34 N.J.L. 187 | N.J. | 1870
We have presented to our consideration in this case but a single question, whether the title of a holder of negotiable paper, acquired before it was due, for valuable consideration, is affected by the fraud
At the trial of this cause, the jury was instructed that if the holder of the note sued on — the plaintiff in the action— acquired his title under circumstances which should have put a person of ordinary prudence upon his guard, the note was invalid, if its inception had been fraudulent.
The verdict was in favor of the defence, and the plaintiff now insists that the judicial instruction should have been, that suspicious circumstances attending the acquisition of his title were not sufficient to defeat his claim, unless of a character to raise a conviction of actual fraud on his part.
Counsel who so ably argued this case in behalf of the defendant, did not deny that the modern English authorities were hostile to'their position, but they went upon the ground that the rule thus sanctioned was an innovation, and consequently would not be followed by this court. The ancient rule, it was maintained, is that declared in Gill v. Cubitt, 3 Barn. & Cress. 466. This decision 'was made in the year 1824, and, beyond- all question, it sustains the principle now claimed by the defence, for, in the reported case referred to,, the jury were explicitly told that “ there were two questions-for their consideration : first-, whether the plaintiff had given value for the bill, of which there could be no doubt; and, secondly, whether he took it under circumstances which ought to have excited the suspicions of a prudent and careful man.” The authority is directly in point, and the only question which can arise is, whether it correctly states the ancient rule of the common law upon the subject.
My first remark in this connection is, that from the opinion of the judges in the case of Gill v. Cubitt, it appears that the doctrine adopted was intended to be an innovation upon the antecedent practice, and that it was avowedly opposed to a decision of the greatest weight. Twenty-three years, before, in the year 1801, Lord Kenyon, in Lawson v. Weston, 4 Esp. 56, had expressly repudiated the idea that suspicious-circumstances, in the absence of actual fraud, would avoid a
An examination of the American reports will disclose a' similar mutation of judicial opinion upon this subject. For a time, in several of the states, the rule broached in the case of Gill v. Cubitt has been acted upon; but now, in most of them, and in those of the most commercial importance, that rule has been entirely discarded. 34 New York, 247, Magee v. Badger; 7 Bosworth 543, Bel. Bank of Ohio v. Hoge et al.; 10 Cush. 488, Worcester, &c., Bank v. Dorchester, &c., Bank ; 4 Geo. 287, Matthews v. Poythress; 6 Md. 509, Elliv. Martin; 36 New Hamp. 273, Crosby v. Grant.
The subject has also recently been settled, after an elaborate discussion and,full consideration in the Supreme Court of the United States, in the case of Goodman v. Simonds, 20 How. 343, the result being an explicit repudiation of the doctrine that suspicious circumstances will, per se, vitiate the title to commercial paper.
From this brief review of the cases, I think it may be safely said that the doctrine introduced by Lord Tenterden stands at the present moment marked with the disapproval of the highest judicial authority. Nor does such disapproval rest upon merely speculative grounds. That doctrine was put in practice for a course of years, and it was thus, from experience, found to be inconsistent with true commercial policy. Its defect — a great defect, as I think' — was, that it provided nothing like a criterion on which a verdict was to be based.
I think a new trial should be granted.
Scudder and Van Syckel, Justices, concurred.