Tulloss v. Rapelye

The note on which the action was brought was not negotiable. Like any other chose in action, it was transferable by assignment or mere delivery. Another assignment was not necessary. The endorsement of the back of it for that purpose was valid, and as it was made for that purpose, and delivered in blank, authority was given with it to the person to whom it was delivered, to fill up such blank will) the proper words of assignment, if necessary.

The payee of the note and the second endorser upon the note were both examined as witnesses for the plaintiff. Subsequently the defendant offered himself as a witness in the cause, and the referee excluded him.

The right of the defendant to be examined upon the same matter that the endorsers had testified to, depended upon the character in which they stood as transferrers of the note. In regard to negotiable paper, this court has held that an endorser of such a note is not an assignor within the meaning of section 399 of the Code. (Hicks v. Wirth, 10 How. Pr. R., *95555). In that case a distinction was suggested between the endorsement of negotiable paper and that not negotiable. The grounds upon which an endorser of negotiable paper was held not to be an assignor, fail when applied to a note not negotiable. In the latter case, the contract of the maker is only to pay to the payee, and he is not authorized by an order to designate the individual to which payment shall be made. The only mode in which the payee can transfer his interest in the note is by an assignment, either parol or written. (Chitty on Bills, 219.)

In Hedges v. Sealy, (9 Barb. S. C. R., 214), it was held that a mere delivery of a note by the payee, without endorsement, was sufficient to transfer the payee’s interest in the note, but that such payee was a mere assignor, and his rights were to be settled by the same rules that govern the case of an assignor of any other chose in action.

In Chamberlain v. Gorham, (20 Johns., 144), the payee of a note not negotiable, who assigned it, was held to be merely an assignor, and the assignee took the note subject to all equities existing at the time against the assignor.

In Jagoe v. Alleyn, (16 Barb. S. C. R., 580), the point was distinctly held by Justice Strong that a payee of a note not negotiable can only transfer it as assignor,—that before the Code such transfer would not authorize a suit in the name of the assignee;—and he adds: As to such a note, I think it clear that a person selling it, is, within the meaning of section 399 of the Code, an assignor of a thing in action. The note is as much a thing in action as a bond or account, either of which may be assigned by delivery. (See also Seeley v. Seeley, 2 Hill, 496.)

In these views, as to notes not negotiable, I concur. The referee therefore erred in excluding the defendant, after the endorsees had been examined. He was competent to testify upon all matters to which their testimony extended.

It is said that McGraw had no interest in the note, and therefore was not to be considered as the assignor. It is a sufficient answer to that objection, to say, that such was McGraw’s testimony. It was important to the defendant, as well as his right, to answer such a statement.

*96He might have testified to a promise of McGraw’s to be surety, or have given some reason for the endorsement. After he had testified, if it became important, the plaintiff could have asked the referee to disregard the testimony, if he found McGraw to be improperly a party to the note.

The report of the referee should be set aside, and the case referred back to him, with directions to open the testimony, and allow either party to produce further evidence. Costs to abide the event.