Case ID: miss_3/html/0642-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Chief Justice ShAkkey", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Netterville & Boyd, Appellants, v. Stevens & Pillett.
    He who seeks to recover on a note of hand, must have an interest therein, and testimony is admissible to show that the plaintiff had no right or interest in the note, which is the cause of action.
    Possession of a promissory note, is deemed prima facie evidence,of interest, but is liable to be rebutted by proof.
    The statute regards as the real plaintiff, him for whose use the suit is brought. If the payee of a promissory note pay a holder whom he knows had no right to recover, it will not be an extinguishment of the debt.
    APPEAL from the Wilkinson circuit court.
    This cause was tried at the November term of said court, 1S33, before the Hon. A. M. Keegan.
    The defendants, as plaintiffs below, brought their suit to recover a promissory note for 1080 dollars. The defendants below pleaded — 1. The general issue. 2. That Stevens, the payee, never assigned or transferred said note, nor any interest therein, to Stevens & Pillett. 3. That Stevens & Pillett have no right, title nor interest in the note, nor had they at the time of the commencement of suit. 4. That the note was given to Stevens as administrator de bonis non of R. B. Hammett, as the purchase money, at an administrator’s sale, of a lot in the town of Wood-ville. That the estate of said Hammett has been reported insolvent, and that commissioners have reported claims against said estate, to a greater amount than the note. That Stevens’s letters were revoked, and that C. S. Kellogg was administrator de bonis non of Hammett at the time this suit was brought, of all which the plaintiffs had notice. 5. That said note belongs to the estate of Hammett.
    There was a general demurrer to all the pleas except the general issue, which was sustained by the court.
    On the trial, the defendants offered testimony to prove that the plaintiffs had no right, title or interest in the note, which was ruled out, and a bill'of exceptions tendered to the opinion of the court.
    Bóyd and Henderson, for the appellants.
    We shall only notice the errors of the court below, in sustaining the demurrer to defendants’ second, third, fourth and fifth pleas. Not but there are other errors in the record, but these are so glaringly manifest as to be all sufficient to reverse the judgment below.
    The second and third pleas are substantially the same, and propose the direct averment that the plaintiffs, for whose use the suit is brought, have no right or title to the note declared on. The fact is admitted by the demurrer, and yet the court commit the gross error of adjudging the plaintiff has nevertheless a right to recover. That the defendants always have the right to this objection, see 2 Phil. Ev. 12 and note (c); 16, text and note (a); 7 Wend. 223; 3 Stark, on Ev. 286.
    
    Now we admit that possession is prima facie evidence of ownership of a note, as in 3 Wheaton, 172; 3 Stark, on Ev. 239; Chitty, 278. But this admission proves the rule that it is necessary for the plaintiff to prove his title to the note sued on. Exhibiting the note is sufficient prima facie; and the principle that it is prima facie, involves the other principle we claim in these pleas, viz: the right to controvert this prima facie evidence.
    The fifth plea proposes the direct charge of fraud in the plaintiffs in their claim to the note, inasmuch as it charges the scienter on the plaintiffs for whose use the writ is brought, that they knew where the note was made to the nominal plaintiff, that it was for the use of R. B. Hammett, Esq.
    That no assignees can receive the assets of a decedent’s estate, they knowing them to be such, is equally consonant with the law as it is, and with justice as it should be. 7 Johns. Chan. Rep. 156, 157, 158, 159, 160, 161; with numerous authorities there cited; Revised Code 60, sec. 109; 3 Bac. Abr. 78; 17 Ves. Rep. 152. 154.
    Judge Ellis decided a few days since, that even a purchaser for valuable consideration without notice, could not derive any title to the personal assets of the decedent’s estate, unless the executor or administrator had made the title pursuant to the provisions of the statute authorising the sale or assignment. Chancellor Quit-man has decided the same thing, but I believe both these decisions go too far.
    If defendant can satisfy the jury, that a plaintiff suing upon a note became fraudulently possessed of it, the defence is sufficient. Or if he by proof can cast a suspicion on the plaintiff’s title, plaintiff must then prove himself an innocent and legal holder. 3 Burr. Rep. 1516; Doug. Rep. 633; 13 East’s Rep. 134; and full in point, 10 Johns. Rep. 231. The jury must determine if the holder be a bona fide purchaser. 3 Burr. Rep. 1523.
    ■ Notes taken at an administrator’s sale are assets, and go to the administrator de bonis non.
    
