Goldsmith v. Holmes

• fullCitation: Goldsmith v. Holmes, 36 F. 484 (D. Or. 1888)
• Decision Date: 05 November 1888
• Citation: 36 F. 484
• Parties: GOLDSMITH et al. v. HOLMES et al.
• Court: U.S. District Court — District of Oregon

36 F. 484

GOLDSMITH et al. v. HOLMES et al.

United States Circuit Court, D. Oregon.

November 5, 1888

(Syllabus by the Court.)

The true relation of parties to a negotiable instrument may, as between themselves, be proven by parol, whenever it is necessary to a correct determination of the right or liability of either of them thereon; and this may be done to enable a party to such an instrument to maintain an action thereon in the United States circuit court.¹

W. F Owens, wishing to borrow $10,000 of the plaintiffs, offered to give a note therefor, with the defendants as security and, the plaintiffs consenting, he delivered them a note for the amount, signed by the defendants and payable to his order, which he at the same time indorsed, and also subscribed a waiver of notice and protest written thereon and received the amount to his own use. The note not being paid when due, the plaintiffs brought this action against the defendants to recover the amount thereof. The defendants demur to the complaint for want of jurisdiction in the court. Held, that the plaintiffs are the payees, and not the assignees, of the note; and that there never was any assignment thereof, within the restriction on the jurisdiction of this court over an action to recover the contents of a promissory note, contained in the last clause of section 1 of the judiciary act of 1887, (24 St. 553.)

Lewis B. Cox, for plaintiffs.

Parish L. Wills, for defendants.

DEADY J.

This action is brought by the plaintiffs, citizens of New York, against the defendants, citizens of Oregon, to recover the contents of a promissory note made by the latter for $10,000.

It is alleged in the complaint that on or about August 1, 1886, W. F. Owens applied to the plaintiffs for a loan of $10,000, and offered to give therefor a promissory note, with such additional parties thereto as should be approved by the plaintiffs, to which application, on the condition stated, the plaintiffs acceded; that thereupon, on August 9, 1886, Owens procured the defendants to 'execute' and deliver to him a promissory note for that sum, payable, with interest, in six months, to his order, and signed by them as makers; that thereafter Owens indorsed said note by writing his name in blank thereon, and at the same time subscribed his name to the following indorsement thereon, 'For value received I hereby waive, on the within, demand, notice, and protect,' and delivered the same to the plaintiffs as security for the payment of the proposed loan, whereupon the plaintiffs accepted said note, and advanced thereon, to Owens, the sum of $10,000; that the defendants 'executed' said note for the accommodation of Owens, to enable him to procure said loan thereon, and not otherwise, and the latter was in fact the maker of said note to the plaintiffs, and never had any cause of action thereon against the defendants; and that said note is wholly unpaid.

The defendants demur to the complaint, for that (1) the court has no jurisdiction of the subject of the action, nor the persons of the defendants therein; and (2) the facts stated do not constitute a cause of action.

On the argument of the demurrer counsel for the defendants relied solely on the point that under section 1 of the act of 1887 (24 St. 553) this court has no jurisdiction of this action to recover the contents of the note in question, because an action could not have been maintained herein for such purpose 'if no assignment or transfer' thereof had been made to them.

It is admitted that Owens is dead, and that in his life-time he was a citizen of Oregon; and that, the complaint being silent as to his citizenship, he must, for the purposes of this demurrer, be presumed to have been a citizen of Oregon at the time of the delivery of the note to the plaintiffs. See Morgan v. Gay, 19 Wall. 81.

On the facts stated in the complaint, counsel for the plaintiffs contend that the case is not within the purview of the statute; that Owens was not the assignor of this note, but a joint maker with the defendants; that the plaintiffs are, in point of fact, the payees of the note, and the first holders of the same, for value; and that it was first put in circulation when delivered to them, and has never been assigned by any one.

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