
    *Ober v. Goodridge, Trustee.
    November Term, 1876,
    Richmond.
    Negotiable Notes — Transfer “Without Recourse.” — A case of the transfer of a number of negotiable notes “without recourse," in which it was held, looking to all the circumstances, that the words were to be construed in their liberal sense; and that the transferrer was not liable for the failure to recover from the endorser. If the transferee intended that they should he sued in this instance in their restricted and limited sense, he should have "been careful to express his meaning, or have it expressed in plain and unmistakable terms.
    This is an appeal from the decree of the circuit court of Westmoreland county, rendered on the 25th day of April 1871, in a foreign attachment suit, in which John Goodridge was plaintiff, and Gustavus Ober, Willoughby Newton, Willoughby Newton, Jr., and William E. Dozier, were defendants. The bill was filed on the 22nd day of October 1869. The plaintiff states, substantially, the following facts therein: that on the 20th day of September 1866, the said Dozier executed a deed of trust, which was duly recorded, and of which a copy was exhibited with the bill, whereby he conveyed to the plaintiff a tract of land lying in said county, in trust to secure the payment of the debts of said Dozier in certain classes; in which deed the plaintiff was empowered to sell the said land either publicly or privately, in his discretion, with the consent of the said Dozier. That in September 1867, the plaintiff with the assent of the said Dozier, sold the said land to the said Ober, a resident of the city of Baltimore in the state of Maryland, and received in payment for the same, the negotiable notes of divers debtors of the *said Ober, of which notes he the said Ober was owner and holder, the amount of which was $4,040.42, and which were due by certain makers and endorsers as set out in a list filed with the bill. That the plaintiff “with the assent of the said Dozier, agreed to take the said paper without recourse to the said Ober, should the makers and endorsers prove insolvent, supposing and believing that the said notes had been all treated regularly as negotiable paper should be; and that the same were, at that time, legal and valid obligations, as well as to the endorsers as to the makers. That at the time of said sale, suits had been brought by said Ober upon the said notes, against the makers and endorsers, in the said court; and the said Ober directed his attorney in the cases —Robert M. Newton, EJsq. — to pay over the same to the plaintiff; and the papers were endorsed for the benefit of the plaintiff, trustee as aforesaid. That among these notes was one against Wat H. Tyler, maker, dated 26 January 1861, payable four months after date, at the Bank of Baltimore, for $528.52, endorsed by Thomas S. Rice and S. B. Atwill, which last is now deceased. That in the case of this note, he (said plaintiff) especially looked to the endorser, T. S. Rice, well knowing, and he charges the fact so to be, that the maker, Wat H. Tyler, was at the time, and had been long before, utterly insolvent, and the circumstances of the other endorser Atwell, were doubtful. That at the March term 1868 of said court, the case of Ober, for the benefit of the plaintiff as aforesaid, against Wat H. Tyler, maker, and Thomas S. Rice, endorser of the said note of $528.52, was tried, and recovery was resisted by said Rice, endorser aforesaid, upon the ground that he had received as such endorser, nó notice, actual or otherwise, of the non-payment and protest of the said note. That on the *sa.id trial the only protest and notice of protest which the said Ober offered in evidence was that made on the — day of July (ought to be the 29th of May) 1861, and filed in said suit. That the said Ober was present at said trial, aiding the counsel employed by him, and was himself examined as a witness in the case; and admitted on cross-examination by the counsel of said Rice, that at the date of said protest and notice, a state of hostilities existed between the United States of America, of which the state of Maryland was one, and the so-called confederate states, of which Virginia was a part; and further, that all intercourse by mail or otherwise between Maryland and Virginia had been prohibited by authority, and ceased until the year 1865. That the said Ober further admitted at the trial aforesaid, that after the cessation of said hostilities and the resumption of intercourse between Maryland and Virginia, no notic.e at all of the said non-payment and protest had ever been given by him, said Ober, or any other person interested, to the said T. S. Rice or said S. B. Atwill, endorser aforesaid, actually or otherwise. That the said Rice was also examined at said trial, on oath, and stated that he had never, at any time received notice of said non-payment and protest. That the judge who tried said case took time to consider of his judgment therein ; and at the October term of the said court, 1868, gave judgment against the said Wat H. Tyler, maker of said note, for $528.52, with interest from 26th May, 1861, and cost of protest and of suit, and discharged said Rice as endorser, with his costs, upon the ground that no legal notice of said non-payment and protest had been given him by said Ober or any other, or received by said Rice;” all of which, so far as it is matter of record, will appear by reference to a transcript of the said suit of Ober v. Tyler & Rice, filed with the said bill.