    The parties for whose use the action is brought are the real plaintiffs. Revised Code, p. 115, sec. 48. Their right to use the name of the payee, is based on the supposition that they have received from him a transfer of his interest in the note, but in a manner not sufficient to entitle them to an action in their own names. The production of the note on trial is prima facie, evidence of this transfer, and is completely rebutted by showing that the payee never made such transfer, or that the note was lost by him, or stolen from him.
    It then is incumbent upon the real plaintiff to show that although the note was thus lost or stolen, or otherwise not transferred by the payee, yet that they have obtained possession of it bona fide, and for a full consideration. On failure to introduce such proof, their action is at an end. 5 Binn. Rep. 472; 3 Johns. Cases, 7, 259; Chit, on Bills, S9, n. 436-7; 498, 513; 2 Campb. 5; 15 Mass. Rep. 435.
    The note sued on is payable to Stevens, and the defendants admit, that they never received any assignment, equitable or legal, from hirn. They cannot then use his name to effect a recovery. The right still exists in him, and if these plaintiffs should receive the amount of the note, they would be liable to him in an action for money had and received to his use.
    It is admitted by the defendants’ attorneys, that if the note sued on had come into their possession in the manner set forth in the pleas., and confessed in the demurrer, after it had been endorsed in blank by Stevens, they could not recover in this action: yet they contend for a right of recovery in the name of Stevens, under the very same circumstances which would bar them in case of an endorsement. The argument amounts to this; that one who steals a note with an endorsement on it, cannot maintain an action in his own name; but if he steal it without such endorsement, he may use the name of the payee. The distinction in law or morals is not readily-perceived. The fourth and fifth pleas add strength to the position when in support of the second and third pleas. They show a state of facts which bar these plaintiffs of their action, even if the note sued on had been endorsed by Stevens to them. 7 Johns. Chan. Rep. 150, 160. Rev. Code, p. 60, sec. 109; 3 Bae. Abr. 78; 17 Yesey, 152-4.
    The case is much stronger when it is admitted by the defendants that no endorsement or other transfer has been made to them. They rely for a recovery on their naked possession obtained by fraud or accident, without consideration and through no act or agency of the administrator; such a claim finds no support in law, and cannot be sustained.
    The objection raised by the first bill of exceptions depends upon the same principles as the demurrer to the pleas. If title in the plaintiff' be a necessary ingredient in every action, the defendant may always deny that title. The claim of the defendant is as completely answered by showing that it does not exist in his favor, as by showing that it does not exist at all.
    Webber, for the respondents.
   Mr. Chief Justice ShAkkey

delivered the opinion of the court.

The note on which this action is founded was given, as it appears, by the appellants, defendants below, to John Stevens in his capacity of administrator, and the suit was instituted by him, for the use of Stevens & Pillett, who were merchants and partners. The appellants pleaded five several pleas. 1. The general issue. 2. That thffnote never was transferred to the plaintiffs. 3. That the plaintiffs had no interest in the note at the commencement of the suit. 4. That the note was given to Stevens as the administrator of an insolvent estate, and that subsequently his letters had been revoked, and administration granted to Kellogg, who held the interest in the note, and that the plaintiffs had notice; and 5. That the note was given for the use and benefit of the estate, and that the plaintiffs had notice. To the last four pleas the plaintiff demurred generally, which was sustained, and the defendants at the trial offered to prove the matters pleaded specially under the general issue, but the evidence was rejected by the court and the defendants took their exceptions and appealed.

The same points are presented by the bills of exceptions taken to the rejection of the testimony under the general issue, that were presented by the special pleas, and in a less objectionable form. Under this aspect they will be noticed.

