« PreviousContinue »
permitted to defalcate from its amount notes of the obligee acquired by the obligor in good faith and without notice of the assignment. Bearing in mind the cause of introducing those words into common use-stated ante, p. 171-the court declined to let them have the effect contended for. Louden v. Tiffany, 5 W. & S. 367. It decided the case upon the general principle that when the instrument is not negotiable the assignee takes it subject to all the equity existing at the time of the assignment and notice; a principle equally well established in New York. Chamberlain v. Gorham, 20
8. State of things in Virginia before the statutes respecting assignments. Effect of those statutes as it regards the assignee's right to sue.
The state of things in Virginia, prior to the act respecting assignments, is mentioned by Judge Lyons in Barksdale v. Fenwick. He states that "before that statute, when bonds. were transferred, it was necessary that a power of attorney should accompany the assignment to enable the assignee to sue in the name of the assignor; to whom he was in fact but attorney, and was not bound to more than ordinary diligence. This practice, however, was found inconvenient, as the drawing of the power of attorney was troublesome, and the necessity of suing in the name of the obligee not only subjected him to costs but gave him a control over the suit and its proceeds, which was often injurious to the assignee; and, therefore, the statute was made merely to enable the latter to sue in his own name." 4 Call 510.
The first Virginia statute on the subject was passed at the session begun in October 1705, (the 4th of Ann). This statute provided as follows:
That it shall and may be lawful to and for any person or persons to assign or transfer any bond or bill for debt over to any other person or persons whatsoever, and that the assignee or assignees, his and their executors and administrators by virtue of such assignment shall and may have lawful power to commence and prosecute any suit at law in his or their own name or names, for the recovery of any debt due by such bond or bill as the first obligor, his executors and administrators, might or could lawfully do. Provided always, That in any suit commenced upon such bond or bill so assigned, the plaintiff shall be obliged to allow all discounts as aforesaid that the defendant can prove either against himself or against the first obligee. 3 Hen. Stat. 378.
In May 1730, (3 & 4 Geo. 2,) a further change was made,
"to the end the recovery of money upon promissory notes and other writings without seal may be rendered more easy." 4 Hen. Stat. p. 275, 8, 11, 12. This act of 1730 was substantially preserved at the revisal of 1748. The latter act (in 6 Hen. Stat. p. 86, 7) is as follows:
$5. That if any person or persons have signed, or shall sign, any note or other writing, whereby he, she, or they promise, or oblige, him, her, or themselves, to pay any sum of money, or quantity of tobacco, to any other person or persons, such person or persons, to whom the same is or shall be payable, may commence and maintain an action of debt, and recover judgment for what shall appear due thereupon, with
§7. That it shall and may be lawful to and for any person, or persons, to assign and transfer any bond, or bill, for debt, or any such note as aforesaid, to any other person or persons whatsoever: And that the assignee or assignees, his and their executors and administrators, by virtue of such assignment, shall, and may have lawful power to commence and prosecute any suit at law, in his, her, or their own name, or names, for the recovery of any debt due by such bond, bill, or note, as the first obligee, his executors and administrators, might or could lawfully do: Provided always, That in any suit upon such bond, bill, or note, so assigned, the plaintiff shall allow all discounts that the defendant can prove, either against the plaintiff himself, or against the first obligee, before notice of such assignment was given to the defend
The same thing is more briefly expressed in subsequent In the act of 1786 (12 Hen. Stat. 359) it is expressed
An action of debt may be maintained upon a note or writing, by which the person signing the same, shall promise or oblige himself to pay a sum of money or quantity of tobacco to another.
Assignments of bonds, bills, and promissory notes, and other writings obligatory, for payment of money or tobacco, shall be valid; and an assignee of any such may thereupon maintain an action of debt, in his own name, but shall allow all just discounts, not only against himself, but against the assignor, before notice of the assignment was given to the defendant.
Still an assignee of a bond with collateral condition could not sue thereon in his own name. Craig v. Craig, 1 Call 483; Henderson &c. v. Hepburn &c. 2 Id. 232; Lewis v. Harwood, 6 Cranch 82; Meredith's adm'x v. Duval, 1 Munf. 83. To remedy this, an act was passed. Sess. Acts 1795-6, p. 18, ch. 14, 2. Thus the provisions came to be as they are in 1 R. C. 1819, p. 484, ch. 125, § 4, 5, and in the Code of 1849, p. 582, § 10, 14. The following are the sections as now contained in the Code:
§ 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