Court Opinion

ID: 6577806
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:35:51.881241+00
Date Added: 2024-06-11T15:57:09.995503
License: Public Domain

Storrs, C. J.
It being found by the court below that the notes in question in this suit were not, as claimed by the *352defendant on the trial, sold in the state of New York, by the corporation which held them, at a greater rate of discount than the legal rate of interest in that state, there is clearly no ground for the first point made by the defendant, which is founded on such a sale. The finding is conclusive on that question of fact, and is not the subject of revision before us.
The defendant next claims that Baldwin was always the legal holder of the notes, from the time when he took them up from Townsend down to the trial of this case, and therefore that the plaintiff, never having any legal title to them, could not maintain this suit. That the plaintiff must have such a title when the suit was brought, and continue to hold it to the time of the trial, is well settled. It not being claimed that he ever parted with such title if he acquired it from Baldwin, the question on this point is, whether he ever so acquired it; and that he did, we entertain no doubt. If the circumstances found by the court below, preceding its final finding as to the conveyance of the legal title of the notes to the plaintiff, are to be regarded as furnishing evidence merely, from which conclusions of fact are to be drawn, and this court had the power to draw such conclusions, we should not probably hesitate to infer from those circumstances such a conveyance. But we have no such power, and can only decide on facts found and presented to us. It is, however, by no means clear that, independent of such final finding, enough does not appear to require us, as matter of law, to pronounce that such a title was conveyed. But it is not necessary to decide that question, because we are clearly of the opinion that the finding of the court on the fact of such a conveyance, notwithstanding its hypothetical form, is in legal effect absolute and unqualified; for the court finds that Baldwin did in fact convey to the plaintiff the legal title to the notes, unless the law be imperatively so that a legal title to them could not be conveyed in the manner and for the purposes before mentioned; and we are of the opinion that, under the circumstances stated, the law interposed no objection to such a conveyance. It was no objection to the transfer of these notes by Townsend to Baldwin, or by the latter to the plaintiff, that they had been dishonored; for *353no principle is better settled than that negotiable notes are assignable as well after as before they have become due, and continue negotiable until they are paid by the party primarily liable on them, subject to the qualifications, which however have no application to the present case, that if transferred after due they are affected by the equities existing with regard to them between the original parties, and that an indorser who has taken them up can not transfer them so as to render subsequent indorsers liable. Chitty on Bills, (9 Am. Ed.,) 241, et seq. Story on Prom. Notes, §§ 178, 180.
These notes, therefore, continuing to be negotiable, notwithstanding their dishonor, the only question on this part of the case is, whether the payment to Townsend by Baldwin of their amount and his receiving them back, was a negotiation or transfer of the notes to Baldwin, or an extinguishment of them, so that they could not afterwards be enforced against any of the prior parties; for,if the transaction was of the former character, they were plainly transferable from Baldwin to the plaintiff. On this point we are clearly of the opinion that the effect of that transaction was not a payment of the notes which operated as an extinguishment of them; that it amounted only to a repurchase of them by Baldwin, which remitted to him, and reinvested him with, his original rights, and placed him, in regard to the parties to the notes prior to himself, in the same situation in which he was before his transfer to Townsend; and that he, by such purchase, acquired the same rights as to such prior parties as any other purchaser from Townsend would be entitled to. Baldwin, having indorsed the notes to Townsend and become liable to him on that indorsement, might pay him their amount and receive them back from him, and thus redeem himself from such liability, and place himself in a situation to obtain the reimbursement to which he would be entitled from the prior parties to the notes; and this only was the legal effect of that transaction. Under a misapprehension of the point decided in Beck v. Robley, 1 H. Bla., 89, note, the Supreme Court of Massachusetts, in the cases of Blake v. Sewall, 3 Mass., 556, and *354Boylston v. Greene, 8 Mass., 465, took a different view of the effect of taking np a note from the holder by a prior indorser; but in the case of Guild v. Eager, 17 Mass., 615, these cases, on a more careful consideration, were overruled by that court, in accordance with the more recent case of Callow v. Lawrence, 3 Mau. & Sel., 95, and the views we have adopted fully established.
In respect to the object or consideration of the transfer from Baldwin to the plaintiff, it is a matter with which the defendant has no concern, although we perceive nothing in the transaction of a peculiar or exceptionable character.
These principles furnish a complete answer to the claim urged by the defendant, that the liabilities of the maker of these notes and of the defendant could not be legally transferred to the plaintiff, on the ground that the promise of the former had been broken and the latter had been charged as indorser. The legal title of these notes being established in the plaintiff, the well-established principle, already stated, that a negotiable note continues to be negotiable as well after as before it falls due, shows conclusively that this claim of the defendant, and the reason on which it is founded, are without force. Eor what constitutes the negotiability of such an instrument but the power of the holder to assign his rights in it to another ? But what sort of negotiability would it be, especially in the case of the notes now in question, if this claim of the defendant were sustained ? The legal title to the notes would pass to the plaintiff, but no rights whatever which were attached to them. Baldwin would not be liable by reason of his being a party to the instruments, for his name does not appear on them; and as no one but the plaintiff has the legal title to them, we do not see how any other person than himself could resort to the defendant, the prior indorser, or why, therefore, the latter would not be altogether discharged from his liability. On the ground, moreover, upon which this objection is urged, that the notes being dishonored no liability on them could afterwards be assigned, Baldwin himself, after he had taken up the notes from Townsend, could not have enforced them against the defendant, because he held them only *355as a purchaser after they had been dishonored. But it is unnecessary to pursue the reasoning on this point. The authorities, and those of the highest character, are decisive of it, and repel the defendant’s claim. It is sufficient only to refer to them. Williams v. Matthews, 3 Cowen, 252. Guild v. Eager, 17 Mass., 615. Callow v. Lawrence, 3 Mau. & Sel., 95.
As to the remaining point suggested in the defendant’s brief, although not pressed on the argument, that it was incumbent on the plaintiff to demand payment of the notes of the defendant, and to give him notice of their non-payment, and to which Bishop v. Dexter, 2 Conn., 419, was cited, — it is sufficient to say that that case has no application to the present, because there the note was not indorsed by the payee until after it fell due; whereas, in this case, it had been negotiated before due by the defendant, and he had regularly received notice of its non-payment by the holder on its dishonor ; and that notice, it is well settled, enured to the benefit of any subsequent holder. Story on Prom. Notes, §§ 302, 303, 334, 452, and cases cited.
A new trial is not advised.
In this opinion the other judges concurred.
New trial not advised.