Austin v. Ryan

The opinion of the court'was delivered by Barrett, J. The plaintiff puts his claim to hold the trustee, as against the claimant, on the ground that the trustee was not notified of the transfer of the note to the claimant before the process was served on the trustee. The note was in fact indorsed to the claimant when it was first placed in his hands for collection, and the claimant brought the suit on it, declaring as indorser and owner. This writ was duly served on Mason as trustee, and the suit was entered in court, and answered to by Mason. Mason was thus notified, in fact, of the transfer and the holding by claimant as alleged owner. That indorsement vested the legal title of the note in the claimant to every intent, as against the maker, the same as it would have been in the payee if the note had remained in the payee’s hands and been sued in his name. As between the claimant and Ryan, the claimant was holding as the trustee of Ryan, and accountable to him for the proceeds. [114] Thus the matter stood, with the suit upon the note still pending, when Ryan assigned the note to the claimant, so that, thereupon, the claimant became the owner in fact, and held in his own right, instead of being the mere title-holder as the trustee of Ryan. The fact then corresponded with what the pending suit notified Mason of, viz. the tranfer to, and ownership by the claimant of, the note. This had all been done before the trustee process was served. As between the claimant and Ryan and Mason, the claimant had become the lawful owner of the note, and entitled to recover in his own right what was due on it from Mason in the suit brought by him on it, which was pending when the trustee suit was brought. The plaintiff stands upon no equity as against any of the other parties, but stands solely and simply upon the legal right accorded to him by the statute, by reason of failure to give notice of the transfer to the claimant, such as is contemplated by the statute. If Mason, as trustee, had disclosed the fact of the suit brought against him by the claimant, and nothing further had been shown, the court would have adjudged him not trustee, or would have ordered Farrington to be cited in as claimant. If so cited, and the fact of the transfer, indorsement, and the suit, and the assignment, had been shown just as they now appear, and nothing further had been shown, it cannot be questioned that the claimant would be held entitled to hold as against the trustee process. In what occurred between Ryan and Mason in submitting their matters, including this note, to arbitration, nothing was done to undo, as between claimant and Ryan, claimants title and ownership of the note. The note in claimant’s hands having been transferred over due, was subject to any defences that might have been made by Mason if held and sued in the name of Ryan; and this probably explains the .embracing of the note in the submission, but that did not devest the claimant’s right to the note as becoming the owner and holder of it over due. The recitals in the submission do not operate to estop the claimant, but are to be regarded only as evidence, in connection with other evidence showing the posture of the claimant in relation to [115] that submission, to be considered by the commissioner on the question of the ownership of the note by the claimant. We are satisfied that the commissioner and the County Court were right in finding and holding as they did. Judgment affirmed.