24 Iowa 15 | Iowa | 1867
The rule as to what should open the door to defenses based upon the loss, larceny or tortious transfer of paper negotiable by delivery, has undergone material changes. It was laid down by Lord Kenyon in Lawson v. Weston
And Mr. Parsons, in his work on Notes and Bills (vol. 2, p. 279), states the doctrine to be, that the title of a bona fide holder of a lost, stolen, or tortiously transferred note or bill transferable by mere delivery, not overdue or dishonored, for a valuable consideration in the usual course of business, and who has taken it without notice of the loss or fraud, is not defeated by proof that he was negligent or even grossly negligent in taking it, and omitted to make inquiries which common prudence would have dictated.
We therefore hold, upon principle and authority, that the fact that a note payable to a payee or bearer is negotiated to another than and not to the payee, is not of itself sufficient to charge the taker with notice of a defect therein as against the maker.
So far as the proof shows the taker to have been a resident of the same city with the co-maker, from whom he received the note, and who was in insolvent circumstances at the time, and left the city soon after, these are facts proper for a jury, or the court when tried to the court as a jury, to take into consideration in determining the notice of the defect or mala fides of the taker or holder. And the finding of the court like that of a jury-can only be set aside when clearly against the weight of evidence. The finding in this case is not so.
Affirmed.