96 Ky. 139 | Ky. Ct. App. | 1894
delivered the opinion oe the court.
In the month of January, 1888, the appellee McCormack, held a note payable to himself on H. Clay Pigg and E. M. Pigg for six hundred dollars, dated March 1, 1886, and due in twelve months. He sold this note to his niece, the appellant, for six hundred and forty-two dollars and sixty-five cents, for which she gave him her check, and he assigned the note to her without recourse. She held the note until March, 1890, when she instituted her action upon it against both the obligors. H. Clay Pigg was insolvent when the note was executed, and known to be by all the parties to the transaction. He left the State, and was a non-resident when the action on the note was instituted. The solvent obligor, E. M. Pigg, when served with process, appeared and pleaded non est factum, and upon that issue it was held by the judgment of the court that he had never executed the paper. At the time the appellee sold the note to the appellant she believed the note was genuine, and had no reason to think otherwise until the defense was made.
After judgment against her and in favor of the solvent obligor, she instituted the present action against her assignor, McCormack, alleging that the signature of E. M.- Pigg to the note was a forgery, and in the action against him on that paper he made that defense and defeated the recovery, and sought to recover upon an express warranty by the assignor as to its validity, or the implied warranty that it contained
On the trial of this action a judgment was rendered against the assignor, McCormack, from which he appealed to the Superior Court, and the judgment of the court below was reversed, on the ground that as assignee she had failed to prosecute the action against the obligors with that diligence required by the law, the Superior Court basing its decision on the case of Wynn v. Poynter, 3 Bush, 54.
When the case was first tried in the court below the plaintiff was required, over the objection of her counsel, to elect whether she would proceed on the-first or second count of the petition, and, electing to-try on the first count, recovered the judgment that was reversed. In the reversal of that judgment it was, in effect, held by the Superior Court that, on the return of the case, the plaintiff should be allowed to-amend, and could recover upon the ground of a want of consideration for the money had and received by the defendant. On the return of the case the court below refused the offer to file such an amendment, and a judgment was entered for the defendant, and from that judgment the plaintiff appeals. It is now insisted that the effect of the first judgment was to-determine the second count of the petition contained no cause of action, and, being res adjudieata, the-plaintiff could file no such amendment. The plaintiff had .been compelled to elect to proceed on the-first paragraph of the petition, and the dismissal of the second paragraph was, in its effect, a dismissal
Every transferrer of a note or bill transferable by delivery, warrants that it is not fictitious, forged or al erecl. (4 Lawson’s Rights, Remedies, &c., sec. 1393; 2 Parsons on Notes and Bills, 589.) When a note is assigned without recourse, it means only that the assignee is not to be responsible by reason of the insolvency of the obligors, but there is an implied warranty that the paper is genuine, that is broken in the event the signatures to the note are forgeries. An assignment of a note for value is a guaranty of the solvency of the obligors at the time of the assignment, and the assignor binds himself to make the note good in the event the assignee used the proper diligence by suit to test the solvency of the payors, but this diligence is not required in order to test the genuineness of the signature, for if the obligee parts with the note by mere delivery for value and without any assignment, he becomes liable to return the consideration in the event the paper he sells is a forgery. His liability in this regard does not depend upon the
The rule is well stated in Emerson v. Claywell, 14 B. M., 19 : “If an absolute and unconditional assignment be made of a bond, either for money or land, the assignor, where there is no express stipulation to that effect, undertakes by implication that he is the absolute and unconditional owner of the bond, and has an indefeasible right to demand what the bond calls for, and if he has no such right, there is a breach of the implied undertaking the moment the bond is assigned.”
Here the assignee, by the contract of assignment, had agreed to risk the solvency of the obligors, and there was no necessity for any suit to test their ability to pay and certainly none to test the genuineness of the signatures. The note was made payable to the assignor. He is presumed to know whether the signatures were or not forgeries, and it was not necessary for the assignee to bring an action that the assignor might be informed as to the validity of the obligation. She has paid full value for a note that was worthless ; that was not in fact or in law the note of the solvent obligor, and if even required to institute legal proceedings that the issue of non est factum might be determined, it then appears that, by a proper legal proceeding not questioned by the appellee, it was adjudged that the name of E. M. Figg was a forgery.
What is the legal as well as rational meaning of the language, without recourse, used in the assignment
The doctrine of the case of Wynn v. Poynter, reported in 3 Bush, 54, is overruled, and the judgment below reversed with directions to permit the amended pleading to be filed, and for proceedings consistent with this opinion.
To a petition for rehearing filed by counsel for appellee judge Puyón delivered the following response of the court:
The only question in this case necessary to be considered is, is the holder of a note assigned without recourse required to bring a suit at the first term of the court after the assignment in order to hold the assignor bound for the genuineness of the signature ? We think the question is too plain for argument, and
If there had been an assignment in the ordinary form, there might be some reason for holding the assignee bound to sue at the first term, as it is admitted that one of the obligors signed the paper; but if he had not sued, and it appeared that he had relied on the solvency of one whose signature was a forgery, and that the other was insolvent and had been from the date of the assignment, still he could recover, because it would have been fraud in fact as well as in law to sell a forged note, the liability arising from the sale and delivery of the paper, and having .been executed to him, it must be conclusively presumed in an action against him to recover back the money, that he knew the paper (if a forgery) was not genuine.
It is argued the Superior Court has decided that the case of Wynn v. Poynter settles the question, and, therefore, the case is res adjudicate when that court expressly authorized the filing of an amended petition, construing the first action as being on the implied warranty of assignment, when there was no such warranty, except such as arises from the fraud of the party selling the paper and the want of consideration. If, therefore, the opinion of that court is res adjudicata as to the one question, it must be so as to all others, and authorizing the amended pleading and sustaining it when it was offered, we have clearly before us what that court did decide. The amended petition should have been filed, and the specific objection made here that the petition or the amendment was not sworn to will not avail.
Petition overruled.