Hickok & Ross v. Labussier.

January 4th, 1839, concerning promissory notes, &c., although said note was made previous to the passage of said law, that said subsequent endorsement would pass all the legal interest in the same to the said endorsee, all of which said instructions were given in charge by the Court to the jury, to which said opinion and instructions of the Court the defendants except.

"The defendants then moved the Court to instruct the jury, that they having produced a receipt in full for said note from said Laubussier, that it then devolved upon said Huner to prove a special assignment or transfer of said note to him, by said Labussier, and notice of the same to defendants, previous to the date of said receipt, from said

Labussier, for the payment of said note, or a special *117 promise to pay said Huner *the amount of said note

as endorsee, previous to the date of said receipt from said Labussier; but the Court being of a different opinion refused to give said instructions."

To this the defendants excepted, and brought the case up here for reversal.

BROWNING & GRIMES, for plaintiffs in error.

RORER & STARR, for defendant in error.

BY THE COURT, MASON, CHIEF JUSTICE. - This case comes up on a bill of exceptions, and we shall, therefore, examine and dispose of each of the material questions therein raised, in their order. And, first, was it necessary that the blank endorsement on the note should have been set forth in the declaration or given with the copy? We think not. The statute requires that a copy of the instrument of writing, on which the suit was brought, should be filed with the declaration. In the case of an ordinary negotiable note, where the suit is brought in the name of the assignee, such endorsement becomes a material part of the

Hickok & Ross v. Labussier.

instrument. It is absolutely necessary that it should be set forth, in order to avoid the effect of a general demur

rer.

But in the case of a note not negotiable, the case is different. The plaintiff, in the first instance, is not bound to set forth or prove the assignment at all. Such proof only becomes necessary where the defence set up can only be defeated in consequence of the assignment. Swan's Treatise, 208 and 209. It was not even necessary that the name of the assignee should have appeared on the docket, provided, that after the production of the receipt from Labussier, the plaintiff had proved the assignment and notice to the defendants of a date prior to that of the receipt. The endorsement is not, therefore, a part of the instrument declared on, but is merely to be used by way of rebutting evidence upon a certain contingency, and is no more necessary to have been set out in the copy filed with the declaration than though such evidence had been contained in a separate instrument, or than though it had been by parol.

In the next place, as to the receipt. This was wholly nugatory, if the note had been previously assigned, and knowledge thereof communicated to the defendants. No formal notice for this purpose was necessary. It is enough if, from the facts and circumstances, it may be fairly presumed that the debtor had positive notice of the assignment. 12 Johns. Reports, 343. The name of the assignee being mentioned in the summons was, we think, sufficient notice to the defendants that he was beneficially in- *118 terested, and if they paid money to Labussier afterwards, it was at their own peril. Swan's Treatise, 208. Whether the legal interest in the note was or was not in Huner, cannot affect this case, except that it may, in the former case, be contended that the suit should have been brought in his name directly. The instruction in that case asked by the plaintiff' would have been pointedly

Hickok & Ross v. Labussier.

against himself; and, if there was error in the instruction of the Court, that error was in favor of the defendants. At all events, we see nothing in this point which should work a reversal of the judgment.

The only question that remains to be disposed of, is in relation to the sufficiency of the proof of assignment. Was the blank endorsement of itself prima facie evidence of this fact? cr, after Labussier's receipt in full had been produced, was a special assignment to Huner necessary to be proved? We are clearly of the opinion that no formal transfer was necessary to be shown. We also think that the endorsement in blank is, of itself, presumptive evidence of the assignment; that it is equivalent to a power of attorney authorizing the holder to sue in the name of the endorser, and to apply the avails to his own use; that the assignee may, at any time, even in Court, fill up the endorsement to this effect; and that, if not filled up, this will be deemed the import and construction of it. Swift's Digest, 434. We are of the opinion, therefore, that the blank endorsement, and the possession of the note by Huner, were sufficient to create the legal presumption of an assignment of the note to him, and that this instruction of the Court to the jury was also correct. The judgment of the Court below will, therefore, be affirmed.

Joseph S. Sater and Wm. Wade v. David Hendershott.

JOSEPH S. SATER and WM. WADE v. DAVID HENDERSHOTT, for the use of Redman and Eberman.

Error to Des Moines.

Where the endorsement of a note is special, and made in the usual manner, the legal interest passes entirely to the endorsee, and he can only sue in his own name. (u).

Such an endorsement is a transferable contract, between the endorser on the one side, and any subsequent holder on the other, and can only be rescinded by the *mutual agreement of those parties. *119 When the note comes again into the ownership of the payee,

both these parties become united in his person, and he can then erase all the endorsements.

The mere fact that a suit is instituted in the name of the payee, for the use of the endorsee, is, of itself, no evidence that the payee is in possession of the note, and still less that he is entitled to bring suit thereon.

Before the statute of Iowa in relation to promissory notes, it is doubtful whether the endorsee could sustain debt on a negotiable instrument. In case of a sealed instrument, therefore, which has been specially endorsed, inasmuch as the action must be debt, the endorsee may sue in the name of the payee, to his use. The law will not, in such cases, compel him to try doubtful experiments. The payee of a sealed note, when he endorses it over in blank, thereby authorizes the endorsee to sue in his (the payee's) name, for the use of the endorsee; for the law enters into and forms a part of the contract. If, therefore, after the note is thus endorsed, a statute authorizes the endorsee to bring suit thereon in his own name, and even declares a transfer of the legal interest to him, this will not prevent him from suing in the name of the payee, for his own use, for this would be impairing the obligation of a previous contract.

(u) Under the Revision of 1860 and the decisions, the party holding the legal title to a note or instrument may sue on it, though he be an agent or trustee, and the party beneficially interested, though he may not have the legal title, may sue in his own name. Cottle v. Cole & Cole, 20 Iowa, 485, 486; Rice v. Savery, 22 Iowa, 470; Rev. §§ 2757, 2758. The equitable rule now applies to law actions. Conyngham v. Smith, 16 Iowa 471.

Joseph S. Sater and Wm. Wade v. David Hendershott.

Action of debt, commenced by defendants in error against plaintiffs in error. Plea, non est factum. Judg ment for plaintiffs below; and bill of exceptions as fol lows:

"Be it remembered that, on the trial of the above cause, the plaintiff offered in evidence, as the ground of his action, a note or bond executed by the said defendants to David Hendershott, or order, which said instrument had been specially assigned by said Hendershott, and also several subsequent assignments, which will more fully appear, reference being had to said instrument now on file in this cause. The defendant then offered to prove, by said Hendershott, that he had assigned away his interest and right of action in said note or bond, and that he had never since said assignment, by any trade or otherwise, acquired any right of any description to said note or bond; and, also, moved the Court for a nonsuit, on the ground that said Hendershott had parted with his interest and right of action in said note or bond, and that said suit could not be maintained in his (said Hendershott's) name; both of which said motions, by said defendants, were overruled by the Court; and the Court decided that, although s id Hendershott had parted with his interest in said note or bond, and although the legal right to the same was in a third per son, yet the said suit could he maintained in the name of the original payee, and that said defendants would not be admitted to bring evidence to prove that the right of action was not in said plaintiff. The endorsements on the

above mentioned note were erased previous to the *120 *trial, except that the pen was not drawn through the name of D. Hendershott. To which said several opinions and instructions of the Court the defendants, by their attorneys, except, &c."

The following is a copy of the writing obligatory, or note referred to in the case, with the endorsements: