Opinion
Opinion filed October 1, 1935.
Trial — Defendant's Motion for Judgment in Case Tried by Municipal Court without Jury, on Case Made by Plaintiff, as Equivalent to Demurrer to Evidence — Trover and Conversion — Amount Unpaid on Lien Notes as Prima Facie Evidence of Value of Property at Time of Conversion — Bills and Notes — Effect of Indorsement of Notes Specified To Be for Collection and Remittance to Payee — Power to Revoke Such Indorsements, and Return or Recall of Paper Uncollected as Constituting Revocation — Title to Notes So Indorsed as Remaining in Payee — Pledges — Rights of Pledgee as Dependent upon Retention of Possession — Prima Facie Effect of Possession by Payee of Notes Previously Indorsed by Him to Bank for Collection and Remittance of Proceeds to Him — Errors against Plaintiff Not Excepted to by Him as Not for Consideration by Supreme Court on Defendant's Exceptions.
1. In action of tort for conversion of evaporator against buyer thereof, to whom it had been sold with title reserved in seller until notes given in payment therefor had been paid, upon refusal of buyer on demand, after default in payment, to surrender evaporator to seller, held, in trial of cause by court in municipal court, that defendant's motion for judgment on case made by plaintiff amounted to demurrer to evidence, admitting all facts which evidence tended to prove, together with all reasonable inferences therefrom.
2. In such action, held that amount unpaid on such lien notes was prima facie evidence of value of property at time of conversion, and was sufficient to sustain judgment, there being no evidence to contrary.
3. Indorsements to bank on notes specified to be "for collection and remittance on our accounts," held to be restrictive in character, and merely to constitute indorsee agent of indorser to collect debt.
4. Such indorsements are not, strictly speaking, contracts of indorsement, but rather creation of a power, and pass title to paper only so far as to enable indorsee to demand, receive, and sue for debt in his own name.
5. Such indorsements may be revoked at pleasure of either party, and they are revoked when indorsee returns paper uncollected, or indorser recalls it before collection.
6. Where notes were indorsed to bank specified to be for collection and remittance on account of payee, legal title remained in payee, and he may maintain suitable actions to enforce obligation.
7. Rights of pledgee in property remain only so long as he retains possession of it.
8. Where notes, indorsed to bank specified to be for collection and remittance to payee, came back into latter's possession, held that prima facie, he was entitled to sue upon them and enforce lien reserved for their security in his own name, though indorsee did not reindorse them, and indorsements were not erased.
9. In action of tort for conversion of evaporator against buyer thereof, to whom it had been sold with title reserved in seller until notes given in payment therefor had been paid, upon refusal of buyer on demand after default in payment to surrender evaporator to seller, production of such notes by seller, though they had previously been indorsed to bank for collection and remittance to payee and had never been reindorsed to seller, held prima facie evidence of his title thereto.
10. When defendant brings case to Supreme Court on exceptions which are overruled, Supreme Court cannot consider errors against plaintiff to which he did not except at trial.
ACTION OF TORT for conversion of evaporator sold to defendant under conditional sales contract. Plea, general issue. Trial without jury in Brattleboro municipal court, Orrin B. Hughes, Municipal Judge, presiding. Judgment for the plaintiff. The defendant excepted. The opinion states the case. Affirmed.
A.L.J. Crispe for the defendant.
Edward C. Barry for the plaintiff.
Present: POWERS, C.J., SLACK, MOULTON, THOMPSON, and SHERBURNE, JJ.
The plaintiff sold the defendant an evaporator accepting in payment therefor three promissory notes for $53.33, each. At the time of the sale, a written memorandum evidencing the terms of the sale and providing that the title to the evaporator should remain in the plaintiff until the notes were paid, was executed by the defendant and delivered to the plaintiff. Default having been made in such payment, the plaintiff, acting through a public officer, made demand for the evaporator, and the defendant refused to surrender the same. Thereupon, this suit was brought for a conversion of the property. It was returnable to and tried in the Brattleboro municipal court, without a jury, and judgment was rendered for the plaintiff for the amount due on the principals of the unpaid notes. The defendant excepted. The defendant offered no evidence at the trial, but moved for a judgment on the case made by the plaintiff. In effect, the motion amounted to a demurrer to the evidence, and admitted all the facts which the evidence tended to prove, together with all reasonable inferences that could be drawn therefrom, 64 C.J. 1211.
The grounds of the defendant's motion, as stated in the court below and as argued here, are as follows:
(1) That the plaintiff's evidence failed to show the value of the evaporator at the time of the demand; (2) that, it having appeared that the notes herein referred to had been pledged at a bank for the plaintiff's debt, and it not appearing that the bank had expressly authorized the plaintiff to sue in his own name, the suit should have been brought in the name of the bank, and not in the name of the plaintiff.
