66 Miss. 479 | Miss. | 1889
delivered the opinion of the court.
Strauss, a merchant in Aberdeen, Mississippi, on the 16th day ■of March indorsed in blank and deposited with Gattman & Co., bankers, a draft drawn on Metzler at Meridian, receiving credit on his pass-book for the amount of the same, less the fee for collection. Gattman & Co. were at that time largely insolvent and had been for more than two years, but of this fact Strauss had no knowledge or suspicion. Gattman & Co. indorsed the draft to the First National Bank of Meridian “ for collection for account.” On the 17th day of March (Saturday) Gattman & Co. transacted business and their doors were not thereafter opened. Strauss, ■learning of their failure, telegraphed Metzler not to pay the draft, •and acting on this advice he permitted it to be protested. Suit having been brought against him, he deposited the money in court, .and Strauss intervened as claimant. In the court below a jury was waived and the cause submitted to the judge, who awarded the money to Strauss, from which judgment the Bank of Meridian, plaintiff, appeals.
The finding by the court in favor of the claimant includes, of necessity, the finding of the fact that the deposit ivas received by Gattman & Go. under such circumstances as to warrant the claimant in rescinding the transfer of the draft for fraud, and on the facts ■disclosed we concur in the conclusion so reached by the court.
Gattman & Co. were at the time irretrievably insolvent; the bank had been really insolvent for years, and at the time of the deposit by the claimant, one of its members had absconded; the concern was tottering to fall, and it is inconceivable that the managing partners who remained in charge were not informed of its hopeless condition. The interval is as broad in law as in morals, that separates the condition of him who, though involved in financial straits, has a bona fide hope or expectation of retrieving' his situation, and prosecutes his business for the honest purpose of so doing, from that of him who, financially destroyed, conceals his own ruin, and recklessly and fraudulently plunders the unwary and trusting, who may be drawn into his toils.
Where ’the condition of a bank is so hopelessly insolvent that one of the managing partners absconds, and the other, with equal opportunities for information touching its condition, continues to receive deposits, it does not devolve upon, depositors, seeking to rescind a sale of paper to the bank, to show that the remaining partner was privy to the flight of the other. The fraud may be sufficiently proved by showing that the circumstances were such that the managing partner must have known the hopeless condition of the bank, and that in the course of business the sum credited to the depositor could not be paid.
The Bank of Meridian was not a purchaser of the draft, and is not entitled to its proceeds to be credited on the debt due to it by Gattman & Co.
In Bank of Metropolis v. The New England Bank, 3 How. 212,
In New York the contrary rule is announced. McBride v. Farmers’ Bank, 26 N. Y. 454 ; Dickerson v. Wason, 47 N. Y. 439. As is pointed out by Mr. Daniels (Dan. on Neg. Inst. 336 et seq.), the difference in decisions springs from the fact that in one case the collecting bank is held to be a bona fide purchaser for value, while in New York, receiving negotiable paper in payment of, or as security for an antecedent debt, does not constitute the receiver a purchaser for value. In this state it is well settled that receiving property merely as security for a pre-existing debt does not constitute the holder a purchaser for value. Pack v. Harney, 4 S. & M. 255; Pope v. Pope, 40 Miss. 517 ; Perkins v. Swank, 43 Miss. 349 ; Hinds v. Pugh, 48 Miss. 268 ; Brooks v. Whitson, 7 S. & M. 513.
Otherwise, if the thing be taken in discharge of ■ the debt, or if other security be surrendered in consideration thereof. Taylor v. Love, 26 Miss. 567; Emanuel v. White, 34 Miss. 56; Upshaw v. Hargrove, 6 S. & M. 286 ; Bank of Manchester v. Lewis, 13 S. & M. 226. So also an agreement to forbear suit for a definite time. Turner v. Brown, 3 S. & M. 425. But a mere forbearance, in the absence of any obligatory agreement therefor, is no consideration. Brown v. Prophit, 53 Miss. 649 ; Keirn v. Andrews, 59 Miss. 39.
It is said that the great weight of authority, in the United States and in England, is that one who accepts negotiable paper before maturity, as security merely for a pre-existing debt, is a holder for .value, but that there is some diversity of opinion even among the English courts. The authorities are collected by Mr. Randolph in his work on Commercial Paper, vol. 2, p. 26.
As to all bills and notes (other than those payable to bearer), it is provided that “ the defendant shall be allowed the benefit of all want of lawful consideration, failure of consideration, payments, discounts, and sets-off, made, had, or possessed against the same, previous to notice of the assignment, in the same manner as though the suit had been brought by the payee.”
It is true this has relation only to defenses existing as between the parties to the instrument and in reference to its consideration, or payment, or sets-off against it; but the effect of the law is to so thoroughly deprive such paper of its ordinary character in the law merchant, as to render inapplicable a principle that springs from such character alone. We are therefore of opinion that the bank of Meridian was not the holder of the draft for value, and that its possession did not preclude the claimant from rescinding its sale to Gattman & Co. for fraud.
The judgment is therefore affirmed,.