J
ohn HUGHES, the 16th of February 1763, gave his bond to John Baynton, conditioned for the payment of one thoufand pounds. One the 3dSeptember, 1764, John Baynton and Samuel Wharton, became bound jointly and feverally, to John Hughes in a bond conditioned for the payment of fix hundred and eight pounds fifteen fhillings. On the 8th of May 1765, John Baynton, affigned the one thoufand pound bond to the plaintiff, Ann Wheeler, for a juft debt, fhe being ignorant of any dealing, between Huges and Baynton. The action was brought on the affigned bond ; the defendant pleaded payment, and offered in evidence the bond dated in September, in bar of the plaintiff's recovery. To this the council for the plaintiff objected, and this day, viz. 23rd April, the caufe came to be argued.The Council for the Plaintiff contended, that by the [♦] act of affembly, bonds, bills and notes were negotiable, as promiffory notes in England under the 3 and 4 Ann. cap. 9 ; that negotiability imported a currency from hand to hand ; that this act of affembly was formed on the plan of the ftatue, in many places ufing the fame words, and being made for the fame purpofe, viz. to encourage trade and commerce, which could only be effected by fuch a conftruction, and that an affigned bond fhould have a currency, from hand to hand, and that the poffeffor fhould recover, independent of any contracts or dealings between the obligor and obligee ; that the claufe in the act of affembly, " Should commence and profecute his, her, or their "actions at law, for the recovery of the money mentioned in fuch "bonds or notes, or fo much thereof, as fhall appear to be due at "the time of fuch affignment," meant as fhall appear on the face of the inftrument itfelt–That, for this reafon, the obligator fhould either guard, in making the contract, by leaving out the negotiable words, or fhould get his payments indofed on the bonds ; that the words, "To recover as the perfon or perfons to whom the fame was or were made payable," only referred to the mode of recovery, where the affigned brought his action in his own name,as he might under his act ; that any other conftruction would defeat the intention of the act, which was to encourage trade and commerce ; but if the affignee was to take the bound fubject to the dealing between the obligator and obligee, there was an end of this fpecies of traffick, as no one would ever take an affigned bond in the courfe of trade, or in any other cafe, but of a doubtful or defperate debt.
To fhew that a third perfon, coming in bona fide, and for a valueable confideration, would be in a better fituation than his vendor, the
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following cafes were cited: ı Siderfin. 134.A. made a feoffment to B. by convin. B. makes a feoffment to D. for a valuable confideration and bona fide. The firft feoffor enters and makes a feoffment for a valuable confideration–The feoffee of the firft feoffee fhall retain the land. Cro' Jac. 32. D. bt on obligation for two hundred pounds: Defendant pleads the ftatute of ufury, and fhews that he was indebted to one Alder in one hundred pounds, and agreed with him that the fhould for bear him for a year in confideration of thirty pounds, and that he fhould make a bond to Alder for the payment of thirty pounds, and for payment of one hundred pounds. That then he and Alder entered into the bond for two hundred pounds. The plaintiff replied that Alder was juftly indebted to him in one hundred pounds, and for payment thereof entered into this bond, that he was not knowing to any corrupt agreement between the defendant and Alder. The Court determined in favour of the plaintiff upon his being a fair and innocent creditor.–To fhew that promifory notes in England, are not fubject to any difcount or dett off, between the promiffor and promifee, the following cafes were quotes. ı Salk. ı 26. Bill loft; finder transfer s it to C. for a valuable confideration–the original owner cannot bring trover againft C. ı Burrow. 459. S.P. ı Raymond 738.2 Burr. 675.6.1224.1227.– 2 Freeman 257. Bill Payable to A. or bearer, is like fo much money paid to whomfoever the note is given ; that let what difcount, or conditons, foever, be between the party who gives the note, and he to whom it is given, yet it fhall not affect the bearer.–3Bacon. title Merchant. Conryns 43. Marius 72. 3 Burrows ı523.27. 29.
It was contended further by the plaintiff, that the act of affembly had changed the nature of thefe contracts ; that they were not to be conftrued on commercial principles only ; that the doctrine of the defendant eftablifhed this principle, that it was nudum pactum, there was no confideration at the time of the bond being given or affigned. To which it was anfwered, that, judging on commercial principles, a want of confideratin was no objection, for there is no fuch thing as nudum pactum in mercantile tranfactions. 3 Burr.1669.– Plaintiff alfo denied defendant to be wtihin the defalcation act.
