Robinson v. Crenshaw
Robinson v. Crenshaw
Opinion of the Court
A trial was had in the County court of Autauga, in the nature of an appeal from the judgment of a justice of the peace. The cause of action was a promissory note, payable to Nancy Crenshaw, or bearer, due about one month before the commencement of the suit, signed by said Robinson and John Ethridge — the former, alone, having been sued. The suit having been brought by the defendant in error, as bearer, Robinson, the original defendant, filed his plea in the County court, averring, that " the note was given on an illegal contract, and one which was against public policy, viz: a prosecution for bastardy, was then pending, instituted against the said John Ethridge, for getting the said Nancy Cren-shaw with child, and it was agreed between the said Nancy and said Ethridge, that the prosecution should be stopped, and that she should not appear to swear said child against him, and upon no other consideration was said note given.” To which the plaintiff demurred — the court sustained the demurrer,' and rendered judgment for the plaintiff.
The decision on demurrer is the cause assigned for error.
The record and arguments present for consideration, two questions of some difficulty.
1. Was the contract valid, or illegal and void ?
2. If the defence was otherwise available, could it prevail against the original plaintiff, who sued upon the note, merely as bearer ?
It is argued, against the legality of the contract, that the consideration was an agreement to suppress a prosecution, by bribery, after it had been commenced, and. one, which public policy required should bo prosecuted. In support of the contract, it <s insist
I recognise the true principle to be as declared by Thompson, J., in delivering the opinion of the Supreme court of N. York, in the case of Belding vs. Pitkin,
Then, to test the facts of this case by this rule, what is the result? The plea on demurrer is to be assumed as true. It states, in substance, that pending the prosecution, it was agreed between the parties that the same should be stopped, and that the party complaining would not appear, to swear against the accused, and this was the consideration. Whether or not this agreement was illegal, must depend on the solution of another question: was the injured female under any legal compulsion to commence or continue the prosecution ? It is scarcely contended she was; and I confidently assume the position, that she was not. — ’No such power of coercion has been delegated to any officer or tribunal.
We should not be deluded by the term “prosecution,” as used in the record, because it is also applicable to juJictmauis---for, could that be material, it is
Thus, from the directions of the staute, and the nature of tljm subject, it results that the mother, in all such cases, is vested with a full discretion to make
The other view is this: the female to whom the note was given, had been seduced into immorality and vice; she was degraded in society ; her health had been affected, and herself rendered the less able to provide the means of support; the fruits of her illicit intercourse must create an additional tax on her resources and industry, unless aided by him on whom nature had imposed an equal obligation,— these are the obvious and unavoidable consequences of her situation. The principal in the note, by giving the same, admitted himself to be the despoiler ; and as such bound to repair the injury, at least, in part. Then, could there be any thing illegal or con
The doctrine is believed to be -well sustained by numerous authorities, that “ a promise, in consideration of past cohabitation;” or “ a promise to indemnify a sheriff for an illegal act, already committed, is good and valid."—Holman vs, Johnson.
The two cases mainly relied on, to establish the illegality of this contract, are believed to be clearly distinguishable from it. In the case of Wheeler vs. Russell,
In the other case, Buck vs. Buck,
In this case, as there was no compulsion on the female to complain to the public, or to continue the prosecution when commenced, and no other person could do so, so, there could be no inhibition against a private contract to repair the injury done — such a contract could have no tendency to encourage any future vice or immorality, consequently does not come within the reason of the rule, which avoids contracts for illegality. Neither “the consideration, which was the ground of the promise, nor the promise which was the effect, or the consequence of the consideration, was unlawful.”
