224 Mass. 574 | Mass. | 1916
This case comes up on an appeal from a decree dismissing the bill entered on an order sustaining a demurrer filed by the defendant Buff. In her bill the plaintiff alleged that in the summer of 1909 she became the owner of seventy-one first mortgage bonds of the defendant welding company; that these bonds were part of an issue of seven hundred secured by a mortgage of certain rights in an invention, future improvements thereon and patents securing the same, together with drawings, patterns, machines, machinery and equipment for the manufacture of the machines covered by the invention and patent; that after making the mortgage the welding company by an indenture dated September 5, 1911, transferred the exclusive right, title and interest to the property covered by the mortgage to the defendant Buff and another, in consideration of and conditioned upon the grantees paying a royalty therein described for all machines manufactured and sold by them under the patent. It is further alleged that by said royalty indenture the welding company agreed that Buff and his associate might have the mortgage securing the seven hundred bonds aforesaid discharged at their own sole expense, and coupled with that authority was an agreement by Buff and his associate that they would “indemnify and save harmless” the welding company “from any loss, costs, charges, damages, expenses, suits, actions, and proceedings at law or equity” which the welding company “might bear, sustain, be at, or be put to, for or by reason or on account of the said bond mortgage” aforesaid, “or the rights of any holders of any of the bonds "issued thereunder.” The bill then alleged that in March, 1914, the defendant Buff procured possession of the plaintiff’s bonds through fraud and
The foundation of the plaintiff’s bill is a right on her part to collect from the welding company the principal of her bonds or (if that is not now due) the amount of the interest coupons which have matured. It is the settled law of this Commonwealth that the right to collect a negotiable instrument is in the holder of it. National Pemberton Bank v. Porter, 125 Mass. 333. Lowell v. Bickford, 201 Mass. 543, and cases cited.
From this it follows that a person who is not the holder of a negotiable instrument but who is entitled to become the holder of it is not in a position to bring an action or suit to collect it. On the face of the bill the plaintiff is not now the holder of the seventy-one bonds here in question. Putting her allegations at the highest she has a right to become the holder of those bonds but she is not now the holder of them.
The bill does not contain the allegations which are necessary
It follows that the bill in this suit is bad. Until the plaintiff becomes the holder of them she has not the right to collect these bonds. In addition if the bill were amended so as to make it a bill of equitable replevin, the relief here sought is not an incident to such a bill.
Under these circumstances, it is not necessary to consider the further difficulties which lie in the plaintiff’s path in her endeavor to collect the amount of these bonds from the defendant Buff.
A decree dismissing this bill would not be a bar to any proper action or actions, suit or suits, to enforce the rights of the plaintiff in the matters here complained of. Capaccio v. Merrill, 222 Mass. 308. In spite of that, the better practice in such a case is to provide in the decree that the bill is dismissed without prejudice. The decree should be modified in that way, and so modified should be affirmed. It is
So ordered.