Pierce v. Crafts — 12 Johns. 90

Majority

p. 90

Pierce against Crafts.

Headnote

inSebitaius totter able the mdorseeTf a note, against the maker.

IN ERROR from the court of common pleas of Otsego county. Crafts brought an action of assumpsit against Pierce, in the court -below.- The declaration was on the counts, for money ienb money paid, and for money had and received to the use of the plaintiff The defendant pleaded wow assumpsit. • 4 •/ At the trial, in support of his declaration, the plaintiff offered in evidence two notes. The first -was as follows: “ For value received, due William Douglas's, or bearer, fourteen dollars and fifty cents, with interest, payable the 1st March next. Springfield, 8th November, 1811. James Pierce.” The second note was dated December 26, 1811, and the defendant promised, for value received, to pay William Douglass, or bearer, the sum of eighteen dollars, with interest, &e. The execution of the notes by the defendant below was admitted ; but his counsel insisted that they could not,, without further evidence, be admitted iii support of the plaintiff’s •declaration: The court below, however, overruled the objection, and directed the jury, that the notes were admissible in evidence in support of the plaintiff’s action, and the jury found a verdict for the plaintiff, for twenty-five, dollars and fifty-five cents. A bill of exceptions was tendered by the plaintiff’s counsel to the opinion

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of the court of C. P., on which a writ of error was brought to this court.

Seely, for the plaintiff in error.

Indebitatus assumpsit will not lie in any case, except where debt lies.^[9] Now, debt lies only between the immediate parties to the contract. It will r ,1 not he against the accepter of a bill of exchange;^[10] nor by an , ° . f , ' , . endorsee against , the maker of a note ; nor^ where there is not some privity between the plaintiff and defendant.^[11]

In Waynam v. Bend,^[12] where a note was payable to L. T. or bearer, Lord Ellenborough held, that the plaintiff could not recover under the money counts, as he was not an original party to the bill. '

Warner, contra.

The act^[13] concerning promissory notes, taken from the English statute of 3 and 4 Anne, c. 9. s. 1., dedares that all notes in writing made, Sec. whereby such person shall promise to pay any other person, &c. his or their order, or unto bearer, any sum of money therein expressed, shall be taken to be due and payable as therein expressed, and shall •have the same effect, and be negotiated in like manner, as inland bills of exchange, according to the custom of merchants; and that the payees or endorsees of every such note, &c. shall and may maintain their action, See. against the makers and endorsers of the same respectively, in like manner as in cases of inland bills of exchange, and not otherwise.

A note is, prima facie, evidence of money lent by the payee to .the maker, and, consequently, of money had and received-: by the maker to the use of the holder, and of money paid by the holder to the use of the maker,^[14] In Grant v. Vaughan,^[15] Lord Mansfield says, “ I do not find it any where disputed, that an action upon an indebitatus assumpsit, generally, for money lent, might be brought on a note payable to one, or order.^[16] Great force arises from the act of parliament of 3 and 4 Anne, putting notes merely on the footing of inland bills of exchange, and particularly specifying “ notes payable to bearer And he adds, “ but on the second count,” which was indebitatus assumpsit for money had and received to the use of the plaintiff “ the present case is quite clear, beyond all dispute. For, undoubtedly, ap action for money had and received to the plaintiff’s use, may be brought by the bona fide bearer of

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á note payable to bearer. There is no case to the contrary. It was certainly.money received' for the' use of the original advancer of it • and if so, it is for the use" Of the person who has the note, as bearer.”

In Tatlock v. Harris,^[9] this doctrine was fully recognised by Lord Kenyon.

It is true, Lord Holt would not allow an action of indebitatus assumpsit on the. note, and. lie was pertinacious on this-head,^[10] but he allowed the note . to be given in evidence'under the general count. - It was, no doubt,' in. consequence of the opinion of Lord Holt, that the statute of 3 and 4 Anne was passed. To support the count for money had and received, it is not necessary, in all cases, to give positive evidence that the defendant has received money belonging, to the plaintiff. It is enough if the facts proved afford a fair presumption that money has been received to the use of the plaintiff.^[11]

In Dimsdale v. Lanchester,^[12] Lord Ellenborough held, that an action for money had and received by the endorsee of á not® against the maker, was maintainable; that a person who puts his name to a' promissory note, thereby acknowledges that' he has;.: in hik hands, '.money of the payee: of the note, and undertakes to pay it to.whoever is legally .entitled ; to receive it, A note payable to J. S. or bearer, is payable to the beater. J. S. is: a mere cypher, and the note passes by delivery, without endorsement. The person named ceases to be a party to it;^[13] and notes endorsed in blank pass by delivery. Possession is,in such case, evidence of'title,^[14]

Want of privity is .no objection to ail-' action of indebitatus assumpsit, for money had and received." There are numerous •cases in which the action has been maintained, without showing a privity between the parties.^[15]

Seely, in reply.

The case of Grant v. Vaughan was' decided on a point different from .the' one raised in the case. In Tatlock v. Harris, the note was payable to a fictitious person, and .the court considered it as equivalent to a bill payable fo: bearer. In the casé of Gibson v. Minet,^[9] decided in the house of lords, all the cases are examined and reviewed, and so far as they are contrary to the' doctrine for which we contend, áre overruled, : ■ ■

delivered the opinion of the court.