The council for the defendant contended, that it was not the intention of the Legiflature to make bonds negotiable here as promiffory notes in England. They allowed the law as laid down in the above cafes, but denied the application ; infifting that they ftood upon quite a different footing–That nothing more was meant by the act, than to give affignees the benefit of fuing in their own names and preventing any releafe, or other dealings, affecting the affignee after affignment once made ; that in England, a bond paffes into the hands of an affignee fubject to all the equity it had in the hands of the affignor, for which they quoted 6 Vern. 692.675. ı0 Mod.445 ı P.Wms. 383.452.459. That the conftruction, contended for by plaintiff, would open a door to numberleff frauds ; that a fatisfied bond might be paffed away, and the obligor compelled to pay it twice ; that even a forged bond might pafs in the fame
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manner ; that the preamble has little weight in the conftruction of a law, being often made by the clerks in Parliament ; that trade and commerce would be beft promoted by their conftruction, as it would only impofe a duty on a perfon taking a bond, to enquire in what ftate it ftood.
That in cafe of bonds miftaid, or loft, no money could be paid on that ; that the intention of the Legiflature was to make thefe bonds, bills, &c. fubject to a common law remedy, and fubftitute the doctrine of the courts equity in England in this Province, and no farther. That it was evident, that a general negotiability was not intended ; if it had, the Legiflature would not have varied the expreffion in thofe parts of the ftatutes, exprefsly refering to inland bills of exchange, and making promiffory notes negotiable as bills of exchange ; the avt of affembly, on the other hand, expreffing fuch a recovery by affignee as the affignor could have had, and confining the recovery to fuch money as was due at the time of the affignment. That this was further confirmed by the laft claufe of the act, which prohibits the affignee releafing any money actuallly, or really, due. That cuftom an dpractice, which are good explofitors of laws, are with them ; and that the ftatute of 4 and 5 Ann. being declared on, fhews it was the fenfe of the Practitioners, that promiforsy notes are not negotiable here as in England. That as to the defalcation act, it is a remedial law, and to be extended by equity to all cafes within the fame mifchief ; that though that part of it, which gives a ƒaire ƒacias, does not apply to this cafe, yet the other part does ; and the defendant is fairly within the reafon of it.
The council for the plaintiff, in reply, admitted the law in England as laid down by the defendant in the cafe of bonds ; and, that before the ftature, promiffory notes were only evidence of debt ; there was no property transfered ; but that the act of affembly and act of parliament, being made parimateria, are to receive the like conftruction. That the conftruction made by the defendant, would render the act nugatory–That merely to give the affignee a right of fuing in his own name, unlefs fome folid advantage attended it, was trifling, nor would it at all encourage trade and commerce. That a limited negotiability was an abfurdity ; it muft be negotiable, or not ; if not at all. That the intention of the act muft wholly fail, it affignee is only to ftand in the place of affignor, and his recovery made to depend on circumftances and proofs, which, in the nature of things, are not in his power. That to fay the affignee muft make inquiry before he meddles with the bond, is begging the queftion. We contend, that this act of affembly meant fomething, and that was, for the fake of trade and commerce, to annex a property in the debt and a currency to the paper, and to improve vigilance in the debtor, to take care either to guard his contract in the firft inftance, or in cafe of payment, or other fatisfaction, to fee his payments indorfed, or his bond cancelled.
