Court Opinion

ID: 7195713
Source: CourtListenerOpinion
Date Created: 2022-07-24 17:02:27.883473+00
Date Added: 2024-06-11T16:16:19.769384
License: Public Domain

On Application por a Rehearing.
This application presents two questions for our consideration — one of fact and the other of law — which, being resolved in favor of the plaintiff, necessitates a change in our decree, and that judgment be pronounced in his favor.
The two propositions are (1) one of fact, whether or not the defendant, Stauffer, was advised of the existence of equities between the plaintiff, Pavey, and Lallande, payee of the two notes in controversy, antecedent to the actual endorsement thereof — said endorsements having been thereon placed before maturity; and (2) one of law, whether, Stauffer having been so advised, the actual endorsement of the notes before maturity, though subsequently to his having been thus advised, relate back to the time of the original transfer, and shut off equities of the'plaintiff as effectually as if it had been made at the time of the equitable assignment — the proof disclosing that an endorsement of the notes was impliedly promised at the time of transfer, and omitted through inadvertence.
(1) A careful examination has satisfied us that the defendant, Stauffer, was advised by the plaintiff, Pavey, of the existence of equities between himself and the payee, Lallande, prior to bhe.actual endorsement of the notes.
The statement of Pavey, as a witness, is direct and positive to that effect; and the real and actual existence of such equities, and for a large amount, is undeniable. This statement is supported by Lallande’s schedule in his insolvency proceedings, and that the object of his visit to New Orleans at the time was to examine those sched*360ules with reference to his notes and account with Lallande. That, upon ascertaining the situation of affairs, and that Stauffer was in possession of his notes, as pledgee, he called upon him and discussed the matter with him fully, disclosing the nature, character and amount of his equities against Lallande.
This statement is not denied by Stauffer, but he declares that he has no recollection of having seen Pavey at all, and, inferentially, no recollection of the conversation that Pavey detailed.
But the facts and circumstances related by Pavey have seriously impressed us with their correctness, and they fully discharge the burden of proof that the law imposes upon him. For, assuming as a fact that Pavey had large offsets against his notes, what more likely than that he should have felt anxiety about the matter, upon ascertaining that Lallande had made a judicial surrender to his creditors; and that he should have looked into the matter at once. Finding that Lallande had pledged his notes to Stauffer, what more likely than that he should have called upon the latter and made a full and complete statement of his claim, and the amount of the credit he was entitled to on the notes he held. Upon the contrary, it would have been most singular and unusual if he had pursued a different course.
In thus deciding we expressly disclaim any intention of placing upon Stauffer the imputation of swearing falsely. On the contrary, it is our deliberate conviction that his recollection of the occurrence that is related by Pavey had failed him; or that, placing full reliance on his pledge and his possession of the notes, he was unmindful of what Pavey did say, and consequently his remembrance of his visit became obscure and doubtful.
In confirmation, however, of the fact that Pavey did visit Stauffer, the record furnishes evidence that, at about the date indicated by Pavey, the two notes were sent by Stauffer to one Levy to be copied; and that the copies showed the notes to have been without endorsement at the time, and upon what other theory can this circumstance be accounted for than that Pavey and Stauffer had had an interview in reference to them, and than Pavey finding them to be without endorsement desired to have copies made, in order to preserve the evidence of that fact for future use.
(2) On the question of law we placed reliance upon the opinions of text writers, and particularly upon that of Mr. Tiedeman in his work *361on commercial paper, to the effect that a subsequent endorsement will relate back to the time of transfer and shut off equities as effectually as if it had been made at the same time — merely reiterating such authorities as those writers had collected without further comment.
And upon their dicta we said in our opinion that “ the pledge was the controlling and dominant act of the parties, to which the written endorsement, clearly contemplated, was merely subsidiary. This being the situation it is not easily perceived what impropriety there was in Lallande supplying the ellipsis by supplementing the evidence of assignment in the act of pledge, by the addition of his signature on the notes.”
But the contention of plaintiff’s counsel is, that while this is perfectly true in respect to the mere transfer of the notes, passing title to Stauffer, pledgee, yet it is not true with respect to the effect of such subsequent endorsement — passing such a title as would exclude equities of the maker against the payee.
A careful examination of the authorities has satisfied us that a subsequent endorsement of a piece of commercial paper, after maturity or notice of the existence of offsets of the maker against the payee, transfers the equitable, but not the legal title — not effectuating an anterior, imperfect transaction, br excluding equitable defences that had become available in the meaftwhile.
To this effect is the great weight of authority, English and American ; but we deem it unnecessary to quote from opinions at great length, and will content ourselves by citing a few of the leading eases, by title merely, so as to make them of easy and convenient reference. And first in importance is the case of Whistler vs. Foster, 108 English Common Law Reports, upon which all subsequent opinions have been mainly predicated; Goschen Bank vs. Bingham, 118 N.Y. 349; Lancaster Bank vs. Taylor, 110 Mass. 18; Southard vs. Porter, 43 N. H. 379; Clark vs. Whittaker, 50 N. H. 474; Haskell vs. Mitchell, 52 Mo. 468; Gilbert vs. Sharp, 2 Lansing, 415; Savage vs. King, 17 Maine, 301; Omaha National Bank vs. Walker, 5 Fed. Rep. 399; Sprinning vs. Sullivan, 22 Mich. 491; Minor vs. Berwick, 35 Mich. 491; Trust Company vs. National Bank, 101 U. S. 68; Randolph on Commercial Paper, pp. 449 and 450; Dan. Neg. Ins. (Fourth Edition) Sec. 745, p. 737.
Our conclusion is that our judgment must be reversed, a rehearing granted and a decree rendered in favor of the plaintiff — the cause *362having been argued orally on this application, no further hearing or delay is necessary.
It is therefore ordered and decreed that our former judgment be set aside, and proceeding to render such judgment as should have been pronounced originally, it is ordered and decreed that the judgment appealed from be annulled and reversed, and that plaintiff have and recover of and from the defendant, I. EL Stauffer, the two notes that are described in his petition, upon making payment to him of the sum of $1492.42; and it is further ordered and decreed that the defendant and appellee pay all costs of both courts.