Goldsmid v. Lewis County Bank

By the Court, Cady, J. The only question seems to be, whether the unauthorized and fraudulent directions written by John W. Martin, and delivered to William H. Angel with the [410] money of the defendants, authorized the Bank of Watertown to retain the money, or in other words, did the bills become the property of the Watertown Bank ? [Saratoga General Term, January 5, 1852. The counsel for the plaintiff has referred to cases for the purpose of showing that “if negotiable paper be stolen, and is received from the thief, in good faith and for value, the holder gets title, and will be protected.” Cases which establish that rule would seem to be very applicable to this case in a moral point of view; for there is not a very marked difference between a theft and the gross fraud which was committed in this case. Many of the cases upon the subject are referred to and commended in Bay v. Coddington, (5 John. Ch. Rep. 54,) and they all show that to enable the holder to retain a bank bill or negotiable paper against the true owner, he must have come by it in the usual course of his business, and for a full and fair consideration. He must have parted with something on the faith of the note or bill; but in this case the Bank of Water-town parted with nothing. It paid no consideration for the $1500 in the bills of the Lewis County Bank. All that was done was to cut the draft or bill and put it amongst cancelled papers; but no party to that draft was discharged. Martin could not set up his own fraud to discharge him, nor could Doig escape responsibility as acceptor of the bill; and as it was the duty of William H. Angel to see that payment was demanded on the draft, and notice given of non-payment, he could not alledge the want of a demand and notice of non-payment in his own discharge. The Bank of Watertown has a perfect remedy on the draft, unless that remedy has been lost by its own negligence ; and if its remedy has been so lost, it furnishes no reason why it should be allowed to recover in this case. I am therefore of opinion that the report should be set aside, and the cause be referred back to the referees ; the costs to abide the event of the suit. Judgment accordingly. Willard, Hand and Cady, Justices.]