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Decisions of the Superior Courts of New South Wales, 1788-1899

Cavenagh v. Pendeay (1828) NSW Sel Cas (Dowling) 359; [1829] NSWSupC 47

promissory note - imprisonment for debt - assumpsit

Supreme Court of New South Wales

Forbes C.J. and Dowling J., 30 June 1829

Source: Darling, Proceedings of the Supreme Court, Vol. 22, Archives Office of New South Wales, 2/3205[1 ]

 

[p. 147] This was an action of assumpsit on a promissory note dated 25th April 1828 drawn by one George Frederick Ord payable to Deft or order whereby the said G.F. Ord promised to pay Deft or order four months after date £23.12.0 sterling value reced[2 ] & by said deft indorsed to Plf, and plf avers that on 27th August said promissory note was presented to Ord the maker who refused to pay same of which said deft had notice.  Common money counts.  To plfs damage of 50£.  Plea the General issue non assumpsit.

On the trial of this action, before Forbes C.J. at the sittings in this term, on the part of the plf the formal proofs of the handwriting of the parties to the note, the presentation of the note to the maker (whilst in the hands of Harrison to whom Plaintiff had indorsed it) the non payment by him on the 27th August 1828 when it became due, and the notice of such non-payment on the following day, were gone into.  On the part of [p. 148] the Deft, the proceedings in an action Harrison v Ord were produced, whereby it appeared that Harrison who held the note at the time it became due (as the plf's indorsee) had in the 4th Term 1828 sued the drawer of the note, Ord, and obtained a judgment against him, & on the 28th Jan 1829 had charged him in execution;[3 ] & he remained in gaol at his suit from that day until the 4th. March following, when he was discharged out of custody by the written order of the plf Harrison's attorney, as it was alleged, on his receiving the amount from the present plf. who was his indorsee.

The questions for the consideration of the Court in this case are

1.st  Whether Harrison the last indorsee had not released all the previous indorsers by his laches in neglecting to take any proceedings against them from 27th August 1828 the day the note became due until 24.th April 1829 & by his having in the mean time voluntarily discharged the maker of [p. 149] the note out of custody after having charged him in execution.

2.nd  Whether Harrison's discharging the maker of the note after he was charged in execution is not a complete release to him the maker from all responsibility on the said note, and if so, whether the present plfs, can acquire any prest-[4 ] cause of action against a previous indorser by his paying the amount of the note while Ord was in the custody of the Sheriff at the suit of Harrison.

Moore for the Deft.  It is contended that Harrison the last indorsee having brought an action against the drawer of the note, & charged him in execution, & after having afterwards voluntarily released him, all prior indorsers were thereby released, no new cause of action having arisen.  He cited Claxton v. Smith 3 Mod. 87 Macdonald v. Bovington 4 T.R. 825 English v. Darley 2 B&P. 61. Smith v. Knox 3 Exp. 46. Ex parte Wilson 11 Ves Jr 411

Williams contra relied upon Macdonald v Bovington as a case decidedly in favour of the plf in principle.

[p. 150] Forbes C.J.  The case turns upon the narrow point, whether Harrison having commenced an action against the maker of the note & discharged him upon receiving payment of the amount from the Plf the first indorsee, thereby releases the Def as payee from liability with plf as first indorsee.  I think that Harrison's discharging Ord from gaol did not operate as a release of the defts liability to the plf, who is a bonâ fide holder for value.  The Ps note has not been in fact paid by Ord, nor by the Deft.

Stephen J. was absent.

Dowling J.  I think the case of Macdonald v Bovington in principle decides this case in favour of the plf.  In that case the holder of a bill sued the acceptor & charged him in execution, the latter having obtained his discharge under the Lords' act,[5 ] the holder then sued the drawer, who after paying the bill, sued the accepter & charged him execution, which was held to be regular, the defts having [p. 151] been charged in execution at the suit of the holder not being a satisfaction as between the drawer & the acceptor.  Here Ord makes a note payable to Pendeay.  Pendeay indorses the note to Cavenagh for valuable consideration.  Cavenagh indorses the note to Harrison for valuable consideration.  The note being discharged when at maturity Harrison sues Ord the maker & charges him in execution, & afterwards releases him out of custody upon Cavenagh's paying the amount of the note.  The question is whether Ords being thus released out of custody after having been tried & taken in execution releases Pendeay the payee of the note from liability to Cavenagh his indorsee.  I am of opinion that it does not.  The plf is an innocent indorsee, & to avoid being tried himself by Harrison, he pays the note to the latter, & consequently Pendeay is liable to Cavenagh as his immediate indorser.  Pendeay the deft has still a remedy agt. Ord the maker of the note, although it may be a barren remedy still in law he is not discharged by [p. 152] Harrison suing Ord, or Cavenagh's paying the amount of the note.  The plf. Cavenagh wd. have been liable on the note, had he not paid the amount, & having paid the amount, I cannot see how the deft as his immediate indorser.  In principle I think Macdonald v. Bovington is decisive of this case.

Judgment for the plf

 

Notes

[1 ] Part of this record of the case is in Dowling, Select Cases, Vol. 2, Archives Office of N.S.W., 2/3462, p. 208.  The Select Cases version commences with the following summary of the result, apparently written by Dowling J.:

"Where A made a promissory note payable to B & B indorsed it to C & C indorsed it D and where the note was dishonored at Maturity, D sued A the maker to execution; & the latter was let out of prison in consequence of  E taking up the note.  Held that C ought to maintain an action against B the payee, who was not discharged by D's letting A out of Custody."

[2 ] Received.

[3 ] This was an expression for imprisonment for debt.

[4 ] Presumably "present".

[5 ] The Lords Act ((1759) 32 Geo. 3 c. 102) was an early form of insolvency, under which the initiative was in the hands of the creditors.  Insolvency allowed the debtor's release from prison, though not from the obligation to pay the debts.

Published by the Division of Law, Macquarie University