Miller v. Pollock

Mr. Justice Sterbett delivered the opinion of the court, January 2d 1882. The real difficulty in the way of a successful defence in the court below was the fact, established by uncontradicted evidence, that the negotiable notes in suit had passed before maturity for a valuable consideration into the hands of a bona fide holder, since deceased, whose personal representatives were the plaintiffs of record. This presented an obstacle that the defendant below could not overcome by the aid of any evidence in the cause, or any testimony, which lie proposed to introduce. The notes, made by Frederic Miller to the order of and indorsed by defendant below, were delivered to Samuel Gr. W. Brown in consideration of the sale and transfer of his interest in the firm of Brown & Ivory, to Frederic Miller, the maker. Having thus originated in a regular business transaction, the notes were undoubtedly valid in the hands of the first indorsee, who before maturity and for a valuable consideration, passing to him at the [206] time, indorsed and delivered them to James E. Brown, whose personal representatives are the plaintiffs below. Each of the notes was separately taken by James E. Brown, as collateral to a larger note made by Samuel G-. W. Brown and simultaneously discounted for him on the faith of the collateral, and the .proceeds drawn by him. The larger notes were renewed, but neither of them was ever paid or reduced. It is, therefore, a mistake to suppose that J ames E. Brown did not thus become a bona fide holder of the notes in suit for value. It is true, they were indorsed and delivered to him as collateral security, but not as collateral for a pre-existing indebtedness. The discounting of the larger notes, on the faith and credit of the note that accompanied each respectively, was a new and valuable consideration passing between the parties at the time; and the principal notes not having been paid, either in whole or in part, the collaterals were outstanding and valid in the hands of James E. Brown for their full face, and according to well settled principles the plaintiffs were entitled to recover: Munn v. McDonald, 10 Watts 270; Spering’s Appeal, 10 Barr 235; 2 American Leading Cases 231, and numerous authorities there cited. In several of these cases the distinction between a merely collateral security and a security given as an inducement to an act, which is performed, is clearly recognized. Such of the facts above stated as were not admitted by the defendant in the court below were clearly proved by competent and uncontradicted evidence, and there was, therefore, no error in giving the jury binding instructions as to its legal effect. There was not a particle of evidence in the ease, on which they could have based any other conclusion. While the third' and fourth assignments are not according to rule, and, therefore, not entitled to notice, it is very evident, from what has been said, that the points therein referred to were rightly refused, for the reasons given at length by the learned judge in his answers thereto. The fifth and sixth assignments of error are not sustained. The offers of evidence embraced in the former were rightly refused, for the reasons given by the court below. There was no offer to show payment, either legal or equitable, to the holder of the notes. As to the amendment complained of in the first and second assignments, we are of opinion that it was fully authorized by the letter, as well as the spirit, of our statutes on that subject. The cause of action was unchanged. In its inception the suit was against the payee and first indorser of the notes by a party supposed to be the legal holder thereof. But it'clearly appeared, during the progress of the trial, that this was a mistake; that, instead of the Kittanning Insurance Company being the legal, [207] and James E. Brown the equitable, owner, at tbo time suit was brought, the latter was both legal and beneficial owner of the notes; and hence the amendment was properly allowed, in order that the case might be tried on its merits. The act of May 4th 1852, expressly authorizes the court, at “ any stage of the proceedings, to permit amendments, by changing or adding the name or names of any party, plaintiff or defendant, whenever it shall appear that a mistake or omission has been made in the name or names of any such party.” Our statutes of amendments have been liberally construed, and it has been repeatedly held that parties might be stricken out or added whenever, by so doing, the canse can be tried on its merits ; and the right to so amend is not confined to a more mistake of fact in the name of the party. As is said in Commonwealth ex rel. v. Dillon, 32 P. F. Smith, 44: “ An action may be commenced in the name of a wrong party by mistake of law, and the legislature meant the power of amendment to extend to that case.” If the defendant below was surprised by the amendment he had a right to ask a continuance, but instead of doing so his counsel informed the court that he did not claim surprise nor ask a continuance. We discover nothing in the record of which the plaintiff in error has just reason to complain. The insuperable difficulty was, as stated in the outset, that he had no available defence to the payment of the notes in the hands of a bona fide holder for value. Judgment affirmed.