Rugh v. Ottenheimer.

cases of future marriages, or of property acquired in future, it is also right and proper to apply it to the lands of persons then married, unless such a construction cannot be given it. Against such a construction it is claimed that the husband, by the common law, became on marriage invested with a freehold in the lands of the wife, which estate continued for their joint lives. This estate, however, was conditional and subject to be defeated by a divorce a vinculo. Schouler's Dom. Rel. 300. The marriage contract out of which this estate arose was at common law one in which the State was interested, and over which it exercised legislative control. It is both sui generis and publici juris. Cord on R. of M. W.; 1 Kent, 418, note a; Maguire v. Maguire, 7 Dana (Ky.), 183.

In this last case the court, in speaking of the legislative control over marriage contracts, says: "Marriage being much more than a contract, and depending essentially on the sovereign will, is not, as we presume, embraced by the constitutional interdiction of legislative acts impairing the obligations of contracts." In view, there fore, of the nature of the contract by which the estate of the husband in his wife's lands is created, and the control which the legislature has always assumed over them, we think that without constitutional authority such contracts are subject to be altered and modified by the legislature. But this section of the Constitution is an expression of the sovereign will of the people expressed in their Constitution, and in the making of that Constitution the convention represented the sovereign power, and was subject to the control of no higher power, except the Constitution of the United States, and if they judged it right to exempt the lands of married women from the debts and contracts of these husbands, they could do so, and the only question is, what is the true meaning and scope of the section of the Constitution in question? As we have before indicated, the language of the section embraces the lands of women who were married at the time Oregon became a State; and such meaning should be given to it, unless it be limited by the last clause of section 10 of article 18 (schedule) of the Constitution, which is: "And private rights shall not be affected by such changes."

In construing these two clauses of the Constitution the obvious. meaning and intent of both should be given effect if possible. They are in pari materia, and must be construed together. The words "private rights" may properly be confined to such rights, when applied to property, as persons may possess unconnected with,

Moore v. Miller.

and not essentially affecting, the public interest, or growing out of a public institution of society.

The marriage relation, affecting the whole public, and being an institution of society affecting more deeply than any other the foundations of social order and public morals, has always been under the control of the legislature. The legislature can, and often does, dissolve the marriage relation between parties, and when the relation is thus destroyed the marital right to use the wife's land, which is incident to such relation, ceases longer to exist. And we think this right is not strictly a private right, but is one which is incident to a relation in which the whole community is interested. We think, therefore, that section 5, article 15, is not modified by section 10, article 18 of the Constitution, and that article 5, section 15, does include all the lands owned in their own right by married women at the time of marriage, whether married before or after Oregon became a State.

[Omitting a technical point.] We have considered all the questions necessary for the determination of this case, and think the decree of the court below should be affirmed.

Judgment affirmed.

MOORE V. MILLER.

(6 Oregon, 254.)

Transfer of negotiable note by delivery.

Where one has paid value for a promissory note payable to order, and takes

A

a transfer of it by delivery only, without indorsement, he acquires title, but not the rights of a bona fide purchaser.

CTION on a promissory note. The facts are stated in the opinion.

B. Witten, N. H. Gates and W. W. Thayer, for appellant.

W. H. Effinger, for respondent.

SHATTUCK, J. The liability of the respondent, Miller, in this case must be ascertained by the writing offered in evidence, including the note sued on. These writings show that Minear made a

Moore v. Miller.

promissory note to the First National Bank of Idaho, for four thousand dollars, bearing interest at two per cent a month, and due August 4, 1874. About the date of the maturity of this note, an extension of the time of payment was sought, and Miller was requested or asked by letter from the cashier of the bank to indorse this note, which by letter he consented to do. The cashier then sent to Miller the note sued on in blank, inclosed in a letter wherein this proposition was made to Miller. "If you will sign and return the note (the one sued on), I will grant the time asked for and deliver up both notes when either is paid " (referring to the Minear note upon which the time asked was granted). Miller signed this note and returned it to the cashier, and stated in the letter inclosing it, in substance, that he gave this note with the understanding contained in the cashier's letter quoted from above.

There was also further evidence in the case tending to show that Moore, at the time of this correspondence, was cashier of the bank and a stockholder in the institution, but since that time he had withdrawn and had received in his settlement with the bank, and as part of his share of assets, the Minear note and the note sued on - both representing, in fact, one debt and entitling the holder to payment of only one of the sums of money specified in them. The note sued on was regularly and properly indorsed by the payee; but the Minear note, through some oversight, was delivered without any indorsement whatever by the payee. The Minear note was delivered to the plaintiff by the payee for a valuable consideration, along with the note sued on, and the plaintiff was the sole party interested in the money due upon these notes.

