Case ID: wash_32/html/0191-01.html
Source: Caselaw Access Project
Author: {"author": "Mount, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

[No. 4680.
    Decided July 8, 1903.]
    Sarah M. Lodge, Appellant, v. James Hamilton Lewis, Respondent.
    
    PROMISSORY NOTES-ACTION BY INDORSEE-SUPPICIENCY OP DELIVERY.
    
      Prima facie ownership of a promissory note sufficient to uphold action thereon is established by evidence showing that it had been indorsed to plaintiff and action thereon brought in her own name, although she had never had the note in her actual possession and the attorney who brought suit thereon had been, selected, not by herself, but by the agent of her indorser.
    SAME-ASSIGNMENT-EIGHT OP ASSIGNEE TO SUE.
    Under Bal. Code, § 4835, which provides that any assignee in writing of any chose in action may sue and maintain an action thereon in his own name, notwithstanding the assignor may have an interest in the thing assigned, but allows the debtor to plead any counterclaim or setoff against the real owner, an indorsee of a promissory note could maintain action thereon, even if title had not passed to the indorsee, and the question of the assignee’s right to the note could not, under the circumstances, be raised by the maker.
    Appeal from Superior Court, King County. — Hon. William R. Bell, Judge.
    Reversed.
    
      
      Benton Embree, for appellant.
    
      George Meade Emory and E. F. Kienstra, for respondent.
   The opinion of the court was delivered by

Mount, J.

This was an action upon a promissory note made by respondent and defendant to one Leander Lodge, and by Mr. Lodge transferred to his wife, who brought this suit in her own name. The complaint is in the usual form. The answer admits the making of the note, but denies that there is anything due thereon, and affirmatively pleads payment. In answer to the second paragraph of the complaint, to the effect that the payee before commencing the action, sold, transferred, and assigned the note to the plaintiff, defendant Lewis, in his answer, says: “This defendant has no knowledge or information sufficient to form a belief as to the allegations, or any of them, contained therein, and therefore puts the plaintiff to the proof of the same.” Upon trial, after the conclusion of plaintiff’s evidence, the defendant Lewis challenged the legal sufficiency of the evidence, and moved the court to dismiss the action upon the ground that the evidence shows that the appellant never had any ownership, possession, or right of possession to the note, for the reason that the note was never delivered to her, and that the payee, Leander Lodge, is the sole owner of the note. The court sustained this motion, and dismissed the action. Plaintiff appeals.

The sole question in the case is whether or not the court erred in dismissing the action upon this ground. The evidence shows that the note was executed by Prank Eberle and James Hamilton Lewis and delivered to Leander Lodge in June, 1892; that in 1893 Mr. Lodge moved from Seattle to California; that when he went away from Seattle he left this note, with other securities, with his agent, Mr. Dearborn; that in April, 1896, Mr. Lodge wrote a letter to Mr. Dearborn as follows:

“I think when you get to it you may deed all my property in Washington to my wife Sarah M. Lodge, and also assign all my notes to her. As I said, I owe nothing there, hut I am working altogether too hard for my years, and, although now in good health, I presume that I am liable to go suddenly at any time, and this action on my part might save expense and trouble. I owe Mrs. Lodge about $1,200, so there can be a reasonable and just consideration.”

Thereupon Mr. Dearborn indorsed upon the back of the note in suit: “Pay to the order of Sarah M. Lodge. Leander Lodge, by W. W. Dearborn, his attorney in fact.” Subsequently in August, 1896, Mr. Lodge wrote to Mr. Dearborn as follows:

“If you think best to give the notes you spoke of to an attorney or any of the others, do so, only have it stipulated: no collection, no pay. Hon. James Hamilton Lewis surely ought to pay.”

Thereupon Mr. Dearborn delivered the note to S. T. Williams, an attorney in Seattle, who brought this action in the name of Mrs. Lodge. The note did not pass out of the possession of Mr. Dearborn until it was delivered by him to Mr. Williams. Mrs. Lodge had not had actual possession of it, nor had she had any communication with Mr. Dearborn about it. The foregoing is the substance of plaintiffs evidence.

The indorsement on the note was prima facie evidence of the fact that the plaintiff was the payee. Yakima National Bank v. Knipe, 6 Wash. 348 (33 Pac. 834); Brooks v. James, 16 Wash. 335 (47 Pac. 751); Seattle National Bank v. Emmons, 16 Wash. 585 (48 Pac. 262). It is probably true, as argued by respondent, tbat delivery of possession was necessary to complete tbe assignment. But where tbe plaintiff’s attorney has possession of tbe note, and introduces tbe same in evidence, it must be presumed tbat be came lawfully by it, and tbat bis possession is tbe possession of tbe plaintiff. When Mr. Dearborn, by resquest of Leander Lodge, delivered tbe note to Mr. Williams to bring snit upon it, sucb delivery will bé beld to be a delivery to tbe plaintiff, in tbe absence of direct evidence showing ,it was not so intended. It is true, Mr. Williams was selected by Mr. Dearborn as tbe attorney to bring tbe suit, but, if be bad been selected by Mr. Lodge, and bad brought tbe suit in tbe name of Mrs. Lodge, be would still be tbe plaintiff’s attorney for tbe purpose of this action, and tbe delivery of tbe note to him by Mr. Lodge would be beld to be a delivery to Mrs. Lodge, unless it clearly appears tbat sucb was not intended to be tbe result. It does not so appear in this case. Tbe plaintiff was certainly authorized to maintain tbe action under § 4835, Bal. Code, which provides, in substance, tbat any assignee of any chose in action may, by virtue of sucb assignment in writing, sue and maintain an action thereon in bis own name, notwithstanding tbe assignor may have an interest in tbe thing assigned; provided, that any debtor may plead in defense a counterclaim or offset, if beld by him against tbe real owner. Under this section, if Mrs. Lodge bad no real interest in tbe note, but was simply tbe assignee thereof, she might maintain tbe action. McDaniel v. Dressier, 3 Wash. 636 (29 Pac. 209); Riddell v. Prichard, 12 Wash. 601 (41 Pac. 905). On tbe question as to whether or not the plaintiff was tbe owner and bolder of tbe note, this court said, in Seattle National Bank v. Emmons, supra:

“. . . it seems to us that this is a question which, outside of any right of off-set or counterclaim which the appellant may have, cannot he raised by the maker of the note. These are questions that are more interesting to the assignor and the assignee.”

Especially is this true where no rights óf the maker are molested, and where the result of the case is conclusive upon the parties to both the note and 'the action, as is the case before us. It was, therefore, error to sustain the motion.

The judgment is reversed, and the cause remanded for a new trial.

Eullebton, C. J., and Hadley, Andebs and Dunbab, JJ., concur.