Court Opinion

ID: 8256425
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:32:07.893505+00
Date Added: 2024-06-11T16:43:00.502304
License: Public Domain

Mr. Chief Justice Smith
delivered the opinion of the court.
There are two questions presented by the record in this case. The first is, whether the order on which the suit was brought was assignable by indorsement, so as to authorize the plaintiff in error, who declared as assignee, to maintain the action in his own name. The second is, whether the defendants in error were not discharged by the payment to Geo. W. Tyson, made under the circumstances detailed in the evidence, from their liability.
As to the negotiability of the draft or order. It was drawn by David J. Tyson in favor of G. W. Tyson & Co. on the defendants, and contained a request that the defendants, would pay to the order of the said Geo. W. Tyson &'Co. “one thousand dollars when collected on paper in their hands, of J. M. Towns & Co.” The defendants accepted generally; and it was afterwards indorsed to plaintiff in error.
It is not pretended that this paper was a bill of exchange; or that it was assignable or negotiable at common law. But it is insisted, that the statute of the 5th of June, 1822, made it a negotiable instrument; and hence its transfer by indorsement to the plaintiff, gave him a right to sue upon it in his own name.
*19The statute referred to is very broad and comprehensive in its terms. “ Ail writings for the payment of money or any other things” are made assignable by indorsement; and the assignee or indorsee of such a writing is authorized to sue in his own name, and maintain any action which the obligee or payee could have maintained thereon previous to assignment. Hutch. Code, 640, p. 9, a.
The instrument under consideration is not a security for the absolute or unconditional payment of money. But it is not the less a writing or contract, by which money is stipulated to be paid. It is manifestly, therefore, within the letter of the statute.
But it is contended, that it was not intended by the legislature, by the adoption of this statute, to give to conditional contracts for the payment of money, the quality of negotiability; but to make only such securities, which import an unconditional engagement to pay money, and which were not previously negotiable at common law, assignable by indorsement.
We do not concur in this construction of the statute. One of the objects of the legislature, in making the several classes of written instruments enumerated assignable, so as to vest in the assignee the legal title of the assignor, was to facilitate commercial exchanges. Those securities were thus made to answer to some extent the purposes of a circulating medium. It cannot be doubted, that this object would be promoted by holding that writings for a conditional as well as an unconditional payment of money, are transferable under the statute. It is no sufficient reason for excluding them from the operation of the act, that they are less available as a means of facilitating exchanges than contracts of the latter description.
Nor do we concur with counsel in the position, that this view of the subject is in .conflict with the interpretation placed upon similar statutes in the States of Virginia and Kentucky.
In the State of Virginia it has been held, that a bond conditioned for the payment of money or certificates, was not assignable under the statute of 1748, by which bonds conditioned for the payment of money or tobacco were made assignable. Craig v. Craig, 1 Call, R. 419; Henderson v. Hepburn, 2 Ib. *20232; 6 Cranch, 82. But no case has been found in which it was holden, that a conditional obligation to pay in either money or tobacco was not assignable under that statute.
In Kentucky, the precise question before us, as far as we are informed, has never been decided by the courts. The authorities cited are cases in which it was holden, under a statute very similar to our own, that contracts or obligations containing stipulations for the performance of any act or duty which was not the payment of money or property, were not assignable. Force’s Adm. v. Thomason, 2 Litt. R. 167; Halbert v. Deering, 4 Ib. 9; 2 Bibb, 233; Craig v. Miller, 3 Ib. 441; 1 J. J. Marshall, 454; 5 Ib. 42.
Holding that the plaintiff was entitled to sue in his own name as the assignee of the instrument declared on, we will proceed to the consideration of the second question.
The defendants in error were partners in the practice of the law, and were resident in this State. They had in their hands for collection a claim belonging to Geo. W. Tyson & Co., of New York, against J. M. Towns & Co., upon which they had instituted suit in the Circuit Court of the United States. In 1838, Taylor, one of the defendants, being then in the city of New York, accepted the order above described, in the name of the firm. The order was accepted some time in August of that year. Taylor was informed by Tyson at the time he gave the acceptance, that his object in procuring his acceptance, was to transfer it to other parties. Tyson did not state to whom he designed to transfer the acceptance.
The firm of Geo. W. Tyson & Co. had, at the time of the date of said acceptance, when other acceptances were also given, large assets in the hands of the defendants for collection. Tyson & Co. were apprehensive that they would be attached or garnisheed in the hands of the defendants, and to prevent such a result the orders were drawn in the manner above described. Tarpley was informed by Taylor that he had given the said acceptance.
On the 22d May, 1839, Tarpley received upon the claim against J. M. Towns & Co. $3,000, which on the day following was paid over to Geo. W. Tyson. No notice whatever had *21been given to either Taylor or Tarpley that the order had been assigned to the plaintiff in error before the payment made to Geo. W. Tyson. The first notice of the transfer was conveyed by a letter written at New York, dated on the 10th of June, 1839, transmitted by mail, and in which defendants were informed that their acceptance had been assigned to plaintiff on the 29th of August, 1838. The only evidence of the actual date of the transfer of the acceptance to plaintiff in error, is the recital of that fact contained in his letter of the 10th of June, 1839.
From this statement of the facts established by the evidence, it is manifest that the defendants had no direct or express notice of the assignment before payment. ' But it is assumed, that the defendants had constructive notice, at least that the facts above detailed were sufficient to have put them upon inquiry, and hence that the,payment made to Tyson & Co. was in violation of the rights of the assignee, and did not discharge them from their obligation as acceptors of the order.
There is no pretence for questioning the bona fides of the payment. And, were it admitted that the doctrine in regard to constructive notice is strictly applicable to the question under consideration, we do not think, that the facts sustain the assumption.
Taylor, when he gave his acceptances, was informed by Tyson that he intended to assign them to third parties. This was certainly not notice, either actual or constructive, that the order before us had been assigned. Nor can it be said with greater reason, that the statement of Tyson that he intended to transfer the acceptance, was a fact which should have put the defendants on inquiry. If it were their duty to make the inquiry, whether the order had been assigned or not; of whom should they have sought the information ? They were certainly not bound to select the plaintiff for that purpose out of the fifty thousand individuals who compose the mercantile community of the city of New York. If defendants had delivered a negotiable note to Geo. W. Tyson & Co. instead of accepting the order, and nothing was said about its transfer, the cases would not have been materially different. In neither instance would a pre*22sumption of law or of fact exist, that a transfer had been or would be made. In either case, if payment were demanded by Tyson & Co. and the note or acceptance not produced, that would be a circumstance which should put them on inquiry. But of whom should the inquiry be made ? Most certainly, the debtor in such case would not be required to go further than the original holder. No man is bound to remain a debtor; he may pay to him with whom he contracted to pay; and if he pay before notice that his debt has been assigned, the law holds him exonerated; for the reason, that it is the duty of the person who has acquired a title by transfer, to demand payment of the debt, to give his debtor notice.
Any act which a person may be compelled to perform by a proceeding at law, may be done voluntarily, and he will be protected by the law.
If the defendants had refused payment to Tyson & Co. when they. applied for the money, and a motion had been entered against them on such refusal, could they, upon the facts, successfully have defended it? We do not doubt that they could not. Hence they were justified in making payment, and were consequently released from their liability on the acceptance.
Judgment affirmed.
YeRGER, Judge, having once acted as counsel in this case, -took no part in its decision.