Cross v. Brown

51 N.H. 486
Supreme Court of New Hampshire·Decided December 15, 1871·Published·Cited by 1 cases

Opinion

Smith, J.

The note, being payable on demand, must be considered as dishonored at the time of indorsement, thirteen months after it was given. Emerson v. Crocker, 5 N. H. 159; Carlton v. Bailey, 27 N. H. 235; 1 Parsons on Notes and Bills 264, note y.

It is not suggested that there was any consideration for the indorsement except the agreement to support the payee. This agreement did not constitute a valid consideration as against the existing creditors of the payee. Smith v. Smith, 11 N. H. 459; Albee v. Webster, 16 N. H. 362; 1 Bishop on the Law of Married Women, sec. 759. It is clear, therefore, that the defendant, independently of his position as administrator, and irrespective of the insolvency of the payee’s estate, or of the proceedings in the probate court, has a right to prove, in set-off, a debt [488] due to him from the maker at the date of the indorsement. Ordiorne v. Woodman, 39 N. H. 541.

But the defendant is not compelled to rely solely upon his right of set-off. He has a mor.e direct defence, grounded upon a denial of the plaintiff’s right to maintain a suit upon this note. The transfer of the note was invalid as against the existing creditors of the payee. If, then, it shall be made to appear that the amount of the note is needed to pay the debts of the payee and the expenses of administration, it follows that the administrator of the payee has a better right to the note than the plaintiff. It must be regarded as settled in this State that the transfer in such a case is void as against the administrator, representing the creditors. Abbott v. Tenney, 18 N. H. 109;—see, also, Marsh v. Fuller, 18 N. H. 360; Everett v. Read, 3 N. H. 55; Kingsbury v. Wild, 3 N. H. 30. And it is, therefore, unnecessary to review the authorities in other jurisdictions. See 1 Am. Lead. Cases, 4th ed., pp. 43, 44. If some third person had been appointed administrator instead of the defendant, it would be a good defence to this suit to show that such administrator had a better right to this note than the plaintiff; and that the administrator had notified the defendant that payment should be made to the administrator and not to the plaintiff. If the maker of a note pays it to a wrongful holder, after notice of the invalidity of the holder’s title, he does so at the risk of being compelled to pay the note again to the rightful owner. See 2 Parsons on Notes and Bills, pp. 256, 211, 212; Davis v. Lane, 8 N. H. 224; same case, 10 N. H. 156, 11 N. H. 512. If it would be a good defence to show that a third person has a better right to the note than the plaintiff, the efficacy of this defence cannot be destroyed by the accidental circumstance that the defendant himself, acting in a representative capacity, is that third person. The defendant, in his individual capacity, is a distinct person, in contemplation of law, from the administrator of the estate of Abby H. Folsom. See Saltmarsh v. Candia, 51 N. H. 71.

The administrator, in his second account, rendered in September, 1870, virtually charged himself with this note as part of the assets of the intestate; and the allowance of this account was, in effect, a decree of the probate court charging the administrator with the note. But the decree as to this matter is not evidence against the plaintiff. The probate court is not the proper tribunal to finally determine upon the validity of the title of third persons claiming to hold property by deed or gift from the intestate. The rights of the administrator, as against such third persons, can only be determined in a court of common law or a court of equity. As between the administrator and those entitled to the estate under the statute of distributions, the judge of probate “ may pass collaterally upon these points,” but cannot conclude the rights of third persons. “ For example, he may charge an administrator with a debt due the deceased, which he ought to have collected, but through negligence has failed to collect. In deciding whether the administrator should be so charged, he may pass incidentally upon the question whether such debt was justly due, or whether it had been [489] paid or otherwise discharged. If the administrator thinks himself wrongfully charged, he must appeal, and thus get time to bring his action for the claim, and try it at common law. If the administrator were so to bring a suit at law against the debtor, and the debtor were to plead that he never promised, or payment, it would be no reply to say that these matters had been passed upon by the court of probate, and that th.e defendant was concluded by the decree of that court.” Thomas, J., in Lewis v. Bolitho, 6 Gray 137, pp. 138, 139.

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Cross v. Brown, 51 N.H. 486 (N.H. 1871).

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