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[No. 1. Clark v. Farmers' Man. Co. 15 Wend. 256; Foster v. Floyd, 4 McCord, 159; Helfer v. Alden, 3 Min. 332.
What, then, is the effect of the indorsement of the name of the obligee
Wenecialty in blank Mank authorizes the implied by la
The indorsement in blank authorizes the holder to write over the name of the indorser in blank only the contract implied by law, and nothing more. Tenney v. Prince, 4 Pick. 385; Nevins v. De Grand, 15 Miss. 436.
The contract of indorsement on commercial paper becomes a commercial contract, operating as a contingent guaranty where the paper is negotiable ; to any other chose in action it becomes an equitable assignment of the beneficial interest, without recourse to the assignor ; and this is, therefore, the only contract which can be legally written over the blank indorsement. Kirkpatrick v. McCullough, 3 Humph. 173; Park: v. Duke, 2 McCord, 380; Folwell v. Beaver, 13 S. & R. 314-316 ; Frevall v. Fitch, 5 Wharton, 325; Patterson v. Poindexter, 6 W. & S. 230, 235; Cummings v. Lynn, 1 Dall. 444; Parker v. Kennedy, 1 Bay, 398; Ex'rs of Garretsie v. Van Ness, Pennington's Rep. (N. J.) 13–24.
To such single bills there are no days of grace, and demand and notice (if any demand and notice can be effective in creating responsibility) should be made and given on the day of actual maturity. Skidmore v. Little, 4 Texas, 301 ; McMullen v. Abbott, 1 Oregon, 258.
Not only so, but the diligence required of the holder of a note, even of a promissory note which is not negotiable, is to demand the amount, as soon as it falls due, of the maker, and, in the event of failure to pay, to sue him immediately. Swift's Ev. 347.
The Code in the 8th section of the 9th article would seem to point out the only cases in which the assignor of a specialty can be held responsible to the assignee. · ALVEY, J., delivered the opinion of the court.
Whether the note sued on is to be treated as a negotiable promissory note, or as a single bill, under the seal of the corporation, the maker, is the main question in this cause, and the one upon which all the other questions depend. According to the rulings of the court below, the instrument was held to be a single bill, and consequently the appellees were not liable on a mere indorsement of the note, as they would have been if the note had been a negotiable promissory note, instead of what it was held to be.
The appellees being sued, and sought to be held liable, by reason of their indorsement of the note, if the instrument be in reality a specialty, though in the form of a promissory note, no obligation or liability arose from the mere indorsement of it, either by the statute or the custom of merchants. As a sealed instrument, it could be assigned, as required by the statute, to enable the assignee to sue in his own name; but then no liability would arise by the assignment, upon which the assignor could be held responsible, unless the assignment be made in the manner and form prescribed by the Code, art. 9, secs, 8 and 9, or unless the assignment embody a separate and distinct contract or undertaking, as in the case of Gist v. Drakeley, 2 Gill, 330. If the indorsement of a sealed instrument be in blank, accompanied by delivery, the party to whom the instrument is delivered may fill up the blank, with a full assignment to himself, and
thus become absolute owner, with right to maintain suit in his own name, within the meaning of the statute; and though the assignment may not be extended until the time of trial, it is regarded, for the purposes of the suit, as having been made in its extended form when the instrument was indorsed ; as was the case in Chesley v. Taylor, 3 Gill, 251.
Here, the note was indorsed in blank by the appellees, who were the payees in the note, and after such indorsement, but before or at the time of the trial, the appellants wrote over the blank indorsement the words, “We hereby indorse and assign the within, and direct payment thereof to be made to Priscilla Lynch,” one of the appellants. This was good as an assignment, upon the assumption that the note was a single bill; and it was all-sufficient as an indorsement in full, treating the instrument as a negotiable promissory note. As an indorsement of negotiable paper it created a liability on the part of the appellees, but as an assignment of a non-negotiable chose in action it created none, and only transferred the right of the assignors, with the power to sue and maintain an action on the note in the name of the assignee. It was in this latter aspect that the court below instructed the jury against the right of the appellants to recover on the indorsement against the appellees.
