Court Opinion

ID: 6576626
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:34:54.752656+00
Date Added: 2024-06-11T15:57:07.455107
License: Public Domain

Amdis, J.
The question in this case is, may one who is the owner and holder of a negotiable promissory note bring a suit thereon in the name of another person who at the time the suit is brought is neither the owner nor holder of the note, who has not the actual possession of the note, nor any interest in it, but who consents that his name may be used as plaintiff by the true owner and holder, and who, being such nominal plaintiff, produces the note on trial.
It is not questioned but that the real owner and holder of a note payable to bearer, may deliver the note to another for the purpose of having him bring a suit, without parting with any portion of his real, beneficial and exclusive interest in the note, and that a suit may be sustained on such note in the name of such other person. This it is said is because by the delivery, the legal title passes. The only practical difference between that case and the one at bar is, that the real, owner must deliver the note to the person who sues before the action is commenced. It is obvious that the formality of a delivery of the note, however important it may be logically and theoretically, in order to vest a title to the note in such nominal plaintiff, is substantially and in practice but the merest ceremony. The real owner has it always in his power to sue in the name of another by complying with the form of delivery. Hence, if evils may be apprehended from holding *594in a case like the present one, that the plaintiff may sustain the suit, no real security wiE be afforded against the same evils, by holding that he can not sustain it. The owner may dehver the note to another, and then such other, as a nominal plaintiff, may sue.
The question is one purely of form. The real owner gains no advantage, acquires no right, by bringing the suit in the name of another. The defendant’s defence, whatever it may be, can not in any way be impaired by the substitution of a nominal for the real plaintiff.
If the defendant has no defence, it is nothing to him to whom he shaE pay his negotiable note; if he have an offset or other just matter of defence, his right to avail himself of it is not impaired. The possession of the notes by the plaintiff, and his production of them on the trial, secures the defendant from possible injury in all cases where the real owner consents to the bringing of the suit. Of course, if the possession is mala fide, the defendant has then the right to set up such defence, in order to protect himself from a subsequent suit.
Such considerations are proper to be regarded, for if any practical evils were likely to arise from aEowing suits to be brought by such nominal plaintiffs, the practice should not be suffered to exist. If, however, none can be perceived and it becomes a mere question of form, then the court would feel justified and even required to harmonize our decision of this question with the general tenor of the decisions in other States, and with the current of authority on this subject.
The point has not been directly decided in this State, but in the case of Hackett v. Kendall, 23 Vt. 276, it was held that the holder of a note payable to bearer could sue, though proved not to be the real owner, and though no assent was given by the true owner to the bringing of the suit. It was held that the real owner, having notice subsequently and not objecting, was held to acquiesce. The general principle is thus expressed by the court: “ The defendant is only allowed to raise the question as to the plaintiff’s title, in order to protect himself from a subsequent suit by some one having a better title who has not acquiesced in the suit.”
*595In a recent case in England, Emmett v. Tottenham, 8 Exch. 884, the contrary doctrine was held. It was there decided that a suit can not be sustained by one having neither interest in, nor possession of a negotiable note, who sues at the request and for the benefit of the real owner.
In this country the authorities seem to incline to the doctrine that a suit by such nominal plaintiff for the benefit of the owner may well be brought.
In Waggoner v. Colvin, 11 Wend. 28, the plaintiff sued as indorsee against the indorser, who pleaded that at the time of bringing suit, one Stilwell and two others were the true and lawful owners and possessors of the note. The court held the plea good, and say “if the suit was brought by them in the name of the plaintiff, or for their benefit, that fact should be replied, and it would be a good answer to the plea.” Here there is no special plea, but the facts in that eas.e set up in the special plea here appearing on trial under the general issue, the further fact that the plaintiff sues for the benefit of the true owner, and at his request, is admitted in the case, and upon the authority of that case is a good answer.
The same question came before the supreme court of New York, in Gage v. Kendall, 15 Wend. 640. The note was paya=ble to William Castle, or bearer. The defendant offered to prove that at the commencement of the suit the plaintiff had no title or interest in the note, but that one Strickland was the owner and holder thereof; and that the suit was begun without the knowledge or consent of the nominal plaintiff. The evidence was rejected. The court held the suit well brought. They say, “ in the case of negotiable paper a suit may be brought in the name of a person having no interest in the contract. He may sue as trustee for those who are interested. Why should the defendant give himself the trouble to investigate the plaintiff’s title ? He owes the money to some one. In this case he offered to show he owed it to the real owner, who had brought the suit, though in the name of another. It is not a case of mala fide possession. A recovery in this case in the name of the present plaintiff, might be pleaded with proper averments in bar of a new suit in' favor of any other person. The defendant is not deprived of *596any defence he may have against the real owner. There is no 'objection in principle to a suit on a promissory note in the name, of a nominal plaintiff; nor is there any authority against it.”
■In Guernsey v. Bwrns & Graves, 25 Wend. 411, a suit was brought on a note belonging to the Bank of Western New York, in the name of the plaintiff. It did not appear when the note was delivered to the plaintiff, but the suit was brought under a general arrangement that suits on notes belonging to the bank should be brought in his name.
The court expressly confirm the case in the 15 Wend., and say “ as between the plaintiff and the defendants, the plaintiff is in law the owner, and they are precluded from disputing it. Unless the possession is mala fide or may work some prejudice to them, they have no concern with that inquiry.” A case in Maine is also cited to the same effect, but we have not seen it; Thaxter v. Moody, 2 Fairfield.
In Chitty on Bills, 536, in note, it is said, a suit brought in the name of the indorsee without his knowledge or consent, and he having no interest, may be sustained if he subsequently assent and he is held a trustee for the indorsee; Man v. Plummer, 3 Greenlf. 73; 29 Maine 437; Lewis v. Hodgson, 5 Shepley 267; Backman v. Wilson, 9 Met. 434. It is obvious that these cases go upon the ground that when the real owner thus sues in the name of another, such other is deemed in law to have the constructive possession of the note. These decisions certainly conflict with the case in the 8 Exch.
We are inclined to follow the decisions in New York, which we deem more consonant with analogous decisions in regard to negotiable paper in other States, and with the general current of authorities in this country, than the decisions cited from the Exchequer Reports.
In this case the note was originally payable to the plaintiff, though he was never the real owner of it. He indorsed it in blank. Restored to his hands he may, on trial, cancel his own indorsement, and the note is then prima facie his, the same as if payable to bearer and he were the holder.
' He is really the agent to sue for the true owner. In all such 'cases, it is settled beyond dispute that the agent’s want of interest *597can not be objected. The want of interest would seem to be tbe most serious objection. If that is removed by supposing him a trustee for the owner, we may well presume in law that the want of actual possession is supplied by supposing the actual possession of the real owner to give a constructive possession to the agent.
Another point has been made by the defendant, that this suit falls within the prohibition of the seventeenth section of the charter of the Orwell Bank.
But as this note was originally made payable to the plaintiff, as its legal title vested at first in the plaintiff, and as the suit is now really brought for the benefit of the bank, and at its request, we do not regard it as coming within the provision of the statute.The provision of the statute is penal, and the suit ought to be brought strictly within its terms and meaning in order to be so defeated.
The judgment of the county court is reversed.