18 Colo. App. 99 | Colo. Ct. App. | 1902
About September 5, 1893, defendant Wilbraham received from The German National Bank of Denver, one of defendants, two time certificates of deposit, each for the sum of $1,000.00, bearing six per cent, interest and payable, the one numbered 102755, on March 5,1894, and the other, numbered 102756, on September 5, 1894. They were in the usual form, each specifying that Wilbraham had deposited in the bank $1,000.00, payable to the order of himself, in current funds, on the return of the certificate properly endorsed by him at the time specified for payment. About March 10 following Wilbraham, at the city of San Antonio in Texas, endorsed and delivered both of said certificates to one W. S. Allen who on the same day deposited them for collection for his account with plaintiffs, D. Sullivan & Company, hankers in said city of San Antonio. Upon transmission to Denver the certificate No. 102755 which was then past due was promptly paid upon presentation to the payor, The German National Bank, but payment of the other certificate was refused because it had not then matured. Upon receipt of payment Sullivan & Company paid to Allen the amount received on collection of the certificate which had been paid and returned to him the other, payment of which had been refused. Shortly thereafter, and before its maturity, Sullivan & Company purchased from Allen the remaining certificate, payment of which had been refused. When this certificate matured, the payor, The German National Bank, had become ■ insolvent, and its business was then in the hands of a receiver. Thereupon, on June 10, 1895, the company instituted this suit to re
Defendant also, by way of counterclaim and cross-complaint, set up the facts with reference to the endorsement, and prayed judgment against the German National bank and Sullivan & 'Co.- for the sum of $1,000.00 represented by the first certificate, which
It is unnecessary to set forth in detail the circumstances attending the endorsement and transfer of the certificates by Wilbraham, and the so-called g'ambling transaction in which they were involved, all of which were fully testified to by this defendant. It is conceded that at the time of the payment by the German National bank of the certificate No. 102755, it had no notice whatever of any infirmity or vice affecting the endorsement by Wilbraham, and that Sullivan & Co. had no such notice at the time it purchased in the usual course of trade, the certificate upon which this suit is based. Indeed, it does not appear that either of the banks ever had any such notice until it was given by the filing of defendant Wilbraham’s answer in this suit, in November, 1898.
That a bank certificate of deposit is a negotiable instrument cannot be questioned. — 2 Daniel on Negotiable Instruments, 4th ed., § 1703; Zang v. Wyant, 25 Colo. 551. It is also settled by undisputed authority that an endorsement of a negotiable instrument is not only a transfer of the instrument, but that it is an original, independent contract, equivalent to the drawing of a new bill on the maker and drawer, or acceptor, as the case may be, of the instrument that is endorsed. By this independent contract the endorser is regarded as undertaking to pay at the place where his endorsement is made in the event of dishonor and
Assuming, therefore, but not conceding, that the facts in this case are sufficie'iit to bring Wilbraham’s contract of endorsement within the inhibition of the Colorado gaming statute, it is nevertheless true that in determining the effect and validity of the endorsement, the law of Texas must control. It has been frequently held in this jurisdiction that the statutes of this state have no extraterritorial force or effect — that they have no application to transactions occurring beyond the limits of the state. — Railroad Co. v. Betts, 10 Colo. 437; Wolf v. Burke, 18 Colo. 264; Wells v. Bank, 23 Colo. 534. No statute of Texas was shown similar to that of Colorado, or which would invalidate the endorsement of a negotiable instrument under the circumstances of this case, or prevent a recovery against the endorser. Under such circumstances, it is held that “where the condition of the law of another state becomes material, and no evidence has been offered concerning it, our courts will presume that the gen
In addition to the indulgence of this legal presumption, the courts of a state in cases where the laws of another state are involved, may and should take notice of the decisions of the highest courts in tlio latter jurisdiction upon the law so involved. In 1890 it was held by the supreme court of Texas that under the law of that state a promissory note, the sole consideration for which was a gambling debt, was not void, but was good and enforceable in the hands of an innocent endorsee for value before maturity- — that such a note, as well as all contracts hav
The Colorado gaming statute is exceedingly similar to that of statute 9 Anne, chapter 14, page 1, as cited by appellee, but the common law of England and acts of parliament in aid thereof, obtain as a rule of decision in this state only as they existed prior to the fourth year of James the First, which was long prior to the reign of Anne.- — Gen. Stats., sec. 197; Mills’ Ann. Stats., sec. 4184.
It is urged, however, by counsel that the rule permitting and requiring the law of the place of contract to control in its interpretation and enforcement, is based alone upon comity between states, and that it is not without exception. He insists that no state should or is bound to follow the rule when the law of the foreign state in question would contravene its- own positive laws, institutions or policy, which prohibit such a contract, or when it would prejudice the rightá of its citizens. This exception is undoubtedly' true, and should be considered and. followed in a proper case, but we do not think this such a case.. The principle which lies at the basis of this exception and upon which it is founded, is that the state should not be compelled to adopt the law of a foreign state, when by so doing it would exhibit to the citizens of the state an “example pernicious and detestable,” and detrimental to good morals. — Greenwood v. Curtis, 6 Mass. 358. In short, the general rule as expressed by the more modern authorities is that the law of the foreign state should control and should be enforced unless it is clearly against good morals, or repugnant to -the positive institutions of the state in which enforcement is sought. We are by no means prepared to say that this case, turning as it does upon the endorsement of
Especially are we confirmed in these views when it has been held by our own courts that our gaming statute is a harsh one, in derogation of the common law, and should be strictly construed; that its provisions making void a certain class of negotiable paper, should not be extended. — Boughner v. Meyer, 5 Colo. 71; Bank v. McClelland, 9 Colo. 611.
It is the rule in this state in reference to negotiable instruments, the sole consideration of which are confessedly gambling debts and come within the inhibition of the gaming statutes, that in actions thereon by an innocent holder for value before maturity, the courts will submit to the statutory command with extreme reluctance. — Bank v. McClelland, supra. If this were a- case between the original parties to a contract whose consideration came within the prohibition of the statute, or wherein an assignee with notice was seeking to enforce it, our conclusions might be entirely different. Then it might well be claimed that a case was presented coming clearly within the exception to the rule that in suits upon contracts the lex loci must control.
It is recognized everywhere as a settled principle of commercial law except where modified by statute, that the holder or purchaser of a. negotiable instrument who has taken it bona fide for a valuable consideration in the ordinaiy course of business before maturity and without notice of facts which impeach its validity as between antecedent parties, may recover
There are several other entirely satisfactory reasons in our opinion why the judgment in this case was radically wrong and should be reversed, but the one which we have stated at length being decisive of the entire case, it is not necessary to mention or discuss them. The judgment will be reversed.
Reversed.