Court Opinion

ID: 7999355
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:47:57.781998+00
Date Added: 2024-06-11T16:35:39.842774
License: Public Domain

Gamble, Judge,
delivered the opinion of the court.
1. When this cause was formerly in this court, it was held that Emerson, as the holder of the notes of James Shepard, indorsed by Elihu H. Shepard, was entitled to the benefit of any counter security given by James Shepard to Elihu H. Shepard, his security upon the notes. It Ayas further held *635that, if by the agreement between Emerson, Elihu H. Shepard and Eoley & Papin, and the acts of the parties under such agreement, E. & P. became the creditors of James Shepard, substituted for Emerson, then E. & P. became entitled to the counter security, which had been given to Elihu PL Shepard.
2. The instruction given upon the trial of the case, presents difficulties which might readily have been avoided. The answer of the defendants alleges that the agreement between Emerson, Elihu H. Shepard and the defendants was, that the defendants should execute their noto to Emerson in lieu of those made by James Shepard, and that James-Shepard’s notes should be delivered to them and-the deed of trust and property held by Elihu for his security should be assigned and transferred to the defendants. The instruction puts it to the jury to find that the agreement was, that the notes of James Shepard were to be delivered to Elihu H. Shepard, and that by the agreement, the defendants were to take the place of the said Emerson as the creditors of James Shepard. There was no necessity for departing, in the instruction, from the terms of the agreement, as set up in the answer. The defendants state the agreement and allege its execution as a bar to the plaintiff’s action, and the court, with great propriety, might have put the case to the jury as the defendants-themselves had stated it. Still, we arc to consider whether the instruction placed before the minds of the jury the real question of defence. The defence is, that, by the agreement, the-notes of. the defendants, delivered to Emerson, were substituted for those of James-Shepard, and were not in satisfaction of them, and that the defendants were to become the creditors of James Shepard. The notes of Shepard were still to be outstanding and unsatisfied, for in no other way could the defendants be the creditors of James Shepard. If they had made a mere voluntary payment of the notes to Emerson, without the knowledge or request of James Shepard, while yet his notes were not due, they would not have been the creditors of J. Shepard. The instruction, then, must mean, that the notes of J. Shepard were *636to continue to be in force and available for the defendants, when it puts the question to the jury whether, by the agreement, the defendants were to take the place of Emerson as the creditors of James Shepard. Such being the question upon which the jury were required to pass, it became of little importance whether the notes were to be delivered to Elihu H. Shepard or to the defendants.
3. The plaintiff insists that his action is not affected by the arrangement between these parties, because Emerson did not assign the notes of James Shepard to the defendants, and therefore they cannot claim. any of the rights which may have belonged to him as the payee of the notes. But it is to be remembered, that we are not determining the case according to the common law. We have already recognized and applied in this case the principles which belong entirely to equity jurisprudence. Such is the meaning of the code of practice. No assignment by an indorsement of the notes of J. Shepard was necessary to substitute the defendants for Emerson, as the creditors. The delivery of the notes with that intent, for a valuable consideration, is all that is required in equity. 2 Story’s Equity, 311, §1047. Heath v. Hale, 4 Taunt. 327. Although such transfer may not be sufficient to authorize the holder of a bond or note to maintain an action in his own name, it will create an equity which will be recognized and protected. The question of fact, then, was tried by the jury, whether, under the agreement, the defendants had been substituted for Emerson as the creditors of James Shepard, and was found for the defendants, and, under the principles declared in the former opinion in this-case, the judgment was correctly given for the defendants. The judgment is affirmed.