    *The plaintiff then further states in his bill that he is advised that by reason of the matters hereinbefore set forth, the said note was a nullity as to the said endorsers at the time the same was transferred by said Ober to plaintiff in part payment for said land; and that the said Wat H. Tyler being insolvent at said time, and still so, the said Ober is justly indebted to said plaintiff for the amount of said note, with interest and costs as aforesaid; that said plaintiff has, since said judgment was rendered, applied to said Ober to pay him said money; but the said Ober refuses so to do, pretending that the plaintiff, having received the assignment or transfer of said note without recourse to him, has no claim upon him as assignor or transferrer. And the plaintiff charges, that in agreeing to take the said notes without recourse, he i looked solely to the solvency or insolvency | of the makers and endorsers, and intended to take upon himself the risk of such solvency or insolvency only; and that such was the view and intention of said Ober at the time; and the plaintiff reiterates his charge, that he supposed and believed at the time -of said transfer of said notes that they had been so treated by said Ober as 'to bind all parties, makers and endorsers.
    The plaintiff then further states that said Ober is a non-resident of the state of Virginia ; that he possesses property and debts due him in the said county, to wit: the land sold him as aforesaid by the plaintiff, a large sum of money due to him by Wil-loughby Newton, and other debts and effects in the hands of Willoughby Newton, jr., of said county.
    The plaintiff therefore prays that the said Ober, said Newton and said Dozier may be made defendants to said bill, and answer the same on oath; that said plaintiff may recover against said Ober the said sum of *$528. S2, with interest and costs as aforesaid; that the said Newton may be compelled to disclose what debts they owe to said Ober, or what effects they may have in their hands belonging to him; that the same, or so much thereof as may be necessary, may be attached to pay to the plaintiff in his demands; and in case the said debts- and effects shall' be insufficient to pay the same, then that the said land, or so much thereof as may be necessary, may be Sold to pay any deficiency or balance due to him; and that he may have such other and further relief in the premises as the case may require.
    The exhibits referred to in the bill' are copied in the record in this case, and form a part thereof. No. 2 is a list of the notes which were transferred by said Ober to the plaintiff as aforesaid, showing the names of the makers - and- endorsers, and amount of the said notes respectively. They are twelve in-number, and amount in principal to.$4,040.44. At the foot of the list isa writing in these words:
    “Montross, September , 1867.
    The above claims are this day transferred to John Goodridge, as trustee of William R. Dozier, in consideration of a' bargain entered into, and concluded between said William Dozier & Gustavus Ober, to wit: William R. Dozier having sold to said Ober a farm of 225 acres in extent for the amount vested in the'said claims, equal to $4,040.44.
    Robert M. .Newton,
    Attorney for G. Ober. ’ ’
    • The first note included in said list is the one' involved in the present controversy, and is therein thus described:
    . *“W. H. Tyler, endorsed by Thomas S. Rice and S. B. Atwill, $528.52. ”
    Opposite to each of four of the said notes in said list, amounting together to $1,723.05, is written the word “paid.”
    Rxhibit No. 3, referred to in the bill, is a copy of the record in the' action at law brought by said Ober against the said Tyler and Rice on the said note for $528.52. It was brought_ in the circuit court of said county, on the 23d day of July 1867, and was pending at the time of the sale of said land and transfer of said notes as aforesaid, which were made in the same county. The declaration in the action was filed on the first Monday in August 1867, about a month before the said sale and transfer. The note and protest referred to in the declaration were filed therewith and are copied in the record. The note is in the following words and figures, to wit:
    “$528.52.
    Hague Post-office,
    Westmoreland County, Va.,
    January 26, 1861.
    Pour months after date I promise to pay to Thomas S. Rice, or order, five hundred twenty-eight dollars and fifty-two cents, payable and negotiable at the Bank of Baltimore, Maryland, without offset.
    . Wat H. Tyler.”
    [indorsed.] — “Thomas S. Rice, pay to John Kettlewell, S. B. Atwell, John Ket-tlewell, G. Ober, John Kettlewell.”
    The note was duly presented for payment on the day on which it-became payable, to wit: the 29th of May 1861, at the Bank of Baltimore, where it was payable, and being dishonored. was duly protested for non-payment. • *The notarial certificate is in due form. After stating the demand of payment and protest of the note, the certificate concludes with these words: “Thus done and protested at the city of Baltimore aforesaid; and on the same day I addressed written notices to the endorsers of said promissory note, informing them that it had not - been paid; payment thereof having been demanded and refused,, and that they would beheld responsible for the payment thereof. Notice for Thomas S. Rice I mailed to him: Rice’s store, Westmoreland county, Virginia., Notice for S. B. Atwill I mailed to him: Mon-tross, Westmoreland county, Virginia. Notices for the other endorsers I left at their respective places of business. In testimony whereof,” &c.
