Minell & Co. v. Reed

CHILTON, C. J. —The decree of the chancellor in this case cannot be supported. It is shown that, when Thorington .gold the lands embraced in the mortgage, and indeed before [732] this'note fell due, he had parted with this paper, and that it had come to the possession of the appellants. The letter of lí. B. Holcombe, which is admitted as evidence, shows that the paper, which is mercantile, had been endorsed by Thor-ington to Minell & Co., and had been deposited in the Bank at which it was payable by their endorsee, the Mechanics’ Bank of New York, on tiro 29th December, 1837, two days before its maturity ; and that after it was protested, it was returned, on the 5th January, 1838, to said Mechanics’ Bank. Now, it is well settled, that where a party shows he is the holder of endorsed mercantile paper before it falls due, the law presumes he holds it bona fide and for a valuable consideration, and requires the party who seeks to defend against it, by reason of some equity, set-off, or payment, existing against, or made to the payee, or some intermediate holder, to show that the holder did not give value for it, or to raise a presumption of that fact, requiring' an explanation of the manner in which he acquired it. In the case of Swift v. Tyson, 16 Peters 1, this doctrine is distinctly asserted, and is classed among the fundamentals of the law, and it is affirmed by this court in Pond v. Lockwood, 8 Ala. 674. As there is not a particle of evidence in this record that Minell & Co. did not give value for this note, and as the law implies they did give value in the absence of rebutting testimony, it follows that, in legal contemplation, they were the bona fide holders of this demand, (having acquired it before it fell clue,) when it is alleged that payment was niado to Thorington, and that such payment cannot be set up against them. The position that the deed gave Thorington power to pay himself by a sale, and that the appellants held the note subject to this power, cannot be supported. The deed, properly recorded, was constructive notice as to the lien upon the property in all contests as to it; but that it should run with mercantile paper, and constructively charge all persons with a knowledge of its recitals, so as to affect the rights of bona fide holders of such paper, is a proposition to which wo cannot subscribe. In the mercantile world, parties negotiate upon the faith of rights which result from the face of the paper itself and the genuineness of tlie siguatiq-es, If they receivg [733] it in duo course of trade, before it falls due, and are thus bona fide holders for value, and the face of the paper shows nothing which could give them notice, or put them upon inquiry, they are exempt from payments, discounts, sets-off, or equities, existing between the antecedent parties. As the court is not full, (Justice G-oldthwaite not sitting in this cause,) and Justice Ligón is on the eve of quitting the bench, I have not time allowed me to give the other questions presented by the argument of counsel the consideration they deserve ; and as they were not decided by the chancellor, and may possibly be made to assume a different shape in the court below upon another trial, we have deemed it proper to confine our opinion to the question of payment, as to which we entertain no doubt. Let the decree be reversed, at the cost of the appellees.