Board of Commissioners of Jefferson County v. Fox

Supreme Court of Iowa
Board of Commissioners of Jefferson County v. Fox, 2 Bradf. 48 (Iowa 1840)
1 Morris 48
Mason

Board of Commissioners of Jefferson County v. Fox

Opinion of the Court

By the Court

Mason, Ch. Jus.

From the facts agreed upon in this case in the court below, it appears that the plaintiffs in error made a contract with one William Olney for building a court house, and gave him their writing obligatory by which they bound themselves to pay him the sum of $650, on or before the 15th day of November, 1839. Partial payments were made upon this bond, but before the time of payment therein specified, and while $150 remained unpaid, it was assigned by Olney to the defendants in error. Before the obligors were notified of the assignment, they were summoned as garnishees in three several suits against Olney, and judgments thereon were rendered against them amounting to $113,13. At the time of the rendition of this judgment the County Commissioners were indebted to Olney to the amount of $45,-50 for extra work, and after they had received notice of the assignment of their obligation, they paid him not only this amount but also the balance which they admitted to be due on the bond, amounting in all to the sum of $82,37.

The court below decided that under the provisions of the statute of Iowa in relation to promissory notes, which took effect on the first day of March 1839, this bond was a negotiable instrument, and on that account the plaintiffs in error were not liable as garnishees in any action against Olney, and that whatever was adjudged against them in that capacity would not prejudice the rights of the defendants in error. A judgment was therefore rendered against the County Commissioners for $150, together with interest and costs. To reverse that judgment the case is now brought into this court.

The main question seems to.be whether the bond on which this suit was instituted was negotiable under our statute. This extends to all notes, bonds due bills, and other instruments of writing for the payment of any sum of money, or articles of personal property, &c. It is contended that this instrument is conditional, and not for the absolute payment of money: and on that account is not reached by the provisions of the statute just referred to.

It is true the bond states that the amount therein specified is to be paid for the building of a court house, but we find nothing in it which can be called a condition. The obligors bind themselves absolutely to pay William Olney the sum of $650, on or before the fifteenth day of November 1839, and the instrument then goes on to state the consideration for which the money is to be paid. We therefore conclude that the bond in question is a negotiable instrument, the legal interest of which vested at once in the assignees.

It may well be urged that the maker of a bond should have the privilege of executing an instrument which would not be assignable in such a manner as to prevent him without hazard from making a payment to the obligee at any time before he received notice of the assignment. Our statute however, declares otherwise. The fourth section of the act in relation to promissory notes, already mentioned, leaves no doubt on the subject, if the first section of that act were not sufficiently explicit. It declares that if any such note, bond, bill, or other instrument of writing shall be endorsed before the day the money or property .therein mentioned became due and payable, and the endorsee shall institute an *50action thereon, the defendant may give in evidence at the trial any money or property actually paid on the said note, &c., before the same was endorsed or assigned to the plaintiff, by proving that the plaintiff had sufficient notice of the siad payment before he accepted or received, such endorsement. This section fully negatives the position that the assignee is bound to give notice of the assignment to the obligor before the obligee’s right to receive payment is cut oif. The ob-ligor can only set up such payment in his defence by proving that the plaintiff had sufficient notice of the same be/ore the note was assigned No notiee of this kind seems to have been proved irt the present ease, and the payment as garnishee is not distinguishable in this respect from an ordinary payment. The maker of a negotiable instrument cannot be made liable on d garnishee process unless that instrument has become due and is shown to be then in the possession of the defendant in the suit.

The decision of this point obviates the necessity of examining the others.

Judgment affirmed.

Reference

Full Case Name
Board of Commissioners of Jefferson County v. Fox & al.
Cited By
1 case
Status
Published