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PHILLIPS V. PRESTON, 46 U. S. 278 (1847)

U.S. Supreme Court

Phillips v. Preston, 46 U.S. 5 How. 278 278 (1847)

Phillips v. Preston

46 U.S. (5 How.) 278


Under the practice of Louisiana, peremptory exceptions must be considered as specially pleaded when they are set fort in writing in a specific or detailed form, and judgment prayed on them.

Although the court should refuse to receive exceptions thus tendered, yet if the party has the benefit of them on a motion in arrest of judgment and in a bill of exceptions, the refusal of the court is not a sufficient cause for reversal.

The statute of Louisiana requiring their courts to have the testimony taken down in all cases where an appeal lies to the Supreme Court, and the adoption of this rule by the court of the United States, includes only cases where an appeal (technically speaking) lies, and not cases which are carried to an appellate court by writ of error.

Where the laws permit a waiver of a trial by jury, it is too late to raise an objection that the waiver was not made a matter of record after the case has proceeded to a hearing.

In a suit by the first endorser of promissory notes against a second endorser upon an alleged contract that the second endorser would bear half the loss which might accrue from their nonpayment by the drawer, it is not a sufficient objection to the jurisdiction of the court that the second endorsee and defendant were citizens of the same state. Such an objection would be well founded if the suit had been upon the notes.

But not where the suit is brought upon a collateral contract.

A contract between two endorsers that they will divide the loss between them is a good contract and founded on a sufficient consideration.

Being a collateral contract by parol, parol evidence can be given to prove it. The payee is a competent witness, and so is the notary, bringing with him the act of sale.

Page 46 U. S. 279

This was a claim advanced by Preston, the first endorser upon certain promissory notes, that Phillips the second endorser, should pay one-half thereof, by virtue of a special agreement between them.

The facts in the case were these.

On 15 March, 1836, Sosthain Allain sold to Robert R. Barrow sundry pieces of property in Louisiana, for the sum of $110,700, payable as follows, viz.:

1837, March 1 . . . . . . . . $ 16,921.27

1838, March 1 . . . . . . . . 18,028.26

1839, March 1 . . . . . . . . 19,135.25

1840, March 1 . . . . . . . . 20,242.20

1841, March 1 . . . . . . . . 21,349.23

1842, March 1 . . . . . . . . 22,456.22

1843, March 1 . . . . . . . . 23,563.21

For the security of the notes given for the above payments, the property was mortgaged.

On 17 of March, 1837, Barrow sold the above property (with a slight addition) to Samuel John Carr, for $141,695.68, payable as follows:

Cash. . . . . . . . . . . . . $ 16,921.27

1838, March 1 . . . . . . . . 18,028.26

1839, March 1 . . . . . . . . 19,135.25

1840, March 1 . . . . . . . . 20,242.24

1841, March 1 . . . . . . . . 21,349.23

1842, March 1 . . . . . . . . 22,456.22

1843, March 1 . . . . . . . . 23,563.21



The act of sale, which was signed by Barrow and Carr, and executed before Louis T. Caire, a notary public, contained, amongst other things, the following provisions, viz.:

1. After reciting the cash payment, it proceeded thus:

"And in payment of the balance, the said purchaser handed over to me, the undersigned notary, six promissory notes, bearing even date herewith, subscribed by him, to the order [of] John S. Preston, endorsed by him, the said John S. Preston, domiciliated in the Parish of Ascension, as first endorser, and by George W. Phillips domiciliated in the Parish of Assumption, as second endorser, it being understood that although each of the endorsers is responsible for the whole amount of said notes, they are between themselves equally responsible; said notes have been made payable at the domicile of the Union Bank of Louisiana, and their amount and terms of payment are as follows, viz."

(Then followed an enumeration of the notes as above).

2. An agreement that the property should stand mortgaged.

3. An agreement that the last-mentioned notes should be substituted, if possible, for those given by Barrow to Allain, and if it

Page 46 U. S. 280

should not be possible to do so, then that payments made upon the last set of notes should be applied to the first set as they became due.

The notes given by Carr to Barrow were endorsed by John S. Preston, as the first endorser, and by George W. Phillips as the second endorser.

