Fayette County IL Archives Court.....Duncan, V. Morrison & Duncan 1825 ************************************************ Copyright. All rights reserved. http://www.usgwarchives.net/copyright.htm http://www.usgwarchives.net/il/ilfiles.htm ************************************************ File contributed for use in USGenWeb Archives by: Deb Haines http://www.genrecords.net/emailregistry/vols/00003.html#0000719 February 9, 2009, 12:42 am Source: Il Court Reports, 1819-1830 Written: 1825 December Term 1825 James M. Duncan, Appellant, v. Robert Morrison and Matthew Duncan, Appellees. APPEAL FROM FAYETTE. An injunction ought not to be allowed for more of the judgment than the complainant shows to be unjust. (1) A party to a negotiable note, where there is no fraud, can not impeach it, either at law or equity. (2) If either the maker or assignee of a note is to suffer a loss, natural equity points in the maker as the party on whom the loss should fall. Where an injunction upon a judgment at law is dissolved, it is erroneous to enter a decree for the amount of the judgment at law. Opinion of the Court by Justice Lockwood. The bill filed by the complainant, states that he executed his note to M. Duncan, and that by inadvertence or mistake, it was omitted to be inserted in the note, that it was to be paid in "state paper," although it was agreed by the parties that it was to discharged in that currency. The bill also states, that before the note became due, it was assigned to Morrison, who has brought suit, obtained judgment, and intends to exact specie. There is no allegation of fraud on the part of M. Duncan, or notice to Morrison that it was to have been paid in state paper. On this bill, an injunction was granted, and subsequently dissolved in the circuit court of Fayette county, and a decree rendered against complainant and his security in the injunction bond, for the whole amount of the debt, together with six per cent, damages and costs, and the bill dismissed. To reverse this judgment, an appeal has been brought to this court. The injunction granted in this case was clearly wrong. It ought only to have been allowed for such portion of the judgment, as the complainant showed by his bill to have been unjust. (Laws of 1819, page 173.) The bill is also defective, in not showing the value of the state paper, and the extent of the discount he claimed. But the main question is, whether such a case is presented by the bill, as to call for the equitable interference of a court of chancery? Morrison, in this case, is to be viewed as the innocent indorsee for a valuable consideration. Can such a negotiable instrument, where there is no fraud, be impeached, either at law or in equity? This question must depend upon the nature of such instruments, and our statutes making them negotiable. A party, when he subscribes his name to such instrument, knows that by the law he authorizes the payee to sell it to whomsoever will buy, and the purchaser has a right to believe, from the act of the maker, that there exists no latent equity, to prevent a recovery of the full amount. If either drawer or indorser is to suffer under such circumstances, which of these parties does natural equity point out as the proper party? We have no hesitation in saying, that if a loss is to be sustained in this case, that equity would decide that it ought to fall on the maker of the negotiable instrument. But in this case, the court is not left to speculation to settle the merits of the cause. The statute making notes, &c., negotiable,* declares that the sum of money mentioned therein shall be due and payable to the person to whom the said note, &c., is made, and that the indorsement shall absolutely transfer and vest the property thereof in the assignee. The second and third sections of the act point out the cases where the maker can defend, as against the indorsee. The complainant has not brought himself within either of these provisions. It is hardly to be presumed, if the legislature, while they were legislating on this subject, had believed that a latent equity, as between maker find indorsee, ought to be a defense between them, but that they would have so declared. Nor does this case come within the provisions of the act regulate the practice in certain cases;** because here was not either a total want of consideration, or a total or partial failure of consideration. Whether on a total want of consideration, or a failure of consideration of a negotiable note, such facts can be set up as a defense, the court are not called on to give an opinion, nor do they intend to do so. The court are, therefore, of opinion, that the injunction was rightly dissolved, and the bill properly dismissed, and affirm the decree so far, and for costs of the suit. With regard to the construction of the 17th section of the act regulating the practice of courts of chancery,*** the court has met with considerable difficulty; but as the counsel for Morrison appeared willing, on the argument, that the decree for the amount of the former recovery, together with the six per cent, damages, should be reversed, it is deemed unnecessary, at this time, to settle the true construction of the statute, except that the court are clearly of opinion that the decree for the amount of the judgment at law, is erroneous. The court further order, that the decree be reversed, as to the former judgment, and the six per cent, damages, and that each party pay one- half of the costs of this appeal. (a) Blackwell, for appellant. Baker, for appellee. ----------------- (1) Such is now the provision of our statute. "No injunction shall be granted to stay any judgment at law, for a greater sum than the complainant shall show himself equitably not bound to pay, and so much as shall be sufficient to cover costs." Purple's Statutes, p. 769, sec 21. Scates' Comp., 147. (2) This is the provision of the present statute of this state. Purple's Statutes, p. 773, secs. 9, 10, 11. Scates' Comp., p. 292; and has been sustained by numerous decisions. Wood v. Hines, 1 Scam., 103. Mulford v. Shepherd, id., 583. Adams v. Wooldridge, 3 Scam., 256. Mobley v. Ryan, 14 Ill., 51. Harlow v. Boswell, 15 Ill., 56. *Laws of 1819, p. l **Ibid., p. 59. ***Ibid, p. 273. (a) A party to a negotiable note or instrument, which he has made or indorsed, is not competent to impeach its validity, although uninterested in the event of the suit. Winton v. Sa_dler, 3 Johns. Cas., 185. Coleman v. Wise, 2 Johns. Rep., 165. Walton v. Shelly, 1 T. R., 296. This rule extends only to negotiable instruments, and can apply only where the paper has been negotiated. Blagg v. Phoenix Ins. Co., 3 Wash. Cir. Court Rep., 5. That it is error to render a decree for the amount of judgment at law, see Hubbard v. Hudson; post. Additional Comments: Reports of Cases at Common Law and in Chancery, Argued and Determined in the Supreme Court of the State of Illinois, From its First Organization in 1819, to the End of December Term, 1831 By Sidney Breese, Counsellor at Law Second Edition, with Additional Notes, By Edwin Beecher Chicago: Callaghan & Company, 1877. 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