31 Iowa 241 | Iowa | 1871
Lead Opinion
— The .only real point of controversy in this case is, whether the transferrer of a judgment, a part of which 'has been, paid, but of which fact he has no knowledge, is liable to the transferee for the amount so paid, when he transfers only his right, title and interest in the judgment, and that without recourse.
The particular form of the transfer or assignment in this case is peculiar, and we ground our conclusion upon its peculiar phraseology. Its substance is well set forth in the findings of fact by the court, and in full, it is as follows: “ Eor value received, we hereby sell and assign all our right, title and interest in this judgment, to Thomas P. Moore, without recourse on us.” Ordinarily, the words “without recom-se” have only the effect to exempt the transferrer from liability by reason of the insolvency of the obligors. Such a transferrer guarantees the genuineness of the instrument transferred, and its vitality as a binding obligation. But it is clear that a transferrer may, if he can find another who will so' contract with him, stipulate for his exemption from liability by reason of the fictitious character of the instrument, or its nullity as an obligation. The real question then is, what is the true construction — the legal effect of the language of this transfer or assignment %
The transferrers do not assert any positive ownership of the judgment, nor that it has any present obligatory force. In effect they say to the assignee “ there is a judgment upon the records of the court and it has been assigned to us upon the record also, by the judgment plaintiff; we
Of course, if the transferrer makes any false or deceitful representations, or even conceals his knowledge of defects or infirmities in the instrument transferred, such representations or fraudulent concealments will make the transferrer liable. In this case there is no finding of fact nor any claim even that the transferrers either made any representations or had any knowledge in relation to the part payment of the judgment transferred, or of any other defect in it. They simply transferred their interest and the defendant must be held to have taken the same under the common-law rule caveat emptor.
Inasmuch as the judgment plaintiff, who reeeived'the part payment on the judgment prior to his assignment of it, might be liable, under the rule herein held, to his immediate transferees; and since his liability over to this defendant, the transferee of his transferees, may be mooted, as it is discussed in Watson v. Chesire, supra, we simply desire to say that, notwithstanding the discussion contained in the opinion in that case, we regard it as still an open question. The judgment in the district court should have been for the
Reversed.
Rehearing
OPINION ON REHEARING.
— -A rehearing was ordered in this case, upon the petition of defendants, and thereupon the cause was again fully and ably argued by the counsel of the parties. Upon a careful reconsideration of the case we are constrained to adhere to the conclusions announced in the foregoing opinion. The earnestness and ability displayed by defendants’ counsel upon the re-argument demand that the points made by them be, at least, briefly noticed. We will, however, first add a few thoughts, in addition to the arguments of our former opinion, which, we believe, support its conclusions. These conclusions are based upon the peculiar language of the assignment. The assignors transferred their “ right, title and interest ” in the judgment “ without recourse.” The words used clearly indicate the absence of any intention to warrant the validity or value of the judgment or that it was collectible. The word “title” relates to the assignors’ ownership of the judgment — that is, by the use of the word they indicate the intention to transfer whatever property they may hold in it. The words “right and interest” relate to the extent of that ownership or property. By the use of these words the assignors undertook to transfer whatever of value they owned or held in the judgment. The thing transferred was the debt, the chose in action, represented by the judgment. The words used in the assignment clearly indicate that the assignors shall not be liable for any failure of title to or diminution of interest in the debt. The use of the words “ without recourse ” gives additional force to this view. The phrase must be understood in connection with the other language of the assignment and as having been used in reference to it. The fair meaning, of the assignment
Defendants’ counsel urge that, because the note and mortgage, the foundation of this suit, was given for the judgment, which could not have been enforced to the full extent of the amount as shown by its face, therefore they cannot be enforced for an amount greater than actually remained unpaid on the judgment. But this argument leaves out of view the fact that the note and mortgage are new contracts, founded upon the transfer of the judgment, which is a sufficient consideration to support them.
Counsel for defendants enter into an extensive examination of the authorities to determine the effect of an assignment of a judgment, and conclude that, though it be made without recourse, yet the assignor is held to warrant that it has not been paid. This may be admitted, and yet the conclusion of the counsel in this case would by no means follow. The qualifying words used in the assignment, namely, “ all my right, title and interest,” as we have above pointed out, express a different contract. These words relate to the thing assigned and express a contract to the effect that whatever property, right or interest the assignors held in the judgment was transferred, and no more. As the extent of that property or interest is not determined by the assignment, but, left indefinite and uncertain, there could exist no warranty relating thereto.
It is further claimed, that as there was a mutual mistake as to the extent of the thing sold — the judgment — equity will relieve the party injured thereby. But how can we say there was a mistake as to the extent of the thing sold, when by the very terms of the assignment it is left uncertain and undetermined ? The language of the contract of the assignment plainly indicates that the value of the judgment was not understood as being within the stipulations of the contract. There could have been no mistake as to
The facts of the case, independent of the terms of the assignment, support our conclusions. That the judgment was a valid lien upon property of sufficient value to secure its collection was a fact well known to both parties. Indeed, for that reason was it purchased by defendant. The only question as to the judgment that could have arisen in the minds of the parties must have related to the assignors’ title, property or interest therein. To these, therefore, were the words of limitation in the assignment intended to apply. Neither party could have had a motive to intend the application to the collectible character of the judgment to its full extent.
Adhering to our former opinion, we adjudge that the decision of the district court be
Reversed.
