58 N.H. 83 | N.H. | 1877
State bonds, and bonds of municipal and other corporations, are negotiable securities, and pass by indorsement, or delivery, like negotiable promissory notes or bank notes unless by special provisions on their face, or by legislature acts authorizing their issue, such transfer is restricted or prohibited. Mercer Co. v. Hacket, 1 Wall. 83; Murray v. Lardner, 2 Wall. 110. The bonds in question are of this character, and there is nothing on their face, so far as the case shows, nor in the law (C. 3, Laws of 1871) authorizing their issue, restricting in any way their negotiability.
The holder of a bill, note, or bond, payable to bearer, like the bonds in this case, or of a negotiable note endorsed in blank, who obtained it before due, for value, in the usual course of business in good faith, and without notice of ally defence or defect in the title, has a good title. This elementary principle of commercial law prevails in every Jurisdiction where commercial business is transacted, and is founded in the policy of sustaining the credit and circulation of negotiable paper. Freedom and safety in the negotiation of such paper are a practical necessity, and require that the innocent holder for value be protected against a defective title; and no difference must be made whether he received it from one who obtained it honestly, or by fraud, finding, or theft. Questions of the meaning and application of the rule are made; but the rule itself is universal and unquestioned, and to it there is no more exception in New Hampshire than anywhere else. Miller v. Race, 1 Burr. 452; Peacock v. Rhodes, 2 Doug. 633; Murray v. Lardner, 2 Wall. 110; Emerson v. Cracker,
The peculiar doctrine, as expressed in Jenness v. Bean,
Numerous authorities are cited by Judge PARKER, which abundantly sustain the doctrine of Clement v. Leverett. Collins v. Martin, 1 B. P. 648, is where the plaintiff had deposited two bills of exchange, endorsed in blank (and so in all legal respects like the plaintiff's two bonds in this case), with his banker, for collection when due. The banker pledged them to the defendant to secure a loan of money to himself. The plaintiff brought trover against the pledgee, and was nonsuited. The plaintiff set up the distinction, which is set up in this case, between a pledge and a sale. But it was held, that the breach of confidence in the agent would be as great in a pledge as in a sale; that in either case the loss would fall on the plaintiff, who, by putting such negotiable paper into the hands of his banker for collection, enabled him to pledge them to an innocent holder; and that, as between the two innocent parties, the plaintiff must suffer. Upon that principle, it would be immaterial whether the paper was committed to the agent for collection, or for safe-keeping. For, between keeping and collecting there is no distinction that can make the plaintiff the loser in the latter case. and the pledgee the loser in the former. Judge PARKER, citing this case as an authority for the decision in Clement v. Leverett, shows that the infirmity of collateral security, which he introduced in Jenness v. Bean and Williams v. Little, does not affect the title of an innocent pledgee, loaning money upon negotiable paper received from an agent, entrusted by the maker or owner with the possession of it for one purpose, and thus enabled to use it for another purpose, leaving one of two innocent persons to suffer a loss. Washington Bank v. Lewis, 22 Pick. 24, Story on Agency, ss. 227, 228, Bank v. Kortright, 22 Wend. 348, 358, 361, Bank v. Plimpton, 17 Pick. 159, are all cited by Judge PARKER in Clement v. Leverett, in point and in the same line with Collins v. Martin. *87
No authorities have been found Which hold to a contrary doctrine. The question has been raised, whether a person receiving paper as collateral security for a debt previously existing, and advancing for it at the time no consideration either in the way of a loan of money or extension of forbearance, is a holder for value, within the meaning of that phrase as used in commercial law. The affirmative is held in Homes v. Smyth,
Whether a deposit for safe-keeping comes within the general rule of agency, which holds a principal bound by an act which he has enabled his agent to perform, we need not here inquire. It is enough that the anomalous infirmity of collateral security, asserted in the New Hampshire cases, has never been held to extend to such a case as this. That infirmity, applied in this case, would affect nothing but the right of the defendants to collect these bonds when due of the state that issued them. It would merely enable the state to set up against the defendants any defence which it might have had against the plaintiff, if she had not lost them, and had called on the state to pay them. It is a New Hampshire idiosyncrasy, rejected by the rest of the world, and will not be followed beyond the limit fixed by the cases asserting it. Swift v. Tyson, 16 Pet. 1; Goodman v. Simonds, 20 How. 343; Murray v. Lardner, 2 Wall. 110; Hotchkiss v. Nat. Banks, 21 Wall. 354; 3 Kent Com. 81, n. 1 (12th ed.); Redfield Bigelow Leading Cases on Bills and Notes 195; Wheeler v. Guild, 20 Pick. 545; Gardner v. Gager, 1 Allen 502; Atkinson v. Brooks,
Judgment for the defendants.
FOSTER and STANLEY, JJ., did not sit. Page 88 *88