37 Mass. 545 | Mass. | 1838
delivered the opinion of the Court. The facts of this case present a very important question for the consideration of the Court. Whatever affects the negotiability, and the free currency of promissory notes and bills of exchange, is of the utmost importance to a mercantile community, the business of which is to a great extent transacted through the medium of these instruments.
The facts which may be deemed material are these. The plaintiff became the holder of the note in question by regular indorsement for valuable consideration, soon after it was made, being a note dated September 1, 1833, payable in three years, with interest, and the last indorsement being in blank. Within a year from the date of the note, to wit, in March, 1834, the plaintiff, John Wheeler, as surety, joined with Daniel G. Wheeler in three promissory notes, one to Brigham & Goodrich, attorneys and partners, in Worcester, one to Tappan & Co. and one to Stewart & Co. of New York, for both of which parties Brigham & Goodrich were agents and attorneys. On that occasion, the plaintiff, John Wheeler, delivered to Brigham and Goodrich, as collateral security to his three joint and several promises, the note in question, indorsed in blank, and took their receipt, specifying that it was so received, and to be by them held, as collateral security for the payment of those notes. In September, 1835, these three notes had been fully paid. Though Brigham and Goodrich were in partnership as attorneys at law, yet Brigham was engaged in much other business, and had many separate negotiations, and the business in question had been done in the partnership name, but in fact by Goodrich. In December, 1835, the plaintiff applied to Goodrich for the note, who then produced and exhibited it from a file of private papers, where it had been kept ay him, and he would then have given it up to the plaintiff, nut the plaintiff had not his receipt with him, to exchange for it. In the mean time, before this application of the plaintiff
Some inferences are to be drawn from this evidence, which may have a bearing on the case ; but we think they are plainly deducible from the circumstances stated, and they are these ; that Goodrich did not assent to the payment received by Brigham, and did not in fact know of it till after he had been applied to by the plaintiff for the note ; that Goodrich had the actual possession and custody of the note, and that at the time that Brigham received the money and gave the receipt, he not only did not produce or exhibit the note, but that he had not the actual custody of it, nor was it so amongst the partnership papers, as that it was in the actual joint custody of the parties as partners. If he had it in his possession, or had regular access to it, in the ordinary way of business, there is no reason why he did not deliver it up to Stafford, instead of giving him a receipt, and a promise to deliver it.
The law in regard to bills of exchange and promissory notes, is so framed as to give confidence and security to those who receive them, for valuable consideration, in the ordinary course of business, when payable to bearer or indorsed in blank so as to be transferable by delivery ; and in general a party taking such a bill under such circumstances, has only to look to the credit of the parties to it, and the regularity and genuineness of the signatures and indorsements. So that if such a bill or note be made without consideration, or be lost n,
But these rules are adopted with this limitation, that the party thus taking the note or bill, does it in the ordinary- course of trade, when not overdue or otherwise dishonored by any thing apparent upon the face of it, and without notice that it had been lost or stolen, or that the holder had obtained it wrongfully, or had no just right to receive it in the way of business. Paterson v. Hardacre, 4 Taunt. 114. If one takes a note or bill with actual notice, that it has been lost by the owner, he cannot hold it against the true owner. Lovell v Martin, 4 Taunt. 799.
It has been argued, that where a party has a legal title by indorsement and delivery, and the actual possession of the bill or note, although he holds without any just right to negotiate or collect it, still as he has a legal title, a transfer from him will vest a legal title in another and authorize such other to take for his own use. But this consequence, we think, does not follow. The true , ground is expressed by Eyre C. J., in the case above cited, Collins v. Martin. He says, “ for the purpose of rendering bills of exchange negotiable, the right of property passes with the bills themselves. The property and the possession are inseparable. This was necessary to make them negotiable and in mis respect they differ essentially
So, payment of a bill or check, before it is due, will not be a discharge, unless made to the real proprietor of it ; and therefore where a banker, contrary to usage, paid a check the day before it bore date, which had been lost by the payee, it was held, that he was liable to repay the amount to the person losing it. Da Silva v. Fuller, Sel. Cas. 238, cited in Chi tty on Bills, (6th Engl, ed.) 148. In this case, although the holder had the legal title arising from the possession of the check, yet he was not bona fide the holder with authority to collect, and as' the banker paid it out of the usual course of business, he paid it at the risk of being obliged to pay it again, if the party presenting it had not just right to receive it.
Most of the same principles and reasons apply alike to transfers and to payments. We think the rules deducible from the cases, are these : where a party takes a bill transferable by
Applying these principles to the present case,, the Court are of opinion, that the payment made by Stafford to Brigham, under the circumstances, did not operate as a payment and discharge of this note, and that the plaintiff is entitled to recover.
The plaintiff was the holder of this note by indorsement, oefore it was pledged to Brigham and Goodrich, and had the
But we think the other point is equally decisive. Brigham not only did not produce or exhibit the note, but he had not the actual custody or possession of it. He did not profess to act for the partnership, but signed the receipt in his own name. Had Brigham and Goodrich as partners, been the true holders of the note, or if they had had a joint authority to collect it, it may well be admitted, that the act of one or the receipt of one would
Besides, the note was not paid in the due course of business. It was paid many months before it was due ; the full sum was not paid, there being more than two years interest due on the notes, which was wholly relinquished ; no notice was given to Goodrich, the partner who transacted the business of taking these notes, and giving the receipt for them, and who had the actual custody of this note ; all of which would be strong evidence to go to a jury, to establish the fact of constructive notice to Stafford, that Brigham had no right, either in his own name or as a partner with Goodrich, to receive payment of, or to discharge this note. But the other grounds are sufficient, without relying upon these circumstances.
The grounds, upon which the Court place their judgment are these : The plaintiff had once a good title to the note. It was delivered to Brigham and Goodrich, for a special purpose, which was accomplished. After that, Brigham and Goodrich had a mere naked custody of the note for the plaintiff and had no right or lawful authority either to negotiate or collect it; a fortiori, Brigham alone had no such authority. The defendant Stafford was not lawfully called upon to pay Brigham, as having the possession and custody with a prima facie title, because he had no such custody or possession, and the note was not due. Stafford was not deceived into taking the note by the production and deliverv nf it, because it was not de
Judgment for plaintiff.