On 1 March, 1838, the first note became due, and was not paid by Carr. But it appeared by the record not to have been protested until 30 March, 1839.

On 1 March, 1839, another note became due which appears to have been protested in proper time.

On 5 April, 1839, Barrow filed a petition in the District Court of the Fourth Judicial district of the State of Louisiana (a state court), representing the above-mentioned facts and stating further that he had made the necessary payments and arrangements with Allain, respecting the notes due in 1837, 1838, 1839, and praying for a sale of the property.

On 1 March, 1840, another note fell due, which was not paid, and was protested.

On 15 August, 1840, the property was sold in block by the sheriff to Isaac T. Preston, for his brother, John S. Preston, for the sum of $67,500, the purchaser assuming the payment of the notes due in 1841, 1842, and 1843.

On 20 August, 1840, the sheriff executed a deed for the property to John S. Preston.

On 17 February, 1841, Preston, calling himself a citizen of South Carolina, filed a petition in the circuit court of the United States against Phillips a citizen of Louisiana, alleging that by virtue of the agreement between them, Phillips was bound to pay to him the one-half of all that he had paid, being $28,702.87, with legal interest on $9,014.13 from 4 March, 1838, and like interest on $9,567.62 1/2 from 4 of March, 1839. And on $10,121, from 4 March, 1840, with half the costs of protests.

On 26 February, 1841, the counsel of Phillips filed an exception, being a plea to the jurisdiction of the court, upon the ground that Barrow was the assignor of the notes to Preston, and that Barrow, being a citizen of the same state with Phillips was incapable of suing him in the United States court.

On 20 April, 1841, the court overruled this exception, and Phillips filed an answer, denying

"all and singular the allegations contained in the plaintiff's petition, and particularly that he ever promised or undertook to be responsible on the notes described in said petition, in any other capacity except as second endorser and after and in default of the plaintiff, or that the said notes ever were duly protested, and notice given to this defendant."

In April, 1841, the cause came up for hearing. On the trial, the following testimony was filed.

Page 46 U. S. 281

"Testimony taken by Consent, this April 23, 1841"

"John S. Preston v. George W. Phillips"

"The testimony of Robert R. Barrow, a witness for the plaintiff, who, being duly sworn, deposeth and saith, being asked by the plaintiff what he knows in relation to an agreement between John S. Preston and George W. Phillips in relation to their endorsement of certain notes given by Samuel J. Carr to him, on payment of a plantation and slaves in Point Coupee, purchased from him by said Carr about 17 March, 1837."

"(The counsel of the defendant, Seth Barton, Esq., objecting to the above question and reserving all legal exceptions.)"

"The witness says that he was present at the time the notes were signed, about 17 March, 1837. Samuel J. Carr, the plaintiff, and defendant, with deponent, met by appointment at the time of the sale at Caire's office, before whom the act was passed; the act was already prepared when the aforesaid parties met, it having been prepared by the notary, under the directions of witness and said Carr; the notes were also drawn up and ready to be signed, under Carr and witness' directions and instructions; the notes were then handed to the plaintiff to endorse; when about to sign, Mr. Preston observed that he thought those notes were to have been drawn to the order of Phillips the defendant. Mr. Carr replied that he did not know that it would make any difference. And thereupon Colonel Preston turned round and, addressing himself to Colonel Phillips, the defendant, said he supposed it made no difference, and said he wished it particularly understood between them that in case Carr should fail to pay the notes and the endorsers compelled to pay them, that he (Phillips) and Preston should be equally bound and share alike in the loss, and that he, Preston, wished it so stated in the act. After this conversation, Colonel Preston turned to Mr. Caire, the notary, and remarked, that he wished it noted in the act that the endorsers should be bound alike on failure of Carr. The notary then put down on paper the exact words that Colonel Preston dictated; all the parties were near each other, and participating more or less in the conversation. After this, Colonel Preston and Colonel Phillips endorsed the notes and handed them over to the notary; Colonel Preston endorsed first, and Colonel Phillips next, and instructions were given to the notary, Caire, to draw up a new act, inserting the clause aforesaid, as regards the equal liability of the endorsers, and then, to identify the notes with the act, the clause was added in the new act, and witness, when his attention was called to it by Mr. Caire, objected to its insertion because, as he then thought, it made the endorsers liable to him for only their half. Mr. Caire called upon an attorney at law, whose name witness does not remember, to explain it, and thereupon witness was satisfied that it did not affect him, but only

