19 F. Cas. 842 | U.S. Circuit Court for the District of Southern New York | 1851
1. I am of opinion that an error was committed in admitting the receipt of Merrill, of the 4th of April, 1844, as evidence of the payment of value for the acceptance in question by the plaintiff at the-time of the transfer to him. It would have been evidence against Merrill, but was not as • against a third person, in a case where the-fact became material. The question here was, whether or not the plaintiff had actually advanced money or property, or had cancelled an. indebtedness from Merrill to him, as a consideration for the transfer of the acceptance, with a view to show that he was a bona fide holder for value. The fact, when material, must be-made out, like any other fact in a cause, by competent evidence. Now, the receipt given by Merrill is of no higher evidence than his admission or statement not under oath, which would clearly have been inadmissible, as it respected any one but himself. I entertain no doubt, on reflection, that I erred in the ruling at the trial on this branch of the case.
2. I think an error was committed, also, in-the ruling that knowledge, on the part of the plaintiff, of the fraud committed by Merrill in procuring the acceptance from the defendant, would not affect his title to the same, if such knowledge was acquired before he made the inquiries of Burr and received from him the information given by the defendant as to the character of the acceptance. This was carrying the protection of the holder, under the circumstances stated, too far — further than policy or justice requires, even in respect to commercial paper. The plaintiff cannot claim to be in a more favorable position, as it re-” spects the inquiries made by Burr, than if he had himself applied to the defendant for the purpose of ascertaining the character of the acceptance; and then, if he had been aware that a fraud had been committed upon the defendant in the procurement of the paper by Merrill, be would have been bound, in good faith and fair dealing, to disclose the fact, so-
If the plaintiff knew that a fraud had been committed in procuring the acceptance, he might well have supposed that, when the defendant confirmed it, on the application of Burr, he was not aware of the fact. And, indeed, from the testimony of Martin, the plaintiff had reason to believe that when Burr applied to the defendant for the information, the latter had no knowledge of the fraud committed upon him. The plaintiff became adyised of the fraud about the middle of March, for he gave the advice to Martin, professionally, that the guaranty delivered to the defendant, to indemnify him and keep him harmless against the acceptance, was good for nothing. Burr did not make his inquiries, according to the •evidence, till a period somewhat later. At all events, the plaintiff had no reason to suppose that the defendant, when he confirmed the paper to Burr, knew what he, the plaintiff, did, namely, that the guaranty was worthless.
For the reasons above given, and upon a careful consideration of the case, I am entirely satisfied that it was not properly submitted to the jury; and, from- their inquiries, and the response of the court, it is obvious that the errors led to the verdict that was given. There must, therefore, be a new trial, with costs to abide the event.