    ■■ On the 21st of October, 1867, the general issue was plead and -joined in the action, and leave was given the defendants to give any special matter in evidence at the trial of the issue. And on the 19th day of October 1868, at -a circuit court held for said county, came the parties by their attornejs; and neither party requiring a jury to try the issue joined in the cause, and agreeing to submit the same to the judgment of the court, and the court having heard the evidence adduced, as well by the plaintiff as the defendants, judgment was thereupon rendered by the court against the-defendant, Wat H. Tyler, maker of the note, for the amount thereof, with interest and costs as aforesaid, and in favor of the defendant, Thomas S. Rice, endorser of .the note, who recovered his costs ■ against the plaintiff. The plaintiff excepted to the judgment, and prayed that the evidence in the case might be certified. No certificate of evidence is copied in the record, and no writ of .error or supersedeas appears to have been obtained or applied for to the judgment.
    *The answer of said Ober was filed at the same time with the filing of the hill, to wit: on the 22d of October 1869. The said defendant states the following facts therein: ‘ ‘That on the day of September 1867 he, at the special instance and earnest request, often repeated, of said William R. Dozier, transferred to the plaintiff, John Goodridge, trustee of said Dozier, certain negotiable notes, then long past due by parties as named in the bill of the plaintiff, in consideration of a tract of land as described in the bill of the plaintiff; that the land was of not more than half the value of the notes transferred, if their amount had been guaranteed; that no guaranty was asked or expected by the plaintiff, but the notes were taken entirely at the risk of the plaintiff for what they were worth, and expressly without recourse ; that the plaintiff knew every fact and circumstance connected with the notes as well as the defendant; that the notes were all in the clerk’s office as the foundation of suits then pending; and that the notices of protest were all in the clerk’s office as the foundation of suits then pending; and that notices of protest and all the facts connected with the protest were filed with the declarations in said suit, and were open to the inspection of said Dozier and his trustee, and your respondent avers were fully examined by them; that if they were ignorant of the legal consequences of these facts, they were ignorant in common with the respondent, and they could not claim relief because of their ignorance of the law. This respondent avers that he was utterly ignorant of the principles of law relied on by the plaintiff as ground for relief; and is assured by counsel, learned in law, that no such principle exists, and that the decision on the law side of this court in the case of Dozier, trustee, v. Tyler & Rice, was entirely ^erroneous, and would be reversed on appeal, which appeal it was the duty of the complainant to institute. This respondent utterly denies all fraud or concealment, and affirms that the contract between himself and said Dozier was entirely fair and open on his part; and he is assured, even if the complainant should fail to realize the amount of Tyler’s note, the bargain has been very profitable to the said Dozier; that it is true that this respondent was examined as a witness in the case of Dozier’s trustee v. Tyler & Rice, and was anxious to give the plaintiff the benefit of any facts within his knowledge; but he knew nothing which was not a matter of public history, and certainly made no admission inconsistent with the facts of the answer and his entire freedom from all responsibility for the notes assigned to the trustee of said Dozier. ’ ’
    On the same day on which the said bill and answer were filed, on the motion of the complainant and by consent of parties, it was ordered that the cause be put upon the argument docket.
    No other answer was filed in the cause, and no evidence was taken thereon. Indeed it appears that no process was issued against any of the defendants; and there was no replication to the answer of said Ober. But on the 25th day of April 1871 the cause came on to be heard upon the bill of complainant with the exhibits therewith filed and the said answer, and was argued by counsel: On consideration whereof the court was of opinion, and decided that the complainant on the one hand, and the defendant on the other, when the note of Wat H. Tyler and Thomas S. Rice was assigned by the defendant to the' complainant ‘without recourse, ’ ’ contemplated only the risk of the solvency or insolvency of the maker and endorser of the said note; and the court therefore decreed that the defendant, *Ober, pay to the complainant the sum of $528.52, with interest as aforesaid till paid, and costs. And the court further decreed, that unless the said Ober pay the complainant or his attorney the said sum of money, interest and costs within ninety days from the date of the decree, then a sale of the said land, or so much thereof as might be necessary for the purpose, was decreed to be made by a commissioner appointed by the decree for the purpose and in the manner and on the terms and conditions prescribed by the decree.
    To the said decree the defendant, Ober, applied to this court for an appeal; which was accordingly allowed.
    R. 'Ll. T. Beale and Holladay & White, for the appellant.
    , Ro. Mayo, for the appellee.
   Moncure, P.,

