, unequivocal or complete, as a promise to pay. Its language is, "received of D. M. Peyser five hundred dollars due on demand." It names no payee, not even the bearer, and would, in form, be as much a receipt as a note, and more a certificate of deposit, perhaps, than either. But evidence was given, without objection, from which the jury might find, and must be deemed to have found, that it was made when the testator paid the plaintiff the amount specified in it already due for board and rooms, and hence was without consideration as a due-bill or note, but really intended by the plaintiff and taken by the testator merely as a receipt, or memorandum of money paid, on account.

The authorities, in my opinion, permit this explanation, and justify the course of the judge. The consideration of a promissory note is open to inquiry, as between the original parties; and under this principle, upon the payment of money due, the giving of a note to the debtor by the creditor, upon such payment, it has been held, may be shown to have been intended as a receipt. Smith v. Rowley, 34 N. Y. 367; Slade v. Halsted, 7 Cow. 322; Bank of Troy v. Topping, 9 Wend. 273. In the present case, the proof showing that the consideration of the note (if a note) was money paid to the maker by the payee as her due, the result would be the same whether it were called a receipt or a note. In either view, no cause of action could arise thereon to the payee, for the precise amount secured to be paid to him appears, at the same time, to have been due from and paid by him to the maker, and hence, while the debt owing to the maker is paid, no consideration for the note made by her remains, The other exceptions taken upon the trial have been examined, but do not appear to have any merit, or to require any comment. VOL. XXXI - 63

498

NEW YORK, JANUARY TERM, 1879.

De Lavallette v. Wendt.

The result is that there should be an affirmance of the judgment, were it not for an error appearing, in the computation of .nterest, in the judgment, as modified by the general term. The interest on the principal sum of $464.28, from the 1st May, 1867, to the day of the trial (the 28th February, 1877), seems to have been computed in the judgment, as finally entered, so that the total amount, as of March. 5, 1877, the date of the original judgment, was $975.70, thus more than doubling the principal, in less than ten years. The judgment should be so modified as to reduce it to the sum of $464.28, and interest thereon to the 28th February, 1877, making the sum of $783.59; and as so modified and entered, as of the date of its original entry, 5th March, 1877, affirmed, with costs of this court.

All concur.

Judgment accordingly.

NOTE BY THE REPORTER. — On the subject of interest on damages, see Lewis v. Rountree, 19 N. C. 122; 8. C., 28 Am. Rep. 309, and note, 314.

In White v. Miller, N. Y. Ct. App., October 14, 1879, an action for breach of warranty on sale of seed, it was held that interest is not allowable from the commencement of the suit. The court said, in substance: The law in this State as to the allowance of interest in common-law actions is in a very unsatisfactory condition. The decisions upon the subject are so contradictory and irreconcilable that no certain rule for guidance in all cases can be deduced from them. The common |law rule, as expounded in England, allowed interest only upon mercantile securities, or in those cases where there had been an express promise to pay interest, or where such promise was to be implied from the usage of trade. Mayne on Damages (2d ed.), 105; Higgins v. Sargent, 2 B. & C. 349; Gordon v. Swan, 12 East, 419; Calton v. Bragg, 15 id. 223; Walker v. Constable, 1 B & P. 306; Carr v. Edwards, 3 Starkie, 132; Nichol v. Thompson, 1 Campb. 52; Trelawney v. Thomas, 1 H. Bl. 303. But a more liberal rule has been adopted here, and the sole fact that a demand has not been liquidated is not a bar to an absolute legal right to interest. The following cases cited show the present and uncertain state of the law upon the subject. Van Rensselaer v. Jewett, 2 N. Y. 135; Dana v. Fiedler, 12 id. 40; McMahon v. N. Y. and E. R. Co. 20 id. 463; Adams v. Fort Plain Bank, 36 id. 255; Mygatt v. Wilcox, 45 id. 306; Smith v. Velie, 60 id. 106; McCollum v. Seward, 62 id. 316; Mercer v. Tose, 67 id. 56. The cases of Feeter v. Heath, 11 Wend. 479; McCollum v. Seward, supra; Mercer v. Vose, supra; Barnard v. Bartholomew, 22 Pick. 291; Amee v. Wilson, 22 Me. 116, tend to show that where an account for service rendered or for goods sold and delivered which has become due and is payable in money, although not strictly liquidated, is presented to the debtor, he is put in default, and interest is set running, and that if not demanded before, the commencement of the suit is a sufficient demand to set the interest running from that date. But there is no authority for holding in a case like this, where the claim sounds purely in damages, is unliquidated and contested, and the amount so uncertain that a demand cannot set the interest running, that it can be set running by the commencement of an action. If interest as a legal right can be allowed in this case from the commencement of the action, it must be allowed in all actions ex contractu and could not be refused in actions a delicto.