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That there is no ground for fupporting the intention of the law was only to give a chancery jurifdiction ; becaufe there was a chancery in this Province until the year 1718 ; fince this act paffed, and as foon as ever the chancery powers ceafed to be exercifed, the Courts of Law took them, and have exercifed them to the great fatisfaction of the Province.–That , if they were competent in one cafe, they were alfo in another ; and they have in many inftances gone much farther then in this. That, in conftruing this law, we are to regard the ftate of the Province at that time. There was little Specie ; no Paper Currency ; a medium of trade was wanted ; the act of Parliament had fhewn how promiffory notes had been made a medium of commerce ; they took it for their guide, and extend it to bond and penal bills. That the variance in wording the act is eafily accounted for. Foreign bills of exchange were not in much ufe, Inland Bills not known ; to have ufed the language of the act of Parliament, would have been penning laws in a language not underftood, and it would be abfurd to refer to a fpecies of contracts known and underftood by very few in the Province. That cuftom and practice is with the plaintiff, as there is fcarcely a news-paper which does not forewarn perfons from taking affignments of bonds, bills, notes, &c.–a practice peculiar to this Province, and, therefore, (illegible text)plainly demonftrating, that this law made fuch a change in thefe affignements, as to put an obligor in a worfe fituation in cafe his bond was affigned, than while it continued in the hands of the obligee. That the practice of declarers in this Province on promiffory notes under the ftatute, may with more propriety be refolved into the convenience and eafe of lawyers, than flowing from any principle of law. That the defalcation at is exprefsly confined to perfons having dealings together ; and as a ƒaire ƒacias is admitted not to ly, it muft be a new conftruction of ftatutes, which makes a perfon a fubject of a ftatute in one part, and not in another ; that he may be prejudiced under the law, but can recieve no benefit from it. The Plaintiff's council clofed with a cafe from Lancafter determined by Meffieurs Lawrence and Willing. It was that of Baufman affignee of Henry Bough, affignee of Jacob Stily, affignee of Henry Waggoner. The action was brought on a note of hand for one hundred and four pounds. Plea, payment. Defendant offered to fhew in evidence and agreement, figned by Waggoner, the original promiffee, made at the time the note was given, tending to fhew a want of confideration. Plaintiff objected–The court held it could not be offered, as it would effectually deftroy the negotiability of notes ; and faid it would be attended with the moft dangerous confequences, if the claim of an honeft affignee of a bond, or note, fhould be defeated by and bargains, or agreements, made at the given fuch notes, or bonds and not expreffed therein. The evidence was accordingly over-ruled.
The court took time, till the 25th April, to confider, and this day gave judgment.
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chew, Chief Juftice. The queftion in this cafe is, whether Hughes can have the fame defalcation againft Wheeler, which he could have had againft Banyton, if this had not been affigned?
It was contended for the Plaintiff, that bonds were negotiable as inland bills of exchange.
It was alfo contended, that defalcation by the act, is only where there are dealings between the parties.
For the defendant it was contended, that the act does not make them negotiable, as bills and notes are by the ftatutes of 3 and 4 Ann.c. 9.
It is plain however that the act was drawn from the ftatute, for in many places it follows it, totidem verbis, through in others it varies. This fhews the legiflature intended in thofe inftances, to very the law. Bills in England were negotiable before the ftatute ; notes were only evidence of a debt ; the ftatue was made to put them on the fame footing with bills.
The queftion is whether the act of affembly has done the fame as the ftatute. He then compared the act with the ftatute, to fhew that it was drawn from the ftatute.
The act however fays, "for the encouragement of trade, commerce and credit ; "the ftatute adds," and to make notes negotiable in the fame manner as bills, This is a material variance, and it carried through the act.
The Defendant relied on the words in the act entitling affignee to recover the money, that fhould appear to be due, in like manner as obligee could.
Here is fame variance as before ; for, by the ftatute, the affignee is to recover what fhall be due, "in like manner as indorfee of a bill of exchange."–Had the act purfued the ftatue in thefe refpects, or expreffed the fame meaning in other words, the plaintiff would be right.
What fhall appear to be due at the time of the affignment, has been differently applied by the oppofite council ;–The Plaintiff's council contended, that it meant what appeared to be due on the bond ; fo that, if the bond fhould be paid, yet if payment was not indorfed, the affignee might recover the whole.
The Defendant contended, that the claufe related only to the manner of proceeding, enabling the affignee to fue in his own name.
We have confidered this matter very deliberately, and are clearly of opinion, that the variance between the act and the ftatute, was intentional, not accidental.
An argument of force with us, not mentioned by the defendant, arifes from the wording of the act.
The words "fo much as fhall appear to be due," relate to the time of trial, and not to the time of the affignment ;−they are in the future tenfe.
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It has been faid, that it is obligor's fault not to have the payment indorfe on the bond : but it is not in his power, for the money muft be paid before he is entitled to a receipt ; and then, if the obligee is a bad man, he may refufe to indorfe it.
We are, therefore, clearly of opinion, that an affignee takes the bond at his own peril ; and that he ftands in the fame place as the obligee, fo as to let in every defalcation which the obligor had againft the obligee, at the time of the affignment, or notice of affignment. The only intent of the act being to enable the affignee to fue in his own name, and prevent the obligee from releafing after affignment.
Judgment for the Defendant.