The distinction respecting the consideration, as contended for by the counsel for the plaintiff in error, has not escaped notice, “that the note vras not given to secure reparation for any damages sustained, but merely for the discontinuance of the prosecution.” The one can not be viewed abstractly from the other, and being inseparable, the distinction can not prevail. The object of the proceedings, was to recover from the despoiler a partial indemnity for the past — the object of the contract was to effect the same thing in a different form. That the indemnity thus intended to be secured, was to be paid to the mother, instead of being subject to the direction of the county court, is by no means conclusive, for the reasons mentioned, that she had full discretion, and was most essentially interested. To these views, may be added the consideration, that from the nature of
As I do not understand the principle to be contested, that a promise, founded on the consideration of a past injury of this kind, is valid. I consider it unnecessary to add farther authority on that point: and in answer to other objections made, besides the references given, I cite only the case of Coventry vs. Barton,
But it is farther objected, that supposing the pro-ceedirigs to have been discontinued, and the money paid, they could have been re-commenced and prosecuted, and the law would not sustain an action to recover back the consideration of the compromise.
The answer to this objection is, that a violation of the contract, in the maimer suggested, at any time before the payment or collection of the money, would have constituted a legal defence against the demand; but a violation afterwards, would leave the payor, only in the same condition, he would have occu pied, had he paid the money when he made the contract: in neither case could it be recovered back. It is also true, that monejr paid on an illegal contract, which the law would not enforce, can not be recovered back, for in pari delicto, meliorest conditio defendenlis. But in such cases, it is generally immaterial, whether the terms of the contract be violated or not, for as far as there is any difference, a violation would receive move countenance from the law, than a compliance by committing the illegal act. Cases may occur, in, which money paid for an illegal act, afterwards to be done, may be recovered back in an action rescinding the bargain before the perpetration of the deed. The po
Again -it is to be observed, that the amount, if any, to be recovered at law, is left, under all the circumstances, to the full discretion of the county court, so as not to exceed fifty dollars per annum, for ten years; but as much less as may be deemed just and proper. Evidence of a judicioits compromise between the parties, and .reasonable reparation made, would constitute a material feature in such a case. It is improbable that the'putative father would pay or promise any thing considerable to the mother, unless he deemed her worthy of the confidence to be reposed. If he should, however, it is highly proper he should do so at his own risk; and courts should not be astute for quibbles on which to exonerate .him. If he. has exercised a proper discretion, and paid an adequate sum, or even less, it is but a fair presumption, that the county court, in the event of a future prosecution, Would regard the accommodation in mitigation of the amount, so that in this way it might be reduced to a nominal sum.
The effect would be similar to that of an accommodation between the individuals in an assault and battery, or other personal violence by one on the other. The private satisfaction made by the offender to the person aggrieved, would not only be a bar to an action for the civil injury, but would be evi-
Though the position is not boldly assumed, that the female could legally be compelled to commence, or continue the prosecution for the bastardy, it has appeared extremely embarrassing to the arguments denying the legality of the contract, to avoid that position; or, to admit the obvious distinction between a case of this kind, and an indictment for felony or misdemeanor. The apparent necessity of blending them in support of that argument, goes far, in my conception, to destroy its force. Hence, I arrive at the conclusion, that so far from containing an inhibition, the statute was intended as a weapon, placed in the hands of the mother, subject to her discretionary use, as the least exceptionable, and most efficacious mode of repairing the injury to herself and society. . The putative father is also allowed his discretion to adjust the complaint with the female, should he deem it prudent to do so; otherwise, he may refuse, and abide the judgment of the court, thereby placing the sum beyond her control.
I am, therefore, of opinion, that this contract was valid and recoverable: and such is the opinion of a majority of the court.
, Under this opinion, it is immaterial to this case, to • decide the second question presented; but, as it is-important, in principle, and has been elaborately discussed, we think it proper to express our opinions upon it, also.
2. This remaining question is, whether, admitting the defence to be available against the.person named as payee, is it equally so against the plaintiff, suing as bearer ?
