Story Case

Abel Brown executed a promissory note in favor of George Davis, an infant. The note was for $100, made payable to Davis in thirty days' time. Davis indorsed the note by signing his name on the back thereof and delivered it to Frank Hamilton in payment of a personal debt to Hamilton of that amount. After the thirty days expired Brown refused to pay the instrument on the ground that Davis was an infant and could not pass title or bind himself on the note by indorsement. Would you advise Hamilton to bring an action against Brown or Davis on the note?

Ruling Court Case. Nightingale Vs. Withington, Volume 15 Massachusetts Reports, Page 272; Volume 8 American Decisions, Page 101

One Vose had been employed by the defendant, Withington. In payment for his services the defendant gave to Vose a promissory note, knowing that Vose was a minor. Vose accepted the note in payment of his services. He indorsed it in blank, i. e., by signing his name to Bacon. He in turn transferred it to the plaintiff, who knew, as did Bacon, that Vose was a minor. When the note fell due, the defendant refused to pay it, and suit was brought thereon by the plaintiff. The defendant contended that he was not liable on the note, because he had paid the sum to the father of the infant, which discharged the obligation. He also contended that the note held by the plaintiff was not good because an infant cannot pass title to negotiable paper by indorsement.

Mr. Parker, Chief Justice, said: "That an infant may indorse a negotiable promissory note, or a bill of exchange, made payable to him, so as to transfer the property to an indorsee for a valuable consideration, seems to be well settled in the law merchant, and is in no way repugnant to the principles of the common law."

Accordingly, it was held that payment to the infant's father did not discharge the obligation, and that the plaintiff received title to the note, and was entitled to recover the amount thereof.

The rule is that an infant can transfer and pass a negotiable note, and no one, except the infant himself, can put in the defense of infancy, and he can do this only when suit is brought against him on the note.

Ruling Law. Story Case Answer

A negotiable instrument is a right to money which passes from hand to hand in a manner similar to the way in which money is passed. Title is said to pass by indorsement or delivery of the instrument. If such an instrument is made payable to one who is an infant, and he then indorses, or if an instrument is indorsed to an infant, who indorses to another, title passes even though he' is an infant.

No one can set up the defense of infancy except the infant. In the Story Case, therefore, Hamilton can hold Brown liable on the instrument because he could not put in the defense of infancy on the part of Davis, the payee and indorsee. Davis passed title to the note by indorsement, although if he himself were sued on the note, he would have the defense of infancy.