Ogilby v. Wallace — 2 N.Y. Super. Ct. 553

Majority

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Robert Ogilby versus Thomas Wallace.

Headnote

Where a note is payable to bearer, or endorsed in blank, an action on it may be maintained in the name of any person, without the plaintiff’s being required to show that he has an interest in it, unless he possesses the note under suspicious circumstances. If any question as to mala fide possessio arise, that is a matter of fact, to be raised by the defendant and submitted to a jury.

Where, therefore, in an action upon a promissory note, payable to order and endorsed in blank, the plaintiff upon the record Was a fictitious person, and the Judge for that reason nonsuited him at the trial, although the note appeared to be the property of a real parly whose name was disclosed ; the court directed the nonsuit to be set aside, that the questions of fact connected with the possession and prosecution of the note, might be submitted to a jury.

Assumpsit upon a promissory note for 500 dollars, drawn by the defendant in favor of Henry Butler & Co., and payable

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to their order, ninety days after date, and endorsed by them in blank.

The cause was tried before Mr. Justice Hoffman; and at the trial the plaintiff’s counsel having produced the note, and proved the handwriting of the maker and endorsers, rested his cause. The defendant thereupon called a witness, who testified, that Samuel B. Hickox, one of the firm of Henry Butler & Co., agreed with the defendant, that, if he would make the note in question, he, (Hickox,) would cause it to be discounted, retain out of its proceeds 300 dollars for the use of his firm, and deliver the balance to the defendant. That when the note should become due, each party should advance the sum retained by' him, and thus discharge the debt. That the defendant, for this purpose and under this agreement, drew the note in question, and delivered it to Hickox ; but not hearing of it for some days thereafter, the defendant made inquiry for the note, and found it in the possession of . one Thomas Ash, who told him that he had received the note from William B. Hart, to whom he had given, in exchange for it, another note and 130 dollars in cash.

That the defendant then informed Ash of the circumstances under which the note was obtained, and he at first promised to return it to the defendant. Afterwards, the defendant threatened to indict the parties concerned, for a fraud upon him, and thereupon Hart and his father gave the defendant a bond, stipulating for the payment of the note by them at its maturity. This bond the defendant retained until the note became due, but it was not then taken up by Hart; and the defendant being informed that the bond was of no value, returned it to Hart, who promised to pay him 100 dollars on account of the note, if he would renew it for the balance. This proposition was acceded to by the defendant, but never fulfilled by Hart.

The defendant then called the plaintiff’s attorney as a witness, who testified, that he received the note of Ash for collection, with instructions that the suit should be brought in the name of Robert Ogilby, or some other name. That Ash assigned as a reason for this, that the note belonged to a person, who did not wish his name to appear, and as the name of Ogilby had before

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been usen in suits by Ash, and as Ash furnished security for the costs, the attorney used the name presented to him, although he did not know any such person as Robert Ogilby.

It further appeared, that Ash deposited the note in the Chemical Bank for collection, and that it remained there for several days after it became due.

Upon this state of facts the presiding Judge required more evidence concerning the plaintiff upon the record, and none being furnished, he nonsuited him.

Mr. J. S. Mitchell, for the plaintiff now moved to set the non-suit aside. He contended,

I. That a promissory note endorsed in blank, is payable to bearer, and that the production of it by the bearer, is evidence of his title. [Chit. on Bills, 132-5, and note.]

II. That the defendant by pleading in chief, admitted the due appearance of the plaintiff; and that the substance of the issue to be tried was, whether the defendant was liable or not. [7 J. R. 373.]

III. That the bearer of a promissory note, has the right to fill up the blank endorsement with any name he thinks proper, and that he does not divest himself of his title as bearer, by inserting another name than his own. [11 J. R. 53.]

IV. That the owner or bearer of a note is not bound to sue in his own name, but may sue in the name of another as his trustee; and who that trustee is, is foreign to the issue. [11 J. R. 53. 7 Cow. R. 176. 3 John. Ca. 263.]

V. That a defendant, to protect himself against an unknown trustee, can apply for security for costs; and that a judgment in favor of the unknown trustee, who is plaintiff on record, will be a bar to the same cause of action forever. [Rule 55. 4 Cow. R. 559.]

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VI. That security for costs in this cause was duly filed, and that a misnomer either of plaintiff or defendant, could only be taken advantage of by plea in abatement. [1 Chit. Plead. 436. 4 Cow. R. 157.]

VII. That the enquiry as to who the plaintiff on the record is, if matter of evidence, should, like other facts, be passed upon by the jury. That the evidence, or want of evidence, as to who the plaintiff is, did not justify a nonsuit; and that no more evidence upon this point should be required on a trial, than on an inquest.

Mr. J. R. Whiting, contra, for the defendant.

The defendant may show, under the general issue, that there is no such person as the plaintiff in existence. It is admitted, that any real person, with or without interest, may sustain an action upon a negotiable promissory note: but the name of s. fictitious plaintiff is only tolerated in the action of ejectment, for the convenience of parties.

