Lee v. Jilson

An action on a promissory negotiable note can be commenced and sustained, by him alone, who has the legal interest. Therefore, if after the commencement of an action on such note, by the prom-isee, and in his name, he parts with his interest therein, by indorsement, such action can no longer be pursued.

This was an action on a promissory negotiable note, brought by the payee against the makers. The defendants pleaded sundry matters in bar. In one of the pleas it was averred, That after the service of the plaintiff’s writ, and before the return day, he, the plaintiff, by. his indorsement of said note, transferred, assigned and delivered it to Steelman & Gordon, of Hartford, who thereby became, and have ever since continued to be, the lawful owners thereof. These averments were traversed, by the plaintiff; on which issue was joined to the court. The court found this issue for the defendants. The issues joined on the other pleas were found for the plaintiff. The case was then reserved for the advice of this Court, on the question whether the plaintiff could maintain his action after the finding that the note was assigned by him to Stedman Gordon. If the action could be maintained in favour of the plaintiff, after the assignment, he was to take judgment for the amount of the note and interest; otherwise, judgment was to be entered up for the defendants. That the action, which was properly commenced in the name of the plaintiff, was not defeated, by the assignment of the note. Where a suit has been rightly commenced, in the name of one person, it may be prosecuted to final judgment, though the fruits of the judgment, by virtue of an assignment, during the pendency of the suit, may belong to another. The Mechanics’ Bank v. Hazard, 13 Johns. Rep. 353. The court, in all such cases, will protect the rights of third persons. that the defence in this case, as in all others, is to be determined with reference to the rights of the parties at the time of plea pleaded, contended, L That Lee cannot now sustain this action, his indorsement having divested him of all interest in the note. As to him, the effect of his indorsement was precisely the same as if he had discharged the note. 1 Swift’s Dig. 430. Bishop v. Dexter, 2 Conn. Rep. 419. The same interest is required in a plaintiff to sustain an action in his own name, or to prosecute it to judgment, as to commence it; and that is, a legal interest. Anderson v. Martindale, East, 497. Munsel v. Sandford, 1 Root 257. But Lee, after the indorsement of the note, had no interest in it whatever, legal or equiable. 2. That Stedman & Gordon cannot prosecute this suit, ' They have the legal interest in the note. They have a right of action on it in their own names, and can now bring ; such an action, and sustain it. This suit cannot be successfully pleaded in abatement of it. Clerk v. Pigot, 12 Mod. 3.93. Burdick v. Green, 15 Johns. Rep. 247. Thatcher v. Winslow, 5 Mason’s Rep. 58.