Penn v. Flack & Cooley , 3 G. & J. 369 ( 1831 )

Stephen, J.,

delivered the opinion of the court.

This case presents two questions for the decision of this court. The first is, whether an endorsee of the payee of a note, can maintain an action for money had and received, against the maker ? and the second, whether it is a material variance to declare that a negotiable note-was endorsed'by the payee before it became due, and to offer proof of an endorsement after it fell due ? Upon the first question there is a contrariety of opinions in the books, but upon the most mature deliberation, we are of opinion that the action is maintainable, upon sound legal principles; the note is a contract by the maker to pay the money to the payee or his endorsee. It is well established, that in an action fby thb payee against the maker, the note is evidence upon a count for money had and received; being therefore, evidence of money had and received to the use of the payee, by the maker, when the payee transfers his interest in thé noto by endorsement, (the note being payable to the payee or his order,) it would seem to follow, that by the very terms of the contract, the endorsee would become substituted in the place of the payee, and be invested with all his legal rights, not only as relates to a suit upon the note since the statute of Ann, but also as to the common law count of money had and received. In the case of Grant vs. Vaughan, 3 Burrow's Rep. 1516, which was an action by the bearer - of a bill of exchange against the drawer, which bill was in the following words, “Pay to Ship Fortune j of béaref,”- áo much, Lord Mansfield makes the following remáfks. “ But upon the second count, (which was for. money háü and received,) the present case is quite clear, beyond all dispute. For undoubtedly an action for money had and received to the plaintiff’s use, may bo brought by the bona fide bearer of a note made payable to bearer. There is no case to the contrary. It was certainly money received for the use of the original advancer of it; and if so, it is for the use of the person, who has the note as bearer. In this case, Bicknell himself might undoubtedly have brought this action. He lost it, and it came bona fide and in the course of trade, into the hands of the present plaintiff, who paid a full and fair consideration for it. Bicknell and the plaintiff are both innocent. The law must determine which of them is to stand to the loss, and by law it falls upon Bicknell.” In this case the bill was payable to bearer; in the case now before this court, it was payable to order, and it seems to us that it would require a considerable degree of legal ingenuity, to distinguish between the two cases, in point of legal principle, as to the legal operation of the two contracts. They were both negotiable in their characters, the only difference is, that the one was payable to bearer, the other to order. In 12 Johns. Rep. 90, the action was brought on two promissory notes : one was in the following words. “ For value received, due Wrn. Douglass or bearer, $14 50, with interest, payable the 1st of March next, Springfield, 8th Nov. 1811, signed James Pierce.” The second note was dated, Dec. 25th. 1811, and the defendant promised for value received, to pay Wm. Douglass, or bearer, the sum of $18, with interest. In a suit brought upon these notes, the plaintiff below, under the direction of the court recovered, and upon a writ of error being brought to the Supreme Court, that court delivered the following opinion. “This was an action of indebitatus assumpsit, for money had and received, money lent, &c. and the chief question is, whether the promissory notes in the hands of the plaintiff below, as bearer, were properly admitted in evidence under such a count. It is clear, that as well before, as since the statute making notes negotiable, the person named as payee, might give such note in evidence,, under the general counts for money lent, or money had and received, &c.” (here this court refers to a number of authorities, and amongst them, the case of Grant vs. Vaughan, above referred to, and then proceeds.) “ The statute of Ann gave an additional remedy, but did not take away the old one.” “ If, as all agree, such a note before the statute, was evidence of money due from the maker to the payee, so as to support a count for money had and received, I can see no good reason why an assignee by endorsement or delivery ought not to have the same remedy. It was the object of the statute to place the assignee in the same relation to the maker, as the payee stood in before; and the legal operation of the transfer is, that the money which by virtue of the note was due to the payee from the' maker, is now due from the maker to the assignee. These notes were payable to William Douglass or bearer, like' the form used in bank notes. Bearer is deScriptio personae, of the real payee. It may be that Wm. Douglass had no knowledge of the note, or is a fictitious person. The note however, is transferable by delivery merely, and possession was evidence of property in the plaintiff below, prima facie. It is objected by the counsel for the defendant, that here is no privity of contract between these parties; and several authorities were cited to show, that indebitatus as- \ sumpsit, will not lie except between privies. To this obIjection there are two answers—first, there is a legal privity | of contract between the maker of a negotiable note and the 1 assignee or bearer in this case. It is a contract to pay the money to whoever may become entitled to it by transfer, as bearer; and such privity commences, as soon as the bearer becomes so entitled.