Fulweiler v. Hughes

The opinion of the court was delivered by Lowrie, J. As the debt of Orrick & Campbell to Hughes lacked ten days of being due when the attachment execution was served, Hughes raises the question that it is not affected by the service. If this is true, then the other questions are of no importance. It is unquestionably true, and for obvious reasons, not applicable here, that wages earned after the service of an attachment execution, are not affected by the writ. It is easy to see how a contrary doctrine might be used to persecute a debtor, and drive him out of all employment. Moreover, wages not earned can with no propriety be called a debt. It is said that the “ debts due” which are liable to the writ must be such as are payable then, and not in future. But this is a narrow construction of a liberal remedy. It is useless to cite instances to show that the word “ due” is continually used by judges, legislators, and lexicographers, as synonymous with “owing.” In the law regulating the remedy, we have the expression “ belonging or due” applied to debts attachable. The construction contended for is not required by the form of the procedure; for it is not applied in cases of foreign attachment, and the law regulating attachment executions refers us to the foreign attachment law, for an analogy as to the form of procedure. It is not required for the benefit of the garnishee debtor, who is thus made liable to suit before he is in default, for he is not chargeable with costs without default, and there is no difficulty in moulding the proceedings, so as not to force anticipated payment, either by withholding the judgment or the execution until the proper time. This was a debt due in the sense of the law, and was therefore subject to the writ, although it was not payable until after the service of the writ; and this decision opens up the case for the consideration of the other question. It is a well settled principle that the holder of negotiable paper is presumed to have received it for value, and in the regular course of -business, and that the promissor in such instrument cannot defend against the holder as he could against the original payee, without first giving some evidence casting suspicion on the holder’s title. This rule is founded in a tender regard for the rights of both the holder and the promissor. If the latter shows a defence as against the original payee, and casts suspicion on the holder’s title, then the holder must prove a good title or the defence will be available. Part only of this principle is applicable to the present case, for the debt is admitted to be due. The. question of the holders’ title is raised, not to let in a defence of the debtor, but to meet a hostile claim of title, which the plaintiffs in this issue assert by virtue of [448] an attachment execution in their favor, arresting the debt as the property of E. Jackson & Co., their debtors. The holder has the presumption of law in favor of his title, and he might have relied upon that until suspicion was cast upon it. But he has added the positive evidence that he bought it for value, and this evidence is uncontradicted. Slater may have been a mere donee, and the gift may have been in fraud of creditors, but Ray bought it for a sufficient consideration, and was therefore in a position to pass a good title to Hughes, unless the title is affected by the supposed knowledge of Ray and Hughes that Slater was a fraudulent donee. Here, then, is the link of the title which now demands investigation. There is evidence that Jackson was insolvent, that Slater was a mere donee from him, and that the subsequent holders knew that it was a gift when they bought it, and for the purpose of the present.question we must suppose that such are the facts. There is not the least evidence that the holders knew that the gift was made in fraud of creditors. This state of the case raises the question, is a purchaser of commercial paper, from one who is known to be a mere donee, bound to inquire into the solvency of the donor ? The learned judge who presided at the trial, decided this question in the negative, and we think he was right. We confine our remarks to this question. From all other property commercial paper is distinguished by the fact that it carries on its face all the evidences of title which persons dealing in it are charged with notice of. Hence a party may, with perfect safety, purchase a negotiable instrument, if it is all fair upon its face, unless he has actual notice of a defect in the holder’s title, or it is offered under suspicious circumstances. Hence, also, notice that the instrument is a mere accommodation or gift does not prevent a purchaser for value from taking a good title; for the giving of the paper is a declaration of intention that it may be put into free circulation for the benefit of the payee; and therefore one may, with a good conscience, buy it and claim upon it, even though he knows its character. A contrary doctrine would involve the duty on the part of the accommodation payee to inform the purchaser of the character of the instrument, and this would then defeat the very object for which it was given. From these remarks it is apparent that a donee of negotiable paper does not stand upon the same rulé as a purchaser from the donee with knowledge of the gift: for the latter may recover, though the former could not have done so. Notice that it is a gift is not notice that payment is not intended, and one may purchase bond fide under the former notice, when he could not under the latter. The donee has a good title, though a revocable one, and he can pass a good title to any one not notified of the revocation. [449] These principles are plain, and rule the question under consideration. The check was a gift to Slater, and by the gift he acquired a good title as against the donor, but revocable by the donor’s creditors. The purchaser knew of the gift, but he did not know of the revocation, or of the facts which amounted to a revocation, for he knew nothing of the donor’s insolvency, and the donee was also ignorant of it. One could sell and the other purchase the check in good faith; and the subsequent notice of insolvency and reclamation by the creditors does not affect the purchaser’s conscience, or make it mala fides in him to hold on to what he has honestly and innocently purchased. These principles also rule the question arising out of the fact that the check was payable to E. Jackson & Co. By the very nature of the partnership relation, and in order to facilitate its purposes, and by the law of negotiable paper, Jackson could endorse the check himself, so that he should have the legal evidence of title. The donee received it with this evidence upon it and sold it; surely the knowledge by the purchaser of the gift does not require him to suspect the title of the donor, which is on its face complete. "When the law requires undue suspicion, it gives an advantage to mean and suspicious men over those who are generous and trustful. All trusts may be abused; but it would be a. shame that partners should trust each to act for all, and then visit the consequences of an abuse of this trust upon those who treat the trust as existing. It would be a shame if the law should define the sufficient evidence of title, and then require people to suspect that evidence false. This would be refinement of casuistry and of logic, which would have a crushing influence on all generous honesty. Judgment -affirmed.