1. The first ground of the motion avails the defendant nothing. Eastman v. Jacobs, 104 Vt. 536, 538, 539, 162 A. 382, and Reed v. Rowell, 100 Vt. 41, 134 A. 641, therein cited, are full authority against him. Under these holdings, the amount unpaid on the lien notes was prima facie evidence of the value of the property at the time of the conversion, and was sufficient to sustain the judgment, since there was no evidence to the contrary.
2. The claim that the notes in question were pledged to a bank is unwarranted. The only evidence regarding a transfer of the notes is the indorsements that appear upon them. On one of them, no indorsee is named. On the others, the name of the National Bank of Ogdensburgh appears as indorsee. All the indorsements are specified to be "for collection and remittance on our accounts." Such indorsements are restrictive in character, and merely constitute the indorsee an agent of the indorser to collect the debt. Moore v. Louisiana Nat. Bank, 44 La. 99, 10 So. 407, 32 A.S.R. 332; People's Bank v. Jefferson Co. Sav. Bank, 106 Ala. 524, 17 So. 728, 54 A.S.R. 59; U.S. Nat. Bank v. Geer, 55 Neb. 462, 75 N.W. 1088, 70 A.S.R. 390; Armour Bros. Banking Co. v. Riley Co. Bank, 30 Kan. 163, 1 P. 506. Indeed, they are not, strictly speaking, contracts of indorsement at all, but rather the creation of a power. Smith v. Bayer, 46 Or. 143, 79 P. 497, 114 A.S.R. 858, 861. They pass title to the paper only so far as to enable the indorsee to demand, receive, and sue for the debt in his own name. Freeman's Nat. Bank v. National Tube-Works Co., 151 Mass. 413, 24 N.E. 779, 8 L.R.A. 42, 21 A.S.R. 461, 463; National Butchers', etc., Bank v. Hubbell, 117 N.Y. 384, 22 N.E. 1031, 7 L.R.A. 852, 15 A.S.R. 515; Sweeney v. Easter, 1 Wall. 166, 17 L. ed. 681. Such indorsements may be revoked at the pleasure of either party; and they are revoked when the indorsee returns the paper uncollected or the indorser recalls it before collection. Haskell v. Avery, 181 Mass. 106, 63 N.E. 15, 92 A.S.R. 401, 403. The legal title remains all the time in the payee, and he may maintain suitable actions to enforce the obligation. Smith v. Bayer, supra; National, etc., Bank v. Hubbell, 117 N.Y. 384, 22 N.E. 1031, 7 L.R.A. 852, 858, 15 A.S.R. 515; White v. Miners' Nat. Bank, 102 U.S. 658, 26 L. ed. 250, 252. Moreover, these notes had been returned to the plaintiff, and so far as third persons are concerned, the rights of the bank therein had terminated. The rights of a pledgee in the property remain only so long as he retains possession of it. Fletcher v. Howard, 2 Aikens, 115, 117, 16 A.D. 686; Russell v. Fillmore, 15 Vt. 130, 135; Samson v. Rouse, 72 Vt. 422, 426, 48 A. 666; Jennings v. Gallagher, 103 Vt. 169, 172, 152 A. 802. When the notes came back into his possession, he could sue upon them and could enforce the lien reserved for their security in his own name. This would be so, prima facie, if the indorsement were absolute, and not restrictive. And it is so, prima facie, though the indorsee did not reindorse them, and the indorsements were not erased. Garden City Nat. Bank v. Fitler, 155 Penn. 210, 26 A. 372, 35 A.S.R. 874, 876; New Haven Mfg. Co. v. New Haven Pulp Board Co., 76 Conn. 126, 55 A. 604, 606; Henderson v. Davison, 157 Ill. 379, 41 N.E. 560; Middleton v. Griffith, 57 N.J. Law, 442, 31 A. 405, 51 A.S.R. 617, 619; Anniston Paper Works v. Mary Pratt Furnace Co., 94 Ala. 606, 10 So. 259; Berney v. Steiner Bros., 108 Ala. 111, 19 So. 806, 54 A.S.R. 144, 146; Dugan v. United States, 3 Wheat. 172, 4 L. ed. 362, 364. It was said in Royce v. Nye, 52 Vt. 372, 375, that "when the payee of the note on which he has made a special indorsement produces it on trial, the legal presumption is that he had never delivered the note to the indorsee, and as without such delivery the indorsement would not take effect the payee would have a right to erase it, so that the production of it by him on the trial would be evidence of his title, and entitled him to recover."
There is no claim that the case is affected by the Negotiable Instruments Act (P.L. 7134 et seq.).
We hold, therefore, that the production of the notes by the plaintiff afforded prima facie evidence of his title thereto, and that the second ground of the motion is unavailing.
The plaintiff says that by inadvertence the interest on the notes was omitted from the judgment, and he asks us to correct this error. But he did not except, and the rule is that, when defendant brings a case here on exceptions which we overrule, we cannot consider errors against the plaintiff to which he did not except at the trial. Wheelock v. Moulton, 13 Vt. 430, 434.
Judgment affirmed.