Beall v. Russell

Lehman, J. The complaint herein alleges that the defendant made and delivered to plaintiff’s assignor his promissory note in writing, drawn to his own order, payable two months after date; that the note “ was - indorsed by the defendant in blank;” that it was assigned and delivered to the plaintiff for a valuable consideration before the. commencement of the action; that plaintiff'is now the owner and holder thereof, and that no part of the note has been paid. At the trial the defendant moved to dismiss the complaint upon the grounds that the complaint alleged no demand; that it contained no allegation that the note was made for value, and contained no allegation that the note was indorsed before maturity. The trial justice granted this motion and dismissed the complaint. There is of course no doubt but that a negotiable instru [245] ment is a chose in action and like other dioses in action, may be assigned either before or after maturity with or without indorsement. The defendant, however, claims that an assignment made by indorsement after maturity is merely an assignment of a chose in action and not of a negotiable instrument, and that, therefore, the plaintiif having failed to allege indorsement and delivery before maturity must allege both demand and consideration. . “ It is true that after maturity a holder of a negotiable instrument can transfer only his own title to the instrument and that the transferee is not a holder for value in due course, but a promissory note negotiable when made undoubtedly continues to be negotiable after it becomes due and has been dishonored in respect of all parties to the note who were liable upon it at its maturity and whose liability has not been discharged.” Leavitt v. Putnam, 1 Sandf. 199; see also opinion of the Court of Appeals in same case, 3 N. Y. 494. The instrument is still a negotiable instrument as between the original parties and is deemed prima facie to have been issued for a valuable consideration, though the absence of consideration is a matter of defense against the transferee. It follows, therefore, that consideration need not be alleged. It has never been held that demand is necessary to hold the maker of a promissory note payable at a definite time. If the instrument was indorsed after maturity his obligation to pay was then complete, and an assignment of the cause of action against him neither increases, nor diminishes his liability. The cases which hold 1hat demand must be promptly made where an instrument is indorsed after maturity are cases where the holder attempted to hold his own indorser liable upon the indorsement. . Leavitt v. Putnam, supra. ■ J udgment should be reversed and a new trial granted, with costs to appellant to abide event. G ur and Bijuk,' JJ., concur. Judgment reversed and new trial ordered, with costs to appellant to abide event.