Brown v. Taber

By the Court, Marcy, J. Groat, by putting the note in circulation, acted in bad faith towards the endorser; and if the person who received it of him knew the circumstances under which it was passed, or is to be considered chargeable with notice, the plaintiff cannot recover. It is not pretended that the clerk of the plaintiff who received the note had actual knowledge of the misappropriation of it; but it is insisted by the defendant that he knew such facts and circumstances as should have put him on enquiry. The verdict was taken subject to the opinion of the court upon the facts of the case; we are therefore to say whether the evidence was sufficient to charge the plaintiff with notice of Groat’s improper conduct in putting off the note. Notice to the agent is notice to the principal. The plaintiff was a dealer in lottery tickets, and the note was received in payment for tickets sold to Groat; the note was therefore received, it is said, in the due course of business. Even if so received, (here may be attendant circumstances, destroying tire bonafides of the transaction. It is alleged, on the part of the defendant that such circumstances exist in this case. Although there is no one circumstance decisive of the case, yet the circumstances combined, appear to me to be sufficient to have put the plaintiff on enquiry. In the first place, the drawer had possession of the note; this fact warranted the inference that the defendant’s endorsement was for his accommodation. The plaintiff’s agent knew it°had been in the bank; he must therefore have understood one of two things, either that the note had been negotiated and discounted at the bank, or lodged there for collection and taken up by the drawer before its maturity, (an occurrence not very probable,) or that the bank bad refused to discount it. Indeed, I think this latter fact was sufficiently brought to the knowledge of the plaintiff’s agent; he was told the note had been in the bank, and it had marks on it made at the bank. He was also applied to in the first instance as a broker to discount it. Some consequence, I think, should be attached [568] to the fact, that after the drawer had failed to obtain money on jie passed it off for a large quantity of lottery tickets, for which he gave the retail price, it being known that he was not a dealer in that article. Again, when passed, it had al- ° 1 most arrived at maturity, it having but 18 days la run. All these circumstances combined amount, in my judgment, to a sufficient notice of the fraud that Groat was practising on the defendant in putting the note in circulation. Judgment for defendant.