Case Name: Joseph P. Paine vs. Henry Furnas
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1875-03-08
Citations: 117 Mass. 290
Docket Number: 
Parties: Joseph P. Paine vs. Henry Furnas.
Judges: 
Reporter: Massachusetts Reports
Volume: 117
Pages: 290–291

Head Matter:
Joseph P. Paine vs. Henry Furnas.
Suffolk.
March 8, 1875.
Colt & Ames, JJ., absent.
If the payee of a promissory note payable to him or bearer delivers it before maturity to a creditor as collateral security, the latter, on the maturity of the note, may maintain an action thereon against the maker without previously demanding repayment of his loan to the payee.
Contract on a promissory note made by the defendant September 1, 1871, payable in one year to George D. Cox or bearer, Writ dated March 5, 1873.
At the trial in the Superior Court, before Pitman, J., the plaintiff testified that he lent to Cox §1000 on November 30, 1871, and took from Cox the note as collateral security for the loan; that the note was not indorsed by Cox ; that the plaintiff had not demanded payment of this particular loan of Cox, and that Cox had never refused to pay the loan to the plaintiff; but that, he had never paid him any part thereof, and was indebted to him in a much larger amount upon other loans, and he had asked for payment generally, but could collect nothing.
The defendant contended that upon this evidence the plaintiff ;ould not recover, because the note was taken only as collateral and repayment of the loan had not been demanded.
The judge ruled that the plaintiff could recover the amount due upon the note; and the defendant alleged exceptions.
F. A. Perry, for the defendant.
F. W. Kittredge, for the plaintiff.

Opinion:
By the Court.
By the transfer of the note to the plaintiff as collateral security he became the bearer thereof, with the right to collect it. Exceptions overruled.