« PreviousContinue »
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
brought against him by the obligee. Norton v. Rose, 2 Wash. 250; Picket v. Morris, Id. 255. It is so likewise in Kentucky, Hunt v. Brand's heirs, 5 B. Monroe 563; Maryland, Jones v. Hardesty &c. 10 Gill & J. 420; and Alabama, Withers v. Greene, 9 How. 221.
In Virginia and Kentucky, when an obligor has, by promising payment to a third person, induced him to take a note by assignment, for valuable consideration, or when, after assignment, he has, by such promises, obtained indulgence which would impair the recourse of the assignee against the assignor, he may be considered as waiving a known equity against the note; and on the ground of a consideration for such promise, consisting either in a benefit to himself or a loss to the other party, induced by his promise, he may be precluded from relying even upon an equity then unknown. Buckner &c. v. Smith &c. 1 Wash. 296; Hoomes ex'or of Elliott v. Smock, Id. 389; Davis's adm'r v. Thomas &c. 5 Leigh 1; Pettit v. Jennings &c. 2 Rob. 676; Clay v. McClanachan, 5 B. Monroe 241. But it is otherwise where the assignment precedes the promise, so that the assignee is not induced thereby to part with his money for the note, and the obligor obtains no benefit in the way of forbearance. S. C.
14. In North Carolina, bonds are put on a footing peculiar to that state. They are made negotiable. Effect thereof.
In North Carolina, by the act of 1762, promissory notes are made assignable in the same manner as inland bills of exchange are by the custom of merchants in England; and by the act of 1786, bonds payable to a person are considered as if payable to him or order and made negotiable; and all interest and property therein are transferrable by endorsement in the same manner as promissory notes. The result is, that the right of property in a bond is transferred by the obligee's endorsement and delivery. Nelson v. Nelson, 6 Iredell Eq. 409; Fairly v. McLean, 11 Iredell 158.
It is only a perfect instrument for money that is susceptible of being transferred. It may be that after a bond has become perfect the obligee can, by his endorsement, order the payment to be made to bearer; but no person can sue on it as bearer except by force of such endorsement. Though the bearer might sue on a bill or note made payable to A or bearer, or to the bearer, yet he cannot sue on a bond so payable. It is considered that being a deed it must be made to some certain person, to whom or for whom it may be delivered, and the suit must be by that person or by his endorsee. Marsh v. Brooks, 10 Iredell 410.
When the bond has been made in North Carolina payable to a certain obligee, and endorsed by that obligee, though the endorsement be in another state, the endorsee can maintain an action in North Carolina on the bond in his own name; he may there sue on it as negotiable paper. Reddick v. Jones, 6 Iredell 106.
When he takes it before maturity, he is on the like footing with the holder of a bill of exchange. If he be a bona fide endorsee for value, he is subject to no defence of the obligor against the obligee, which would not be valid against a bona fide endorsee of a bill. Turner v. Beggarly &c. 11 Iredell 331. He will be affected by no payments to the obligee unless they be endorsed on the paper or he had notice thereof. Ormond v. Moyc. Id. 567.
20. The rule of Marsh v. Brooks, 10 Iredell 410, important to be considered in a state wherein bonds are not negotiable.
If in North Carolina, though bonds are there negotiable, the doctrine of Marsh v. Brooks, 10 Iredell 410, cited ante, p. 267, be sound, it would seem still more clear in a state wherein bonds are not negotiable, that upon a bond payable to A B or bearer, no matter through how many hands it may have passed, no action can be brought by any other party than A B, until a statute shall provide otherwise. It was remarked by Bronson, J., in 1843, that a great effort had been made within the last few years to have every thing in the form of paper credit turned into a circulating medium, or at the least placed upon the footing of bills of exchange and promissory notes. If, he said, our overstrained credit system had held out a few years longer he was not sure that the courts would have been able to resist the current which was setting so strongly in favour of negotiability. But the bubble having exploded, he trusted the common law which declares that choses in action are not assignable would not be overturned in New York. In that state it is a settled question that special contracts, other than bills of exchange and promissory notes, are not negotiable instruments, and that upon instruments not negotiable no one can sue in his own name but an original party to the contract. Birckhead v. Brown, 5 Hill 646.
IN VIRGINIA AND OTHER STATES RIGHT OF ACTION OF ASSIGNEE
1. In North Carolina assignment of a bond makes assignor as much liable as if he had endorsed, and indeed as if he had made a negotiable note.
The course long pursued in North Carolina, to determine whether in an action against an assignor of a bond the plaintiff can recover, arises out of the statutes of that state just referred to (ante p. 267). There is a case of a sealed instrument assigned in Virginia and on which there had been brought in Virginia a suit against the obligor which proved unavailing. In an action in North Carolina against the assignor, it seems not to have been made known to the court that on a contract of assignment in Virginia the right of action against the assignor depends on whether due diligence had been used against the obligor. Considering the case upon the rule applicable to negotiable paper-as to demand and refusal to pay, and notice thereof the court held that proof of notice was dispensed with by reason of an express promise to pay made with knowledge of the facts; and on this ground the assignee recovered. Moore v. Tucker, 3 Iredell 347.
An act of 1827 declares that the endorser shall be liable as surety. It has been settled that the sole purpose of this act was to turn the implied conditional contract between the endorser and holder into an unconditional one. He is not charged as if he had executed the bond as co-obligor, nor charged on an endorsement without consideration, nor deprived of the benefit of the statute of limitations. Williams v. Irwin, 3 Dev. & Bat. 74; Ingersoll v. Long, 4 Id. 293. But in declaring against him there may be omitted the former requisites of a demand on the obligor and a notice of dishonour to the endorser. Topping v. Blount, 11 Iredell 64.
With this course of legislation and decision in one of the southern states, one should not be surprised to learn that in others, bonds were used after the peace of 1783, to a great extent as a kind of circulating medium. 1 Bay 399.
Decisions in South Carolina.
In 1785 an obligee in South Carolina wrote on the back of