—Secondly, it is not true, that the action for money had and received, can only be grounded on privity of contract. It lies against the finder of money lost. It is the proper action to recover money obtained by fraud ior deceit. If a man without my authority, receive money \due to me, I may recover it from him in this form of action, and certainly in these cases there is no privity of contract.: In the case of Wayman vs. Bend, 1st Campbell's nisi prius, 175, precisely like the present case, Lord Ellenborough decided, that the right of giving a promissory note in evidence under the general money counts, is confined to the original party to whom the note was payable. But this was a nisi prius opinion: and as the plaintiff in that case recovered on another count as endorsee of the same note, it never became material to revise the decision. That opinion of Lord Ellenborough, contradicts the decisions of several of his illustrious predecessors. In the case of Tablock vs. Harris, 3 D. and E. 174, it was decided, that an endorsee of a bill of exchange may recover against the acceptor, under a count for money had and received; and Lord Kenyon there says, “in making this decision we do not mean to infringe a rule of law, which is very properly settled, that a chose in action cannot be transferred: but we consider it as an agreement between all the parties, to appropriate so much property, to be carried to the account of the holder of the bill.” In the case of Grant vs. Vaughan, 3 Burr. 1516, it was decided, that indebitatus assumpsit for money had and received was a proper action to recover the value of a bill of exchange by the bearer against the drawer : and Lord Mansfield there says, “undoubtedly an action for money had and received to the plaintiff’s use, may be brought by the bona fide bearer of a note, made payable to a bearer ; there is no case to the contrary.” The case of Cruger vs. Armstrong and another, 3 Johns. Cases, 5, supports the same doctrine. The principles contained in this decision are fully sustained by the Supreme Court of the United States, in the case of Raborg and others vs. Peyton. In that case, (which was an action of debt brought by the endorsees of a bill of exchange against the acceptor,) Mr. Justice Storey, in delivering the opinion of the court says, “privity of contract may exist, if there be an express contract, although the consideration of the contract originated aliunde. Besides, if one person deliver money to another, for the use of a third person, it has been settled that such a privity exists, that the latter may maintain an action of debt against the bailee. In general, the legal predicament of the maker of a note, is like that of the acceptor of a bill. Each is liable to the payee for the payment of the note or bill, in the first instance ; and after endorsement each incurs the same liabilities.” The judge, in delivering the opinion of the court, further remarks, that, “ in point of law every subsequent holder, in respect to the acceptor of a bill, and the maker of a note, stands in the same predicament as the payee. An acceptance is as much evidence of money had and received by the acceptor to the use of such holder, and of money paid by such holder for the use of the acceptor, as if he were the payee.”

iThe only remaining question is, whether, when a fióte is declared on by the endorsee against the maker as being endorsed before it is due, it is a material variance to prove ¿ it to have been endorsed after it became payable? In1 Chitty on bills, 462, the law is stated to be, that “ if a note payable to bearer be declared on as endorsed, the endorsement must be proved; but when the declaration states, that the endorsement was after the making of the bill, and it appears in evidence to have been before, or that it was before the bill was due, and it appears in evidence to have been made afterwards, this is not a material variance.” In support of this principle, he refers to Young vs. Wright, 1 Campb. 139.

In this case we think it proper to observe, that it appears to us, that the prayer in the first bill of exceptions is too general under the act of 1825, but, as the prayer in the second bill of exceptions is sufficiently specific, and the case was fully argued, to prevent future litigation, we ' have delivered our opinions upon both exceptions.

We are of opinion, that there is no error ifi the judgment of the court below, and that it ought to be affirmed.

JUDGMENT AFFIRMED.