Page 46 U. S. 282

related to the respective liabilities of the endorsers. The act was not signed at the time the notes were given, but was signed at a different time on that day, or the day next, but he cannot remember. Witness recollects the conversation very distinctly, as it was impressed on his mind at the time, and has frequently thought of it since."

"Being shown the copy of the act annexed to the petition and the clause at the top of the page, says they are the same referred to by him. The three notes marked A, B, and C, filed with this deposition, are part of the consideration of the sale; Colonel Preston took up three of the notes, A, B, and C, and paid them after protest, interest and all charges, which payment was made before this suit was instituted. The tract of land in West Feliciana mortgaged to secure the payment of these notes was seized and sold to pay prior mortgages of said Carr, and consequently there was nothing to come from that land to pay this debt of Carr's for the plantation sold as aforesaid; this tract was woodland; Colonel Preston has paid the notes which have matured, and has assumed the balance due, he having purchased in the property mortgaged to secure the payment of the notes aforesaid."

"The defendant, by S. Barton, his attorney, objects to the whole of the foregoing deposition of the witness as illegal and incompetent, and specially to all such parts of it as are hearsay or secondary proof, and specially also to all such parts of it as go to vary or contradict or explain the written testimony to which the witness refers, and particularly such parts as tend to prove anything against or beyond the authentic act of sale on file in this cause, and insisting on such objections (to be urged on trial), and waiving no part thereof, cross-examines the witness, under the above reservations."

"Witness never had the act of sale referred to recorded in West Feliciana; that the property in Feliciana was sold for judgments of younger date than the sale aforesaid; the first note of $18,000 was paid by a renewal of note payable to the Union Bank; the other two were paid by drafts; the note given on renewal was not endorsed by Colonel Phillips; Colonel Phillips was no party to the drafts referred to; the drafts were on time and suited witness; witness thought from appearances that Preston and Phillips were just introduced to each other or not long acquainted when they met at the notary's as above related; some short time before the act was passed, witness met Colonel Phillips at the theater, and had some conversation about his endorsing for Carr; said he, Phillips had promised to endorse for Carr, but Carr said it would only be temporarily, as he had made arrangements to change the endorsements by substituting Colonel Isaac T. Preston in the place; witness thinks that Colonel Phillips must have heard the conversation related to above, as it took place at the notary's; does not recollect

Page 46 U. S. 283

that Phillips made any reply to Colonel Preston; Phillips must have heard it, as the conversation was made direct by Preston to him, and Phillips must have heard the direction of Preston to the notary to insert the clause; thinks they met at the notary's at ten or eleven in the morning; neither the plaintiff or defendant attended at any other time at the notary's than that mentioned, nor were they present when he and Carr executed the act, nor can he say that Phillips has seen the act; there was no arrangement between him and Preston in relation to the sale of the property. It is admitted, that the property was purchased by Colonel Preston, plaintiff, for $67,500; that the third note was paid by draft prior to the sale under the seizure and sale; the three last notes assumed by Preston are in the hands of witness; witness has never had the mortgage raised to secure the last three notes."

"[Signed] R. BARROW"

"Sworn to and subscribed before me, this 23 April, 1841."


Upon the trial, the counsel for Phillips the defendant, filed the following bill of exceptions:

"1st. The defendant, by his attorney, offered to file document A as his peremptory exceptions founded in law, to the filing whereof the plaintiff's counsel objected, and their objection was sustained by the court, to which decision the defendant excepts."

This document was offered after the pleadings were read:

"2d. Before any evidence was offered by either of the parties in support of the several issues on their respective parts to be maintained, the defendant's counsel moved the court that the clerk be directed to take down the testimony of all the witnesses whom either party should adduce on the trial, and to file all documentary proof received in evidence, and keep minutes thereof, but the court overruled the motion and witnesses were examined without their testimony being taken down, and documentary proof received without being marked as filed, or minutes taken thereof, to which decision the defendant excepts."