But is the note a specialty or single bill, as distinguished from a promissory note, made negotiable by the statute of 3 & 4 Anne, ch. 9 ? The Building Association that made the note was organized under the present general incorporation law of the state, and by the 9th and 11th articles of its association, it is provided that its board may issue promissory notes on mortgages only, and that such notes shall always be drawn to the order of the mortgagor, who shall, in all cases, indorse the notes thus drawn. The president, secretary, treasurer, and three directors, are authorized to sign all promissory notes issued by the association. The note in question was issued on the mortgage of the payees of the note, and is conceded to have been under the authority of the articles just referred to. The note is strictly in form a promissory note, payable to the order of the payees named, who are the present appellees. It was drawn at sixty days' time, and payable at a certain named bank. It has been treated as ordinary negotiable paper, and hence it was protested for non-payment. It was signed by the officers designated in the articles of association to execute promissory notes, and the only thing that is supposed to deprive it of the qualities of such paper is the appearance, in one corner of the face of the note, of the type or emblem of what is said to be the seal of the corporation. There is no statement or declaration in any part of the note that it was, or was designed to be, executed under the corporate seal. What is alleged to be the seal consists simply of an emblem or symbol printed by the printer at the time when the printed blank note was struck. Whether this printed symbol is a sufficient seal, or can be made sufficient by adoption, is a question that we need not now decide ; for, even conceding it to be a sufficient representation of the corporate seal, still, we are of opinion that the note in question is a negotiable promissory note, by the indorsement of which in the ordinary manner liability attached to the indorser.
In this case, as we have seen, the officers of the corporation signing the note were authorized and directed to issue promissory notes in a negotia
It excute promissory na stech paper is the ma pot what is said
JACKSON v. MYERS.
ble form, and it should be presumed that they intended to conform to their authority rather than violate it. But, apart from this consideration, the very nature of the transaction itself, the objects and purposes to be subserved by the issue of the note, as well as its form, plainly indicate that the parties must have understood that the note was negotiable, and that it would be so accepted and dealt with by the commercial community. The Building Association issued the note to the appellees, instead of money for which the inortgage was given. It was certainly contemplated, that the appellees should negotiate the note, in order to obtain the money that the association had contracted to loan, and that was rendered impossible, from the form of the note, except by indorsement. No bank or banker would likely discount the note, if not negotiable, upon mere assignment, subject to the equities existing between the original parties. It sufficiently appears that the present note, and others like it, have been dealt with by the banks, and the commercial community generally, as ordinarily negotiable paper; and in their understanding of the nature and qualities of these instruments, we think they have not been mistaken. The symbol or printed representation of the seal, if it be conceded to be a sufficient seal, was not printed on the note to restrain its negotiability, or to change it into a specialty, but rather as a mark of genuineness. The note in no manner depends upon the seal for its validity, but derives its entire authenticity from the signatures of the officers authorized to execute it. This view of the subject is fully sustained by the recent cases of Dinsmore v. Duncan, 57 N. Y. 573, and Vermilye v. Adams Express Co. 21 Wall. 138, involving the consideration of the nature and qualities of the United States treasury notes, issued under the seal of the treasury, as authorized by the Act of Congress of March 3, 1865.
The authorities mainly relied on by the appellees in support of the position that because there is a seal, or the representation of a seal, on the note, therefore the note must be a specialty, are the cases of Trasher v. Everhart, 3 Gill & John. 234; Stabler v. Cowman, 7 Gill & John. 284, and Gist v. Drakeley, 2 Gill, 330. The first two of these cases presented no question as to what constituted, or as to the effect of printing a representation of a corporate seal on an instrument executed by a corporation ; but were cases where the instruments involved were executed by individuals, using the scrawl at the end of their names as seals. The law settled by those cases we in no manner design to disturb. Nor do we propose to qualify or disturb any of the principles decided in the case of Gist v. Drakeley. That case, however, is quite distinguishable from the present. There, the two notes executed by the corporation, though in the ordinary form of promissory notes, bore upon their face such evidence of design as to leave no doubt of their real character. They bore the regular impress of the seal, attested by the signature of the president; the notes concluded with the words, “Witness the seal of the company, attested by the signature of the president." The seal was the only real evidence of execution, the signature of the president being added to attest the affixing of the seal to the instruments. Not so in the execution of the note before us.
With these views, differing from those entertained by the court below as to the nature and character of the note in suit, and without referring
[No. 1. specifically to the several prayers offered on each side, as they will be of little or no importance in the re-trial of the cause, we shall reverse the judgment appealed from, and award a new trial.
Judgment reversed, and new trial awarded.
CIRCUIT COURT OF THE UNITED STATES.-SOUTHERN DIS
TRICT OF MISSISSIPPI.
BANKRUPTCY. - CHAMPERTY, — ATTORNEY AND CLIENT. — CONTIN
GENT FEE, ETC.
MAYBIN v. RAYMOND, assignee.
