Hough v. Barton

The opinion of the court was delivered by Davis, J. It was conceded, on trial, that Barker was the owner of the note given by the defendant to Hough, and that the suit was commenced and prosecuted by him, for his own benefit, though in the name of the payee. Although the language of the record is not perfectly explicit on this subject, it may reasonably be inferred, that, at the time of bringing the action, and before, the defendant was apprised of the transfer to Kidder, and afterwards by him to Barker. Under such circumstances, although a different rule prevails in England, yet in this state and in most of the American States it is regarded as inequitable and unjust, to permit the defendant to avail himself of any discharge, release, retraxit, or admission, by the nominal plaintiff, to defeat the action. It was not competent for Hough to make admissions, after suit brought, to prejudice the rights of the real party in interest. Sargeant v. Sargeant et al., 18 Vt. 371. Cow. & Hill’s notes to Phil. Ev. 172. 1 Greenl. Ev. §§ 172-3, and note (2.) Objection was made to the introduction of Francis Kidder’s deposition by the plaintiff, upon the ground, that, as he assigned the note to Barker, the latter, on failure to recover of the defendant, might have recourse to the former for the amount. The case does not disclose any contract as indorser, or guarantor, — nothing but a sale and transfer of the property in the note, for a valuable consideration. Assuming that, although no express warranty of any kind was made, yet the law implies, from the very fact of selling and assigning the note upon a consideration received, an undertaking, [459] that the note was. duly executed by a party legally competent to execute it, upon a proper consideration, and that it was due and unpaid, (Thrall v. Newell, 19 Vt. 203,) still the case discloses facts, which preclude the possibility of any resulting liability of this kind, — inasmuch as the defendant conceded his original and continued indebtedness by virtue of the note. The deposition was therefore properly admitted by the county court. It remains to be considered, whether there is any legal obstacle to the plaintiff’s recovery, arising from the .loss of the note, and whether the instructions, which the county court gave to the jury, contained any error prejudicial to the rights of the defendant. In delivering the opinion of the court in the case of Lazell v. Lazell, 12 Vt. 443, being a suit upon a lost note, with a count for the original cause of action, Judge Bennett observed, — “The Iawf is well settled, that, when a note not negotiable, or, if negotiable byi being payable to order, not negotiated, is lost, an action at law mayj be maintained on the note, on proof of its loss, to recover its con-* tents.” Such appears to be the recognized doctrine in England; while it is at the same time held, that, in respect to notes and bills payable to order, and indorsed in blank, or payable to bearer, it is the right of the party liable upon it to insist on its production and delivery as a voucher, at the time of payment; and on suit no recovery can be had at law, without such production. W. W. Story, in his recent valuable treatise upon promissory notes, while he admits the law to be as stated, in respect to non-negotiable paper, assigns reasons of much weight in a practical point of view, why the same rule should be applied to both descriptions of paper. Story on Prom. Notes, § 106. In the case of negotiable notes, no distinction is made, whether the loss happens before or after they fall due. Hansard v. Robinson, 7 B. & C. 90. In this state, where, as already appears in the observations I have made respecting the right claimed by the defendant to avail himself of the admissions of the nominal plaintiff, we recognize the possibility of acquiring a Jegal interest in paper not negotiable, in opposition to the party whose name must be used in enforcing that right, there would seem to be additional reasons for abolishing the distinction. In this very case, so far as appears; the note was neither payable to order, or bearer, and yet Barker, by reason of the blank [460] indorsement, obtained a legal right to collect and appropriate the contents to his own exclusive use, — not, it is true, by a suit in his own name, but by using the name of Hough for that purpose. To this \ Hough consented; hut the right would have been the same, had ] there been no consent. Having transferred the note for value, his ' consent to the use of his name, on proper indemnity against costs, results by implication; and, as a necessary consequence, he is rendered incapable of impairing that right by discharge, release, or ¡¡other act. There is here no antagonism of interest between the real and the nominal plaintiff; but in other cases there may be; and it seems to follow from such a possibility, that much the same necessity exists, looking to the security of the maker, for the actual production of the note in one case, as the other. But however this may be, the court • do not feel disposed to make any innovation upon the principle generally established, and recognized in the cases of Viles et al. v. Moulton, 11 Vt. 470, and Lazell v. Lazell, 12 Vt. 443. Upon this principle the plaintiff’s right to recover is unquestionable, on proof of the execution, delivery and terms of the note, and of its loss merely, without its destruction, unless it were in fact negotiable. If it were so, the case shows it was negotiated; for the in-dorsement of the name of the payee- and its subsequent loss are, with respect to the contingent interest of some bona fide, unknown holder, equivalent to a formal negotiation. Now it is sufficient, upon this point, to say, as the case is presented to us, there is no evidence whatever that the note was made payable to order, or bearer. The circumstance relied upon as conclusive evidence, that it was of that character, that is, the fact of a blank indorsement thereon, was not only not conclusive of the point sought to be proved, but it had no tendency to prove it. Notes not strictly negotiable may be, and often are, upon good reason, indorsed in the same way. The fact that Barker, who possessed a valid claim to it through Kidder, instead of putting it in suit in his own name, and thus avoiding much inconvenience an$ hazard to himself, sued it in the name of Hough, the payee, furnished much more conclusive evidence, that the note could not be sued in any other form. The judgment of the county court is therefore affirmed,