Case Name: Hiram Jackson versus The Y. & C. Railroad Co.
Court: Maine Supreme Judicial Court
Jurisdiction: Maine
Decision Date: 1858
Citations: 48 Me. 147
Docket Number: 
Parties: Hiram Jackson versus The Y. & C. Railroad Co.
Judges: 
Reporter: Maine Reports
Volume: 48
Pages: 147–158

Head Matter:
Hiram Jackson versus The Y. & C. Railroad Co.
Without some statutory provision, no action can be maintained in the name of an assignee, upon interest coupons, which contain no negotiable words, nor language from which it can be inferred, that it was the design of the corporation issuing them, to treat them as negotiable paper, — or, as creating an obligation distinct from, and» independent of, the bonds to which they were severally attached when the bonds were issued.
The negotiability of such coupons is a question of law, to be determined, from the papers themselves, by fixed and well settled rules; and proof of custom, as to the negotiability of them, is inadmissible.
The bonds being specialties, the remedy for breaches thereof, is, by an action, not of assumpsit, but of debt or of covenant broken; not being legally assignable, no action is maintainable in the name of the holder, though he be assignee. Goodenow, J., dissenting.
It is indispensable to its maintenance that the cause of action exist at the time the action was commenced. The statute of 1856, e. 218, does not remedy this defect.
Reported from Nisi Prius, October term, 1855, by How-ARD, J.
This was an action of assumpsit, brought on eleven memoranda in writing, called “ coupons,” issued by the defendant corporation, promising to pay various sums of money on each of said coupons, on the first day of May, 1854. . The general issue was pleaded and joined. The plaintiff, after reading the writ and coupons, called Daniel C. Emery, who testified that he signed the coupons declared upon in the writ, as treasurer of the defendant corporation; that these coupons were issued by the said corporation in connection with and attached to certain bonds, upon the same sheets of paper with the bonds, and that they were each and all so issued by the defendant corporation for a valuable consideration, as appeared by the bond book of the defendants, then in Court.
The plaintiff then introduced one of the bonds declared upon in this writ, No. 60, for §800, and the parties agreed that this bond should be a sample of, and substituted for, all the other bonds referred to, by numbers upon the several coupons, declared upon, differing from them only in the nuniber appearing on their face, and in the amount of money therein promised to be paid. Said Emery further testified that all the coupons, declared upon in the plaintiff’s writ, were, when issued by the said defendants, attached to bonds as aforesaid.
On cross-examination, he testified that the several bonds, to which the coupons declared upon were attached, when first issued by defendants, were issued to different persons, some to E. L. Cummings, and some to others, but none to the plaintiff.
The defendants’ counsel then called E. L. Cummings, who, at request of counsel, produced two writs, pending in this* Court, each against the said defendant corporation, one in favor of William C. Lord and the other in favor of the witness, on coupons No. 6 of the bonds from which coupons No. 5, declared on in this suit, were taken, and upon other coupons from different bonds.
Defendants’ counsel then asked the witness if he owned all the bonds referred to upon the coupons, in the suit at bar, at the date of the writ. The question was objected to by plaintiff, but admitted, and the witness answered that he did then own them.
The plaintiff offered to prove the custom as to the negotiability of these coupons. This testimony was ruled out by the Court. The defendants offered to prove that the bonds, referred to in the coupons in suit, were, when originally issued by the defendant corporation to Cummings and others, as above appears, issued for a less sum than their nominal value. This testimony was excluded by the Court. The case was thereupon taken from the jury, the defendant defaulted, and the case reported by the presiding Judge for the decision of the full Court.
The case was argued by
E. L. Cummings, for the plaintiff, and by
J. C. Woodman, for the defendants.
This ease was first argued in 1856, re-argued very elaborately in writing, in 1858, and decided by a majority of the Court, as then constituted, although the opinion was not announced until a more recent period.

Opinion:
The opinion concurred in by a majority of the Judges was drawn up by
Tenney, C. J.
The plaintiff claims, in this action of assumpsit, the amount due on certain memoranda in writing, called coupons, signed by the treasurer of the defendants. They were originally upon the same sheet, with bonds to which each corresponded respectively, and which were issued by the company and signed by the proper officers, with the seal of the corporation affixed.
None of the bonds, to which the coupons in suit were severally annexed, were made to the plaintiff, and it appeared that he did not own the bonds at the commencement of the suit; and it did not appear that he had any interest in them, at any time.