With this testimony before the court below, it was not error to instruct the jury as a general proposition that parties to promissory notes may, as between themselves, make a separate contract as to the liability assumed by which their rights are to be governed, or they may make a contract as for an indorsement upon a separate piece of paper and attach the same to the note.

But the evidence in this case makes Miller's undertaking amount to something more than is implied in this general proposition of law. The writings introduced in evidence, fairly construed, mean simply this, that Miller, in consideration of forbearance to Minear, promised to pay, not Minear's note, but a certain definite sum of money at a certain time, with a condition, however, that if Minear's note should be paid before the day fixed, then this promise should be void. The only satisfaction or fulfillment of this prom

Moore v. Miller.

ise, or the only defense to this action, upon this view of the testimony, which can avail the respondent, is payment of the one or the other of these two notes, and in so far as the instruction given by the court to the jury conveyed to them a view of the matter different from that just expressed, it was erroneous. The second instruction given, to which exception was taken, and the instruction asked by plaintiff and refused, both refer to the same point, and may be considered together. The instruction given was this: "If you find that Miller executed the note of date August 4, 1874, for four thousand one hundred and eighty-six dollars and sixty-seven cents to the First National Bank of Idaho, as collateral security for the payment of the Minear note, sixty days after the maturity of the Minear note, you must also find, before the plaintiff can recover, that he is the owner and holder of both the notes, and as they are negotiable promissory notes, that they were transferred to him by indorsement; for in no other way will the transfer convey the legal title so as to permit the plaintiff to recover in this action."

The instruction asked and refused was this: "If you believe from the evidence that plaintiff is the owner and holder of the Minear note, that will be sufficient for plaintiff to maintain an action against defendant on his note without the indorsement of the Minear note."

Two propositions are asserted by these constructions: one that the plaintiff must be the owner and the holder of both notes, in order to maintain this action; the other that the ownership of the Minear note, for the purposes of the action, must be created and exist by indorsement of the payee's name, and not otherwise. The first of these propositions need not be considered, for the decisions of the second will dispose of the case.

The question then is, can Moore become the owner of the Minear note, it being payable to the order of the payee without the indorsement of the payee? The court below held, and the counsel for respondent here contend that he cannot, and we are cited to a provision of our statute, and to elementary works on bills and notes, besides several reports, that employ language mainly the same as that used in the instruction given. But those cases and rules have reference to purely legal titles, to negotiable paper, and legal remedies thereon, as enforced under the law merchant. It does not follow from these citations that a party who pays valuable consideration for a note or bill, payable to order, and takes a transfer of it by delivery only, without indorsement, may not be

Moore v. Miller.

deemed in law for many purposes the owner. By such a transfer, it is true, the holder does not take the paper clothed with all the rights of an indorsee of negotiable paper, transferred in the usual manner and course of business. He nevertheless could, under the old law, sue upon it in the name of the payee, and was so far recognized as owner as that he might lawfully collect and receive for his own use the money due on it; but, different from a regular indorsee, he would doubtless be subject to the equities subsisting between the maker and the payee. Under the New York Code, and it is presumed wherever that Code has been adopted such a note payable to order may be transferred by delivery without indorsement, so as to vest the property in it in the purchaser and holder, and to entitle the holder to sue upon it in his own name. Edwards on Bills, 286; 11 Barb. 620; 12 How. Pr. 165. And it would seem that such a holder of a note, for which he has paid value, would have a good, equitable title that would sustain a suit to enforce collection, and to establish his right to the money against both the maker and the payee.

The Code of this State has preserved to a considerable extent the distinction between law and equity jurisdiction and modes of proceeding; and whether or not Moore could maintain an ordinary action at law under our Code upon the Minear note, on the ground of his being the real party in interest, it is not necessary to determine at this time. But, beyond question, the evidence in this case tended to show facts from which the legal inference is that Moore has title to the Minear note and the sole right to receive the money due upon it and to cancel and deliver it up; that he could collect it, if not by action at law in his own name, certainly by action at law in the name of the payee, or by suit in equity in his own name against the maker and payee.

Having such a title to the Minear note and a perfect legal title to the note sued on, we think Moore can maintain this action without having the indorsement of the payee upon the Minear note.

It follows that there was error in the instructions given and in refusing the instructions asked, and the judgment will have to be reversed and a new trial ordered.

Judgment reversed.

VOL. XXV -66