Court Opinion

ID: 7998205
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:46:26.457545+00
Date Added: 2024-06-11T16:35:35.448703
License: Public Domain

Chancellor.
This bill is filed against the accommodation indorsers of a lost note, to recover of them its amount; and has been demurred to. The first ground of demurrer is :
1. That Henry Smith, one of the complainants, is improperly joined, as such.
It may be remarked as to that objection, that this complainant, whose joinder is objected to, was at one time, prior to the filing of the bill, the holder and owner of the note in controversy, and while such, obtained a judgment at law upon it, against the maker of the note ; that after this judgment was obtained, the note was withdrawn from the suit at law, and transmitted for the purpose of suit against.other parties to the note to a distant county, and was, in • the course of transmission, accidentally lost; that, while the note ■ was thus lost, by an agreement between the complainant, Henry Smith and the other complainants, Henry Smith assigned to them the contents of the note, and the right to control its proceeds ; the note was not then in the possession of either party, and of course no delivery of it took place ; Henry Smith was, therefore, still the holder of the legal title, the other complainants had a mere equity in the note, which was but a- chose in action, and of course all they obtained by the transfer was a mere right in equity to its proceeds. *435Henry Smith was, therefore, a proper party, either plaintiff or defendant ; where a party has clearly an interest in the matter in controversy, it is not in equity generally a matter of materiality, whether he be made plaintiff or defendant. I think in this case, the complainant is properly made a party as such.
The second cause of demurrer assigned is, that the complainants had not, before the filing of the bill, offered to give the defendants indemnity against a suit by a future holder of the note.
It seems to me, that this objection is based upon a total misconception of what was necessary in coming into this Court to recover upon a lost note. It is not necessary in such a case to tender indemnity before the bill is filed, or to tender it directly to the parties themselves. It is sufficient, if the bill offered to give indemnity when required, which is only done at the final decree, and in fact forms a part of it.
It is, I find, upon looking into the authorities, necessary, as preliminary to this Court’s having jurisdiction of a case of this kind, that the complainants, upon the face of their bill, offer to give such indemnity as may be required ; the bill in this case does contain this oiler, and I must, therefore, overrule this ground of demurrer.
The third cause of demurrer assigned is, that no proof of the loss of the note accompanies the bill.
I cannot perceive the precise meaning of this ground of objection to the bill; if the defendant intends by it, that there is no affidavit of the loss of the note, he is within the rule upon that subject, but the answer to that objection is, that it has no foundation in fact; there is an affidavit appended to the bill, complying fully with the requisition of the law.
The fourth cause of demurrer is, that this Court has no jurisdiction of the case.
A reference to the authorities show these distinctions : if the note was negotiated after it is due, or if it was not upon its face negotiable, the party alleging the loss might sue at law ; because, in either of these events, the maker could defend in any action that might be subsequently brought against him, and set up any equities that might exist between 'him and the lawful owner of the note, any payment he might have made him, and thereby could defeat the person into whose hands it might pass, and who might attempt *436to enforce its collection ; because a party taking a note under the circumstances I have enumerated, takes it subject, in the language of the commercial law, to the equities of the maker, as against the prior holder.
In England, the only ground for corning into equity to recover for a lost note, was, that the defendant could by that means obtain adequate indemnity ; a court of law has no power to give indemnity, a court of chancery can compel it; and this seems to be the foundation for chancery jurisdiction in such cases. There can be in this case, therefore, no doubt whatever of the jurisdiction of the Court.
The fifth objection is a general one ; of irregularity, &c., in the construction of the bill.
1 have examined the bill ; it is technical, and well drawn, sufficient both in its averments and substance to entitle the parties complainant to the decree they ask.
The demurrer must be overruled, and the defendant allowed ninety days in which to answer.