Merchants & Mechanics' Bank v. Hewitt

3 Iowa 93 | Iowa | 1856

Stockton, J.

The important and material question involved in this cause is, whether the receipt sued on is a negotiable instrument, under the laws of this state, and whether the defendant should .have been permitted by the court, to make the same defence to it, in the hands of the assignee, that he might have made to a suit brought, upon it by the original obligee. , Such a receipt was not assignable at common law, so as to authorize suit upon it in the name of the assignee. Our statute (Code, § 949) has altered the .common law rule, so far as to allow such a suit. Independent of this provision of the statute, unless Hewitt had assented to the assignment, suit must have been brought in the name of Atwood, for the use of the assignee. Such an action .would have been open to all the equitable defences which Hewitt might have made, had the suit been for the benefit of Atwood, as well as in his name, provided those defences rest in honest transactions, which took place between Hewitt and Atwood before the assignment, or after the assign- • ment and before Hewitt had notice or knowledge of it. Parsons on Contracts, 196.

It is claimed by plaintiff, that the receipt is negotiable, under section 950 of the Code; that the corn being deliverable to the “order” of Atwood, the receipt has all the incidents of negotiability. We cannot coincide in' this opinion. Such instruments may undoubtedly be made negotiable by agreement of parties, but they are only so under the statute, “ whenever it is manifest from their terms, that such was the intent of the maker; but the use of the technical terms, “or order,” .or “bearer,” will not manifest such intent.” The corn, in this case, was to. be delivered to the “ order” of Atwood. These words,, however, unaccompanied with any other evidence of an intent to make the receipt negotiable, are not sufficient to give it the character and incidents of negotiability. Our conclusion is, that as it is not manifest from the terms of the receipt, that it was the intention of Hewitt to make it negotiable, although under section 949 of the Code, it is assignable by indorsement, and the assignee may sue on it in his own name, yet it is subject to any defence or set-off, legal or equitable, which Hewitt had against Atwood before notice of the assignment. In order to -constitute a valid assignment of an instrument of writing like the present, notice must be given to the maker. If without such notice, the maker deliver the property to the assignor, he will be discharged. And if after assignment, another person obtain a.second assignment, and first give notice of his equity, he will be preferred to the first assignee. Parsons on Contracts, 196; Richards v. Griggs, 16 Missouri, 418; Dearle v. Hall, 3 Russell Ch. 1; 2 Story’s Eq. Jurisprudence, §§ 1047, 1057.

' The defendant avers in his answer, that until the commencement of the suit, he had no notice of the assignment of the receipt to plaintiff; and before.he received such notice, Atwood was, and still is, indebted to defendant, in the sum of four hundred and fifty dollars, for the price of the corn; that he has never received payment from said Atwood nor any other person; and that the corn is still in his possession, where it had been since the execution of the receipt, and he claims the right to retain it, -until he is paid the price of the same. To this answer, a demurrer was sustained. ■ If it is permitted to Hewitt, to make the same defence to -the action by the assignee t-o .recover the value of the corn, that he might have made to a “suit on the receipt by Atwood, we cannot resist the conclusion, that the demurrer was improperly sustained. The receipt not being negotiable, the plaintiff stands in no better position than Atwood would have stood in, if he had sued Hewitt on -the receipt. In such an action, then, would Hewitt’s answer have been a good defence ? It will be remembered, that tbiere had been no delivery of the.corn. It still remains in the warehouse of Hewitt. Atwood had -accepted a draft for the price of the corn, which was protested, and never paid. If property is sold for cash, and the price be not paid; or if it be sold on a credit, and remain in the hands of the vendor, the vendor has a lien on it for the price; and only payment or tender, gives the vendee a right to possession. 1 Parsons on Contract, 440. Demand on Hewitt for the corn was not made until October; and as Atwood had not, in the meantime, paid the price of it to Hewitt, and the corn had all the time remained in his possession, Hewitt was entitled to retain the corn until he was paid for it, according to agreement. This answer, then, would have been good in a suit by Atwood against Hewitt, and is equally good in any suit by Atwood’s assignee. We conclude, therefore, that the demurrer to the answer was improperly sustained, and the evidence offered by defendant should have been received.

We have carefully considered the arguments of plaintiffs’ counsel, based upon the analogy between this receipt, and an ordinary bill of lading. We see no good reason to change our views of the subject presented .above. A bill of lading is the contract of the master of a vessel, to deliver the property to the person to whom the consignor or shipper shall order the delivery. It is transferable by indorsement, and the property passes to the assignee. This is the result of well settled principles of the commercial law. The doctrine predicated of bills of lading, by the defendant’s ■counsel, is undoubtedly correct in all questions arising between the consignor or shipper, and the consignee or his assignees. But in an action against the master of a vessel, or obligor in the bill of lading, for the non-delivery of the goods, other principles must govern, and the right of the parties must be regulated by the Code; and we are unable to give its provisions any other interpretation than such as will allow to the maker of the corn receipt, every legal and equitable defence in a suit by the assignee, which he might make in a suit, in the name of the original payee.

Judgment reversed.