It is conceded, that notes payable to bearer, as this is, are as fully embraced by the statute, in their original state, as any other bonds or notes can be: indeed it would be impossible to deny it, unless through the absurd position, that notes drawn payable to an individual or boarer, are not assignable by endorsement by the payee. .Nor can it be denied with any degree of "plausibility, that this note, had it been endorsed to A. Crenshaw, would have been subject to the full operation of the statute; consequently, the maker would have had a right to impeach the consideration ; 'or to have availed himself of any payment, or set-off, against the note, previous to notice of the-assignment. If such would not have been his privilege under this statute, relative to payment, the consequence is, that it has authorised the haost palpable fraud, by depriving the maker of a clear common law right, while it professes to recognise no instru
It has been ruled in many cases, by this 'court, that the term “ discount,” as used in the statute, extends, by just construction, to all legal objections to the consideration, of such contracts, as are therein provided for. Such also is the construction of a sta-similar in this respect, in Virginia, by the court of appeals of that state. — Norton vs. Rose.
The contested principle is, whether the circumstance of the note having been sued on, by the plaintiff, as bearer, instead of indorsee, can preclude en-quiry into the equity of the note, and deny to the maker the privilege of defence, on the ground of illegality, or want of consideration. To contend that the consideration can not be impeached, is to maintain that the obligation of the maker to pay a note in this form, founded on a void consideration, depends on the manner of. assigning it; that by indorsing it, the-payee opens the equity for the benefit of the maker; but by transferring it by delivery merely, all enquiry into the equity is denied: or it may be even worse — ■ that the right of defence is dependent on the volition and machination of the holder as indorsee, whether he will sue as indorsee, or strike out the indorse
While I deny not the power of the legislature to sanction- such inconsistency and iniquity, I contend it has not done so; and that unless this be found to be the obvious import of the statute, it is irrational to suppose such to have been its intention.
The act of 1807, “ to render promissory notes and cotton receipts negotiable,” áte. was similar to the English statute of 3rd and 4th Anne, so far as it related to promissory notes ; but so far, it was entirely repealed by the above recited act of 1812. That cotton receipts, (as decided by this court,
The idea that a note, in this state, is negotiable in strict legal acceptation, in its original formation ; but that its negociability may be destroyed by an indorsement, is believed to be sufficiently refuted by .the doctrine of the case, ciled in-argument, of Grant vs. Vaughan :
Mr. Justice Wilmot, in the same case, also says, whether such bills or notes as this is, are %n tlmir own nature■, negotiable, is a point of law.' “But this is a negotiable note; and the action may be brought in the name of the bearer. Bearer is descriptio per-sonen ; and a person may take by that description as well as by any other. In the nature of the contract, there is no impropriety in his doing so. ' It is a contract to pay the bearer, or the person to whom 'he shall deliver it, (whether it be a note or a bill of exchange.) and it is repugnant to the contract, that the drawer should object, that the bea.rer Las no right to demand payment from him,”
Mr. Justice Yates also said: “Nothing can be inore peculiarly negotiable than a draft or bill payable to bearer; which is in its nature payable from hand to fiand, levies quolies.”'
It. has not escaped me, that the case from which the above extracts are taken, was urged in argument o q support, of the opposite principle. It is relied upon to sustain the position, that a note payable to bearer, is a negotiable instrument; and if without indorsement, is exempt from ihe operation of the statute of 1812.