"3d. The plaintiff offered in evidence the deposition of Robert R. Barrow, marked B, to the reception whereof the defendant objected, but the objection was overruled by the court and the deposition was admitted in evidence, to which decision of the court the defendant excepts."

"4th. The plaintiff offered in evidence the first, second, and third of the promissory notes described in the petition, together with the protests thereof, and the several certificates of the notary in relation to the manner and times in which he notified the plaintiff and defendant of the dishonor of the notes as they respectively matured. Whereupon the defendant objected to the admission of the said certificates or any proof adduced for the purpose of and leaving notice to the endorsers of protest, as no such notices were alleged

Page 46 U. S. 284

in the petition; the court overruled the objection, and admitted the evidence, and to its decision therein the defendant excepts."

"5th. The plaintiff offered Louis T. Caire (the notary before whom the act of sale was passed that is described in the petition) as a witness to prove the allegations of the petition, and a verbal agreement between the plaintiff and the defendant, made before the passing of the act of sale, that, as between themselves, they would be equally liable as endorsers, as stated in the petition. And also, to prove by him that the clause in the act of sale, setting forth said agreement, was inserted therein by the instruction of the plaintiff, in the presence of the defendant, and without any objection thereto on his part. Whereupon the defendant objected to the admission of such evidence, but the court overruled the objection, and admitted the evidence, and to its decision therein the defendant excepts."

"6th. The plaintiff offered in evidence the copy of the act of sale described in the petition, and marked (C), to the admission of which, and such parts thereof as were adduced for the purpose, and tended to prove any agreement between the plaintiff and the defendant, as to their equal liability between themselves, upon their several endorsements upon the promissory notes described in the petition, and to charge the defendant with any liability resulting therefrom, the defendant objected; but the court overruled the objection, and admitted the evidence; and to such, its decision, the defendant excepts."

"7th. The plaintiff offered in evidence the record of the suit of Robert R. Barrow v. S. John Carr, being the order of seizure and sale, and proceedings therein, relating to the seizure and sale of such of the property described in the petition and act of sale, as was situated and located in the Parish of Point Coupee, Louisiana. The said record is marked (D), to the admission of which record and proceedings the defendant objected, but the objection was overruled by the court, and to such, its decision, the defendant excepts."

"8th. The plaintiff offered in evidence document marked (D), purporting to be an act of sale from the sheriff of Point Coupee, adjudicating the property last mentioned to the plaintiff, as the purchaser at public sale; to the admission whereof the defendant objected, but the court overruled the objection, to which decision of the court the defendant excepts."

"The defendant, by his attorney, having reserved the foregoing several exceptions, as the occasions thereof severally arose in the course of the trial, and at the suggestion of the court, the drafting of separate bills of exceptions were dispensed with, and the general bill for the whole postponed, till the plaintiff's testimony was closed."

"He now respectfully presents to the court this his bill of exceptions, embracing all the several points reserved, and prays the court to sign and seal the same, which is done accordingly."



"April 28, 1841"

Page 46 U. S. 285

"Peremptory exceptions referred to in bill of exceptions, marked as filed, same day."

"United States of America: Circuit Court of the United States, being the Ninth Circuit thereof, and holden at New Orleans, in and for the Eastern District of Louisiana."

"John S. Preston v. George W. Phillips. April term, 1841."

"And now at said term came the defendant, George W. Phillips by his attorney, and (not waiving, but insisting on his answer heretofore filed in this cause), availing himself of the provisions of the Louisiana code of practice in that behalf, and as the same has been adopted by this Honorable Court, he here presents his peremptory exceptions, founded in law, to the further maintenance of this suit."

"And for causes of peremptory exception, he sets forth and assigns the following, to-wit:"

"1st. The agreement stated in the petition to have been entered into by the plaintiff and defendant is nowhere alleged to have been in writing, or signed by the parties, or embodied in any instrument of writing to which they were parties, or to which they, or either of them, assented, by their presence or otherwise, at the time of the execution of any such instrument of writing, by those who may have been parties thereto."

