73 N.Y. 226 | NY | 1878
The action was replevin to recover five bonds issued by the city of Poughkeepsie which had been stolen from the plaintiff, about the 9th of October, 1869, and sold to the defendants a month later. The evidence was that the defendants, who were brokers in New York, purchased them at ninety-six per cent, which was about the fair value for them, and the contested question of fact was whether the defendants purchased them in good faith. The bonds were negotiable and the rule is that a purchaser of such paper for value will be protected, unless the circumstances are such that an inference could be fairly and legitimately drawn that the purchase was made with notice of a defective title in the seller, or in bad faith. It is not sufficient that a prudent man would be put upon inquiry, nor that the purchaser was negligent, nor that he did not exercise a proper degree of caution. A purchaser of such securities for value will be protected, if he is honest and believes that the seller has a good title. (Welch v. Sage,
The judgment must be reversed and a new trial ordered, costs to abide the event.
All concur, except ALLEN and MILLER, JJ., absent.
Judgment reversed.