29 N.J. Eq. 547 | New York Court of Chancery | 1878
The defendants deny that the bill shows a good cause of action. The bill avers that two of the three defendants made their note payable to the order of the third, for his accommodation, who passed it to the complainant in exchange for the complainant’s note.. The defendant sold the complainant’s note and appropriated the proceeds. Both notes bore the same date, were for the same amount, and payable at the same time. The complainant .agreed to make the exchange upon the defendant’s promise that he would endorse the note he held to the complainant, but when he handed it over he omitted to do so. The omission was accidental. The complainant received it before maturity. After the notes fell due, the complainant was compelled to pay his; the other was not paid. A week or two after its maturity, the complainant delivered it to the defendant,' requesting him to have the other two defendants (the makers) to pay it or renew it. He surrendered it to the makers, representing that he had not used it, and they destroyed it. Subsequently the complainant brought an' action at law, on the note, against the three defendants, which resulted in a judgment for the defendants, the complainant being unable to show a title to the note which the tribunal where he sought his remedy could recognize.
Is he barred by the judgment at law ? His right to the note was purely equitable; a legal title could not be acquired without writing. Having simply an equitable right, he was without remedy in a common law tribunal, but he attempted to avail himself'of his right there, and failed. Hoes that adjudication bar his remedy here? I think it is very clear it does not. He failed there because that tribunal could neither enforce nor recognize his title. It was only authorized to enforce his legal rights ; it was not competent to enter upon an inquiry whether or not he was the equitable owner of the note. It is obvious, its adjudication does not conclude an inquiry it could not make, nor cut off a remedy it was incompetent to administér. The authorities on this point are decisive. Where the party has equitable rights, not cognizable in a court of law, which would in a court of equity have prevented such an adjudication as was made in the court of law, the judgment will interpose no obstacle to redress in equity, since the court of law had no proper jurisdiction of the subject matter forming the basis of redress in equity. 2 Story’s Eq. Jur., § 1573. Equity will relieve a party against a judgment at law when its justice can be impeached by facts, or on grounds of which the party seeking its aid could not have availed himself at law; or, as stated by Chief Justice Mar
The demurrer must he overruled, with costs.