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§ 10. An action of debt may be maintained upon any note or writing by which there is a promise, undertaking or obligation to pay money, if the same be signed by the party who is to be charged thereby, or his agent.
§14. The assignee of any bond, note or writing not negotiable, may maintain thereupon any action in his own name which the original obligee or payee might have brought, but shall allow all just discounts, not only against himself, but against the assignor, before the defendant had notice of the assignment.
It is held that the assignee of a bond, note or writing not negotiable, does not, by force of the statute, acquire the legal title to the debt; that there is simply added to the equitable right which he had at common law, the capacity to sue in his own name; and hence, that notwithstanding the assignment an action may be maintained in the name of the original obligee, for the benefit of the assignee, upon the strength of the legal title remaining in the obligee. Garland v. Richeson, 4 Rand. 266.
9. Right of assignee to sue under South Carolina statute.
The object of the South Carolina act of 1798 was declared by the act itself to be to remedy the "inconveniences which have been experienced from the assignees of bonds, notes or bills of exchange not payable to order, or not negotiable, being compelled to bring suit for the recovery of moneys due thereon in the names of the obligees of said bonds, or payees of said notes or bills." And it was first construed to embrace such instruments only as are for the payment of money. Peay v. Pickett, 1 Nott & M. 252; Cobbs &c. v. Williams, 1 Hill 375. But a disposition has been since manifested to extend it farther. Hale v. Schultz, 3 McCord 218. Its words are held broad enough to allow an action by an assignee on a bond given on obtaining an injunction to a judgment, Cay &c. v. Galliott &c. 4 Strobhart 282; on a bond and guaranty thereof against the obligors in the bond, and also against the guarantors, Waring v. Cheesebrough &c. 4 Richardson 243, note; and on a bond payable on a contingency to arise out of the default of another, when that contingency has happened. Folk &c. v. Cruikshanks, Id. 243.
As under the Virginia, so under the South Carolina act, notwithstanding the transfer of a note an action may be maintained thereon in the name of the payee; for though it empowers the assignee to sue in his own name, it does not take away the right to proceed according to the common law. Ware v. Key, 2 McCord 373; Thorn v. Myers, 5 Strobhart 210.
10. Statute of Alabama similar to that of Virginia.
The statute of Alabama was judicially construed in Withers v. Greene, 9 How. 221. It appears to be very similar to that of Virginia. It provides as follows:
That all bonds, obligations, bills single, promissory notes, and other writings, for the payment of money or any other thing, may be assigned by endorsement, whether the same be made payable to the order or assigns of the obligee or payee or not; and the assignee may sue in his own name, and maintain any action which the obligee or payee might have maintained thereon previous to assignment, and in all actions to be commenced and sued upon any such assigned bond, obligation, bill single, promissory note, or other writing aforesaid, the defendant shall be allowed the benefit of all payments, discounts, and set-offs, made, had, or possessed against the same, previous to notice of the assignment, in the same manner as if the same had been sued and prosecuted by the obligee or payee therein.
11. Extent to which legal title to the instrument, and legal right of action passes to the assignee in Kentucky.
Upon an executory agreement importing that a vendor would convey to the vendee a house and lot, an action of covenant has been maintained in Kentucky against the vendor by an assignee of the vendee. McDonald v. Ford, 1 Dana 464. A covenant to pay in promissory notes, or to assign such notes, is there assignable, equally with a covenant to convey land or to pay bank notes. Sirlott v. Tandy, 3 Id. 142. The statute, it appears, authorizes the assignment of instruments for the payment of "money or property;" but not an instrument which besides being for the payment of money, stipulates for the performance of other things, Force's adm'r v. Thomasson, 2 Litt. 167; Halbert v. Deering, 4 Id. 9; Henry v. Hughes, 1 J. J. Mar. 454; for example, to clothe a slave or pay his tax and return him at the end of the term for which he is hired, Boyd v. Ramsey, 5 Id. 42; or to do work and labour. Marcum &c. v. Hereford, 8 Dana 1. It is considered that the contract is indivisible and must pass entire by the assignment or not at all; that the statute expressing, as the writings embraced by it, bonds, bills and promissory notes, whether for money or property, the writing must, in all its parts, be of this character or it is not assignable. White v. Buck, 7 B. Monroe 546.
A note payable to Mary Clark being assigned by a writing signed "James L. Lees per Mary Clark," the right of the as
signee to sue in his own name was sustained.
McIlroy, 3 Dana 407.
On a note dated July 27, 1832, payable 5 days after date, and assigned in these terms: "Pay the within to J L S, after the 1st day of October 1834," the assignee could not before that day (October 1, 1834,) sue in his own name. Haney v. Sangston, 3 Dana 246.
In Kentucky it is considered that the legal title in a note, and the legal right of action on it, passes to an assignee when the assignment to him is of the entire demand-the entire note, Bledsoe v. Fisher, 2 Bibb 471; but not when the assignment to him is of part of it. If the payee after assigning part of the note to one person, assign the residue to another, as neither assignee has in such case the entire demandthe entire note-neither can maintain in his own name an action on it; but the action will in such case be in the payee's name. Elledge &c. v. Straughan, 2 B. Monroe 82; Bank of Gallipolis v. Trimble &c. 6 Id. 599.
