Chadsey v. Lewis
6 Ill. 153
Ill.
1844
Check Treatment

The Opinion of the Court was delivered by

Treat, J.

This was an action brought by Chadsey, as administrator of Oliver, against William Lewis. The decíaration was in debt on a bond, made by Lewis to Oliver, and conditioned for the payment of five hundred dollars. The defendant pleaded two pleas in bar. First, payment — second, that Oliver, in his life-time, made a voluntary gift of the bond to Mary Lewis and Margaret Lewis, and delivered the same for their use and benefit, whereby the property became vested in them. The Court overruled a demurrer to this plea, and rendered judgment for the -defendant. The administrator prosecutes a writ of error.

The chief point in the case is, as to the validity of the second plea. Without inquiring whether the facts alleged in the plea constitute such a gift of the bond, as a Court of Equity will protect and enforce when its aid is sought, it is very clear that they constitute no legal defence to this action. This is an action at law, and it is only necessary to ascertain who has the legal-interest in the bond. The demurrer only admits such facts as are well pleaded. The plea does not allege an assignment of the bond. Under our statute, the legal interest can only be transferred by indorsement in writing. A mere delivery does not pass such an interest. An action can only be maintained in the name of the person who has the legal interest. Kyle v. Thompson, 2 Scam. 432; Campbell v. Humphries, Ib. 478.

The defendant failing to allege an assignment of the bond, the inference is unavoidable, that there was none, and that Oliver never parted with the legal interest. At his decease, as a matter of course, that interest descended to his personal representative, in whose name alone an action must be brought to recover the money. Chadsey, in whom the legal interest is thus vested, institutes an action on the bond, and the obligor does not deny that interest, but insists as a defence that third persons have an equitable interest in the obligation. Is this any answer in law to the action ? This question was, in principle, settled by this Court, in the case of McHenry v. Ridgeley, 2 Scam. 309. In that case, an action was brought in the name of Ridgeley, on a note assigned to him as cashier. A plea that the note was assigned to Ridgeley as the agent of the Bank; that he never had any interest in the note; and that the legal and beneficial interest therein, was in the Bank, was held by the Court to constitute no defence to the action. In that case, the legal interest was in the plaintiff, and the defendant was not permitted to defeat a recovery, by showing that the note was held for the benefit of others. In the present case, the legal interest of the administrator is not questioned, and the only defence interposed hy the obligor is, that third persons are beneficially interested in the bond. This is no reason why he should not perform his obligation. The suit is in the name of the proper person, and it makes no difference to' the defendant for whose benefit it is brought. As was- said in the case of McHenry v. Ridgeley, the Court will not inquire whether the plaintiff sues for himself, or as trustee for some other person. It is sufficient that he has the legal interest, For aught the record shows, this suit may be prosecuted for the benefit of the donees of the bond. Whether it is or not, the rights of the defendant are not to be affected by the recovery. Admitting the truth of the plea to the fullest extent, it shows hut this, that the plaintiff has the legal, and the donees the equitable estate. In a Court of Law, which of these interests is to prevail? Most assuredly the legal one. This view is conclusive on the defendant. The Court of Law, having jurisdiction of the case, should proceed to try it according to its rules, leaving to those claiming the beneficial interest in the subject matter to invoke the aid of Equity. If the Lewises are in fact the donees of the bond, the administrator holds it as trustee for them, and if he refuses to account to them, a Court of Equity will compel him to execute the trust. It may be a serious question whether there was a valid gift of the bond, important alike to the interests of the estate, and the donees. That question ought certainly not to be determined in this collateral manner, in a proceeding to which the donees are not parties, and, of course, not bound by any adjudication which may be made. In this conflict between the legal and the equitable interests, a Court of Equity is peculiarly the appropriate tribunal to adjust the rights of the parties. The defendant is not interested in that adjustment, it being a matter exclusively between the administrator and the donees.

We think, therefore, that the Circuit Court erred in deciding thejdea to be valid, and its judgment is reversed with costs, and the cause remanded for further proceedings, consistent with this Opinion.

Judgment reversed.