White & Sheffield v. Springfield Bank

Edmonds, J. The rule is too well settled in this state, to warrant any discussion, that the holder of a negotiable security, which has been passed to him in fraud of the rights of others, in order that he may be protected, must not only have taken it without notice, but must also have parted with something of actual value on the credit or faith thereof, and that merely receiving it in security or payment of an antecedent debt is not sufficient. In this case, the defendants have parted with nothing but [227] an unaccepted draft; and their doing so has in no respect changed the situation of the parties. Howard & Lathrop are just as much hable to the bank now as ever they were, for the money they received on the discount of that draft. And the note of the plaintiffs was in fact received by them either in security for, or in payment of, this precedent debt. It is true that they pretend, in their answer, to have relinquished their securities. But aside from the disingenuousness of that paper) which is too palpable to deceive the most ordinary understanding, the facts stated in it show the utter falsity of the pretence. There is much more force in the objection that the plaintiffs have an adequate remedy at law. If this case was before me on an application for an injunction, before filing the bill, I am inclined to think I should for that reason refuse to allow it. But as this court has already got possession of the case, and it has progressed nearly to a close, and as this is one of a class of cases where the jurisdiction in equity is concurrent with that at law, I do not think it discreet to turn the parties round to their legal remedy; more especially when the objection comes fiom those who are in contempt for having violated the process of the court, whose aid they are now asking. Motion denied, with costs.