A copy of the bond, numbered 60, from which one of the coupons in suit was taken, is made a part of the case, and the portion thereof, material to the question before us, is in. these words: — "Know all men by these presents, that the York and Cumberland Railroad Company acknowledge themselves indebted to Toppan Robie, or bearer, in the sum of three hundred dollars, which sum they promise to pay Top-pan Robie, or bearer, in the city of Portland, on the first day of November, A. D., 1871, with interest thereon, payable semiannually, at said city of Portland, on the first day of May and November, in each year, upon the surrender of the corresponding coupon hereto annexed, at the office of the company in Portland." . The coupon taken from the bond, of which the foregoing is copied, is in the following terms:— "•York and Cumberland Railroad Company. Coupon No. 1. Bond No. 60. On the first day of May, 1852, the York and Cumberland Railroad Company will pay nine dollars, on this coupon, in Portland. $9." signed by the treasurer of the company.
The other bonds, from which the coupons in suit were respectively taken, are in the same form, varying in the amount and numbers, and the other coupons, which are declared upon in this action, are similar in form to the one copied, varying, also, in the sum named and in numbers. '
The coupons on their face are not made payable to any person named, nor to the bearer thereof. Each refers, by the. number, to the bond with which it was connected, and made part of the same j this is apparent, when separated therefrom. The language of the bond clearly imports, that the expectation of the company, and of the holder of the bond, was, that the coupon would continue to be part and parcel thereof, till the interest, as it should become due and payable upon the bond, at the respective times specified therein, should be paid, and then, the coupon corresponding in time and amount with such interest would be separated from the bond, and surrendered to the company. The possession of the coupon, by the company, and the want of the same upon the bond, or in the hands of the holder, would be evidence of payment, and would supersede the necessity of indorsement of interest, as it should be paid from time to' time.
The coupons in this case, containing no negotiable words, nor any language implying, or from which it can be inferred, that it was the design of the company to treat them as negotiable paper, or as creating any obligation, distinct from, and independent of the bonds to which they were severally at tached, no action can be maintained thereon, in the name of an assignee without some statutory provision.
The proof offered by the plaintiff, of the custom, as to the negotiability of these coupons, was properly excluded. Whether paper is negotiable or not is a question of law, to be determined from the paper itself, by fixed and well settled rules.
But, it it is said that coupons are negotiable by the custom of merchants. " General mercantile customs, which have frequently become the subject of legal investigation in the course of evidence, when ascertained by long experience, to be of public use and utility, are at last recognized and adopted by the law without further proof." 2 Stark. Ev., 450. In the case of Edie v. East India Company, 2 Burr., 1216, Justice Foster said, "much has been said about the custom of merchants, but the custom of merchants or the laws of merchants, is the law of the kingdom and is part of the common law. People do not sufficiently distinguish between customs of different sorts; the true distinction is between general customs, which are a part of the common law, and local custom which are not so. This custom of merchants is the general law of the kingdom; part of the common law; and therefore, should not have been left to the jury, after it had been settled by judicial determinations." In the case of Pillans v. Micross, 3 Burr., 1669, Lord Mansfield said, "a witness cannot be admitted to prove the law of merchants."
It is said by Mr. Parsons, in his work on Contracts, vol. 1, p. 240--"It may, however, be said here, that we regard the, English authorities as making all instruments negotiable, which are payable to bearer, and are also eustomably transferrable by delivery, within which definition, we suppose, that the common bonds of railroad companies would fall. Of the coupons attached, which have no seal, this would seem to be probable." These remarks are inapplicable to the coupons, which are the basis of the present suit, they not being payable to the order of any person, or to bearer.
The bonds, with which these coupons were connected, are specialties, and actions of assumpsit thereon for breaches are not maintainable, but the remedy is by action of debt or covenant broken. And such instruments are not legally assignable, so that a suit can be sustained in the name of an assignee or holder.
In the bonds to which the coupons were originally attached, now in suit, interest was secured equally with the principal. It is not easy to perceive that, so far as the interest is secured by the bonds, a different form of action could be treated as the remedy for the breach of this part of the covenant, from that required, if the company should fail to pay the principal. The coupons attached to the bonds certainly do not cancel or nullify the covenant in the bond to pay the interest, and if suits in assumpsit can be maintained for the former, the company is liable to the payment of double interest.
This action was commenced and the same was tried prior to the statute of 1856, c. 248. It is a general principle that the cause of action must exist at the time it is instituted, as indispensable to its maintenance; otherwise the obligation of the contract would be impaired. No cause for this action in the name of the plaintiff is shown at the time it was commenced, or when the trial took place. And the statute does not profess to remedy this defect. Plaintiff nonsuit.
Note. — Since the above was written, Redfield on Railways has been published, to which I refer, page 595, § 239, and cases there cited.