Court Opinion

ID: 8058032
Source: CourtListenerOpinion
Date Created: 2022-09-09 04:34:57.973381+00
Date Added: 2024-06-11T16:37:56.260612
License: Public Domain

The opinion of the court was delivered by the
Chief Justice.
The common law doctrine, that choses in action are not assignable at law, so as to vest a right of action in the assignee, is subject to modifications. It has long been settled that it does not extend to hank notes, bills of exchange, or promissory notes negotiable upon their face. Miller v. Race, 1 Burr. 452 ; Grant v. Vaughan, 3 Burr. 1516; Peacock v. Rhodes, Doug. 636. And the ox-*262eruption has been extended to exchequer bills, government securities, and the coupon bonds of corporations, .made payable to bearer, and designed to be sold and transferred as negotiable paper. Wookey v. Pole, 4 Barn. & Ald. 1; Gorgier v. Milville, 3 Barn. & Cress. 45 ; Lang v. Smith, 7 Bing. 284; Morris Canal and Banking Company v. Fisher, 1 Stock. 667; 1 Parsons on Con. 240.
In all these cases the securities were designed to be circulated, and to pass by delivery as money or by sale and transfer, the legal as well as the equitable title upon such transfer being vested in the holder free from all equities, as between the obligor and any prior holder of the security.
The security upon which the present action is founded does not fall within the operation of the principle adopted in these cases. It is not an obligation to pay the bearer or the holder of the certificate a specific sum, with ascertained interest, at a specified time. It does not appear upon its face to have been designed to circulate as money or for sale and transfer by delivery, nor is there any averment in the declaration that it did so circulate; on. the contrary, the terms of the instrument forbid any such inference. It is a special contract for the payment of labor done for the city in the improvement of Palisade avenue. It obliges the city to pay to Shaler, Gardner & Co., or the holder, $500, with interest at six per cent, from the time the assessment shall be confirmed by common council, in amounts of not less than $50 at any time, as the money on the assessment shall come to the hands of the treasurer. It stipulates that the certificate shall be receivable by the collector in payment for the assessments upon which it is drawn, and ' shall be transferable by endorsement. It contains a covenant that the city will use due diligence in making and collecting the said assessment, and if not collected to meet the certificate within one year from its date, the city will pay the said sum of $500, • with interest, to the holder upon thirty days’ notice of *263default. The stipulation that the certificate shall be receivable in payment of the assessment before its maturity, that the city shall use duo diligence in making and collecting the assessment, and that thirty days’ notice of default in collecting the assessment shall he given before the city is chargeable, are all inconsistent with the use of the certificate as money or of its sale and transfer by delivery.
The certificate is transferable only by endorsement. That, I think, is the only fair and legitimate construction of the contract. It is true that in terms it entities Shaler, Gardner & Co. or the holder to receive from the city $500. If die certificate had been issued to the plaintiff; if he claimed as an original holder of the paper, and not by transfer, his title as holder under the terms of the contract would be clear. But he claims by assignment, and he must establish his claim by that title. In express terms, the certificate is made transferable by endorsement. It is true that, by the last clause of the certificate, as well as by the first, the city engage to pay the money to the holder; but that must be interpreted to mean the holder in one of the modes provided for in the contract, vis. cither by receiving it under the original issue or by endorsement. Upon any other construction, the clause providing for the mode of transfer is without effect or meaning.
Both the character of the instrument sued upon and its express terms prohibit the plaintiff from recovering as the mere holder or bearer of the certificate- lie can show title only by proof of his being the original holder or by valid assignment from the owner. He claims by assignment, and the sole question for consideration is whether the assignment averred operates as a valid transfer. The terms of the contract are fully answered by a simple endorsement. Whether a general endorsement will make the paper negotiable and transferable by mere delivery, or whether the endorser will hold the certificate free from *264all equities between the city and tbe original holder, are questions not in issue. The only question is, whether, under the terms of the contract and by the law of the land, an endorsement and delivery of the paper by the true owner to the plaintiff will operate as a valid assignment. At common law, a sealed instrument could not be assigned, though the instrument upon its face was made payable to bearer or to the obligee and his assigns. Sheppard v. Stites, 2 Halst. 90. But under our statute, assignments of bills, bonds, and other writings obligatory for the payment of money are good and effectual in law, and vest the right of action in the assignee. Nix. Dig. 542, § 2.
And it is immaterial whether in terms they are made transferable or not. Carhart v. Miller, 2 South. 573; Sheppard v. Stites, 2 Halst. 90. The statute provides no particular mode of assignment. It may be by writing under seal, by writing without seal, or by mere delivery for value. Hutchings v. Low, 1 Green 246 ; Allen v. Pancoast, Spencer 68; Gregory v. Freeman, 2 Zab. 405.
Inasmuch as by the statute the instrument is made assignable not in any specified mode, and as by the terms of the contract it is made assignable by endorsement, the holder may in that mode acquire title to the instrument and a right to maintain an action in his own name.
It is urged that a mere endorsement of a name upon the certificate is not a recognized or legal mode of transfer of bills obligatory. But why under the statute and the terms of this contract should it not be regarded as transferring a valid title? If the instrument had been in other respects so framed as to be designed for circulation as money, and had the clause touching the mode of transfer been omitted, upon the authority of the cases ’cited the paper would have been transferable by mere delivery, If such an instrument provides that it shall be transferred, not by mere delivery but by endorsement, will that render the transfer invalid? The declaration in this case avers that the certificate was for a valuable consideration on*265clorsed, assigned, transferred, and delivered to tlic plaintiff without the endorsement, the averment of title would be sufficient. Tho fact of the endorsement, if it does not confirm, cannot impair the plaintiffs title to the instrument, or his right of action upon it.
The demurrer should be overruled.
Cited in Morrow v. Inhbts. of Vernon, 6 Vr. 493; Knapp v. City of Hoboken, 9 Vr. 372.