7 Iowa 145 | Iowa | 1858
Lead Opinion
I. We think the instrument of writing is well declared upon as a promissory note. It is a promise
’ II. The maker annexes to his obligation, a written authority to the payee, to dispose of certain bonds, placed in his hands as a collateral security for the payment of the note. This part of the writing imposes no duty on the payee, nor affixes any condition to the liability of defendant. The payee is authorized to dispose -of the ■ bonds at eighty cents on the dollar, and apply the proceeds, as far as they may go, in discharge of the note. If the bonds cannot be sold at eighty cents, and the defendant does not pay the note at maturity, the holder is authorized to forfeit the bonds — by which, we understand, he is authorized to •sell them at their current value in the market; or he may, at his option, return them to defendant, and commence suit on the note. If he does neither, we do not undertsand that the liability of the maker, is in any degree lessened, or the right of the payee, or holder, to have payment of the note, in any sense taken away.
It is agreed by defendant, that by the terms of the instrument of writing, upon the failure of respondent to pay at maturity, the holder has his election to do two things : he may credit the note with the amount of the bonds, or he may return them to defendant, and commence suit; and that his right to sue, is depend-ant upon his compliance with one or the other of these stipulations.
"VVe do not regard the matter appended, as constituting a part of the promissory note, in any greater degree than if the authority conferred by it on the obliged, had been given by a separate instrument of writing, or on a separate piece of paper. The bonds were already in the hands of the creditor as collateral security, and this is not an agreement to sell them, and to. credit their amount on the note —nor to return them to defendant before suit brought. N either of these events is stipulated for, or imposed by way
We cannot give to the instrument such an interpretation as shall require the holder, in any suit brought upon it, to aver and show, that the collateral security had been either sold and applied in payment of the debt, or returned to the defendant. He may have been unable to dispose of the bonds, and under such a construction as defendant con. tends for, he need only, in such event, refuse' payment of the note, in order to have the collateral security returned to him, before he could be sued. Such a requirement, would be wholly inconsistent with the idea that the bonds had been delivered to the creditor as collateral security.
Still more inconsistent is it with the idea of the obligation of a promissory note, that the holder shall be required, before he can enforce its payment, to surrender a collateral security deposited with him. There has been no such agreement in this case. The obligation to pay, has not been clogged with any such condition. It is a simple promise to pay, with authority to dispose of the collateral security. The words of the instrument, “ or the said Decker & Knipper, may, at their option, return said bonds to said Olíase, and commence suit against him,” are only an attempt to confer upon the payee, a right and authority to sue, which he already possessed, without the consent, or agreement of defendant.
III. The objection to the assignment is, that it does not show that the plaintiff is the owner of the promissory note. The plaintiff does not aver,-in his petition, that the Decker, who is shown to have made the assignment, and the Knipper, to whom he transfers his interest, are the identical Decker & Knipper, the payees of the note. Rut he avers that, by the assignment, the note has become the property of the plaintiff. We think that the note is sufficiently shown jprivict, facie,to be the property of the plaintiff.
We think the demurrer to the petition should have been overruled.
Judgment reversed.
Woodward, J., dissenting.
Dissenting Opinion
dissenting. — I am unable to concur in the foregoing opinion, on the main point. The holders Avere to return the securities before suit, in my opinion. It is no matter how little this may comport with the idea of a collateral; nor is it absurd to suppose, that they may have undertaken to return, if they resorted to suit. These things may be affected, and were governed by the contract, and, to my mind, it is very plain that it does control them. Looking at the contract made by the parties, and notat the law, as it would be without such agreement, I think the de_ murrer was rightly sustained.
