Court Opinion

ID: 5468418
Source: CourtListenerOpinion
Date Created: 2022-01-09 20:11:34.342708+00
Date Added: 2024-06-11T08:33:12.348183
License: Public Domain

Rockwell, Justice.
This demurrer is far from being frivolous. Before the Code, it was not necessary that an action upon a promissory note, payable to bearer, or endorsed in blank, should be prosecuted in the name of the owner, or real party in interest. Where the note was endorsed in blank, the owner had a right to fill up the endorsement with any name he pleased, and the person whose name was so inserted would be deemed on the record as the legal owner; and if not so in fact, he could sue as trustee for the person having the real interest. The defendant was responsible to the person whose name was so inserted in the blank endorsement. (Lovett agt. Evertson, 11 John. R. 52; Olcott agt. Rathbone, 5 Wend. 494; Gage agt. Kendall, 15 Wend. 640; Guernsey agt. Burns, 25 Wend. 411.)
But the Code now provides that actions shall be prosecuted in the name of the real party in interest; and this general provision includes actions upon negotiable bills and notes; and such actions are not included among the exceptions contained in a subsequent section. (Code, §§ 111, 113.)
The mere holder of a negotiable promissory note, who has no interest in it, cannot therefore now maintain an action upon it. Such action can only be prosecuted in the name of the owner of the note, or the real party in interest.
How does it appear that the present action is prosecuted in the name of the real party in interest 1 A statement, in a complaint, of the facts constituting a cause of action, must embrace the plaintiff’s title; or, in other words, his right of action against the defendant. Without this, a statement of a cause of action is a mere legal abstraction, which can furnish no foundation for an action or other proceeding in a court of justice.
*236In this case, the plaintiffs have attempted to allege a right of action in themselves upon these notes, by stating severally, m the first place, the delivery of the note to the payee. Then that the payee endorsed it, and duly delivered it. But in what manner did the payee endorse 1 Did he endorse in blank, thus rendering the note payable to the bearer; or specially, thereby transferring it, or directing and appointing the money due thereon to be paid to some particular person 1 And to whom was the note delivered 1 Upon all these points the complaint is utterly silent.
It then goes on to state, that the note, before it became due, was duly delivered to, and came into the possession of the plaintiffs; but by whom delivered, is not stated. Mere delivery is an immaterial ceremony, unless made by some person having power or authority to confer title. Delivery is often essential to perfect title. But in such cases it accompanies a sale, gift, or other disposition of property. It is the accessory, not the principal. And for what purpose was the note delivered to the plaintiffs 1 It is just as easy to infer that it was delivered to, and received by them, as agents or attorneys for collection, as owners. It is not even alleged that it was endorsed to the plaintiffs. And even if it had been, such endorsement might have been, in legal effect, a mere direction, or appointment to pay the money due upon the note to the plaintiffs, for the use and benefit of the real party in interest. An endorsement for such a purpose is an ordinary business transaction. It takes place whenever a note is deposited with a bank for collection. And in such a case, if the note is not paid by the maker, no one, as the law now is, but the owner, or real party in interest, can prosecute an action upon it.
If there is no actual defect in the plaintiffs’ title, or right of action upon these notes, it will be very easy for them, by proper averments, to obviate the objection to the complaint, above suggested.
All that I can now decide is, that the demurrer is not frivolous.
Plaintiffs’ motion for judgment denied, with $10 costs.