It is considered that so far as regards the transfer of the legal title and right of action on the instrument, the effect of an assignment is the same under the statute as under the mercantile law, and as the statute is silent as to the form of assignment, the mercantile law has been looked to as furnishing analogies upon that point. It has accordingly been determined that the delivery of a note with the blank endorsement of the person having the legal title to it, deprives him of his interest and authorizes the assignment to be filled up to any subsequent holder, with the effect of vesting in him the legal title, and with the further effect of evidencing prima facie a contract of assignment between him and the blank endorser. Reese v. Walton, 4 B. Monroe 510, 11; Hunt v. Armstrong's adm'r &c. 5 Id. 400.
And when the note is payable to A B or bearer, delivery alone, without writing, is deemed a sufficient assignment of it so as to enable the bearer to sue as assignee under the statute. It is of course implied that the holder suing as such came by the note lawfully. If he did not, and it be material, his title may be impeached by plea. Odenheimer &c. v. Douglass &c. 5 B. Monroe 107.
12. Extent to which Maryland act gives a right of action to assignee.
By the 7th section of the Maryland act of 1763, ch. 23, where a person is bound in a bond which is unpaid by the principal debtor, if the money be paid or tendered by the su
rety the obligee is bound to assign such bond to the surety, and he may, by virtue of the assignment, have an action in his own name against the principal debtor. And under § 9, "upon all bonds or obligations that shall be assigned under seal, the assignee may maintain an action in his own name against the obligor or obligors." Neither section allows one surety who has satisfied a bond to bring an action on it against a co-surety; not §7, because the remedy by that is only against the principal debtor; and not § 9, because that designed nothing more than to change the common law, so as to give to the assignee, as the holder of a bond of third parties, the right to sue in his own name; it does not affect the preexisting rules between a surety and co-sureties, but leaves him with his common law remedy against them in assumpsit for contribution. Carroll v. Bowie, 7 Gill 41. And no change in this respect is made by the act of 1829, ch. 51. S. C. This act provides:
"That any assignee or assignees bona fide entitled to any judgment, bond, specialty, or other chose in action, for the payment of money by assignment in writing, signed by the person or persons authorized to make the same, may by virtue of such assignment, sue and maintain, an action, or actions, &c. in any court of law, or equity in this state, as the case may require, in his, her, or their name or names, against the obligor, or obligors, debtor, or debtors therein named."
Notwithstanding some words in the preamble, importing that assignees had sustained injuries by the death of the assignors, it is held that the right to sue in his own name is given by this act to any equitable assignee of a chose in action, whether the assignor be dead or alive; and if dead, whether there be executor or administrator or not. Kent v. Somervell, 7 Gill & J. 274. A legacy of a bond being assented to by the executor, and the legatee having assigned it, an action on the bond was maintained in the names of the assignees. The bequest was regarded as an inchoate transfer, which, when assented to by the executor, vested in the legatee the bona fide title or interest in the bond; and it was deemed an assignment in writing sufficient to satisfy the act, and to enable the legatee to make an assignment by virtue of which his assignee could sue under the act. S. C.
The act is considered to embrace all choses in action with the single qualification that they must be for the payment of money. Under it an action has been maintained by the assignee of an account for medicines and medical services. Crawford v. Brooke, 4 Gill 221. But the power of an assignee to sue in his own name is restricted to cases where the
only action which, from the nature and stipulations of the chose in action assigned, the assignor could have maintained, if no assignment had been made, was that for the payment of the money due on the contract. It never was intended that the assignor should transfer to the assignee a complete right of action, to be prosecuted in his own name, and at the same time retain in himself, under the same chose in action, a power to sue for the breach of stipulations not for the payment of money. Dorsey, J. in Gordon v. Downey, 1 Gill 51. With respect to the mode of transfer, it will be observed. that both by the terms of the act of 1829, and the construction thereof in Kent v. Somervell, it is enough that there is an "assignment, in writing, signed." Before that act it was established that the blank endorsement and delivery of a bond by the obligee invests the holder with the right of collecting, or suing for in the name of the assignor, the money due on such bond, and of appropriating the same to his own use; that it is prima facie evidence of title to the bond in the assignee. McNulty v. Cooper, 3 Gill & J. 218. Since that act, when the obligee has written his name on the specialty, it is no valid objection that over that name an assignment to the plaintiff was written at the bar after the jury were impanneled. Chesley v. Taylor, 3 Gill 255. This did not invalidate the instrument of assignment. It was not like the proof in Crawford v. Brooke to invalidate the assignment of the account. There the proof was admitted to shew that the assignment was not bona fide but made to enable the assignor to become a witness, and thereby remove the bar created by the statute of limitations.
13. In Virginia, Kentucky, Maryland and Alabama, such defence as obligor had against obligee at the time of notice of assignment may be set up against assignee.
In Virginia, it was not intended by the statute to abridge the rights of the obligor, or to enlarge those of the assignee, beyond the right of suing in his own name; and since it was clear that prior to the statute an original equity, attached to the bond, followed it into the hands of the assignee, the statute does not expressly, nor by implication, destroy that principle. Saving, as it does, all just discounts which the obligor had before notice of the assignment, it does not deprive him of an equity strong enough to invalidate the whole claim. He may set off and discount against the debt, when claimed by the assignee, what before notice of the assignment he might have set off and discounted if an action had been