CASES

IN THE

SUPREME COURT

OF

NORTH CAROLINA.

HILL V. SHIELDS.

(81 N. C. 250,)

Negotiable instruments — evidence- agreement between payee and his immediate

indorsee.

In an action upon a note by a remote indorsee, who purchased bona fide for full value and without notice, against the payee who indorsed the note in blank, evidence of an agreement between the payee and his immediate indorsee that the former should not be held liable on his indorsement is not admissible, and the plaintiff holds the note unaffected by such agreement.*

A

CTION on a promissory note. The facts appear in the opinion. The plaintiff had judgment below.

R. B. Peebles, for plaintiff.

W. H. Day and Batchelor & Son, for defendant, cited Wright v. Latham, 3 Murp. 298; Davis v. Morgan, 64 N. C. 570; Runyon v. Clark, 4 Jones, 52; Baucom v. Smith, 66 N C. 537; Crossley v. Ham, 13 East, 498; 12 E. C. L. Rep. 420; Harris v. Burwell, 65 N. C. 584.

DILLARD, J. From the case of appeal sent up to this court the case is that defendant was payee in a promissory note executed to him by Edward Anderson, payable at twelve months for a large sum of money and secured by a mortgage on property, and on the

• See Rodney v. Wilson (67 Mo. 163), 29 Am. Rep. 499, to same effect.

Hill v. Shields.

23d day of January, 1875, after its dishonor, he transferred the same by a blank indorsement thereon to the Mercantile Bank of Norfolk, which carried with it the mortgage as an incident, and the bank afterwards transferred the same to the present plaintiff by delivery for full value. After receiving several payments on the note and realizing all the proceeds of the property conveyed in the mortgage there still remained a balance unpaid on the note, and for that this action was brought.

On the trial in the court below the plaintiff tendered the issue, "was the plaintiff a bona fide purchaser of said note for full value and without notice?" Defendant admitted the affirmative of that issue and tendered, on his own behalf, the following issues:

1. Did defendant and the bank, when the former indorsed the note in blank, agree that defendant was not to be held responsible on his indorsement ?

2. Did any consideration pass from the bank to defendant for his indorsement?

The plaintiff objected to said issues upon the ground that an affirmative response thereto could in no way affect the liability of the defendant to the plaintiff, who was admitted to be a remote indorsee for full value and without notice, and his honor being of opinion with the plaintiff on the objection refused to submit the said issues and thereupon pronounced judgment, upon said admission of defendant and other facts not denied in the pleadings, for the plaintiff for the unpaid balance of his debt, from which judgment the appeal is taken.

The question presented by the appeal for our determination is, does the plaintiff, a remote indorsee of defendant's note put into circulation past due, hold the same subject to the special agreement of defendant with the Mercantile Bank, his immediate indorsee, not to hold him responsible on his indorsement, the plaintiff being a purchaser for full value and without notice of the alleged special agreement?

We concur in the opinion of his honor that the plaintiff held the legal title to the note unaffected by the special agreement between the defendant and the bank supposing such agreement to have been made.

A promissory note, by statute of 3 and 4 Anne in England and by statute in this State, is made negotiable as inland bills of exchange, and the legal title may be passed by indorsement thereon in full or