If the material question iu this case was, whether the note was or was not originallyLiegotiable at common law, and was res integra, I would incline to the affirmative ; and also to place notes payable to one, or order, in the same class, notwithstanding the contrary opinion of Lord Holt, and other distinguished jurists, and the necessity of passing the statute of
But it is also worthy of remark, that in the case of Grant vs. Vaughan, the paper to pay ship Fortune, or bearer, £70,” which was the foundation of the action, and in reference to which, the language quoted, was used, was considered, as it should have been, rather in the nature of a cheék, or bill of exchange, or bank note passing as money, than a common promissory note. It is true, the judges sometimes entitled the paper a note, as well as’ a check, but it will bo found, on a review of most of the early cases on bills or notes, that the word note was often used as a generic term, to include either bills or notes proper, and
I have introduced that case to shew, not only that it does not decide the legitimate character-of this note; but also to prove that, what instruments are or are not negotiable, depends on their originalformation, and the law of the land; and that whether they be .so or not is a question of law, determinable by the court, and not by the payee or indorsee — That to allow an assignment, by a common indorsement, whether in blank, or in full,'.which is.the usual mode of negotiating paper, to destroy its negotiability, would be an anomaly in jurisprudence. If then, it be even admitted, that by the more correct construction of the common law, the parties to promissory notes, should have been deemed competent, by the terms of their contracts, to render them negotiable, by drawing them payable to A. B. or order, or bearer, my'proposition still remains unshaken ; for their original formation and the law, constituted the criterion of negotiability ; and I think it has been sufficiently demonstrated, that our siatute of 1812, with its reference to that of 1807, (which is a copy of the statute of Ahne) has determined the character and legal effect of all promissory notes; and has placed all on precisely the same footing, as respects their negotiability.
. If it be objected to this interpretation, that it was unnecessary that the statute should have authorised suit, by bearer, in his own name, because it was a common law right, my reply is, that, though he could sue as bearer, doubt and difficulty existed, respecting the form of action that he might prosecute — whether the assignment was by delivery or by indorsement; and
The case of Raborg vs. Peyton,
Mr. Justice Story, delivered the opinion of the court, and said, “ It is admitted, that in Hardres, 485, the court held that debt does not lie by the payee of a bill of exchange against the acceptor. The reasons given for this'opiniou were, first, that there is no privity of contract between the' parties; and secondly, that an acceptance is only in the nature of a collateral pro
But the most important case, is that of Bishop vs. Young.
The case of Grant vs. Vaughan, as well as Raborg vs. Peyton, shew, that the holder of a note payable to bearer, may; in the nature of his action, and form, of his declaration, against the maker, assume to. himself, the capacity of the payee ; also, that regardless of the form of the action, or the true' capacity of the plaintiff, the principles of the common law, and the eguity of our statute oí 1812, permit the maker, when sued, to impeach the consideration of any note which is not purely negotiable.
In the case of Grant vs. Vaughan, all the Judges held, substantially, that a note payable to one or bearer, is payable in the alternative either to the one or the other, who may hold it as bona fide bearer; that either, suing upon it, may assume to himself the attitude;, or be treated by the defendant, as payee, and the defence may be regulated accordingly. — - Lord Mansfield, as we have seen, said, the money due on such note, is held by the defendant for the use of the person who has the note as bearer: and he undoubtedly has a right to recover it, i.n an for money had and received.- Mr. Justic declared, that bearer is descriptio persona, son may take by that description, as well other” — that, V it is a contract to pay the |<Mrer, or the person to whom he may deliver it.^ p,
In the case of Wayman vs. Bend,
In the case of the Bank of Kentucky vs. Wister, et al.
