First National Bank v. Michael

Merrimon, J., (after stating the facts). The statute (The Code, §41,) makes bonds and notes under seal, for money, whether made payable to order or not, assignable over in like manner as inland bills of exchange are by the custom of merchants, and the person to whom the same shall be assigned or endorsed, may maintain an action against the maker and endorser upon the same, as in case of inland bills of exchange. . A promissory note in this State is a written engagement under seal or not, wherein the maker stipulates and promises to pay a person therein named, absolutely and unconditionally, a certain sum of money, at a time therein specified. The bond in question has all these requisites and qualities. In it there is a certain obligor and obligee, and there is an express promise to pay absolutely and unconditionally a certain sum of money at a time therein specified. It was therefore, negotiable. It was endorsed, and the plaintiff became the bona fide holder of it "before it matured, and before the defendant obligor paid the obligee therein named the money which he intended should discharge it. In this latter respect, this case is essentially different from that of Miller v. Tharell, 75 N. C., 148. In that case, the note was paid — discharged — before the payee sold it, and it was not endorsed. The Court intimates strongly that if it had been endorsed, the plaintiff might have recovered, notwithstanding the payment. The defendant contends that the reference in the body of the bond to the consideration for which it was given, rendered it non-negotiable. We do not think so. This inference does not imply a condition or limitation, affecting the promise to pay the sum of money specified; it simply recites the particular consideration, and is intended to mark the *58 bond, as of a particular transaction, between the original parties to it, for their convenience. This view is strengthened by the fact that the bond is expressly in terms made payable to “ order,” thus indicating the purpose of the parties to make it negotiable. The mere fact that the particular consideration of the note is mentioned in it, and that it possibly might involve or give rise to equities between the parties to it, cannot prevent its negotiability by endorsement. To have this effect, it must appear from the reference to it in the note, that it qualifies the promise to pay the sum of money specified, and renders it conditional, or the amount to be paid uncertain. A different rule would much embarrass business transactions involving negotiable notes and bonds, and tend to impair the freedom and confidence that ought to prevail and be upheld in the course of general business and trade. This view was taken by the Supreme Court of Tennessee in Ryland v. Brown, 2 Head., 270; which case is in material respects like the present one. See also Goodloe v. Taylor, 3 Hawks, 458; Elliott v. Southerman, 2 D. & B. 358; Story on Prom. Notes, §26. The case of Howard v. Kimball, 65 N. C., 175; cited for the defendant, is unlike this one. Reference is made in the note in that case, to the “ Rocky Swamp tract of land,” as the consideration for which it was given, and the Court held that such reference was notice of any equity in favor of the maker, but it did not hold that the note was non-negotiable —indeed, it recognized its negotiability by endorsement. This decision cannot help the defendant. The bond, as we have seen, was negotiable and was endorsed to the plaintiff before it was due. This gave it the legal and equitable title to it, certainly as to the relief now sought by the defendant. Blackmer v. Phillips, 67 N. C., 340. The reference to the land as the consideration of the bond could not, in any just and reasonable view, put the plaintiff on notice as to the attempted payment of it by the defendant *59 to the obligee, in its absence. It was not bound to presume or suppose that the defendant would attempt to thus pay the bond without taking adequate indemnity against it. He was bound to know its negotiable nature, and that it was not due. It was his own laches thus to attempt to pay the note— not that of the plaintiff. It was the misfortune of the defendant that he dealt with and confided in a man who seems to have been faithless and dishonest. There is no error, and the judgment must be affirmed. No error. Affirmed.