Court Opinion

ID: 5458770
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:27:25.538179+00
Date Added: 2024-06-11T08:32:47.097808
License: Public Domain

By the Court,

Greene, J.
The drafts received by Battle on the sale of his interest in the Troy and Erie Line were simple bills of exchange, by which the drawers and acceptors assumed the ordinary liabilities of such parties to that species of paper. The Canal Bank of Lockport, as the indorser of those bills from Battle, acquired his right to enforce against the drawers and acceptors the contracts which they had made *73by drawing and accepting the bills, and nothing more. It is not claimed that he expressly assumed to transfer to the bank any other right. But it is claimed on the part of the bank, the real plaintiff in this action, that the right of Battle to sue for the consideration for which the bills were drawn, passed to the bank, by the indorsement of the bills, as a necessary incident thereto. The cases cited for the plaintiff establish the familiar principle that where a creditor holds a collateral security for a debt—-as in the ordinary case- of a bond secured by a mortgage—a simple assignment of the debt, or principal security, by the creditor, passes all his interest in the collateral security to the assignee. It is also well settled that a creditor has a right to the benefit of all securities placed by the debtor in the hands of his sureties for the purpose of paying . the creditor’s claim. But the present case does not come within either of these principles. The plaintiff, however, contends that the converse of the first proposition is true; in other words, that the transfer of a collateral security operates as a transfer of the original indebtedness. I think this position cannot be sustained upon principle or authority. It is true “ that the right to enforce the collection of these drafts cannot exist in one person, and at the same time another person have the right to enforce payment upon the original consideration,” for the reason that the law permits the recovery of but one satisfaction for.the same debt. But the consequence contended for by the plaintiff by no means follows. Where a vendor receives the note of the vendee, for property sold, he may, after the maturity of the note, bring his action either upon the note or the original consideration, and recover upon the latter, on surrendering the note. But if the note has been negotiated, and is in the hands of a third party, the vendor cannot, while he is thus disabled from surrendering the note, recover upon the original consideration. In such a case payment to the holder discharges the debtor from all liability both upon the note and the original contract. His debt is paid, and the claim of the vendor is satisfied. But by what title does the holder claim; by what obligation is the maker bound to him' for this payment ? Simply by his express agree*74ment to pay the sum specified in the note to which the holder has acquired a title by the transfer from the payee. This however gives the holder of the paper no right to sue on the original consideration. As regards the consideration, there is no privity of contract between the holder and the maker. •
[Erie General Term,
November 13, 1854.
Marvin, Bowen and Greene, Justices.]
There is no necessity for a resort to this action to secure any right which the plaintiff has acquired by virtue of the contract under which he claims. It is enough that the law enforces the agreement which the parties have made, by a direct action upon that agreement. What the plaintiff asks in this case is, not a new remedy upon, but a new right under this contract. This we have not the power to grant. The difficulty in the case probably is, that the parties to this paper do not happen to be the responsible parties to the original agreement with the payee. But they are the parties whose obligations he chose to take, and the plaintiff was willing to take the paper of him, and in this as in all other cases, each party must abide by his contract, and be content with the remedies which the law gives upon it.
I think the judgment should be affirmed.
Judgment affirmed.