In the case of Fales, et al. vs. Maycerry,
These principles shew, that paper, which is in its nature and character negotiable, may be assigned by indorsement, either in full or .in blank, or when payable to bearer, by delivery merely; and that then it becomes entitled to protection as a negotiable security in the hands of an innocent holder, ignorant of any objection to its equity, and this is for the benefit of commerce. But yet no sanction is afforded to the argument, that our statute has created, or admitted any distinction as regards their negotiability', between the different forms of promissory notes ; or that it has not denied fidl negotiability to them all; or that it has given to the holder of a note payable to himself or bearer, the power to destroy its negotiable effect, by a general indorsement, when by simple delivery it would be preserved. On the contrary,, the effect of the foregoing doctrine is, that a note payable Lo B, or bearer, is the same as if the name ofB had been omitted', that one holding such note may sue upon it as \payee or assignee by delivery; that if he sue as assignee his rights are the same, whether the assignment was by delivery or by indorsement, and if the note was payable to another or bearer, and indorsed to him, he may strike out the indorsement and sue as bearer ; and that a paper originally negotiable, continues so in
Then as it. is not, and can not be, contended, t-hat our statute recognises the negotiability of any paper embraced by it, and it expressly .provides for all promissory notes,, the conclusion appears irresistable, that all must stand on the same principle; that they are recoverable after assignment either by indorsement or delivery, at the suit of the assignee — saving, however, to the maker “ the benefit of all payments, discounts, and sets-off.” _ *
I conceive the chief error in the contrary construction, to be in. the clause of the statute which provides, “ that the assignee shall and may sue in his own name, and maintain any action which the obli-gee or payee might or could have sued or maintained thereon, previous to assignment: and, that, in all actions, to be-commenced and sued upon any such assigned bond, note,” &c. the defendant shall be allowed the benefit of all payments, discounts and' sets-off, previous to notice of the assignment. Had the language been so far different as to have said, “in all actions, to be commenced and'sued upon any bonds, notes, &c. assigned by endorsement, (or in manner aforesaid) the defendant should be allowed,” «fee. then bonds and notes, payable to bearer, and assigned by delivery would appear to have been excluded from its operation, and left as at common law. But, I think the fair construction of'the adjective pronoun, “such,” preceding, “ assigned bond, note,” «fee. refers it alone to the kinds of bonds, notes, «fee. mentioned in the beginning of the section, as those' that might be assigned by indorsement, whether the assignment was contemplated in the body' of them or not, by the
This construction seems to obviate every difficulty : to give a just and rational operation' to the statute, by protecting the rights of. the makers of all bonds and notes, so far as to allow- them the benefit of all payments, discounts and sets-off, against the obligees or payees, existing previous to notice of any legal assignment. It must also be recollected, that the difficulty of ascertaining the .time of assignment, would be the same, whether by indorsement' or delivery; in either case the true time, when material to the rights of the defendant, must be proved, otherwise, than by the date of the indorsement, even should there be one with a date, which is not very usual; the date of an indorsement, if not .the discretionary act of the indorsee, when he comes to sue, is at best, but the act of the payee, to which the maker is not a party; consequently, it is no evidence against him. This'was the doctrine of this court, in the case of Gross vs. Van Wick, et al.
The result, however, is, from the opinion of a majority, in favor of the plaintiff below, on both points, (in the first of which I concur) that The judgment must be affirmed. ’ ' . •' ~
The single error assigned in this case, is, “ The court erred in sustaining the demurrer- to the defendant’s plea.”
The suit was originally brought before a justice of the peace, against the plaintiff in error, on a note executed by him and one John Ethridge, to Nancy Crenshaw or bearer, for thirty-seven dollars and fifty cents. A judgment was rendered, by the -justice, against the defendant below, from which he appealed to the county court. In that court the following plea was filed. “The defendant pleads, in short, that the note above described was given on an ■ illegal contract, and which was against public policy,
It is insisted by the plaintiff in error, that the plea shows, that the consideration for which the note was given, is an illegal one. The defendant contends, that the consideration is legal; but, if it were not, it will not prevent a recovery, as it is a commercial instrument, being made payable to bearer — and this de-fence cannot be made against the present holder.
In order to ascertain whether the consideration was illegal, it is necessary to examine the object of the statute, wdiich authorises the proceeding against the putative father of a bastard child, which had been commenced in this instance. It will be conceded, and, as I understood the defendant’s counsel, was admitted, in the argument, that, if the object of the statute, is to secure the state or county against a charge, to which it might, otherwise, be subject, the proceeding is in the nature of a public prosecution; and any agreement to prevent it, is contrary to public policy, and void. Indeed, it is perfectly immaterial what the mode of proceeding may be, the object intended to be effected by the framers of the statute, is, alone, to be considered: and, if that was to secure the public interest, and not to give, or provide a remedy to enforce a private right, no compromise of that interest could be made.