delivered the opinion of the court.

After stating the case he proceeded as follows:

The court is of opinion that the circuit court erred in deciding that the complainant on the one hand, and the defendant on the other, when the note of Wat H. Tyler and Thomas S. Rice was assigned by the defendant to the complainant, “without recourse,” contemplated only the risk of the solvency or insolvency of the maker and endorser of the said note; and in rendering a decree that the said defendant pay to the complainant the amount of said note with interest and costs, as mentioned in the said decree. The bill and answer were filed on the same day; whereupon, on motion of the complainant and by consent of parties, it was ordered that the cause be put upon the argument *docket. And af-terwards, the cause came on to be heard upon the bill and answer only, without any other evidence, and without any replication to the answer. In such a case, the facts stated in the answer in relation to the controversy, whether responsive to the bill or not, must be taken to be true. 2 Rob. Old Pr., p. 312, and the cases there cited.

But it is stated as a fact in the bill as well as in the answer, that the assignment aforesaid was “without recourse;” and.the question is whether these words are to be construed in this case according to their literal sense, at least so far as to embrace the risk in regard to the sufficiency of proof of the dishonor of the note to charge the endorser; or in the restricted or limited sense in which they were construed by the circuit court?

This court is of opinion that they ought 'to be construed in their literal sense, at least so far as to embrace the said risk, and not in the restricted and limited sense aforesaid; and that such was the manifest intention of the parties.

The ground on which the circuit court held that the endorser of the said note was not liable, to wit: the supposed insufficiency of proof in regard to notice of the dishonor of the note to the said endorser; was as well known to William R. Dozier, and to John Goodridge, his trustee, the transferee of the note, as to Gustavus Ober the trans-ferrer. The former two lived in the county of Westmoreland, where lived also the maker and endorser of the note; and where, too, the note was made and endorsed; though it was payable and negotiable at the Bank of Baltimore. At the time of the transfer, an action had been brought by said Ober against the said maker and endorser of said note in the circuit court of said county, and *was then pending in said court, and the plaintiff in the action had .filed his declaration therein; and with it, as evidence of the presentation and demand of payment and dishonor of the note, and notice thereof to the endorsers, the notarial certificate of protest, &c., which has ever since remained on file among the papers in the said action. This evidence was seen and known to the said Goodridge and Dozier at the time of the transfer of the said note to them by the said Ober; the said note being then on file among the papers of the said action, and remaining there after the transfer. The said transferees became thereafter the beneficiaries in the said action, and prosecuted the same in the name of the said Ober for their own use, upon the evidence which had been filed by him to establish his right to recover in the action, both against the maker and endorser. No doubt the same attorney who brought the action for Ober continued to prosecute it for Goodridge and Dozier after the transfer, and until it was determined. There is no affirmative evidence of this fact in the record, but it may well be presumed, in the absence of evidence to the contrary. The fact no doubt is, that the doubt or difficulty in regard to the sufficiency of proof as' to the notice of dishonor to charge the endorser, was the cause of the resistance by the endorsers of the demand against them, upon this and other notes of the same kind held by Ober, and of the necessity for the actions which were brought upon them against the said endorsers. And the risk arising from that .vexed question was, no doubt, the very risk which induced Ober to transfer the notes “without recourse,” in consideration of the purchase of the land. Ror he expressly says in his answer, that the land was of not more than half the value of the bonds transferred; if their amount had *been guaranteed. The amount of the notes was $4,040.41; and it seems that four of them, amounting to $1,723.05, had already been paid when the bill was filed in this case. Ober in his answer says, that “even if the complainant should fail to realize the amount of Tyler’s note, the bargain has been very profitable to the said Dozier.” That the question in regard to the sufficiency of the proof of notice to charge the endorser was a vexed one, is plainly evident from the record. The circuit court so considered it, and held the case under advisement until another term after it was submitted, and the judgment when rendered was excepted to, no doubt by the beneficiary plaintiff who then had charge of the action, and who seems by such exception to have then contemplated applying for a writ of error and supersedeas to the judgment. But he never did so.

It is plain that Ober intended by the transfer of the note “without recourse;” that those words should include the risk in question, and they sufficiently express his intention. If the transferee intended that they should be used in this instance in the restricted and limited sense now contended for by him, he should have taken care to express his meaning, or have it expressed in plain and unmistakable words. But he manifestly did not so intend.

We deem it unnecessary to comment on the cases referred to by the learned counsel in their notes of argument in this case. There is nothing in any of them in conflict with the views we have expressed; and both of the two cases mainly relied on by the said counsel respectively, to wit: Crawford v. McDonald, 2 Hen. & Mun. 189, by the counsel for the appellant; and Mays v. Callison, 6 Leigh 230, by the counsel for the appellees, sustain these views.

*The decision of the question we have just been considering is, in effect, a decision of this case; and we need not consider any of the other questions arising in it, although there are several others.

The court is therefore of opinion that the decree is erroneous for the reasons aforesaid, and that it ought to be reversed and the bill dismissed.

Decree reversed.  