Folger v. Chase

Wilde J.

delivered the opinion of the Court. This was an action of assumpsit on three promissory notes of hand, on two of which the defendants are sued as executors of an indorser, and they object to the plaintiffs’ recovery on these notes, on the ground that no demand has been made on the makers and no diligence used to collect the debts of them. These notes, however, were made payable at the Phoenix Bank, and were the property of the bank. No demand was necessary except at the bank ; and although there is no express proof that the notes were there, and some officer of the bank in attendance, at the times the notes fell due," yet this must be presumed, and it was for the defendants to show that the makers called at the place appointed, for the purpose of making payment. The testator, by his indorsements, guarantied that the makers would respectively be at the bank and pay the notes according to their tenor. Berkshire Bank v. Jones, 6 Mass. R. 525.

In the next place it is objected, that the bank had no authority to indorse the notes in question, as the indorsement was made after the charter of the bank had expired by its own limitation ; and that the bank had no power to sell or indorse their notes by virtue of St. 1819, c. 43. That statute provides, that all bodies corporate and politic, whose powers would expire, either by express limitation in their charters of incorporation, or otherwise, should be continued bodies corporate and politic, for the term of three years from and after the day on which their powers would expire, for the purpose of prosecuting and defending all suits, and of enabling them to settle and close their concerns and divide their capital stock ; but not for the purpose of continuing their business.

This is a just and wise remedial law, and ought to be liberally expounded. By the principles of the common law, upon the civil death of a corporation, all its real estate remaining unsold, reverts back to the original grantor and his heirs ; and the debts due to and from the corporation are extinguished. The object of the statute was effectually to guard against the inequitable consequences of this rule of the common law. Now *67it appears, that within three years after the expiration of the charter of the bank these notes were indorsed, and we think the bank had competent authority, by virtue of the statute, to make the indorsements. The notes not having been collected, the bank had clearly a right to sell them, or to dispose of them in any other reasonable and proper manner, so as to wind up their concerns. The bank clearly had a right to transfer the notes to the plaintiffs, and it is no concern of the defendants how the money, when collected, is to be disposed of.

As to the objection, that the indorsement is not made in the name of the corporation, we think the indorsement by the cashier in his official capacity sufficiently shows, that the indorsement was made in behalf of the bank, and if that is not sufficiently certain, the plaintiffs have the right now to prefix the name of corporation.

The last objection is, that the indorsement on one of the notes was not made on the back of the original note, and therefore amounted only to an equitable transfer. The indorsement was made on a paper attached to the back of the note by a wafer, and it had been before thus attached for the purpose of entering thereon indorsements of payments, the back of the original note having been before covered with indorsements ; and several payments had been indorsed on the attached paper, before the note -was transferred by indorsement to the plaintiff. This paper thus attached" had become "a part of the note, and no good reason can be given why an indorsement made thereon should not be held a valid and legal transfer. The objection is, that such an indorsement is not sanctioned by custom ; but we think it is supported by the reasons on which the custom was originally founded. Bills of exchange and promissory notes tvere indorsed on the back of the bills and notes, because it was a convenient mode of making the transfer, and in order that the evidence thereof might accompany the note. Such an indorsement as this will rarely happen, and no authority to support it could reasonably be expected ; but there is no authority against it.

If a person write his .name on a blank paper, to be used as an indorsement of a note to be written on the other side, and it be filled up as intended, the party would loe held liable as *68indorser of the note, although such indorsements are infrequent, and are not according to the customary form of making a transfer ; but they have been held to be within the r( ason of the custom, and are supported by principle. Bayley on Bills, 92, Violett v. Patton, 5 Cranch, 142.

So in the present case, as there is no authority against the validity of the indorsement, we think we shall violate no principle in holding it to be a legal transfer of the note.

Judgment for the plaintiffs.