Case Name: The President, &c., of the Bank of the United States v. Charles Hammond
Court: Constitutional Court of South Carolina
Jurisdiction: South Carolina
Decision Date: 1810-05
Citations: 2 Brev. 415
Docket Number: 
Parties: The President, &c., of the Bank of the United States v. Charles Hammond.
Judges: 
Reporter: South Carolina Law Reports
Volume: 4
Pages: 415–416

Head Matter:
CONSTITUTIONAL COURT, COLUMBIA,
MAY, 1810.
The President, &c., of the Bank of the United States v. Charles Hammond.
Notes indorsed in blank, and deposited in a bank, as security for money borrowed, may be put in suit by the bank as indorsees; and the defendant cannot object to the action.
Motion to set aside a nonsuit. The action was assumpsit, by the plaintiffs, as indorsees of two promissory notes, made by the defendant, and payable to Thomas and William Smith, by whom they were indorsed to the plaintiffs.
On the trial, before Gkimke, J., in Edgefield district, the indorse-ments were proven by a witness, who also proved that the notes were deposited in the plaintiffs’ hand, or rather in the hands of their agents, at Savannah, m the Branch Bank there, as collateral security; and that they were not received in payment, absolutely. On this evidence, the presiding judge being of opinion, that the indorse-ments, under these circumstances, did not transfer any property in the notes to the plaintiffs, but only a right to collect them, ordered a nonsuit.
The motion in this court was argued in November, 1809, and the sickness of two of the judges having prevented the declaration of the opinion of the court, at that meeting of the court, it was postponed until now.
It was argued by Egan, and Hooker, for the plaintiffs, and Goodwin, for the defendant.
It was contended for the defendant, that it was a bank transac. .tion, and not subject to the rules of law in ordinary cases. Cited 1 East. 544.

Opinion:
4th May, 1810.
Bay, J.,
delivered the opinion of the whole court; in substance agreeing with the opinion Brevard, J., had prepared, as follows: In support of the decision of the District Court it has been contended, that the general law on the subject of negotiable notes of hand has no application to this case. That this was a bank transaction, the nature of which gave no right to the plaintiffs to sue as indorsees and recover in their own names, and ;for their own use, the money due thereon, from the maker, the defendant ; and the case of Parke v. Eliason and others, 1 East. 544, has been relied on as, supporting this argument. That was a case where certain bills of exchange, with blank indorsements, were placed by the plaintiffs in the hands of certain persons, who after-' wards became bankrupts, with a view to draw occasionally to tho amount due on the said bills; and the action was against the assignees of the bankrupts. The question was the same as if it had been between the original parties, which is not the case here. Lord Kenyon, in that case says, " there is no technical sense attached to the term discount. A discount is the same as a purchase." It appeared in that case that the bills were deposited for a special pur* pose, which was not answered ; and the assignees of the bankrupts were not permitted to appropriate them to the use of tho bankrupts' estate; for it appeared the condition had failed, on which the bills were received. It is not easy to discover any analogy between that case and this ; or any thing therein to support the argument advanced in opposition to the present motion. There is no question in the present case between the Messrs. Smiths, the indorsers of these notes, and the plaintiffs, about the right of the plaintiffs to receive the money due on them, and to appropriate the same. If the notes were deposited for a special purpose, and that purpose has not been answered; if the condition on which the notes were deposited has been violated, which, however, does not appear, still no objection lies on that score, on the part of the defendant. He owes the money, and is liable to pay the same to whoever is entitled to demand and receive it. If he pays the plaintiffs, who appear legally entitled to receive the money in discharge of the notes as in-dorsees, he cannot be answersable to the original payees.
The objection made by the defendant, if good at all, must come from the Messrs. Smiths, who deposited the notes. But they do not object; aud as they do not object, it is fair to presume there is no foundation in fact for the objection. If the indorsements were in blank, the plaintiffs might elect to sue as indorsees, or in the names of the original payees. The notes being made payable by indorsement to a banking company, or body corporate, makes no1 difference in the case. Such companies, or corporate bodies, lie under no restraints in relation to negotiable paper, which merchants,- and others, are not equally subject to. Vide 5 T. R. 215. Kydon. Bills, &c. 20, 58.
Motion granted.