This was an action of indebitatus assumpsit for money had and received, money lent, &c.; and the chief question is, whethey the promissory notes in the hands of the plaintiff below, as bearer, were properly admitted in evidence under sucha count?

It is clear, that as well before as .since the statute making notes negotiable, the person named as payee might give such note in evidence, under the general counts for money lent, or money had and received, Sec. (Clerke v. Martin, 2 Lord Raym. 755. Story v. Atkins, 2 Stra. 719. Grant v. Vaughan, 3 Burr. 1516. Smith v. Smith, 2 Johns. Rep. 235 . Arnold v. Crane, 8 Johns. Rep. 81 .)

- The statute of Anne gave an additional remedy, but did not take away the old one.

. That statute, as we have adopted it, enacts, “ that all notes in writing, made and signed by any person, &c. whereby such person, "&c. shall promise to pay to any other person, &c. his or their order, or unto bearer, ,any sum of money therein mentioned, shall, by virtue thereof, be taken and construed to .be due and payable as therein expressed; and shall have the same effect, and be negotiable in like manner, as inland bills of exchange,” &c.

The effect of this statute is twofold : first, in making a promissory note- evidence, per se, of money due; so that it may be declared on.like a specialty; and, secondly, in making it negotiable.

If, as all agree, such a note, before the statute, was evidence of money due from the maker to the payee, so as to support a .count for money had and received, I can see no good reason . why an assignee, by endorsement or delivery, ought not to have the same remedy. It was the object of the statute to place the assignee in the same relation to the maker, as the payee stood in before; and the legal operation of the transfer is, that the money which, by virtue of the note, was due to: the payee from the maker, is now due from the maker to the assignee.

.These notes were payable “ to William Douglass, or bearer,” like the form used in bank notes. “ Bearer is descript ¿o per-¡ soncc of the real payee.} It may be that William Douglass had no knowledge of the note, or is a fictitious person. The noté, however, is transferable by delivery merely, and possession was evidence of property in the plaintiff below, prima facie.

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' It is objected by the counsel for the defendant, that here is no privity of contract between these parties ; and several authorities were cited to show that indebitatus assumpsit- will, not "lie# except between privies.-’ ; ■ “ ■

To this objection there are two answers: first, there is a legal privity of contract between the maker of a negotiable note and the assignee or bearer in this case. It is a contract to. pay the money to whoever may become entitled to it by transfer, as bearer; and such privity commences as soon as the bearer becomes so entitled. Secondly, it is not true .that-the action for money' had and received can only be grounded on privity of contract. It lies- against the finder of money lost. It is the proper action to recovér money obtained by fraud or deceit. If a man, without my authority, receive money due to-me, • I may recover it of him in this form of action; and 'certainly, in these eases, there is no privity of contract. ' - .

Another objection is, that this general form of action subjects the defendant to unfair surprise.; This objection is too large. It would apply with equal force to all the cases above stated, and to many others in which this action is confessedly appropriate. And besides, the defendant may always protect himself against surprise, by demanding a bill of particulars.. (Tidd’s Prac. 53 4.)

in the case of Waynam v. Bend, (1 Campb. N. P. 175.) precisely like the present case, Lord Ellenborough decided that the right of giving a promissory note in evidence under the gene-, raí money coxxnts, - is coüfinéd: to the original party to whom It was made payable; But this was a nisi prius opinion; and as the plaintiff in that cáse recovered.on another count, as endorsee of the same note, it. never became material to revise that decision. ... ...

That opinion of Lord Ellenborough contradicts the decisions of several of his illustrious predecessors.

In the case of Tatlock v. Harris, (3 D. & E. 174.), it was decided that an endorsee of á bill of exchange may recover' against the accepter, under a count for money had and received, and Lord Kenyon there says, “ In making this decision, we do not mean to infringe a rule of law, which is very properly settled, that a chose in. action cannot be transferred ; but we consider it as an agreement between all the parties-to ap

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propriate so much property to be carried to the account of the holder of the bill.”

In the case of Grant v. Vaughan, (3 Burr. 1516.) it was deeided that indebitatus assumpsit for money had and received, was a proper action to recover the value of a bill of exchange, by the bearer against the drawer; and Lord Mansfield there says, « Undoubtedly, an action for money. had and received to the plaintiff’s use, may be brought by the bona fide bearer of a note, made payable to bearer. There is no case to the contrary.” The case of Cruger v. Armstrong and another, (3 Johns. Cases, 5.) supports the same doctrine.

Another exception to the record in this case is; that .the judgment purports to be rendered upon a verdict for 27 dollars and 55 cents, whereas it appears by the bill of exceptions that the verdict was for 25 dollars and 55 cents only.

To this I think it a sufficient answer, that it is not strictly the office of a bill of exceptions to ascertain the amount of the verdict. The clerk received and enrolled the verdict under the direction of the court, and we must presume the record to foe made up according to the official entry of the clerk, which is the best evidence in the case.

The court are of opinion that the judgment below ought to •be affirmed.

Judgment affirmed,