for payment. The plaintiff, at the time of drawing the bill, paid the full value for the same to Sir Wm. Forbes, J. Hunter & Co., the drawers, but did not ask, or obtain, their consent, or that of the defendants, the acceptors, to make any alteration in the tenor of the bill by indorsement either as to the condition of the payment, or the extension of time. The plaintiff's name had never appeared in the Gazette as ensign in any regiment of the line.

The question for the opinion of the court was whether the plaintiff was entitled to recover. If he was, the verdict was to stand; if he was not entitled to recover, a verdict was to be entered for the defendants. This case was argued by Lens, Serjt., for the plaintiff, who contended that it was competent for the plaintiff by this special indorsement to make only a conditional transfer of the absolute interest in the bill, which he had purchased for a full consideration, and had vested in him by the delivery of the drawer. The defendants, by subsequently accepting the bill, had become parties to that conditional transfer, and as the condition had never been performed, the transfer was defeated, and they became liable, after the expiration of the two months, to pay the plaintiff, to whom the property then reverted, the contents of the bill, of which none of the indorsers could enforce payment against the defendants at the 45 days' end, because they had all received the bill subject to the condition, and were bound thereby. He cited Ancher v. Bank of England, Doug. 638.

Shepherd, Serjt., for the defendant, contended that it was immaterial whether the acceptance was before or after the conditional indorsement. The acceptance admitted the handwriting of the drawer, but it did not mix itself with the conduct of the indorsers. It admitted nothing which was on the back of the bill. The whole practice of the courts was accordingly; for in an action against the acceptor it became unnecessary to prove the handwriting of the drawer, but it was necessary to prove the handwriting of the indorser.

THE COURT gave judgment for the plaintiff.

SECTION 4.-TRANSFER BY DELIVERY

MAURAN v. LAMB.

(Supreme Court of New York, 1827. 7 Cow. 174.)

Assumpsit by the plaintiff as bearer, against the defendant, as drawer, of a check on the Bank of America, dated New York, October 21, 1824, for $1,912.02, payble to No. 25 or bearer.

The cause was tried at the New York circuit, March 25, 1826, before Duer, Judge.

It was admitted at the trial that the plaintiff had no interest in the check, but sued for the benefit of Mrs. Remsen, to whom the check belonged, with her consent.

The defendant objected that the action was not sustainable by the plaintiff in his name; but the objection was overruled. Verdict for the plaintiff. 21

WOODWORTH, J. It is contended that the plaintiff, being a mere agent, and having no interest, cannot maintain this action. It appears that the plaintiff came fairly by the possession; and his name was used for the benefit of Mrs. Remsen, claiming to be the person in interest. The rule is that the bearer of a note or bill payable to bearer need not prove a consideration, unless he possesses it under suspicious circumstances. 1 Chit. on Bills, 51. If a question of mala fide possessio arises, that is a fact to be raised by the defendant, and submitted to the jury. Conroy v. Warren, 3 John. Cas. 259, 2 Am. Dec. 156. In that case, Mr. Justice Kent referred to Livingston v. Clinton, decided July term, 1799, where the law was laid down that, if a note be indorsed in blank, the court never inquires into the right of the plaintiff, whether he sues in his own right or as trustee; that any person in the possession of a note may sue; and he says a decision to the like effect (Cooper v. Kerr) was, in March, 1800, affirmed in the Court of Errors. In Payne v. Eden, 3 Caines, 213, the note was indorsed to the plaintiff. He had no interest, but was merely a trustee for others. No objection was taken to his want of interest. The question was as to the consideration of the note, and, that being illegal, the plaintiff failed. Thompson, Justice, who delivered the opinion of the court, considered the cause in the same point of view as if the original parties were before the court. In consequence of proving that the plaintiff has no interest, the remedy is not defeated; but the defendant is permitted to avail himself of a defense against the original party. It is no answer to say that the defendant cannot plead a set-off against the cestui que trust. It may, in some cases, be a hardship, as such a defense applies to the parties on the record only. The act authorizing a set-off may not be sufficient to meet this case; but the remedy is with the Legislature, not the courts of justice.

* * *

New trial denied.

21 The statement of facts is abridged, and the arguments of counsel and part of the opinion are omitted.

GAGE v. KENDALL.

(Supreme Court of New York, 1836. 15 Wend. 640.)

Error from the Cortland common pleas. Kendall declared in the court below on a promissory note made by Gage, payable to William Castle or bearer. The defendant pleaded the general issue, and gave notice with his plea that he would prove, on the trial, that the plaintiff, at the commencement of the suit, had no title to or interest in the note declared on, but had transferred the same to one Shankland, who was • the owner and holder thereof, and that the suit was commenced without the knowledge, consent or authority of the plaintiff. On the trial, the defendant offered to prove the facts set forth in his notice. The evidence was objected to, and rejected by the court. The defendant excepted. The plaintiff obtained a verdict, upon which judgment was entered. The defendant sued out a writ of error.

PER CURIAM. The question is whether the fact that the holder and owner of a negotiable note has prosecuted such note in the name of a stranger, without his knowledge or consent, is a bar to a recovery in the name of such nominal plaintiff.

Perhaps this question cannot be better answered than it has been by this court in Lovell v. Evertson, 11 Johns. 52. The note being indorsed in blank (in this case payable to bearer), the owner had a right to fill it up with what name he pleased, and the person whose name was so inserted would be deemed, on record, as the legal owner; and if not so in fact, he could sue as trustee for the persons having the real interest. But the defendant could have no concern with that question. He was responsible to the person whose name was so inserted in the blank indorsement. It is true, as contended for by the plaintiff in error, that suits should be brought by the persons having the legal interest in contracts; but, in the case of negotiable paper, a suit may be brought in the name of a person having no interest in the contract. He may sue as trustee for those who are interested.

