Backus v. Danforth

10 Conn. 297

• Court: Supreme Court of Connecticut
• Decided: July 15, 1834
• Status: Published

Opinion

Williams, J.

The matters upon which the defendant relies for his justification, are the proceedings on the previous attachment ; and if those proceedings have been regular, he has made a good defence.

The plaintiffs claim, that they have not been regular; because the writ was sued out before the note was due; and because the return upon the execution is not such as the law requires, to protect the officer who makes it.

Under the first objection, the plaintiffs claim, that the note is one, which, by law, was entitled to three days of grace ; that this appeared on the face of the writ; and that, therefore, the officer was bound to know, that the writ issued prematurely. To support this claim, the plaintiffs must show, either that this is a negotiable note, which is certainly entitled to grace ; or they must show, that notes not negotiable are equally entitled to this privilege.

I had not supposed, that the former could now be considered as an open question. But as it seems to have been questioned, in the Common Pleas in England, in two cases upon bills of exchange, and the court waived an opinion upon it; (Chamberlyn v. Delarive, 2 Wils. 353. Dawkes & ux. v. Lord De Loraine, 3 Wils. 207. 212. S. C. Bla. Rep. 782.) as it has been litigated in a neighbouring state; and as it is now seriously questioned; it demands consideration.

To determine as to notes, we must first inquire what is the law as to bills of exchange. The earliest writer on the subject says : “ The bill not being payable to a man, or his assigns, or order, an assignment of it will not avail; but the money must be paid to the man himself.” Marius 141. In conformity to which is the opinion of Holt, Ch. J., in the case of Hill v. Lewis, 1 Salk. 132—3. where a bill was payable to the defendant without the words or his order ; “and the Chief Justice did agree, that the indorsement of this bill did not make him that drew the bill chargeable to the indorsee ; for the words or to his order, give authority to the plaintiffs to assign it, by indorsement; and it is an agreement by the first drawer, that he would answer it to the assignee. But the indorsement of a bill which has not the words or to his order, is good, or of the same effect, between the indorser and the indorsee, to make the indorser chargeable to the indorsee.” From the manner in which the terms bill and note are used in the old reports, I know, it is somewhat doubtful, whether that was a bill of exchange or a note ; but as that judge did not allow any effect to the word order in a note, I conclude it was a bill. But if it was a note, the argument is equally applicable to this case.

In the case of Dawkes & ux. v. Lord De Loraine, above cited, Gould, J. says, he was present at the Old Bailey, when a person was indicted for forging a bill of exchange, neither payable to order, nor for value received. All the aldermen then present at the Old Bailey said, it was no bill of exchange; and the prisoner was acquitted. He adds : “In a little book, called Lex Mercatoria, there are various precedents of bills of exchange, some with value received, and some without; but there is not one not payable to order.” 3 Wils. 212.

Bayley says, in his treatise : “ That bills and notes are made assignable to order, or to bearer, or to specified individuals. A bill or note payable to J. S. or order, is payable to the order of J. S.., and is negotiable by indorsement."" Bailey on Bills, 18. chap. 1. see. 8.

Selwyn says : “ The negotiability of a bill of exchange depends upon its being made payable to A or order, or to A or bearer.” Selw. N. P. 326.

Espinasse, after laying down the same proposition, says : “ If a bill is payable to a person only, by name, it is not negotiable ; as, by the terms of it, it is confined to such person only.” Esp. Dig. 26.

And Judge Swift says : “ To make a bill negotiable, it is indispensable that it should be drawn payable to order, to assign, or bearer, or to one's own order Sw. Ev. 253. 1 Sw. Dig. 42.

This being the undeniable rule regarding bills of exchange, we might expect, that when a statute was made to put notes upon the same footing, the same words would be necessary to make them negotiable. The history of negotiable promissory notes is familiar. Lord Holt seemed to ieel as if the admission of their negotiability would uproot the common law. He therefore resisted, with great vehemence, this attempt of the bankers. Clerke v. Martin, 2 Ld. Raym. 758. Three years after this decision, the statute of 3 and 4 of Anne, c. 9. was passed, by which it is provided, that, “ Whereas it hath been held, that notes in writing, signed by the party who makes the same, whereby such party promises to pay unto any other person, or his order, any sum of money therein mentioned, are not assignable or indorsable over, within the custom of merchants, to any other person ; and that such person to whom the sum of money mentioned in such note is payable, cannot maintain an action, by the custom of merchants, against the person who first made and assigned the same; and that any person tc whom such note should be assigned, indorsed, or made paya ■ ble, could not, within the said cs.stom of merchants, maintain any action upon such note against the person who first drew or signed the same : Therefore, to the intent to encourage trade and commerce, which will be much advanced, if such notes shall have the same effect as inland bills of exchange, and shall be negotiated in like manner: Be it enacted, that all notes in writing, that shall he made and signed, &c. whereby he, she, or they promise to pay to another person or persons, body politic and corporate, his, her, or their order, or unto bearer, any sum of money mentioned in such note, shall be taken and construed to be, by virtue thereof, due and payable to any such person, &c. to whom the same is made payable ; and also every such note, payable to any person or persons, <fcc. his, her, or their order, shall be assignable or indorsablc over, in the same manner as inland bills of exchange are or may be, according to the custom of merchants ; and that the person or persons, &c. to whom such sum of money is or shall be, by such note, made payable, shall and may maintain an action^” &c.

