WHO MAY SUE AS INDORSEE.

SENECA PETTEE v. RICHARD PROUT.

(3 Gray, 502. Supreme Court of Massachusetts, September, 1855.)

Presumption of title. — In an action upon a note payable to A., or bearer, the production of the note by the plaintiff, B., is sufficient evidence of his title, though he is the general agent of A., who, the answer alleges, is the owner of he note.

Equities. One to whom a note payable to A., or bearer, is transferred before maturity, takes it subject to no equities or rights of set-off which the maker might have against A.

ACTION of contract on a promissory note for $50, dated March 14, 1851, signed by the defendant, and payable in one year to the Cheshire Iron Works or bearer, with interest. The defendant, in his answer, denied that the plaintiff was the owner and bearer of the note sued upon, and alleged that it was the property of the Cheshire Iron Works; and also filed a declaration in set-off upon the following note: "$49.74. Cheshire, June 11, 1851. Six months after date we promise to pay to the order of Gilman Bowker, forty-nine dollars, value received, ten dollars of which is to be paid in goods, with interest.

"Cheshire Iron Works, by S. Pettee, General Agent." The case was submitted to the court upon a statement of facts, in which it was agreed that the plaintiff was the general agent of the Cheshire Iron Works; that the two notes were duly executed on the days of their respective dates; that the

note in set-off was assigned by the holder thereof to the defendant, for a valuable consideration, with the intention of securing a debt against the Cheshire Iron Works; that the Cheshire Iron Works were insolvent, and had no property; and that their stockholders, of whom the plaintiff was one, were individually liable for their debts.

There being no evidence to whom the note sued upon belonged, beyond the note itself, the defendant contended that the plaintiff had not proved his title to the note; and further contended that if he had, the note for $49.74 should be allowed in set-off.

SHAW, C. J. The plaintiff brings his action, as bearer of a note made by the defendant to the Cheshire Iron Works or bearer. He therefore claims as the holder of a negotiable promissory note, payable on time, and not dishonored; and if he establishes this title by proof, he is entitled to the same privileges and immunities as an indorsee, having taken a note by indorsement in the course of business, before it has become due. He is not subject to any equities as between the promisor and the original payee, nor to the set-off of any debt, legal or equitable, which the promisor may afterwards acquire. Wheeler v. Guild, 20 Pick. 545. By giving a note payable to bearer at a future day, which is strictly a negotiable note, the defendant agreed to pay the amount to any person to whom it should be transferred, before the day of payment, without claiming to set off any demand which he then had or might have against the promisee. It is in this respect like mercantile notes (in use, we believe, in some of the States where the law allows set-offs and other equitable defences, even against indorsees of promissory notes), payable “without defalcation," thereby meaning, by force of the contract itself, to bind the maker to pay the amount absolutely to the regular holder, and renouncing any benefit of set-off or other equitable defence against the payee.

Then the question is, as to the proof. Where a plaintiff brings the note declared upon in his hand, and offers it in evidence, this is not only evidence that he is the bearer, but also raises a presumption of fact that he is the owner; and this will stand as proof of title, until other evidence is produced to control it. Ordinarily, such bearer, relying on the general presumption, has no means of proving the transfer of the note to himself.

The defendant contends that, as the plaintiff was the general agent of the corporation to whom the note was payable, and, as such, had the custody of all their notes, his possession may have been the possession of the corporation. But we think this fact alone is not sufficient to rebut the general presumption.

The demand relied on by the defendant is a note signed by the Cheshire Iron Works, payees of the note in suit, and payable to order; still it was not negotiable, because payable in part in goods. A negotiable note must be payable in money. But though the defendant could not sue on this note in his own name, yet we believe by the Rev. Sts. c. 96, § 5, as the assignee of a chose in action, the holder of such note might use it as a set-off, in a proper case, as against a suit brought by the debtor, in the same manner as if it were a legal debt. But it is unnecessary further to remark on the validity of the set-off; the ground of our decision is, that the plaintiff held the note in suit under such a title that no demand of the defendant, legal or equitable, against the Cheshire Iron Works, could avail him as a set-off.

Judgment for the plaintiff.

JOHN M. WAY v. IVORY W. RICHARDSON.

(3 Gray, 412. Supreme Court of Massachusetts, March, 1855.)

Presumption of title. It is not competent for the defendant to deny that the plaintiff is the owner and holder of a note, upon which he brings suit as such, without traversing the signature or the indorsement or the delivery of the note; and in such case evidence is inadmissible to prove that the plaintiff never owned the note, and never employed counsel to prosecute the action, and that he had no interest in the suit.

ACTION of contract on a promissory note for $100, made by the defendant, payable to his own order, and thus indorsed: "I. W. Richardson." "Without recourse, J. Wetherbee, Jr." Answer, that the defendant executed the note declared upon, without any consideration, and for the accommodation of Nathaniel Richardson; that the note was delivered by Nathaniel Richardson to Wetherbee, and, at the time it fell due, was in the hands of Wetherbee, and held by him, and was paid by Nathaniel Richardson to Wetherbee, while it was so in his hands; that Wetherbee is still the owner of the note, and that this suit is prosecuted for his benefit; and that if the plaintiff is the owner of the note, he received it after it had been paid and was overdue, with a full knowledge that it was an accommodation note, and had been paid, and that he paid no consideration for it. Trial in the Court of Common Pleas at January Term, 1854, before Wells, C. J., who signed the following bill of exceptions:

"The plaintiff read the note declared on and the indorsements thereon to the jury, and rested his case. The defendant then offered to prove that the plaintiff in this action never owned the note declared upon, and never had said note in his possession, nor employed counsel to pursue or prosecute said action; and that the plaintiff had no interest in the suit or judgment, should one be recovered in his favor; and that the note was never assigned to the plaintiff by delivery or other

wise; and that the plaintiff never paid any thing for said note. To this the plaintiff objected, upon two grounds: first, that it was not admissible under the defendant's answer; second, that if proved, it would form no defence to this action. And the court rejected the evidence. The defendant offered no other evidence, and the court directed a verdict for the plaintiff. To all which rulings of the court the defendant excepts.'

SHAW, C. J. The evidence offered by the defendant was rightly rejected. Independently of the consideration that it was not specified in the answer, the evidence would have constituted no defence. The action was upon a note made by the defendant, payable to his own order, and by him indorsed in blank, and then by Wetherbee indorsed in blank, by which the plaintiff, if holder, had a right to fill up the indorsements, and make the note payable to himself, as second indorsee, which we are to presume was done, or considered as done, at the trial. The genuineness of the signature and indorsements was admitted. This, with the production of the note, was prima facie evidence of title, and good, unless rebutted; for, although Wetherbee's indorsement was "without recourse," yet this was as effective to transfer the note as if those words had not been used; it was a blank indorsement.

The plaintiff, by his attorney, whose authority to appear it was then too late to contest, produced the note at the trial; the plaintiff's possession must be presumed to be lawful, and to have existed from the time of the indorsement, until the contrary appeared; and no evidence to the contrary was offered. It was not competent for the defendant to deny that the plaintiff was the owner and holder of the note, without traversing the signature or the indorsement or the delivery of the note, which he did not offer to do.

The plaintiff was not bound to prove that he gave value for it; the first indorsee might have given it to him, or authorized