But why should the defendant give himself the trouble to investigate the plaintiff's title? He owes the money to some one. In this case he offered to show that he owed it to Mr. Shankland, who had brought the suit. It is not a case, therefore, of mala fide possession. A recovery in this case in the name of the present plaintiff might be pleaded, with proper averments, in bar of a new suit in favor of any other person. The defendant is not deprived, in such a suit, of any defense which he may have as against the real owner. There is, in principle, no objection to a suit on a promissory note in the name of a nominal plaintiff; nor is there any authority against it. The cases referred to do not sustain the defense. In the case of Olcott v. Rathbone, 5 Wend. 494, it was said the owner of a promissory note, indorsed in blank, can make whom he pleases the holder. The difficulty in that case was that it did not appear that the owner had assigned the note to the plain

tiff, or had directed that suit. There is no such difficulty here. The defendant's offer was to show that the true owner had himself brought the suit. The case of Waggoner v. Colvin, 11 Wend. 27, when properly considered, is not an authority for the plaintiff in error. That case came up on demurrer. The defendant pleaded that, before the commencement of the suit, the plaintiff had indorsed the note to Stilwell and others and delivered the note to them, who were the true and lawful owners and possessors of the note. The court said that the plea was good, because it showed the legal title out of the plaintiff, but add⚫ed that, if the suit was brought in the name of the plaintiff for the benefit of the owners, that fact should be replied, and it would be a good answer to the plea-distinctly asserting that a suit may be brought in the name of a person having no interest in the note, if for the benefit and by the direction of the owner.

The court below decided correctly, and their judgment must be affirmed.

Judgment affirmed.

HAYS v. HATHORN et al.

(Court of Appeals of New York, 1878. 74 N. Y. 486.)

Appeal from judgment of the General Term of the Supreme Court, in the Third Judicial Department, affirming a judgment in favor of plaintiff, entered upon a decision of the court on trial without a jury (reported below, 10 Hun, 511).

This action was upon a promissory note, alleged in the complaint to have been made by the firm of Hathorn & Southgate, payable to the order of defendant, Frank H. Hathorn, and by him indorsed and transferred to plaintiff.

The facts appear sufficiently in the opinion. 22

HAND, J. In their answer the defendants denied that the note on which the action was brought was ever transferred to the plaintiff or that he was the legal owner or holder thereof. They further denied that the plaintiff was the real party in interest, and alleged that the Saratoga County Bank was the real party in interest and the owner and holder and should be the plaintiff, and that the note was duly transferred to it instead of to the plaintiff.

Upon the trial, the plaintiff having produced the note which was payable to the order of F. H. Hathorn and indorsed in blank by him, rested. The defendants then offered to prove that the note "was not the property of the plaintiff; that the same was never transferred to him; that he was not the real party in interest; that the note was the property of the savings bank, who is the real party in interest." The

22 The arguments of counsel are omitted.

evidence was objected to by the plaintiff as immaterial and was excluded. This ruling I think was erroneous and renders necessary a reversal of the judgment.

Under the answer and this offer, the defendants unquestionably proposed to show substantially that the plaintiff had no title, legal or equitable, to the note, and no right as owner to its possession. This might have been done by proving that he was the mere finder or the unlawful possessor, or that the right to its possession and ownership was in the bank, to whom they were liable thereon, or in some other way. This they had a right to show.

It may be that, had their offer been admitted, they would have produced in fact no evidence to sustain it or prevent a recovery, but in considering the validity of their exception to the exclusion, we must assume that the evidence would have fully covered the propositions contained in the offer. And, as remarked in the dissenting opinion in the court below, "unless the defendants are to be precluded altogether from giving any evidence of a matter confessedly issuable, I do not see how this offer could be rejected."

The cases relied upon as justifying the exclusion of the evidence do not go that length. In Cummings v. Morris, 25. N. Y. 625, it was held that the maker of a note could not defeat the plaintiff, not a payee, by proof that the consideration of the transfer to him was contingent upon his collecting the note. Such plaintiff was declared to be the real party in interest on the express ground that the transfer was complete and irrevocably vested in him the title to the note. In City Bank v. Perkins, 29 N. Y. 554, 86 Am. Dec. 332, there was no question of exclusion of evidence, but all the circumstances being proved, it was held that where the cashier of a bank holding commercial paper, pledged it "duly indorsed" to the plaintiff as security for a loan by the plaintiff to his bank, and it had been actually transmitted under his direction to the plaintiff so indorsed, it was no defense to one admitting his liability upon such paper to show lack of authority in the cashier alone to contract a loan for the bank; or the fraudulent diversion by him of the funds received from the plaintiff on such loan. Some remarks in the opinion in that case, not necessary to the decision, are perhaps too broad to be entirely approved, but it is fully conceded in it that proof that the plaintiff had no right whatever to the possession but was a mere finder or had obtained it by some "positive breach of law" would be a defense.

Brown v. Penfield, 36 N. Y. 473, holds merely that proof, by the party liable on a bill, of gross inadequacy of the consideration for the transfer of such bill to the plaintiff does not impeach the validity of such transfer as to the party so liable.

In Allen v. Brown, 44 N. Y. 228, it was decided that, as against the plaintiff holding legal title to the claim by written assignment valid upon its face, the debtor cannot raise the question as to the considera