The second and third pleas amount to nothing more than the general issue, and the fourth and fifth are manifestly bad, as, for aught that appears, Stevens & Pillet may have received the note in question before the revocation of the payee’s letters, and in the due course of administration, for valuable consideration.

The first bill of exceptions presents the case on principles which can admit of no doubt. After the note was read to the jury, the defendants below offered to prove that the plaintiffs had “no right, title or interest in the note sued on,” which was rejected by the court. It is certainly an undeniable position, that he who seeks to recover must have an interest in the subject matter of the suit, and if he have no interest it is difficult to perceive how he can sustain the character of plaintiff in a court of law or equity, where a recovery is sought in his own right. This principle is as applicable to actions on notes, as any thing else; but what will be deemed sufficient evidence of that interest may depend upon the nature of the cause of action. As regards promissory notes, possession is to be deemed prima facie evidence of interest. When notes have been indorsed, proof of the indorsements is sufficient to entitle the indorsee to recover, but such proof can be required for no other purpose than to show his interest and consequent right to recover. These instruments being frequently the subjects of trade, pass from one to another by endorsement or delivery, and it would operate injudiciously to require a party in the first instance to do more than produce the note regularly endorsed, and where the Ux mercatoria prevails to its full extent, it has been held sufficient for the plaintiff to show that he acquired a check payable to bearer in the fair course of trade for a valuable consideration, although it had been found by the person who sold it. Grant v. Vaughan, 3 Burr. 1516. This was sufficient to give him an interest, but in the same case the principle is distinctly recognised by Lord Mansfield, that an interest in the note is essentially necessary, and it was also said that the holder of a note payable to bearer would, under suspicious circumstances, be required to show how he became a party to it. Such proof could not be required if an interest in the note was not deemed essential to the plaintiff’s right to recover. This right to the note can mean nothing else but his interest, and if a party under suspicious circumstances will be required to show his right or how he came by the note, it must follow that he cannot sustain the action unless he came to the possession fairly, else why permit such an inquiry? And if the holder under certain circumstances will be required to show how he came by it, it seems clear that the defendant may show that the plaintiff holds it unfairly, or has no interest in it. Nothing but a fair and bona fide transfer or purchase could divest the right of the payee. Authorities are abundant if they were necessary, to show that the holder of a note must have an interest in it, or, what is the same thing, a right to it before he can recover. Chitty on Bills, 89 and note, 498, 511; 2 Stark. Ev. 286; Holm v. Karsper, 5 Binn. 469; Ball v. Allen, 15 Mass. Rep. 433; 7 Wend. 223; 3 Johns. Cas. 259.

Stevens & Pillett are to be regarded as the real plaintiffs, they being beneficially interested; for so it seems our statute regards an individual for whose use a suit is brought; and although Stevens the payee is one of the plaintiffs, he has sued in a different character from that in which the note was given, and being joined with Pillett, claims entirely a different interest, and this will make the rule apply with as much force as it would to a different person.

But even if Stevens & Pillett are the persons merely equitably claiming, I cannot see why the law should not apply, it being equally necessary that they should have an interest to enable them to sustain that character.

I cannot assent to the doctrine urged in argument for the defendants, that this is a question which cannot be raised by the appellants, they being bound to pay whoever may hold the note. It cannot differ greatly from a voluntary payment; and surely if the makers were to pay voluntarily to the holder of a note, knowing that he had no right to receive it, it would not extinguish the debt. Suppose the payee to have lost the note by accident, or that it had been stolen or fraudulently taken; the makers, with a knowledge of the fact, would not be justified in making payment to the holder, who had by any of these means acquired it.

It is also urged that the appellants are certainly bound for the amount of the note, and if a recovery cannot be had in this-action, they will be entirely released. This is not necessarily the result. An adjudication between parties who have no right to the subject of the suit, cannot effect those who have, without the acquiescence of the party interested.

The plaintiffs below, when they presented the note to the jury, had made out a case which prima facie authorised a recovery; but the defendants offered to show, that they had no right to the note. If so, of course they had no right to recover, and the court should have received the testimony.

The judgment must be reversed and cause remanded, and venire de novo awarded.