1. After a bankrupt had been discharged, a large fund was recovered in a suit against
the United States in the court of claims, by counsel employed by him before his bankruptcy, on a contract that they should carry on the suit to recover the same at their own costs and charges, and have and retain for their compensation one half the amount recovered. The fund so recovered being in possession of the bankrupt court, the bankrupt filed his petition, praying that the share of his said counsel in the fund might be paid to them, that a sufficient sum might be set apart to pay all debts proven against his estate, and also the costs and commissions of the bankruptcy, and that the residue might be paid over to himself; held, that such a petition was one in the ordinary course of a bankrupt proceeding, and was not a bill in equity, nor did the relief prayed for require the filing of a bill in equity; nor was a decree of the bankrupt court, directing the payment to said counsel of their share in the recovery, the allowance of a claim against the bankrupt estate. The proper method, therefore, to reverse a decree made on such a petition was not by appeal, but by petition, addressed to the
supervisory jurisdiction of the circuit court. 2. The common law on the subject of champerty and maintenance has not been generally
adopted in this country, the reasons on which the law was founded not existing here. Therefore, a contract, such as that mentioned in the first head-note, made by a party with his counsel is not an unlawful, but is a valid and binding contract. 3. Upon the facts stated in the first head-note, the attorneys who recovered the judgment were entitled to one half the amount recovered, notwithstanding the subsequent bankruptcy of the party with whom they contracted, and notwithstanding the recov
ery was subsequent to the bankruptcy. 4. A paper writing purporting to be the discharge of a bankrupt, without date, signed
by the register without application therefor by the assignee, and which by inadvertence has found its way among the records of the court, does not put an end to the powers of the assignee, or terminate the bankruptcy proceedings; it is no part of the
record, and may be ordered by the court to be stricken from the files. 5. The discharge of a bankrupt is not such an adjudication of the fact that he has sur
rendered all his property for the benefit of his creditors as to bar the right of his assignee to recover property discovered after the discharge, and which the bankrupt had
failed to place upon his schedule. 6. Where an assignee in bankruptcy more than two years after his appointment is sub
stituted for the bankrupt as plaintiff in a suit pending in the bankrupt's name, and recovers à sum of money in the suit, the bankrupt cannot claim from the assignee the money so recovered, on the ground that the cause of action in favor of the latter was
barred at the time he was substituted as plaintiff in the suit. 7. Where authority was obtained from the bankrupt court upon the application of the
assignee to make the contract mentioned in the first head-note for the prosecution of a claim due the bankrupt estate, the court being kept in ignorance of facts which, if
MAYBIN v. RAYMOND.
known to it, would surely have induced it to withhold such authority, the contract is not binding in the court or on the bankrupt estate, especially when the attorneys with whom the contract was made knew that the assignee had not communicated such facts to the court.
trict coulin anticis, 1876,
that Mary 26,ation of of thed at
On the 3d of June, 1876, the district court of the United States for the Southern District of Mississippi, sitting in bankruptcy, made a decree, to revise certain portions of which these petitions were filed. This decree was made under the following circumstances :
Raymond, the assignee of Maybin, had recovered in the court of claims a judgment against the United States for $71,020, which sum had been drawn from the treasury of the United States, and at the date of the decree of the district court was in the registry of the court subject to distribution by its order. In anticipation of this state of fact, Maybin, the bankrupt, had filed on January 26, 1876, a petition in the district court in which he set forth that Messrs. Harris & Harris, a firm of solicitors in Vicksburg, were entitled to one half the amount so recovered from the United States, by reason of a contract entered into in 1866 with them by him before his bankruptcy, by which he agreed that in consideration of their prosecuting said claim and paying all expenses incident to such prosecution, they were to have and retain one half the amount they might recover from the United States. That Harris & Harris bad associated with themselves in the contract Messrs. Bartley & Casey, solicitors in Washington city, and that by the united services of all his said counsel on May 25, 1875, a judgment was recovered in favor of petitioner and against the United States, in the court of claims, for $71,020.
His petition further states that in July, 1873, and more than three years after the discharge of the petitioner in the bankrupt court, John B. Raymond his assignee had procured himself to be substituted for the petitioner as plaintiff in the said suit in the court of claims; that but one debt had been proved against the estate of the petitioner, and that for the sum of $2,000 only; and that said assignee intended to collect said judgment and hold said money, and refused to recognize the compensation due to the said counsel of petitioner.
The petition prayed that the counsel of petitioner should be paid their said fees out of the fund when recovered, and that petitioner should be allowed to deposit in the registry of the court a sufficient sum to cover all claims against him and all costs and commissions of the assignee, and that the remainder of the proceeds of said judgment should be paid to petitioner. . After the filing of this petition and before a decree was made thereon, the judgment of the court of claims had been affirmed by the supreme court of the United States, and the amount of the judgment was drawn from the treasury of the United States and was in the custody of the bankrupt court.
Before the decree was made upon said petition other proofs of debt had been filed against the estate of said Maybin, in addition to said claim of $2,000, so that the debts filed against the said estate amounted to about $26,000. These debts however, it was claimed by Maybin, were not valid claims against his estate.
Raymond, the assignee of Maybin, filed an answer to this petition in