The 1st and 2d sections of the statute are in the following words: “ When any single woman, who shall be pregnant, or delivered of a child, which, by law, would be deemed and held a bastard, shall make complaint to any one or more justices of the peace, for the county where she may be so pregnant or delivered, as aforesaid, and shall accuse any one of being the father of such child, it shall be the duty of such justice or justices, to issue process to the sheriff or coroner, or any constable of such county, against the person so accused, as aforesaid, and cause him to be brought before him. — That, upon his appearance, it shall be the duty of such justice or justices, to examine the said female, in the presence of the man-alleged to be the father of the child, touching the charge against him ; and if said justice or justices shall be of opinion that sufficient cause appears, it shall be his or their duty, to bind the person so accused,, in bond, with good and sufficient security, to be and appear before the next county court, to be hold-en for said county ; and, in the mean time, to be of good behaviour.”
All the requisites of a public prosecution are con-' tained in such a proceeding. It is not a suit instituted by the mother, which is provided; but a warrant, in the name of the State, is the only process which the justice could issue, when the complaint is made. The person against whom the proceeding is instituted, is not termed “ the defendant,” but the statute speaks of him as “the accused;” and the justice is to exercise his judgment in discharging “the accus
It, then, appears to be the true policy of the law, that such prosecutions should take place, and that expenses attendant upon the support of such children, should be paid by those who, in justice, should bear them.
But it is said, in opposition to this inference, that the statute contains no compulsory provisions — that the mother is left to her own volition, and may eith-’ er proseeute^the putative father or not, as she pleases; and that as this is the case, she rnay abandon the prosecution when she pleases.
Even if this were the true construction of the statute, I do not, know that it would weigh much in favor of the legality of such a contract. Generally, in cases of misdemeanor, no one is compelled- to be-' come a prosecutor or informer. It may be replied, the law makes it the duty of every citizen, who knows of such offence, to have the offender borught to punishment. Admit tt, and I would say, in return, that it is-the duty of a woman, having a bastard child,' .to take the steps prescribed by the statute. But, I. do not admit, that, when once she has exhibited the charge, she can, at pleasure, abandon it; I.believe she might be compelled to attend and give evidence. But there are several reasons, perfectly consistent with the positions assumed, which may be assigned for its being left discretionary with a woman in this situation, either to commence a prosecution or not. Some might be perfectly able to support their chil
A sure test by which to try the legality of this contract is to ascertain whether or not it is obligatory on the woman. Was she 'bound by the agreement set out in the plea, not to appear and testify. If she was not, tl\ere can be no ground for sustaining the action. The object of the prosecution is to secure an adequate provision for the child. It is not to be recovered by or paid to the person who made this agreement, but the county court'is to receive the amount of the recovery. Can we view the mother as any thing more than a witness for the state? It seems to me that she clearly stands in that relation to the prosecution, and that a witness in any other prosecution or suit would be equally authorised to enter into a stipulation, with a party, against whom he was summoned to give evidence, to absent himself from the trial. And would a suit brought to recover the amount agreed to be paid a witness for such a consideration, whether he was summoned in a suit between individuals, or between the state and an individual, be tolerated for a moment? But after*a witness had entered into such an agreement; and received his reward, he would be just as competent as before. So, in this case; the wpman, after the execution of this note to her, could have testified in the suit, and none could have hindered her. It would have been a most strange proceeding, if, when she came forward for that purpose)
The case of Wheeler vs. Russell,
Numerous other cases might be cited, to shew that courts, will never give effect to contracts, made in violation of the policy of a public law, and intended to defeat its operations. But to permit a witness to enforce an agreement, the consideration of which was, that he would not testify in a cause, is, in my opinion, making adecision of dangerous tendency.
I therefore, am decidedly of opinion, that the consideration stated in the plea, as the one for which the note was given, is against public policy.
