Willis v. Cresey

*12The opinion of the Court was by

Emery J.

We apprehend that the rule of court, requiring signers of notes to deny the signature, does apply to notes not produced, when the action contains a count upon the particular note or notes alleged to be lost. No exception on account of the note being lost is contained in the rule, and we do not perceive that there ought to be. The defendant is supposed to know whether he gave the note or not, and should be held to make his election in season to admit or deny the signature, so that no surprize should be occasioned to the party seeking to recover.

The note in question was by the defendants given to Sewatt Gilbert, or order, on the 30th of June, 1835, for $769,11, payable in three years from the date with interest, indorsed by Sewatt Gilbert in blank, in the early part of the year 1836.

It was thus in a situation to pass to any one who came fairly to the possession of it for a valuable consideration.

But were the suit in England or New-York in the name even of Heath, the decision would be directly against Heath’s claim, because upon a lost negotiable note there indorsed, not proved to be destroyed, an action is not to be sustained at law. Even in England, some redress seems attainable in such cases, in a Court of Equity, because there it is said, that Court has sufficient means whereby it can fix upon the extent of the indemnity which must be furnished from the plaintiff to the defendant against the eventual hazard to which he may be exposed on the call of a bona fide holder for valuable consideration of the lost negotiable security.

In Massachusetts it is well settled, that redress may be had at law. In Freeman v. Boynton, 7 Mass. R. 483, Parker Justice, says, where the security may be lost, a tender of sufficient indemnity would make the demand valid without producing the security. In Peabody v. Denton & al., 2 Gal. 351, a recovery was permitted upon a note of which the plaintiff claimed to be indorsee, dated in 1797. The trial was in 1815. It was sustained before Story, Justice, and held, that after so great a lapse of time, it was incumbent on the defendants to show either that the note existed, or that it had been demanded of them; and that it must be presumed that no demand would-now be made. Authority for the testimony of the plaintiff that the note was not in his possession or control, and *13the like for that of the indorser of the writ, is found in Donnelson v. Taylor, 8 Pick. 390, and it was there said, that judgment would be rendered on filing sufficient bond of indemnity to save harmless from any future claim.

A more extended opinion was given on the subject in Fales & al. v. Russell, 16 Pick. 315. The suit was by the indorsees who were the holders of the two notes when they were stolen from them. The declaration contained only the general counts, none on the notes. But the case was before the Court on an agreed statement of facts, to this extent and more. The notes had never been paid or heard of by either plaintiff or defendant. Immediate notice was given to the defendants of the theft, with a request not to pay the notes to any person but the plaintiffs or to their order in writing separate from the notes. Notice of the theft was also given in the newspapers, with proper caution to all against buying them. The plaintiffs too had offered to indemnify the defendants, if they would pay to them the amount due on the notes.

The Court were of opinion, that on filing a sufficient bond of indemnity, with sureties, the plaintiff would be entitled to recover.

In this State the question has not before been directly presented to this Court.

In the masterly opinions of the Lord Chancellor, in the case of Walmsley v. Child, 1 Vesey, 345, and in Gwin v. Bank of England, 2 Vesey, 38, 41, there is a manifest preference, that the matter should be decided at law. The bill in the first case was dismissed for that reason. It was a goldsmith’s note, payable to Walmsley, or bearer, and in Gwin v. The Bank of England, the Lord Chancellor proposed to retain the bill, in order to give an opportunity to try the matter at law. If that was declined, the bill was to be dismissed. It seemed to be considered, that as soon as the affidavit of loss was received, the jurisdiction was changed from the Court of law to the Court of Equity. The Courts of law here have allowed this preliminary step to be taken before themselves, without usurping the powers of a Court of Equity.” Taylor v. Riggs, 1 Peters, 591, and cases cited by C. J. Marshall. Without however deciding the point as to sustaining an action at law on a lost negotiable security generally, we proceed now to inquire, how shall we deal with the present case, in conformity *14with what has”already been settled ? It is a rule that the plaintiff should make title to the negotiable security by having it delivered to him, or indorsed to him. It has been held, that an order on a different paper is not equivalent to an indorsement on the note. This note havingjbeen rightfully once indorsed in blank, was properly holden by Heath. He was the bearer of it when it was lost. But the present plaintiff never saw the note. It was never delivered to him. And not till after its loss does there commence any negotiation between him and Heath. Heath never had possession of it as agent or attorney for the plaintiff.

We believe to give countenance to the present suit, would be going so much further than decided cases warrant as to negotiable paper, lost before it is payable, and before any pretence of claim or interest set up by the plaintiff, that we think the plaintiff cannot recover. Thus far there is unanimity in our conclusions.

Plaintiff must be nonsuit.