Opinion
(December Term, 1859.)
Where a party bought an inland bill of exchange bona fide and in the regular course of business, but without endorsement from the payee, and brought a suit at law in the name of the payee, to his use, against the drawer, it was Held that although the drawer and payee both alleged the instrument was forged, on such payee's receiving from the beneficial claimant a bond to indemnify him, he would be restrained from dismissing the suit at law, and that the defendant would be restrained from using a release in that court until the question as to genuineness of the paper might be tried.
CAUSE removed from the Court of Equity of LENOIR.
No counsel for plaintiffs.
McRae for defendants.
The bill alleges that in the regular course of business and bona fide, the plaintiffs obtained from one Charles Eaton an inland bill of exchange, drawn by the defendants Scott Bro. for $259, on Lamont Monk, of Wilmington, drawn in favor of Weill Anathan, payable sixty days after date, and dated at Wilmington, 20 April, 1857, which said bill is endorsed by Daniel Perry, F. B. Harrison, and Bryan Quinn. That at the maturity of the said bill they presented it to Lamont Monk, who refused to pay it, because, as they said, they were so instructed by the defendants Scott Bro. The plaintiffs having made demand of Scott Bro. and given notice to the endorsers, (165) brought suit at law in the name of Weill Anathan, to their use, against the defendants Scott Bro. and the endorser Quinn, and that the same is still pending in the county of Lenoir. That the defendants Scott Bro. have procured from Weill Anathan a release of the said cause of action and an authority to have said suit at law dismissed. That they have pleaded the release aforesaid to their cause of action and threatened to have the same dismissed by virtue of the said written authority obtained from the defendants Weill Anathan. The prayer is for an injunction to restrain the defendants Scott Bro. from setting up the said release in the court of law and to forbid the said Weill Anathan from dismissing the said suit at law. The injunction issued in vacation.
The defendants Scott Bro. answered that they did not make any such bill of exchange to Weill Anathan, and the latter answer that they never had such a bill, and they both say the one in question is a forgery, and, as they believe, perpetrated by Charles Eaton, from whom plaintiffs got it. The account which they give of the transaction is that Scott Bro. made a bill of goods with Weill Anathan and took a note of hand for the amount ($259), and it was agreed that if this note was not paid at maturity, in cash, it was to be met by a bill of exchange on Lamont Monk at sixty days; that the blank form of such a bill was prepared at Wilmington, where Weill Anathan resided, and taken home by the defendant J. F. Scott to be used as above stated in case it became necessary, but that they paid off the note at maturity, and having no occasion to use the bill of exchange had not signed the same; that they (Scott Bro.) had loaned the blank form thus prepared to a neighbor by the name of Williams, as a guide to him in a matter of business, and that Eaton, who was his clerk, stole the same, forged the names of Scott Bro. to it, and put the same in circulation, and has since fled the country for that and similar crimes. They both answer that the release was given because there was no debt due from (166) Scott Bro. to Weill Anathan, and that it was no more than equity and justice that the same should be used to defeat the said action. Weill Anathan admit that they have given a written authority to the clerk to dismiss the suit, and that this was done for the reasons above stated. Replication to the answer.
On coming in of the answers, the defendants moved to dismiss the bill for the want of equity and to dissolve the injunction, and the cause being set down for hearing on the bill, answer, and on the motion to dissolve, was sent to this Court.
It is a well-settled rule of the court of equity that it will restrain by injunction the assignor of an equitable claim from dismissing a suit at law brought by the assignee in his name. Deaver v. Eller, 42 N.C. 24; 2 Story Eq. Jur., secs. 1040, 1050. The present is not a case of such assignment, but it is one in which the plaintiffs allege that they purchased bona fide, in the regular course of their business, an inland bill of exchange purporting to have been drawn by the defendants Scott Bro. on Lamont Monk of Wilmington, and payable to the defendants Weill Anathan, which was not endorsed by the said payees, but was endorsed by other persons to the plaintiffs for value paid by them. The defendants Scott Bro. allege that the bill of exchange is a forgery, and the other defendants Weill Anathan deny that they ever held such a bill of exchange as payees, and, of course, could never have put it in circulation, and they executed to Scott Bro. a release of all their interest in it. But notwithstanding these answers, we think that the plaintiffs have a right, upon executing to the defendants Weill Anathan a suitable and sufficient bond of indemnity, to institute and carry on a suit at law in their names against Scott Bro. to try the question whether the instrument in controversy is a (167) forgery or not. Weill Anathan, upon having such an indemnity provided for them, cannot have any direct interest in the event of the suit, and the other defendants ought not to be allowed to use the release to avoid their responsibility upon the bill of exchange if it were not in fact a forgery, and if they be liable to the plaintiffs upon it according to the law merchant. As between the plaintiffs and these defendants, so far as the pleadings show, the question is purely a legal one, and the latter ought to be restrained from insisting on the release for the purpose of preventing a trial at law.
A decree may be drawn upon the principles herein declared.
PER CURIAM. Decree accordingly.