6 Ala. 761 | Ala. | 1844
It was contended in argument, that this case is identical in principle with the case of Hall v. Hallett, et al. decided at the present term. In that case, it was held, that receiving, a negotiable note by indorsement, m payment and discharge of a pre-existing debt, was a taking in the usual course of trade, and that the holder was not affected by the equities between the original parties, of which he had no notice.
The object of the bill is, to have the notes credited by thé amount still due on the mortgage to Hallett.
The general doctrine is very clear, that any one in possession of a negotiable security, may, by indorsement, vest a complete title to it, though he may have obtained it by fraud, or for an entirely different purpose, if the indorsee gives a valuable conside
It results as a corollary from the proposition above stated, that if the transferee has notice at the time of the transfer of the fraud or other defence to the instrument, he will be affected by it, and the instrument in his hands will be subject to the same de-fence as if it had never been negotiated, unless it has been said he can deduce a title from some one upon the bill not affected with notice, a question which does not arise in this case.
The only question necessary to be settled, is, whether the Planters’ and Merchants’ Bank, have such a title to the notes in question, as by the rules of the law merchant, will protect it against the latent equity of the complainant.
To vest the legal title in a negotiable instrument, it must, according to the law merchant, be transferred to the holder. If it be payable to bearer, the transfer may be by delivery; if payable to order, it can only be by an indorsement on the paper itself, or at least on one attached to it. [Story on Bills, 222, and cases cited; Chitty on Bills, 251; Gibson v. Minet, 1 H. B. See the opinion of G. J. Eyre, at page 605-6.] This results from the rule, that the title and possession of a negotiable security, are inseperable — ■ the property passes with the possession. In the language of C. J. Eyre, in Collins v. Martin, [1 B. P. 648,] “every holder with the bill, takes the property, and his title is stamped upon the bills themselves.”
•Tested by these rules, it will be perceived that the transfer of the notes in this case to the P. and M. Bank, has not one of the properties of the endorsement of a negotiable security. When the agreement was entered into by the P. and M. Bank, with E. Andrews, the notes were not in the possession of Andrews, but were then in the custody and under the control of the Bank of Mobile, to which they had been pledged by Andrews as collateral security. The transfer was not made by endorsement on the notes, but by a deed of assignment, by which these notes, with other securities, were conveyed to the Bank. Nor did the Bank, by the con
In Hopkirk v. Page, [2 Brock. 41.] where negotiable securities, as in this case, had been transferred by a deed of assignment. Chief Justice Marshall holds the following language: “Nothing can be more anti-commercial than the idea of transferring negotiable paper by a deed, transferring a vast number of bills, bonds, notes and accounts. Such an instrument may very properly be considered as conveying the equitable interest, the right to receive the money, but cannot be considered as a negotiation of the bill upon mercantile principles, or according to mercantile usage, so as to authorize the holder to sue in his own ñamo. The books treat of no such mode of transfer.”
It is true, that by our statute, the assignee is vested with the legal title, but the Bank can derive no aid from that circumstance, because the statute subjects the assignee to all the defences which existed to the note at the time of the transfer.
This view being decisive in favor of the decree made by the chancellor, we have not considered it necessary to enter upon the inquiry, whether upon'the other facts disclosed by the record, the Bank could be considered a bona fide holder for a valuable consideration, and the decree is consequently affirmed with costs.