Bacon v. Dahlgreen

Preston, J.,

dissenting. This suit was instituted on the 27th of December, 1849, against John Routh, residing in the State of Louisiana, on the following instrument assigned to the plaintiffs:

“ $63,945. Natchez, January 27th, 1839. On the first of March afterdate, we, or either -of us, promise to pay the President, Directors and Company of the Planters’ Bank of the State of Mississippi, for value received, sixty-three thousand nine hundred and forty-five dollars, payable and negotiable at the Planters’ Bank of the State of Mississippi, at Natchez. . Mart M. Ellis, Adm’x. of J. G. Ellis, deceased; John Routh; Elias Ogden.”

*608There are credits on the note. The last is endorsed the 25th of February, 1843. It is not pretended that there is any later acknowledgement of the defendant’s liability. There was suit instituted in the State of Mississippi, against parties to the note, in January, 1849. So that, neither suit nor acknowledgement interrupted the prescription of five years, which is plead under article 3505 of our code against the present action upon the note.

The note was given by the Administratrix of an estate, and it is supposed that Routh, the present defendant, is only a surety on the note. A suit in equity was instituted in the State of Mississippi, against the estate, in January, 1849, and it was decided by the chancellor that a recovery was barred by the statute of limitations. An appeal was taken, which remains undecided. This court having equitable powers, I do not think that judgment should be rendered in this case against the defendant, until the suit in the State of Mississippiis decided. Otherwise, it might be decided that the obligation is extinguished as to the principal, but in full force against the surety ; for the statute of limitations of the State of Mississippi, like prescription under our code, extinguishes the legal obligation of a contract. This would conflict with our principles and laws, providing that the suretyship cannot exceed what may be due by the debtor, nor be contracted under more onerous conditions, and that the surety may require the creditor to discuss the properly of the principal obligor. Civil Code, art. 3006, 3014.

I am, moreover, of opinion, that the note sued upon is prescribed by art. 3505 of the Civil Code. It prescribes, “ Actions on bills of exchange, notes payable to order, or bearer, except bank notes, those, on all effects negotiable, or transferable by endorsement or delivery, are prescribed by five years, reckoning from the day when these engagements were payable.” The action on the note is therefore prescribed, if it be a negotiable instrument.

An instrument is negotiable which can be transferred by an endorsement on the back, so as to enable the assignee to sue for its contents in his own name. It should, further, not be subject to the equitable assets of the obligor, a qualification, which will be noticed as to the note in controversy. A statute of the State of Mississippi prescribes, that “ All bonds, obligations, bills, single promisory notes, and all other writings for the payment of money, or any other things, shall and may be assigned by endorsement, whether the same be made payable to order, or assigns of the obligee, or payee, or not; and the assignee, or endorsee, shall and may sue in his own name, and maintain any action which the obligee, or payee might or could have sued or maintained thereon, previous to assignment.”

The note was thus made negotiable by statute, in the State where it was executed. It is said it was still not negotiable, because the obligor could plead any offset against the payee. He could, under this statute, to the time of assignment, but not afterwards.

It was held by the High Court of Errors and Appeals of the State of Mississippi, in the case of Oldham v. Ledbetter, 1 How. Rep. 46, that by this statute, “ promisory notes may be assigned by endorsement, though the same be not made payable to order ; and by the principles of the common law, they are transferable by bare delivery. In either case there has operated a complete divestment of all rights to the contents of the note, and of all authority to control their appropriation on the part of the payer. In one case, the assignee is clothed with authority to sue in his own name ; in the other, the transferee is empowered to use the name of the payee to consummate his equitable interest by a collec*609tion of the money. The service of garnishment will not after transfer, though without notice, subject the debt due, by the maker, to the demand of the attacking creditor; for, as by assignment or delivery, the party into whose hands the note may coiné, is instanter vested with an absolute right to control its contents; the payer from that moment becomes the debtor of the holder, and responsable to him alone. The process of attachment cannot restore a relation which has ceased to exist, or appropriate rights of one individual to a discharge of the obligation of another. If this position should require aid from authority, a decision of the Supreme Court, Walker’s Reports, 389, made in reference to the existing laws on this subject, will be found fully to sustain it.” Under this decision, the negotiability of the note, after its assignment, was substantially established as to the maker, free of his subsequent equities, and I do not find it reversed. It can never lie in the mouth of the assignor or endorser, to say the instrument was not negotiable, because the payer might have equitable offsets against him before he assigned the instrument, and it was negotiable as to the holders, because it is not pretended by them that, in point of fact, there were any offsets against the note when it was negociated to them. They also have the guarantee of the jurisprudence settled by the decision quoted.

The defendant pleads the negotiability of the instrument against the bank that negotiated it, and assignees to whom it was negotiated. They cannot deny its negotiability; the first, because the statute and their acts made it negotiable, and the last, because, in point of fact, the instrument had every negotiable quality. Besides, for the very purpose of negotiating it, the parties made it negotiable in terms.

It is the intention of the parties to an instrument which renders it negotiable, if expressed in terms which may have that effect. And any terms expressing the intent, will render the bill or note negotiable. Chitty, 181. 1 Pard. 360-361.

It is laid down by elementary writers, that no form of words is absolutely necessary, to-produce that effect. Making the instrument payable to order, is the usual form. But if the parties declare on its face that the instrument shall be negotiable, it should have that effect, ns clearly as it can be implied, from the use of the word “order,” Any words, from whence it can be inferred, that the pprson making the bill, or note, or any other party to it, intended to be negotiable, will give it a transferable quality against that person. Chitty, 219, ed. of 1836.

The bank required the defendants to give them a note “ negotiable at the Planters’ Bank of Mississippi, at Natchez,” for their debt, and the debtor did so. This was undoubtedly intended to enable the bank to transfer it by endorsement, if she' chose, so as to enable her assignees to sue in their own name; to do precisely what has been done. The instrument has been assigned, so as to enable the assignees to sue in their own name for the whole debt. That embraces every requisite to the definition of negotiability.

It is a principle of the interpretation of all instruments, to give every word in them effect, if possible. The term “ negotiable,” in the note under consideration, would have no meaning, if the note was not negotiable. But it can and has meaning and effect, because the note has been transferred by endorsement, and the endorsees have every right and power which belonged to the payees. That makes the negotiability of the instrument.

There has been but a single adverse decision, by this court, in the case of Young v. Crossgrove, 4 Ann. 234. It is a question of evidence, and of the *610construction of an instrument of writing, not a question of law, and, therefore, I do not feel bound by the precedent.

The instrument, in my opinion, was, in Mississippi, by express statute, and is, in Louisiana, by its tprms, negotiable, and the action on it is prescribed by our code, which prescribes actions on negotiable instruments, by the lapse of five years between their maturity and the commencement of a suit.

I think the judgment of the district court should be affirmed, with costs.

Application for a re-hearing refused.