The. time when this act was passed, the decisions which preceded it, the preamble of the statute, and the language of the enactment, all combine to show, that the object was to place promissory notes on the same footing as bills of exchange. If, therefore, bills, to be negotiable, must be payable to order, so must promissory notes be ; and so it seems to be admitted, by the writers on this subject.

Chitty says, the words order, assign, or bearer, are the words ordinarily used to render the note negotiable ; and unless the words order or bearer, or some other words authorizing the payee of the bill so to assign it, be inserted therein, it cannot be transferred so as to give the assignee a right of action against any one of the parties, except the indorser. Chitt. on Bills, 82. 125. Evans, in his essay on Bills, speaking of notes not payable to order or bearer, says, that these instruments are not negotiable. Chap. 26. sect. 1. And Chancellor Kent says, the instrument, must be made payable to the payee, and to his order, or assign, or to hearer, to render it negotiable. If it want negotiable words, it cannot be transferred or negotiated, so as to enable the assignee to sue upon it, in his own name. 2 Kent's Com. 77. 2nd ed. And in the case of Rex v. Box, 6 Taun. 325. a prisoner was convicted of forging a note payable to A and B, stewardesses of a certain unincorporated society, or their successors; and it was adjudged, that though this note could not enure to the successors, and was not negotiable, the conviction was good. The fact, too, that a short time after the case of Brown v. Harraden, 4 Term Rep. 148. the same court should have permitted the same (íuest'on to l,e argued in case of a note not payable to order, that in the latter case, no claim was made by counsel, or by the court, that this note was negotiable, satisfies my mind, ⅛⅛ question was at that time entirely at rest, if it ever was a question in England. In one of our sister states, however, this precise point has been made and decided, in conformity to what, so far as I know, have been the uniform opinions in this state. Gerard v. La Coste & al. 1 Dal. 194. Barriere v. Nairac, 2 Dal. 249.

In this state, all notes, until the year 1812, were considered as specialties. Then a statute was passed, similar to the statute of Anne, as to the negotiability of certain notes. That statute has never been considered as affecting notes of this description. In Lyon v. Summers, 7 Conn. Rep. 399. 406. Daggett, J. says : “ It is true, that the note is not negotiable, not being payable to order.” In the same manner was such a note held, in Huntington v. Harvey, 4 Conn. Rep. 124. 128.

That notes of this description, therefore, are not negotiable, cannot admit of a doubt.

But it is said, that although they are not negotiable, still they are entitled to days of grace. So it was held, by Lord Kenyon, in the case of Smith v. Kendal, 1 Esp. Rep. 231. And this opinion was confirmed, by the'court of King’s Bench ; (6 Term Rep. 123.) and must now be considered the settled law of that country. It seems, also, to have been adopted, in the state of New-York, in conformity with this precedent. Downing v. Backenstoes, 3 Caines 137. The Goshen and Minisink Turnpike Road v. Hartin, 9 Johns. Rep. 217. The Dutchess Cotton Manufactory v. Davis, 14 Johns. Rep. 238. 244. And if authority merely is to govern us, we should so decide. But the manner in which the English judge begins his opinion, is enough to make us hesitate in adopting it. “ Were this,” says he, “ res integra, and there was no decision upon the subject, there would be a great deal of weight in the defendant’s objections.” The authorities cited in the argument, and the case relied upon by his lordship, only go to prove, that although the note is not payable to order or bearer, yet it is a note within the statute, upon which the payee, not the in-dorsee, may maintain a suit. Such was the case relied upon of Burchell, adm’r, v. Slocock, 2 Ld. Raym. 1545. Now, if the fact that such notes may be declared upon as subsisting- instruments, proves, that they are entitled to days of grace, then our notes have always been entitled to that privilege ; because they have always been so declared upon.

But I have never been able to discover what there was in the statute of Anne affecting any notes, except those which it made negotiable. The evil complained of, in the preamble, is, that it has been held, that certain notes were not assignable, &c. To relieve from this embarrassment, and “to the intent to encourage trade and commerce, which will be much advanced, if suck notes shall have the same effect as inland bills of exchange, and be negotiated in like manner.” The evil, then, to be redressed, was holding certain notes not to be negotiable ; and the relief granted was, to make them negotiable. The statute seems to me to be conversant about such notes, and no other ; and I have never been able to find the clause in that statute applicable to any notes, except those thus rendered assignable or negotiable. If so, and these notes are not negotiable, then, of course, they are no more entitled to grace since the statute of Anne than before. Our own statute, stripped of the verbosity of the English statute, will serve to show at least what our legislature intended. “ Beit enacted, that all promissory notes, duly executed, to the amount of thirty-five dollars, or more, for the payment of money only, and made payable to any person or persons, or his, her or their order, or to the bearer, shall be assignable and negotiable, according to the custom of merchants and the law relating to inland bills of exchange.” This contains the substance of that part of the statute of Anne, changing the character of promissory notes ; and this is conversant only about those notes, which, under this statute, are to become negotiable ; and I can see nothing more in the statute of Anne.

