Hall v. Hale

Hosmer, Ch. J. It is unquestionably clear, that Benton has no interest in the event of the plaintiff’s suit, neither directly nor remotely, and the objection to his deposition has been waived in the argument of the case. Woodhull v. Holmes, 10 Johns. Rep. 231. With respect to the other ground of new trial, no extended discussion is required. The law has been fully and uniformly settled. It is an established principle, that negotiable paper may be assigned or transferred, by an agent or any other person, fraudulently, so as to bind the true owner as against the holder, if it was taken by him in the usual course of trade, and for a fair and valuable consideration, without notice of the fraud. Bay v. Coddington & al. 5 Johns. Chan. Rep. 54. 56. Miller v. Race, 1 Burr. 452. Grant v. Vaughan, 3 Burr. 1516. Peacock v. Rhodes, Doug. 633. King v. Milsom, 2 Campb. 5, Solomons v. Bank of England, 13 East, 135. in notis. Cruger v. Armstrong & al. 3 Johns. Ca. 5. Conroy v. Warren, 3 Johns. Ca. 259. It is equally well settled, that if an indorsee takes a bill without due caution, and under circumstances, which ought to have excited the suspicion of a prudent and careful man, the maker acceptor, or prior indorser may be let into his defence. Ayer v. Hutchins & al. 4 Mass. Rep. 370. Slater & al. v. West, 3 Car. & Payne 325. (14 Serg. & Lowb. 330.) Holme v. Karsper, 5 Binn. 469. Gill v. Cubitt, 3 Barn. & Cres. 466. (10 Serg. & Lowb. 154.) In Wiggin & al. v. Bush, 12 Johns. Rep. 306. 310. a note: dated on the 24th of May, but made on the 22nd of April, had entered upon it a memorandum of the day, on which in fact it was executed and indorsed. The court held, that by this [341] indorsement of the real date, the plaintifs, who were indorsees, had such information as ought to have led to an enquiry into the manner of obtaining it. It is undoubtedly clear, that if the word renewal had been fairly written on the note in question, and remained upon it, at its negotiation to the plaintiff; or, if it had been partially erased, leaving such appearances, as would, in the ordinary course of business, have excited the suspicions of a careful and prudent man; the defendant would be authorized to defend himself on the ground assumed by him. But it must be borne in mind, that the degree of caution and prudence, to be exercised, by a person in the usual course of trade, is the point on which the enquiry turns. The ordinary and prudent circumspection, that may well be exercised, on the reception of a note, in the usual course of business, and which is exercised by men who transact their concerns with care and caution, is demandable of the plaintiff. But, as was well remarked, by Sir William Jones, in his treatise on Bailments, (p, 8.) there are infinite shades of care and diligence, from the slightest momentary thought, or transient glance of attention, to the most vigilant anxiety or solicitude; and it is very obvious, that the law does not and ought not to require of the unsuspecting indorsee of a note in the common course of trade, the same caution, vigilance and careful inspection, as is exercised by a jury. This would be an entire departure from the established rule, and the nature and equity of the case. The jury have pointed out to them the mark or cause of suspicion; they hear the subject ably commented on, by counsel; they are directed in their enquiries, by the court; and thus excited to observation, they have hours unitedly to examine and deliberate. Of them may be justly demanded the utmost possible enquiry and circumspection. But the condition of a person in the usual course of trade, is altogether different; and a different rule, from the nature of the case, is justly required and prescribed. In this case, the degree of observation and caution proper for the jury, was made the standard to test the observation by law demandable of the plaintiff. If there were any trace or mark of the word renewal. it was said to be sufficient to put the plaintiff on enquiry. All that the defendant claimed, was, that by inspection and close examination, certain letters of the word renewal were in part visible ; and this close examination, to the object of which the jury were pointed, was the principle adopted for the determination of the cause. [342] There exists no doubt that the charge to the jury was incorrect> I will only observe further, that if the word renewal had been so far visible as to put on the plaintiff the necessity of enquiry, it would not necessarily follow, that the note was fraudulently transferred. At the same time, I admit, that if it were not explained, consistently with the right to negotiate the note, the transfer whould be invalid. The other Judges were of the same opinion, except Bissell, J. who was absent. New trial to be granted.