"2d. The petition in no part alleges any, or a sufficient, consideration for the said supposed agreement, nor does it allege or show, that the said agreement imported in itself any, or a sufficient, consideration."

"3d. The said supposed agreement is at variance with, and in contradiction of, and seeks to change, the liabilities and relations of the plaintiff and defendant to each other, in relation to certain contracts in writing, to which the petition alleges they are parties, by respectively signing their names on the backs of six several promissory notes, as first and second endorsers thereof."

"4th. The petition, in no part of it, alleges that either the plaintiff or the defendant was duly notified of the dishonor of any of the said promissory notes, which it alleges to have been protested for nonpayment, as they severally matured, nor does the petition show in what manner the plaintiff was, or could have been, coerced to make the several payments he alleges he has made."

"5th. All the statements and allegations of the petitions in reference to any agreement or circumstance, but of which any liability of the defendant to the plaintiff is supposed to arise, are loose, vague, and indefinite, and insufficient in law to put the parties to their proofs upon the several issues of fact which the pleadings present."

"Wherefore, and for divers other good reasons in this behalf, the defendant prays judgment of this Honorable Court upon the said

Page 46 U. S. 286

petition, and the dismissal thereof, with a further judgment for costs in this behalf most unjustly sustained."

"[Signed] JANIN & BARTON, Defendant's attorneys"

"And afterwards, to-wit, on 29 April, 1841, the following motion in arrest of judgment was filed."

"United States of America: Circuit Court of the United States, holden at New Orleans, in and for the Eastern District of Louisiana."

"John S. Preston v. George W. Phillips. April term, 1841."

"And now comes the defendant by his attorney and prays the court to arrest the judgment in this case, and sets forth and assigns as grounds for the motion:"

"1st. That the plaintiff's petition does not allege that the agreement described therein, and out of which the defendant's liability is supposed to arise, was signed by either plaintiff or defendant, or that the same was in writing."

"2d. The petition does not allege any, or a sufficient, consideration for the agreement which it states to have been entered into by the defendant, to and with the plaintiff."

"3d. The agreement stated in the petition is at variance with, and in contradiction of, the contract of endorsements, which arises from the signatures of plaintiff and defendant as first and second endorsers, upon several promissory notes, which the petition alleges they signed as such."

"4th. There is no allegation in the petition of notice or notices being given, either to plaintiff or defendant, of the dishonor or protest of anyone of the said promissory notes, as they respectively matured."

"5th. The evidence adduced at the trial, as shown by the statement of facts, and the several documentary proofs to which it makes reference, is not sufficient in law to support the issues on the plaintiff's behalf to be maintained, or to authorize any judgment in favor of the plaintiff, and against the defendant."

"6th. A trial of this cause by the court, and without the intervention of a jury, unless there had been an express waiver of record, is not authorized by the law regulating the practice of this Court."

"Wherefore, the defendant prays that the judgment be arrested, that the plaintiff take nothing by his plaint, that his petition be dismissed, and that the defendant may go hence without day, and recover of the plaintiff his costs in this behalf most wrongfully sustained."

"[Signed] S. BARTON, Defendant's attorney"

"On the 29th of April, 1841, the court entered up judgment in favor of the plaintiff, John S. Preston, and against the defendant,

Page 46 U. S. 287

George W. Phillips for the sum of $19,688.74, with interest of five percentum per annum upon $9,567.62 thereof, from 4 March, 1839; and upon $10,121.12, from 4 March, 1840, till paid; for $5.25, cost of protest, and cost of this suit."

This judgment was for one-half of the note due March 1, 1839, and one-half of the note due March 1, 1840, viz.:

Amount of judgment . . . . . . . . . . $19,688.74


Note due 1-4 March, 1839, $19,135.25

One half of which is . . . . . . . . . 9,567.62

Note due 1-4 March, 1840, $20,242.24

One half of which is . . . . . . . . . 10,121.12



The defendant's counsel moved an arrest of judgment upon the grounds just stated, which motion was overruled.

To review all these opinions of the court, the case was brought up to this Court.

Page 46 U. S. 288

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