Towne v. Wason

Lord, J. Upon a careful examination of the points and argu ments of the respective counsel, we think the difference between them is not upon any principle of law, but upon the application of the law to the facts of the case. It is agreed that the actual manual possession of a promissory note, payable to bearer, or indorsed in blank, gives to the holder prima facie a right to sue upon it; and there does not seem to be any controversy between the parties upon the question whether the lawful possession gives to the party holding it absolutely the right to sue upon it without regard to the holder’s title to or interest in the note. Upon the other hand, it is not contended that, if the note is stolen, the thief may maintain an action upon it, although he may have the actual manual custody of it, and prima facie the right to sue upon it. In the argument of the cause, the plaintiff contended that simple possession, without regard to title or interest, is sufficient, unless such possession is fraudulent. The defendant contended that possession is insufficient if that possession be mala fide. Of course, we understand these propositions to be identical. In this case, the defendant contended that the plaintiff’s intestate had neither title to, interest in, nor lawful possession of, the note in suit; that he never had actual, personal possession; that he happened to be the president of a bank in which the money, tl e consideration of this note, was deposited for the use of certain heirs; that, although he took the money and exchanged it into this note, made payable to the defendant’s order and indorsed by him in blank, yet that he did not take it under any claim of interest in it or personal possession of it, but that he put it immediately into the possession of the bank, indorsing upon the envelope in which it was enclosed the fact that it [520] belonged to and was “ property of heirs of L. Chase; ” that, when the note was presented to the defendant for signature, there was nothing written beyond the word “ interest; ” and that, before signing it, he required this additional phrase to be inserted, “this money being a fund belonging to the estate of the late Leonard Chase; ” that the plaintiff’s intestate never had, or claimed to have, any title or interest or right of possession to the note; that it was never in any manner a part of his estate, and there was no right in this plaintiff to assume to take it as a part of the assets of that estate; and that his possession of it was fraudulent and mala fide. And, if we understand the bill of exceptions aright, this plaintiff has ceased to be the administrator of William B. Towne; the present administrator makes no claim of title to, interest in, or possession of the note; and the administrator of the estate of Leonard Chase, which is in process of settlement, claims it as belonging to that estate, and has demanded it of the plaintiff, as having without right converted it to his own use. It is true that the plaintiff contended that his intestate had an interest of some kind in the note; and the question whether he had or had not any interest in the note was submitted to the jury upon instructions quite sufficiently favorable to the plaintiff, and that issue was found against him. The only embarrassment we find in the case is in determining whether or not the issue of lawful possession of the note by the plaintiff was presented with sufficient distinctness and carefulness by the presiding judge. Upon a consideration of the full case as reported, and upon the real issues tried, as shown by the bill of exceptions, we are satisfied that the question was necessarily involved in the issues presented under the instructions of the court. It seems apparent that the real issue tried was whether the plaintiff’s intestate had any right or interest in the note, or whether he n¿d any “ claim or unsettled accounts with or against the estate of said Chase.” These facts could be important only upon the question of the plaintiff’s rightful possession of the note; and when the judge adds that in addition to those facts the defendant must also prove that the plaintiff “ was not in any way beneficially interested in the note, and that the suit was not prosecuted by him for the benefit of the parties who were [521] beneficially interested, but against their objection,” the conclusion seems to be irresistible, that the holding of the note by the plaintiff was by reason of an unlawful and fraudulent withholding it from the true owner, and thereby converting it to his own use, in which case the possession of it under the facts stated could not be lawful. It is, however, strenuously urged that the Chase heirs are not parties to this suit, have no rights in it, and cannot be affected by any judgment in it. This is true, and is of itself the strongest reason why the defendant should be allowed to make this defence. He has been notified by the true owner that the note has been fraudulently obtained by the plaintiff; that it was a demand note, and subject to all the defences which might exist to it even in the hands of an innocent holder. He is notified that the present holder is a fraudulent holder; that he has no claim upon the note, or the proceeds of it; that the true owner will require of him payment of the- note; and that, if he pays it to the fraudulent owner, or permits the fraudulent owner to recover judgment without interposing the defence which the true owner is prepared to furnish him, he will do so in his own wrong. Exceptions overruled.