Lord Kenyon, instead of deriving support to his opinion from the statute, goes on to remark, that he finds the merchants in London allow three days of grace on notes like the present. Though the opinion of merchants would not govern this Court, it would be dangerous now to shake that practice, which is warranted by a solemn decision of this Court, by any speculative reasoning on the subject. 6 Term Hey. 125. None of these reasons operate here. We have no decision upon the subject. We are not informed of any practice upon the subject; and we are not aware of any danger to arise from such a decision. It is certainly desirable, that there should be a uniformity of practice upon mercantile subjects, in the commercial world. Yet when we are upon a construction of a statute, we are not at liberty to extend its provisions, merely because uniformity is desirable.

When this statute has been before our courts, it has been considered as applicable only to negotiable securities. Thus, in Norton v. Lewis, 2 Conn. Rep. 478., where it was decided, that negotiable notes were, under that statute, entitled to grace, Swift, Ch. J. says : “When the statute made promissory notes assignable, it communicated to them all the properties of negotiable instruments. As these are entitled to days of grace, it follows, of course, that notes made assignable by statute, musí be entitled to days of grace.” And Hosmer, J. says: “ I have no doubt, that days of grace must be allowed on a negotiable promissory note.” And when it is considered, that at the time of making that act, notes were considered as specialties ; that we yet declare upon them as such ; that they are subject to the same statute of limitations; lean see no reason for extending that statute to a class of notes not embraced in its letter, and, as I believe, not included within its intent.

There are, and ever must be, broad distinctions between notes not negotiable, and those that are negotiable. This, as to the time of payment, seems to be one of them. How a note payable at sixty days, shall be held not to be due until sixty-three days have elapsed, except from usage or statute, I do not know. The statute, it has been shown, does not reach it. No evidence of usage has been adduced. The consequence is, that this note must be considered as due at the time specified by the parties ; and, of course, not entitled to days of grace.

It is also objected to this defence, that the officer’s return does not show, that the goods were posted or sold in the society in which they were taken.

The return is dated at Neio-London. It states, that at New-London the officer made demand, and levied upon certain goods, and posted them on the sign-post in New-London. The officer has made his return just as if there was but one society in New-London. He posted on the sign-post in New-London. This seems to imply, that there is but one ; and are we to presume, in order to defeat this return, that there is more than one ? We know, in fact, that some of our towns compose one society ; and some contain several. It would be-going very far, to hold, that because some towns have more than one society, New-London is one of them. If there were more than one, and that appeared to the Court, there would be some foundation for this objection. But certainty to a reasona ble intent, is all that is to be required ; and so we decided in Picket v. Allen, 10 Conn. Rep. 146. This objection, therefore, cannot prevail.

Similar remarks are applicable to the claim, that it does not appear, that the goods were sold in the society. The sale, it seems, was made in Main-street, New-London ; and, unless wre are to presume, that there is more than one society in that town, there can be no difficulty on this point.

The plaintiffs further claim, that the officer is bound to set out the circumstances which entitle him to sell these goods at a place other than the sign-post.

By the general law, sales are to be made at the public signpost. By a recent statute, whenever the property cannot be removed to the public sign-post, without great injury or expense, or which cannot be sold there, without great inconvenience or injury from exposure to the weather, such officer may, in his advertisement, designate some other place in the society. 2 Stat. 225. Ness. 1829. c.ii. s. 1. Upon this statute, it is tobe observed, in the first place, that the officer may seil at the post, or another place, tinder certain circumstances. Whether these circumstances exist, he is, in the first place, to judge ; and as he can change the place only when they do exist, the fact of such change seems to me sufficiently to show, that, in his opinion, those facts have occurred, or that necessity did exist. Whether such circumstances do exist or not, is always a question, which may be examined, whether the officer return his opinion or not. Besides, many cases exist, where such an opinion must not only be useless, but ludicrous. Suppose a ship were taken on execution, shall the officer’s return be held void, because he omitted to state, in his return, that as it would have been very inconvenient or expensive to drag it to the public signpost, he sold it at the wharf ? And in this case, when dry goods and teas were to be sold, is anything valuable added to the return, by setting out, that there is great inconvenience or injury arising to such property from exposure to the weather, in the open street ?

Without giving any opinion upon the other answers to the plaintiffs’ objections to this return, I am of opinion, that the facts found, justify the officer ; and that the Superior Court should be advised to render judgment for the defendant.

The other Judges were of the same opinion, except Peters, j., who was absent.

judgment for defendant.