It is contended by the plaintiff, that this advantage can be taken by plea in abatement only, but it is available under the general issue also. Under this issue the defendant may show, that another person ought to have been made a co-plaintiff; that the defendant has no capacity to contract, &c. [1. Chit. Plead. 470.] Any thing which shows that the plaintiff had no subsisting cause of action at the time of the commencement of the suit, may be given in evidence under this issue. [Ib. 472.] The-defendant here, showed his own incapacity to contract, by showing the plaintiff’s absolute nonentity. There is no foundation for the argument, that a plea in abatement ought to be interposed.

A misnomer of the plaintiff may be taken advantage of under the general issue, and be the ground of nonsuit at the trial. [Vide, Col lman, et al. v. Collins, post.] In case of the Bank of Utica v. Smalley, Chief Justice Savage holds the doctrine, that the defen

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dant should plead the misnomer of the plain tiffin abatement, to be untrue, and not supported by the cases. [2 Cowen’s Rep. 780.]

It is no answer to the objection that security for costs has been filed; that remedy is merely cumulative, and in many cases proves ineffectual. The defendant, if he succeeds, is entitled to a judgment against a real person for his costs.

It is sufficiently shown in this case, that the note on which the suit is brought was the property of Ash, and that it was sued in the name of the plaintiff) as his trustee, and for his benefit. The plaintiff’s attorney was called as a witness; and from his evidence, there was good reason to believe that the plaintiff is a fictitious person. The Judge required further evidence as to who he was, with a view, I presume, to ascertain whether he was or was not a real person, and none being given, he directed a nonsuit. It is now moved to set this nonsuit aside.

It seems to be settled, that where a note is payable to bearer, or is endorsed in blank, an action on it may be maintained in the name of any person, without the plaintiff’s being required to show that he has any interest in it, unless he possesses the note under suspicious circumstances. [11 J. R. 53. 7 Cow. R. 176.] It also appears to be established, that if any question of mala fide possessio arise, that is a matter of fact to be raised by the defendant, and submitted to the jury. In no other case does the court inquire into the right of the plaintiff, as possession will be evidence of property in him. [3 J. Cases, 263.] It is also recognized as a rule, that where the plaintiff on the record is a mere trustee for another, the defendant may avail himself of any defence, (except probably a set-off,) which he might set up against the real owner, if the suit were in his name. [7 Cow. R. 177.]

Applying these principles to the case now before us, it would seem that the real inquiry ought to have been, whether Ash, the owner of the note, was the bond fide possessor of it. The circumstances, under which it was obtained from the defendant.

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and put into circulation, were sufficient to throw upon Ash the burthen of showing how it came into his hands. The proof, " that the plaintiff was a fictitious person, may have been very material, to show bad faith or fraud in Ash, in prosecuting the note. That was a question, however, which should have been submitted to the jury. The probability raised by the evidence, that the plaintiff was fictitious, could not, properly, have been made the ground of a nonsuit. If it had been competent, under any circumstances, to call upon the plaintiff to prove who and what he was, that also was an inquiry for the jury. Prima facie, undoubtedly the plaintiff is to be deemed a real person, and whether the evidence showed him to be otherwise, was not for the court to determine. In any point of view, therefore, it seems to me that the nonsuit ought not to have been granted.

Nonsuit set aside, and new trial granted.

[T. S. Mitchell, Att’y for the plff. J. R. Whiting, Att’y for the deft.]

Note.—Upon the second trial of this cause, the facts proved did not differ materially from those established at the first trial, except that it clearly appeared that Ash paid no value for the note when he received it of Hart; but there was some evidence to show that the latter had advanced to Hickox 130 dollars when it was delivered to him; and the plaintiff’s counsel contended, that he had a right to recover of the defendant to that amount. The Chief Justice, before whom the cause was tried, charged the jury, that the defence set up, was not sufficient to protect the defendant, unless they should be of opinion that the note was fraudulently negotiated by Hickox, and taken by Hart with notice of the fraud. That if they believed that Hart had made an advance upon the note bond fide, they would be warranted in finding a verdict for the plaintiff to the amount of that advance.

The jury found a verdict for the defendant, and the court afterwards refused to set it aside.

They observed that it was a well settled rule, that if a note is put into circulation fraudulently, no person can maintain a suit upon it, who has not paid a valuable consideration for it, in ignorance of the fraud. That the facts of the case had all been presented fairly to the jury, who had passed upon them, and that under the eircumstances of the case the verdict ought not to be disturbed.

Mr. M‘Coun, for the plaintiff, cited 5 Barn. & Ald. 674, and 4 Cow. R. 567., as to the acquiescence of the defendant in the passing of the note.

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Mr. Whiling, contra, cited 7 Cow. R. 176. 10 J. R. 231. 15 J. R. 270.

As to the acquiescence of the defendant in the passing of the note, the court observed that there was no evidence of an advance upon it by Ash, after the bond of Hart was received by the defendant, and that that branch of the defence could not therefore be sustained.