Opinion
04-22-1819
Brown v. Ross
An action of assumpsit was brought by James Brown, jr. against David R. Ross in the Hustings Court of the City of Richmond; the plaintiff in his declaration stating that the defendant, for value received, assigned him a note of a certain J. W. Ryan, negotiable at the Bank of Virginia; and that he could not recover the amount thereof from the said Ryan, who, before the money became due and payable, was totally and notoriously insolvent, and unable to pay the same, or any part thereof; by reason of which premises, and by the law of the land, the defendant became bound to pay to the plaintiff the amount of said note, with all interest due thereon.
At the trial, upon the plea of non assumpsit, the plaintiff introduced the note, and protest by a Notary Public; and also Anderson Barrett, a witness, who stated, that he held a note drawn by said Ryan for four hundred dollars, due about the same time with the note upon which this action was brought; and that he was unable to recover the same of said Ryan, who, in his opinion, was notoriously insolvent; that he was a merchant in Richmond, and had shut up his store, and stopped business, about the time the said note became due; and, farther, that, on application to Ryan for payment of his note to the witness, he referred him to D. R. Ross the defendant; that the said Ross admitted, that a consignment of tobacco had been made to him by said Ryan, to secure him as his endorser of sundry notes; and that, if the said consignment turned out well, he should be secure, and would pay the said note to Barrett; also Frederick Pleasants, a merchant, who stated that, in his opinion, the said Ryan was notoriously insolvent. And, this being all the evidence on the part of the plaintiff, the Counsel for the defendant moved the Court to instruct the Jury that, if the plaintiff in support of this action, relied on the insolvency of the said Ryan, it was incumbent on him to prove that insolvency by the institution and prosecution of a suit on said note against the said Ryan, with a judicious course of execution thereon, which had failed of effect, or on which the amount of said note had not been made or recovered; or that the said Ryan had been, previously to the time when said note became due, discharged under the Bankrupt Laws of the United States, or proved to be insolvent under the Act of the Virginia Assembly for the relief of insolvent debtors. The Court instructed the Jury accordingly; to which opinion the plaintiff excepted. Upon this instruction, a Verdict was found, and Judgment entered, for the defendant; which, upon an appeal, was affirmed by the Superior Court; whereupon, the plaintiff appealed to this Court.
Judge Roane delivered the Court's Opinion, as follows. Judge Brooke, concurs in this opinion.
OPINION
Roane, Judge.
In the case of the assignment of a note, it is generally necessary for the assignee to sue the drawer, in order to charge the indorser. There are exceptions, however, from this rule; two of which are those stated in the opinion of the Hustings Court; --viz. a charge under the former bankrupt laws, or the insolvent law of this State. But these are not the only exceptions. Another exists, whenever the plaintiff can shew to the jury that the drawer is in fact insolvent, whereby a suit would have been wholly unavailing. In this case, like the others, the undertaking of the assignee to use due diligence to recover the money from the drawer, is not infringed by the omission to sue; and this omission, if objected, may be always answered, on the part of the assignee, by shewing that a suit would have been fruitless on account of the actual insolvency of the drawer.
The opinion of the Court in this case prevented the appellant from shewing this insolvency, and limited the enquiries of the Jury to the two cases therein stated; whereby the appellant may have been injured. Both judgments are therefore reversed, and a new trial awarded, in which the instruction in question is not to be repeated, but one given in pursuance of this opinion, if required.