Garwood v. Simpson

Burnett, J., after stating the facts, delivered the opinion of the Court—Terry, J., concurring.

The first question arising under the state of facts in this case, is, whether the order was a negotiable instrument at the time it was executed by Carsen & Yance. It is objected that it was not a bill of exchange, because there was no sum certain stated, and it was payable out of a particular fund, and not generally.

It is well settled by all the authorities, that the first and principal requisite of a bill of exchange, is, that it must be for the payment of money only, and for a named sum certain. (Chitty on Bills, 132, 133.) And it would seem clear in this case, that although the order was drawn payable to Tomlinson or order, still, before he presented it for acceptance, ho could not have transferred it as a negotiable instrument. If it had been a bill of exchange, then, upon presentation and refusal to accept, a protest and notice would have been necessary to fix the liability. of the drawers.

It is true, that a promissory note, or a bill of exchange, will be good when a blank is left for the sum, and that blank is filled up by the party to whom it is given. But this order is a very different instrument. Here the holder was not authorized, before negotiation, to state the sum for which the bill was drawn. This was not left discretionary with him, and yet it was not set-*105tied by the order itself. When a bill is executed and delivered by the drawer, with a blank left for the sum, or time when payable, these matters are not certain, but the power to make them certain, is given to the holder. In this case, Tomlinson could not assign the order before it was accepted, and the sum ascertained. (4 Doug., 9; 26 Eng. Com. Law, 193; 22 Pick., 83.) The legal effect of this order was an assignment of the particular fund mentioned to Tomlinson. (5 Paige, 632; 6 Barbour, 182.)

But conceding that the order was not negotiable when drawn, was the conduct of the defendant such as to make a transfer of the instrument by Tomlinson to an innocent purchaser, without notice, binding upon the defendant ?

The legal effect of the order being an assignment by Carsen & Vance of the particular fund to Tomlinson, the moment the order was accepted, and a certain sum was endorsed upon the order, that moment the debt became one from Simpson to Tomlinson, and the condition of Carsen & Vance, in respect to Tomlinson, was the same as if Simpson & Jackson had actually paid over the money to Tomlinson. Carsen & Vance had, doubtless, drawn this order in favor of Tomlinson, either as a conditional payment, or loan, and, when Tomlinson accepted the endorsment of Simpson, in lieu of the money, he necessarily released Carsen & Vance from any obligation to him. The debt then became a debt for a sum certain, due from Simpson to Tomlinson, or order, payable on demand. The legal effect of the endorsement of Simpson upon the order, was to incorporate the terms of the order with the endorsement, and upon the delivery of both to Tomlinson, the instrument became a direct and original undertaking on the part of Simpson to pay to Tomlinson, or order, the sum of money stated.

It must be conceded that had no process of garnishment been served, the assignment to plaintiff would have been good, and he would have been able, under our statute, to maintain a suit in his own name. And if assignable at all, then an innocent holder had the right to take it for what it purported to be. By the endorsement, the amount stated was then admitted to be due to Tomlinson; and having put this paper in circulation, the defendant Simpson is estopped from setting up any antecedent matter. Suppose Simpson had actually paid the money to Tomlinson, and then returned him this order thus endorsed, and Tomlinson had afterwards on the same day, sold it to an innocent purchaser for value, would not Simpson have been liable to the holder? If Simpson intended to secure himself from liability to third parties, he should have stated' the fact in the endorsement, that the debt had been garnisheed. But no one looking at the order and endorsement, would ever suppose that such a thing had occurred. The endorsement contained nothing to put the purchaser even upon enquiry. Upon the face of the order and endorsement *106there was due at the time stated, a certain sum which was admitted to be payable to Tomlinson or order, on demand. Having made this admission, and a third party having acted upon it, the defendant cannot be permitted to say that this sum was not then due to Tomlinson, but was due to his creditors.

The cases, cited by the learned counsel for the respondent, differ in their circumstances from the present case. In the case of Fisk v. Witt, principal, and Moore, trustee, certain negotiable notes had been placed by Witt in the hands of Moore for collection, for which Moore gave an accountable receipt, promising to account for the proceeds to Witt or bearer. Moore collected a portion of the notes, when a trustee process was served upon him, and afterwards his receipt was presented by a third party, who claimed to be the bearer. It was held that the receipt was not a negotiable security, because not a promise to pay a sum certain. In this case the bearer had taken the receipt without any indorsement by the trustee, stating the sum due. 22 Pick., p. 83.

Another case referred to by the counsel of respondent, is that of Cushman v. Haynes, principal, and Allen and others, trustees, 20 Pick., 132. The language of the Chief Justice, in delivering the opinion of the Court, would seem to sustain the view we have taken, though it must be conceded that the circumstances of the case itself were quite different from those of the case now under consideration. Haynes had consigned to the trustees certain goods to be sold on commission, and, at the same time, drew an order on them, payable to his order in thirty days, for the sum of one thousand dollars, on what might be due, after deducting all advances and expenses, which order was accepted by them. After this acceptance, and before the goods were sold, the trustees were summoned in a process of foreign attachment, and it was held that the accepted order was not a negotiable security, and that the order and acceptance could not operate as an assignment, not being made to a third person. In this case, the accepted order had not been assigned to a third person, and was for no definite amount, even after acceptance. The acceptance specified no certain sum, and the Chief Justice said: “ But we are of opinion that the acceptance, not being for a sum certain, but for an uncertain amount—to wit, the balance of the proceeds of goods not then sold—was not negotiable." “It not being a negotiable security, the trustees would not be liable to an action upon it by an endorsee, and it did. not amount to payment or an advance." If the acceptance had been for a sum certain, it is apprehended the decision of the Court would have been different.

For these reasons, it is my opinion that the judgment of the Court below should be reversed, and judgment rendered in that Court for plaintiff.