I proceed to the second question, viz: can the illegality of the consideration affect the validity of the note in the h^nds of the present plaintiff 1 '
I shall not attempt to examine whether promissory notes were negotiable in England, before the celebrated statute, which was produced by the decisions of Lord Holt, against their' negotiability. However, that may have been, it is certain that our act of 1812, “ concerning the assignment of bonds, notes,” &c. places promissory notes, generally, on the same footing with “ bonds, obi igations, bills single, and all other writings for the payment of money, or any other
Our legislature seems to' have considered the statute of Anne necessary to render notes payable to order, negotiable; for, in the year 1807, that statute, with some variation, extending its provisions to cotton receipts, was substantially enacted here.— But the act of 1812, just referred to, repealed the statute -of 1807, so far as its provisions affected promissory notes. By the act of 1812, it is provided, “ that all bonds, obligations, bills single, promissory notes, and all other writings for the payment of money, or. any other, thing, shall and may be hereafter assigned ■by indorsement, whether the same be made' payable to the order or assigns*of the obligee or payee, or not; and that the assignee shall and may sue in his own name, and maintain any action which the obligee or payee might or could have sued or maintained thereon previous to assignment; and that in all actions to be commenced and sued upon any such assigned bond, obligation, bill single, promissory note, or other writing as aforesaid, the defendant shall be allowed the benefit of all payments, discounts and sets-ofF,1 made, had, or possessed against the same, previous to notice of the assignment,” &c.
This court has uniformly determined, that this statute authorised the obligor, payor, &c. to plead any defence in an action brought by an assignee of any of the instruments included in the statute,, that he could against the obligee or payee, and, whether pro
But we are to determine, whether ■ or not the statute embraces promissory notes payable to bearer.
The object of the statute is, to give a right of action to the assignees'of the different instruments described in it, to convert an equitable into a legal interest, and, while it does so, to secure the makers of such instruments all equitable defences. But the intention of enabling the assignee to sue, could have no application to the holder of a note payable to bearer. His right to sue in his own name, had never been seriously questioned in England, nor in any state of this union. Nor was an assignment ever deemed necessary to vest this right of action. Any holder could sue as the bearer, to whom the note was payable.— But it is said the statute expressly includes all promissory notes, &e. “ whether made payable to order or not.” This language is certainly used by the statute, but there was evidently no intention to require instruments to be “ assigned by endorsement,” the legal right to which, passed by mere delivery before, to convert a note payable to beorer into one payable to order; but the object was to enlarge the power of the. obligee or payee. In England, it has uniformly, down to the present timé, been deteimined, that no note was. negotiable unless the words “ or order” “ or bearer,” or some other words expressly authorising the payee of a bill, or note, to assign it, be inserted therein, unless the negotiable words were omitted by mistake. To prevent a construction of the statute leading to a similar doctrine, with respect to the as-
And this court has, by a uniform train of decisonsj sanctioned this construction. If it be incorrect, a note payable to bearer must be assigned by indorsement, before a transferee could sue on it in his own name, because the statute gives the right to such as-signee, and him only. But this, has never been contended for. Suits have, in such Gases, always-been brought in the name of the bearer, and no doubt, has ever been expressed, in this court, of the correctness of this course : indeed, it would be absurd to indorse such notes as are made payable to bearer.
I think, therefore, that the statute does not embrace a note of this description. Has the' payee a right to make this defence against the holder, a transferee, at common law ? '
Such a defence, it is admitted, could not' be- made against the assignee' of a negotiable instrument: it is hot one of those- considerations, which,, like usury, totally vitiates and destroys a security ; but, it is a consideration against public policy, which policy, while it condemns- the transaction, and renders the security voidable,'in the hands of an original party, may be best '•promoted, by making it valid, when the property of an -innocent third person.
