Holly v. . Holly

MereiMON, J., (after stating the case). The case states, that the notes under seal in question, payable to William J. Holly or order, and unendorsed, were found among the papers of the testator at the time of his death, and this arid the will, constitute all the evidence in respect to the ownership of them before us, and all that we are at liberty to consider in passing upon the first exception of the appellants. In view of the evidence, the terms of the bequest recited above do not embrace these bonds. They did not, upon their face, nor in any legal or equitable aspect of them, constitute any claim or demand, in whole or in part, of any kind, in favor of the testotor, and against William J. Holly. So far as appears, they were made payable to him or his order, but he did not endorse them, nor did he promise or oblige himself to become responsible for, or to pay them, or any part of them, in any contingency, nor is there any presumption that he did. Of themselves, they constitute no claim against him. The bequest embraces only “ claims and demands ” against him. He is not, therefore, entitled to the bonds as part of the bequest to him. Then, did the bonds belong to the estate of the testator? Accepting the evidence as true, this question must be answered in the negative. The testator was prima fade the owner of them, except as against the payee who held the legal title to them. Robertson v. Dunn, 87 N. C., 191. *673 Unquestionably, the complete equitable title to, and the substantial ownership of, a note or bond, negotiable by endorsement, may, without endorsement, be passed by the payee or obligee, to another person, by a sale and delivery thereof, and in this State, the purchaser thus becomes so thoroughly the owner, that an action upon the note or bond so transferred, can only be maintained in the name of the real or equitable owner. The Code, §177. Andrews v. McDaniel, 68 N. C., 385 ; Alexander v. Wriston, 81 N. C., 191. As the substantial interest in the note or bond may thus pass to the purchaser without endorsement, and he may collect it without action, or sue for the same in his own name, or sell it again, and it may thus be sold to different persons indefinitely, a just and reasonable presumption of fact arises, that the person in possession of it, is the substantial and equitable owner thereof. Such presumption is not conclusive, but it is sufficiently strong to put the person claiming it adversely to him in possession thereof, to proof to rebut the presumption, except that this does not extend to him to whom it was made payable, and who, therefore, in the absence of endorsement holds the legal title. The possession and claim is evidence of ownership. Such a presumption seems necessary and expedient, under the present method of civil procedure in this State, which requires civil actions generally, to be prosecuted in the name of the real party in interest, and that the legal and equitable rights of litigants shall be administered in the same action, when need be. In Jackson v. Love, 82 N. C., 405, the Chief Justice, discussing the subject now under consideration, said: “This recognition of equitable ownership of a negotiable bond or note, as property, seems to place it upon the footing of other personal property, and admits the application of the rule, which infers title from •possession, until the presumption is met and overcome by rebutting evidence.” He further said, that “the Judge in the Court below held, that the denial in the answer, of the plaintiff’s title, had the effect of requiring from him, proof beyond and in addi *674 tion to the production of the note. In this we think he misconceived the legal effect of the conflicting pleadings. The denial destroys the force of an allegation, and puts the controverted facts in issue. It would do the same, in case the endorser or bearer brought the action in his own name. But in neither case is the denial evidence against, nor the plaintiff’s allegation evidence for, the truth of the disputed fact, to be considered by the jury. The issue is eliminated and presented in the form of a simple inquiry as to the plaintiff’s ownership of the note in suit. The burden of proof rests upon him, and upon the authorities, the presumptive evidence is furnished, when the note is produced and read in support of his title. As there was nothing shown to repel its force, the presumption should have prevailed, and the plaintiff was entitled to the verdict.” That case is very much in point here. We therefore think the Court properly instructed, the jury to find the issue submitted to them in the affirmative. Prima jade, the bonds belonged to the testator in his lifetime, except as against, the payee who had the legal title. The second exception is untenable. The lease was for years, and in the articles of agreement creating it, the lessees expressly covenanted to pay to the lessor an "annual rent” of $500. Obviously, it was not the intention to create a debt due from year to year, distinct from and without regard to the lease. The latter, and the rents agreed to be paid, were of each other, and were intended to go together; the one was not distinct from the other. In such (¡ase, it is settled, that the rents that come due after the death of the testator, follow the reversion to the devisee. Kornegay v. Collier, 65 N. C., 69; Rogers v. McKenzie, Ibid., 218; Nixon v. Coffield, 2 Ired., 301. Let this opinion be certified to the Superior Court. It is sc ordered. No error. Affirmed.