Hardesty v. Newby

Napton, Judge, delivered tlie opinion of tbe court. This was a suit upon a negotiable note, purchased by the plaintiff from one Love, who professed to be the agent of the payee, Mason, and who, in that capacity, endorsed it to plaintiff. It appeared that Mason handed the note to Love for collection, and Love had no express authority from him to sell or transfer it by assignment. The court held that the mere possession of the note by Love raised a presumption that he had authority to pass title, and that it was incumbent on the defendant, who was the maker of the note, to show that Love was not authorized to transfer the note and that this want of authority was known to the plaintiff. This view of the subject is, in our judgment, erroneous. A negotiable note, after due and without any endorsement by the payee, occupies, so far as this question is concerned, no other position than a note not negotiable would. A party buying such paper from a stranger professing to be an agent of the payee, must establish the agency. Such agency may undoubtedly be either express or implied, but the mere circumstance of possession, when the note is not endorsed in blank, can raise no presumption either way. The natural and reasonable inference would be that the note was' in the hands of such an agent merely for collection; for if a transfer had been designed by the owner of the note, he would of course put his name on the back of it. The case of Bay v. Coddington, 5 John. C. R. 50, does not maintain any principle conflicting with this view. The notes, in that case, were endorsed in blank, and the court held that if they had been transferred in the usual course of trade and without any notice in the purchaser of the fraud of the agent or factor, a good title would have passed. But as the transaction was not regarded as a fair one, the transfer was not considered valid. This case and others of a similar character are cases of the transfer of negotiable paper, endorsed in blank by the payee, or payable to order. The title in such cases is held to pass where there is no fraud upon the part [570] of the purchaser, however destitute of authority may be the agent from whom the title is acquired. In the present case, it devolved on the plaintiff, as he held the note by assignment, to prove the assignment; and as it purported to be executed by an agent, the further proof of agency was necessary. In many cases, very slight proof will establish this, owing to the previous dealings or relations of the parties. Here there was nothing to show an authority, either express or implied, but the bare circumstance of possession — a fact which could properly lead to no other conclusion than that the agent was an agent for collection and not for a sale of the note. Judgment reversed and case remanded. The other judges concur.