In Chitty on Bills,
In the case of Grant vs. Vaughan, decided by the court of King’s Bench, in 1764,
It may be well to remark here, that the statute of 3 and 4 Anne, ch. 9, does not, in any way, increase the powers of the holders of such paper. The right to. sue, in his own name, is given to the assignee of a promissory note, made payable to order; but no such right is given to the holder of a note, made payable to hearer. It is true, that' Lord Mansfield observes, in the case of Grant vs. Vaughan, “ The act of 3 and 4 Anne, ch. 9, puts promissory notes upon the same foot, throughout, with inland bills of exchange. And, therefore, whatever is the rule, as to inland bills of exchange, payable to bearer, must be so, likewise, as to notes, payable to bearer. Great force arises from the act of parliament, putting notes merely upon the foot of inland bills of exchange, and particularly specifying notes, payable to bearer.”— But this observation is made after the negotiability, of the paper is sustained, by reason and authority, without reference to the statute. And the other judges, although they refer to the statute, as settling any doubt, yet clearly hold, that, without it, the ac- - tion could be sustained. But the general ground ta
The cases decided in the United States, are believed, without exception, to have sustained the same doctrine. The Supreme court of the United States, in the case of The Bank of Kentucky vs. Wister & Co.
The decisions of the Supreme court of the United States, forcibly sustain this opinion. By the constitution of the United States, citizens of different States may sue each other in the Federal courts, but those of the same State, cannot. It has been uniformly determined, by those courts, that the assignee óf a note, payable to order, has no greater privilege, in this respect, than the payee; that is, if the payor and payee are citizens of the same State, and the as-signee of another, that no suit can be maintained in the Federal courts : nor does the negotiability of the paper, in the State in which it was made or asign-ed, make any difference. But' if a note be made payable to hearer, by a citizen of one State, and given to another citizen of the same State, and a citizen
It is a common thing for a note to be executed to “ the bearer,” without specifying the name'of any payee. To permit defences, like the one attempted in the present action, in cases of this kind, when a third person was the holder, would be extending the investigation to a tedious length.
By giving such a note, the payor-invites any and every person to become the holder, and promises to pay whoever may be so, without regard to the original consideration, or the situation of accounts, between 'him and the person to whom it was first given : and, it would be most impolitic and vexatious, to permit evidence to be introduced on the trial, of who the original payee was, the consideration, and the state of accounts, not only between him and the payor, but between him and every subsequent holder, with the view of establishing an off-set against some one or more of them.
But, it may be objected, that our statute, of 1807, similar to that of 3rd and 4th Anne, which was repealed by that of 1812, varied from that of Anne, in this — that, notes, payable to- bearer, were expressly made negotiable, by that statute, as well as those payable to order: and, when the legislature, in the repealing act, use the words, “ promissory notes, whether the same be made payable to order, or not,” it must have been intended, to include every kind of note, particularly all'those embraced in the statute which this act repealed.
In all instances, however, the plaintiff who sues, as bearer, should he an honest and bona fide holder of the note; but this will b.e presumed, unless something to excite suspicion, appears in the progress of the suit. ’
I am, therefore, of the opinion, that the defence set up by the plea, would be available, between the original parties ; but could not be used against an innocent third person, who had fairly and honestly become the holder of the note.
Caine's Rep. 147.
Cowper, 343.
2 Wils,339.
17 Mass. R. 258.
17John,R. 142.
2Wash.R. 233.
3 Kent’sC 59.
Peake's N. P. R. 225.
1 PainesR. 156.
2 Stewart, 137.
3 Burr 1516.
2 Wheat, 385
2 Bos. & Pul. 78.
1 Camp, 175.
2Starkie’s. Ev 301.
2Peter'sU S.R.318.
2 Gall.560
3 Comm. 50
1 11. Bl. 313.
3 Term R. 481-and 1 H. Bl. 569.
Comm. 51
Comm. 5960.
Al.Rep.7
17 Mass. Rep. 258.
Page 83
3 Burr. 1516.
2 Peters, 318.
3 Burr. R. 1523, 1526, 1528-and 2Starkie's Ev 126.
Concurring Opinion
I concur with Judge Saffold, on the first point — that is, that the consideration is suf-fiqient: and, I concur with Judge Taylor, on the second — that the defence- offered, could not be set up, against an innocent holder.
Reference
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- ROBINSON versus CRENSHAW
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