Jackson v. Myers

Alvey, J.,

delivered the opinion of the Court.

Whether the note sued on is to be treated as a negotiable promissory note, or as a single bill, under the seal of the corporation, the maker, is the main question in this cause, and the one upon which all the other questions depend. According to the rulings of the Court below, *462the instrument was held to be a single bill, and consequently the appellees were not liable on a mere endorsement of the note, as they would have been if the note had been a negotiable promissory note, instead of what it was held to be.

The appellees being sued, and sought to be held liable, by reason of their endorsement of the note, if the instrument be in reality a specialty, though in the form of-a promissory note, no obligation or liability arose from the mere endorsement of it, either by the statute or the custom of merchants. As a sealed instrument, it could be assigned, as required by the statute,, to enable the assignee to sue in his own name; but then no liability would arise by the assignment, upon which the assignor could be held responsible, unless the assignment be made in the manner and form prescribed by the Code, Art. 9, secs. 8 and 9, or unless the assignment embody a separate and distinct contract or undertaking, as in the case of Gist vs. Drakeley, 2 Gill, 330. If the endorsement of a sealed instrument be in blank, accompanied by delivery, the party to whom the instrument is delivered may. fill up the blank, with a full assignment to himself, and thus become absolute owner, with right to maintain suit in his own name, within the meaning‘of the statute; and though the assignment may not be extended until the time of trial, it is regarded, for the jmrposes of the suit, as having been made in its extended form when the instrument was endorsed; as -was the case in Chesley vs. Taylor, 3 Gill, 251.

Here, the note was endorsed in blank by the appellees, who were the payees in the note, and after such endorsement, but before or at the time.of the trial, the appellants wrote over the blank endorsement the words, “We hereby endorse and assign the within, and direct payment thereof to be made to Priscilla Lynch,” one of the appellants. This was good as an assignment, upon the assumption *463that the note was a single bill; and it was all-sufficient as an endorsement in full, treating the instrument as a negotiable promissory note. As an endorsement of negotiable paper it created a liability on the part of the appellees, but as an assignment of a non-negotiable chose in action it created none, and only transferred the right of the assignors, with the power to sue and maintain an action oil the note in the name of the assignee. It was in this latter aspect that the Court below instructed the jury against the right of the appellants to recover on the endorsement against the appellees.

But is the note a specialty or single bill, as distinguished from a promissory note, made negotiable by the statute of 3 and 4 Anne, ch. 9 ? The Building Association that made the note, was organized under the present general incorporation law of the State, and by the 9th and 11th articles of its association, it is provided that its board may issue promissory notes on mortgages only, and that such notes shall always be drawn to the order of the mortgagor, who shall, in all cases, endorse the notes thus drawn. The president, secretary, treasurer and three directors, are authorized to sign all promissory notes issued by the association. The note in question was issued on the mortgage of the payees of the note, and is conceded to have been under the authority of the articles just referred to. The note is strictly in form a promissory note, payable to the order of the payees named, who are the present appellees. It was drawn at sixty days time, and payable at a certain named bank. It has been treated as ordinary negotiable paper, and hence it was protested for non-payment. It was signed by the officers designated in the articles of association to execute promissory notes, and the only thing that is supposed to deprive it of the qualities of such paper is the appearance, in one corner of the face of the note, of the type or emblem of what is said to be the seal of the corporation. There is no statement or declaration in any *464part of the note that it was, or was designed to be, executed under the corporate seal. What is alleged to be the seal consists simply of an emblem or symbol printed by the printer at the time when the printed blank note was struck Whether this printed symbol is a sufficient seal, or can be made sufficient by adoption, is a question that we need not now decide; for, even conceding it to be a sufficient representation of the corporate seal, still, we are of opinion that the note in question is a negotiable promissory note, by the endorsement of which in the ordinary manner liability attached to the endorser.

In this case, as we have seen, the officers of the corporation signing the note were authorized and directed to issue promissory notes in a negotiable form, and it should be presumed that they intended to conform to their authority rather than violate it. But, apart from this consideration, the very nature of the transaction itself, the objects and purposes to be subserved by the issue of the note, as well as its form,.plainly indicate that the parties must have understood that the note was negotiable, and that it would be so accepted and dealt with by the commercial community. The Building Association issued the note to the appellees, instead of money for which the mortgage was given. It was certainly contemplated, that the appellees. should negotiate the note, in order to obtain the money that the Association had contracted to loan, and that was rendered impossible, from the form of the note, except by endorsement. No bank or banker, would likely discount the note, if not negotiable, upon mere assignment, subject to the equities existing between the original parties. It sufficiently appears that the present note, and others like it, have been dealt with by the banks, and the commercial community generally, as ordinary negotiable paper; and in their understanding of the nature and qualities of these instruments, we think they have not been mistaken. The symbol or printed representation *465of the seal, if it be conceded to be a sufficient seal, was not printed on the note to restrain its negotiability, or to change it into a specialty, but rather as a mark of genuineness. The note in no manner depends upon the seal for its validity, but derives its entire authenticity from the signatures of the officers authorized to execute it. This view of the subject is fully sustained by the recent cases of Dinsmore vs. Duncan, 57 N. Y., 573, and Vermilye vs. Adams Express Co., 21 Wall., 138, involving the consideration of the nature and qualities of the United States treasury notes, issued under the seal of the treasury, as authorized by the Act of Congress of March 3, 1805.

The authorities mainly relied on by the appellees in support of tho position that because there is a seal, or the representation of a seal, on the note, therefore the note must he a specialty, are the cases of Trasher vs. Everhart, 3 Gill & John., 234; Stabler vs. Cowman, 7 Gill & John., 284, and Gist vs. Drakeley, 2 Gill, 330. The first two of these cases presented no question as to what constituted, or as to the effect of printing a representation of a corporate seal on an instrument executed by a corporation ; but were cases where the instruments involved were executed by individuals, using the scrawl at the end of their names as seals. The law settled by those cases we in no manner design to disturb. Nor do we propose to qualify or disturb any of the principles decided in the case of Gist vs. Drakeley. That case, however, is quite distinguishable from the present. There, the two notes executed by the corporation, though in the ordinary form of promissory notes, bore upon their ?ace such evidence of design as to leave no doubt of their •eal character. They bore the regular impress of the ¡eal, attested by the signature of the president; the notes ¡oncludiug with the words, “Witness the seal of the lompany, attested by the signature of the president.” *466Tbe seal was tbe only real evidence of execution, tbe signature of tbe president being added to attest the affixing of, the 'seal to the instruments. Not so in the execution of the note before us.

(Decided 21st January, 1876.)

With these views, differing from those entertained by the Court below as to the nature and character of the note in suit, and without - referring specifically to the several prayers offered on each side, as they will be of little or no importance in the re-trial of the cause, we shall reverse the judgment appealed from, and award a new trial.

Judgment reversed, and new trial awarded.