Selkirk v. Betts & Co., 1 Dallam 471

HUTCHINSON, Justice. Betts & Co. made their note to McLellan of November 2, 1839, payable at one day. After maturity it was assigned to Selkirk, having credits on it reducing it to $178.16. The assignee sued the makers to recover that residue. They pleaded payment before suit, without stating to whom.

The court instructed the jury that a set-off or failure of consideration was a good defense against the assignee suing on a note assigned to him after its maturity, and that in regard to any promise made to the assignee after transfer to pay the note to him, ■it was a new contract on which he should have sued, so that the testimony on that score should be disregarded. The jury found that the makers ■were entitled to a set-off, at or before the transfer of the note, to $208.13, but that after transfer they promised the holder to pay the note. The judgment on this verdict was for the costs of the defendants.

Without noticing specially the points presented on the brief of the learned counsel, we will state the principles we think applicable to the case. The Act of 1840, concerning negotiable instruments, discounts and set-offs, should not have been consulted as the rule of decision. Legislation affecting rights can not be retrospective, though enactments changing the remedies may be enforced upon pre-existing rights.

The rights of these parties were and still are determinable according to the civil law, because the note and evidences of payment or set-off on the transcript seem to have arisen prior to the act mentioned, and to that introducing generally the English common law. The suit was well brought on the note.

It was not necessary for the plaintiff to have noticed any subsequent promise of the makers to pay its amount or the balance to him; on the contrary, if the defendants had actually paid the note to the payee before notice of transfer, testimony of the fact would have been admissible under the plea of payment pleaded, and evidence of the promise would have been good countervailing proof if it had been made by the defendants when not under mistake of the facts or of their rights.

If the defendants relied on a cross-demand, matured against the payee before notice of assignment, they ought to have pleaded it, so as to have notified their adversary. He then could have replied the subsequent promise to pay him or given evidence of it.

In reference to the requisites of the allegata, a promise to pay a debt barred by prescription, or a statute of limitation, or a promise to pay to the assignee or holder of a chose in action is not a n5w contract, nor is there any need for a new or cumulative cause or consideration to support it, although it has been sometimes so decided ; it is only a recognition of a subsisting obligation, for in the one case, though the remedy is precluded by lapse of time, the morality of the duty to be performed remains; and in the other, the party is presumed to have either no defense or to have waived the assertion of it. ■ In the case before us the court below erred in permitting evidence of a counter demand without an allegation on which to support it; in charging the jury that the plaintiff ought to have averred the promise to pay the note'; and in not instructing the jury in regard to the traits necessary to give vitality to such promise.

Such promise in order to be effectual must be understandingly made. If the makers of this note when ignorant of the fact of an existing cause of cross-action, or when laboring under a delusion or misconception of their right to avail of it, promised payment to the holder, it was precisely such a promise as no just law ought to enforce; but if made upon knowledge of the fact and of their right, it gave efficacy to the note in the hands of the holder, and the makers must resort to the payee, their debtor on their account.

This principle of the Roman, Spanish, English, and we may say American.law, is too firmly established to be controverted. It has been adopted as a doctrine of Texian jurisprudence in the case of Hall v. Phelps, January, 1841. The judgment, therefore, must be reversed and the cause remanded.

This cause coming on the heard on the transcript of the record in the District Court of Matagorda, and it being inspected and the arguments of counsel heard, because it seems to the court here that there is error in the judgment below, it is therefore considered that the same be reversed; that this cause be remanded, with discretion to the said district court to allow the appellees to plead farther to the merits, and thereupon to try the cause upon the principles in this court declared; and it is further considered that the appellant recover of the appellees his costs herein in this court expended; and that this decision be certified below for observance.

Reversed and remanded.