Case Name: Smith v. St. Lawrence
Court: North Carolina Superior Court
Jurisdiction: North Carolina
Decision Date: 1795-04
Citations: 1 Hayw. 200
Docket Number: 
Parties: Smith v. St. Lawrence.
Judges: 
Reporter: North Carolina Reports
Volume: 2
Pages: 200–201

Head Matter:
Smith v. St. Lawrence.
The negotiability of a bill or note may be restrained by indorsement, or by special words, in the body of the not.-. Indorser may sustain an action in his own name, either .trikingout the indorsement, or witlniu it; possession of Ule note being prima facie evidence of payment to indorsee.
This was an action instituted upon a note under seal, dated sim e the year 1786, promising to pay toe money to Plaintilf ami to him only. It was indorsed by ihe Plaintiff to an assignee, but the action was still commenced in the name of the original payee. Mr. Moore, for the Defendant, objected that the Plaintiff ought not to recover, because it appeared by this indorsement that the property or interest in flus note, ‘.vas n »t, in the. Plaintiff but in another person, the indorsee. Gen. Davie, e oulra — the indorsement of a note by special words, may restrain its future negotiability, 2 Doug 638.— And by parity of reason, the uego'i dniity of i no emay-be i-i s' rained by special words in ihe body of the note itseff — if so, then here is tin word only, meant no d lUitt to restrain its transfer, and ¡henil i.- not negotiable under the act of 1786. c. . which only .says, that “ all bills, bonds or notes f r money, as wefi those with seal as those without seal ; those which are not expressed to be pay ablet» order, or for value received, as those which are expressed to be payable to order, or for value received, shall, after lh<‘ passing of the; net, bo held and deemed to be negotiable; and ell inte.es? and property therein shall he transferable by indorsement, in the same manner, and under the. same rules, r uiulati.ms and restrictions, as notes, called pio.ui-.c y tr negotiable notes, have heretofore been.” This clause comprehends the case of notes, in v.h:,‘b the.e is n ohing expressed towards rendering to mi ‘gotiaole; but it does not extend to cases like the present, where negotiability is ex pressly guarded against; and of course the indorsement in rhe present case cannot operate as a legal transfer of the note. One of the Judges mentioned the case of Book t. Caswell, formerly derided in this court, where the note was indorsed to Benton, but the suit commenced in the name of Book, and the court allowed the indorse» ment to be struck out. upon an objection similar to the present being made. Upon the mentioning this case the record was searched and found to be so.

Opinion:
Per Curiam
The negotiability of a bill or note may be restrained by indorsement, or by special words in the body of the note itself; and if it could not, yet the origi-na/ payee, having the bill or note in his possession, is evidence of the note having been returned to him by the indorsee after the indorsement; and if a payee indorses by a general or special indot semeut, and the assignee cannot obtain payment of die draper, or maker of the bill or note, he may call upon the indorser, and he is Compellable to pay the money aud take back the bill or. note j and if in such case the indorser or payee could not sue the maker in his own name because of the in-dorsement, he could not recover at all. He may strike out the indorsement, or recover without striking it our — . his possession of the bill or note being' evidence of such a repayment, until the contrary be shewn. Show. 163. Lutw. 885, 888, 896—So there was a verdict and judgment f.r the Plaintiff.
Noth. — Vide L. Ray. 743, where the indorser, who was in possession oi the bill, having paid it to the last indorsee, as nonsuited for not producing a receipt for the moee.i paid from 'he Iasi indorsee— but the chief-Justice Holt thought proof «fine pie ment would have been sufficient without the receipt. The fact in the cited case was, that Hook the pay -e, had endorsed to Benton, who was an attorney, thai he might institute the suit in ids own came, but to the use of Booh — Benton gave nothing for the bill, and died before toe com-mencem -¡it of the intended action, tvher ,up.-n the bill was returned by the Executors to Book.
Note. — Vide Drew v- Jacoeks's Adm'r. 2 Murph. 138. Book v. Caswell and the note thereto, ante 18.