Adams v. Edmunds

[353] The opinion of the court was delivered by Powers, J. The plaintiff in his special count, which is demurred to, declares upon a lost note payable to him or bearer. He alleges that he lost the note in question and that it cannot be found, but does not allege that the note is destroyed. It is the settled law in England and in this State that no recovery can be had upon such a note at law. A court of equity alone can give relief upon an indemnity being given to the maker.. A note payable to bearer imparts a legal liability of the maker to pay any holder who may present it, and if lost it may come to the hands of a bona-fide holder for value before maturity and thus be enforceable even though it had been paid to the true owner. This rule of law doubtless springs from the custom of merchants which requires the surrender of the note, on payment, to the maker that he may have a voucher showing payment. Without such voucher the maker is exposed to the hazard of litigation with an unknown holder. A different rule prevails in some of our sister States, but this court has uniformly followed the English rule, which is thoroughly discussed in Hansard v. Robinson, 7 B. & C. 90 ; Wright v. Jacobs, 1 Aik. 304 ; Lazell v. Lazell, 12 Vt. 443 ; Hough v. Barton, 20 Vt. 455. The case of Hopkins v. Adams, 20 Vt. 407, is not in conflict with this rule. That was a bill in chancery to obtain relief upon a lost note, not in fact negotiated, and the question was whether respecting such a note, the bill should contain an offer of indemnity, and it was held that it need not. Redeield, J., delivering the opinion says that, if properly negotiated, the remedy is in equity and an indemnity would be required ; that no recovery could be had at law. This case merely settles the question respecting the giving of an indemnity, and proceeds upon the theory that lost notes payable to bearer, or notes negotiable in form and endorsed in fact, being valid in the hands of the holder, are enforceable alone in equity, and enforceable then only on giving indemnity against the title of the unknown holder. The judgment is reversed, the special count adjudged insufficient, and the case remanded.