Evertson v. National Bank of Newport

But two questions are presented upon this appeal: First, whether the instruments which are the subjects of the controversy are negotiable promises for the payment óf money, and therefore subject to the samé rules as bank bills or other negotiable instruments, so that one who acquires title in the usual course of business and in good faith, although from one who has obtained them feloniously, may withhold them from the true owner; and secondly, whether they were dishonored at' the time of the purchase of them by the plaintiff.

"■ The rule of cmeat empior does not apply to negotiable instruments payable in money and to the bearer; and a purchaser in good faith from one who has stolen them acquires a valid title. (Spooner v. Holmes, 102 Mass., 503 ; Birdsall v. Russell, 29 N. Y., 220 .)

/ The coupons of the Indianapolis,- Bloomington and Western Bailway Company are, in terms, distinct promises to pay the bearer the amount specified therein at a day and place named, and are, within the authorities, promissory notes for the payment of money to the holder, and transferable by delivery, although detached from the bonds to which they íéfer. The fact that they are declared to be for interest upon bonds specified by their numbers, does not destroy their nego-’ liability when separated from the bond, or impair the title of one purchasing from another without production of the bond/ The bonds themselves, although under the seal of the Company, are negotiable instruments within the repeated deck, sion's of our ■ courts. " (White v. V. and M. Railroad Co., 21 How. [U. S.], 575; Gelpcke v. Dubuque, 1 Wall, 175 Clark v. Iowa City, 20 id., 583; Brainerd v. New York and Harlem Railroad Co., 25 N. Y., 496 ; Dinsmore v. Duncan, 57. id., 573 ; Haven v. Grand June. Railroad and Depot Co., 109 Mass., 88 .) The cases of Myers v. York and Cumberland Railroad Company ( 43 Me., 232 ) and Jackson v. The Same,

' The coupons of the' Danville, Urbana, Bloomington and4' Pekin Railroad Company, termed upon then* face “ interest i warrants,” are in somewhat different form. Whether they-are within that description of property to which a title may * be acquired by a iona fide transferree for value, notwithstand-"ing a defect of title in the transferror, depends upon their - negotiability. If they are not negotiable instruments, and as * such representatives of money, the plaintiff acquired no better title than the party from whom he purchased them had ; '< i. <?., he took them subject to all the defects of his title and 1 subject to the claims of the true owner. The instruments are ■ not, upon their face, negotiable; they are not payable to any person by name, or his order, or to the bearer, or to the order; of a fictitious person. In all the cases to which reference has already been made, the coupons contained distinct promises to * pay the bearer the sums named therein at a time and place specified. They were perfect negotiable instruments, inde- • pendent of the bond from which they had been severed, and-' were not only negotiable within the statutes upon that subject and the Law Merchant, but were intended by the parties • to be negotiable. The negotiability of instruments depends > somewhat upon statute. The statute of this - State (1 R. S., 768) embodies, substantially,' the law, and declares, as under-; stood' at the time, what instruments shall be negotiable. To-bring an instrument within this statute there must be a prom-: ise to pay to the order of the maker, or some other person or' his order, or to the order of a fictitious person, or to the • bearer, a sum certain absolutely. Whether the parties to an instrument can give it a negotiable character with all the inch" dents pertaining to negotiable paper, when it is not in terms <\ within the class of instruments known to the law as negotia-' ble, may be questioned. (Crouch v. Credit Foncier of England, L. R., 8 Q. B., 374.)

It is for the interest of corporations issuing bonds for the-' payment of money that they should be negotiable; and they-

The contract embodied in these interest warrants, so far as any contract can be implied, cannot, upon principle or within any well-considered authority, be made an exception to the

The coupons of the Indianapolis, Bloomington and Western Bailway Company, being promissory notes, they necessarily had all the characteristics of such instruments, and ■ weie ..entitled to the benefit of the days of grace allowable .on bills and notes payable at a given day or on time. Having every other quality'they cannot be excepted from the general rule .which, by commercial usage, sanctioned by law, is applied t'a ..every instrument, negotiable in its character, coming within the ordinary definition of bills of exchange or promissory ■notes. (Story on Bills, § 342; Story, on Promissory Notes, § 215; Hodges v. Shuler, supra.) In the case last cited, the bond itself, to which interest warrants had been attached, was .-presented at maturity, on the third day of grace, at the placó ;of payment, and upon payment being refused the defendants, :as indorsers, were notified of the dishonor, and the court held .that they were properly charged; all the judges agreeing that ■the instrument in suit was a promissory note. It does not seem to have been doubted, that, being a. promissory note, although something more, it was within the rule allowing •days of grace to commercial instruments of that character. If the coupons were not, for the purposes of days of grace, as • as .well-as for other purposes, promissory notes, but were payable at a day certain without grace, then, at the time of the ■ purchase by the plaintiff, they were overdue,, and the holder conveyed no better title to the plaintiff than he had ■himself. (Chester v. Dorr, 41 N. Y., 279 .) It is probably .true that they are regarded and treated as well by promisor as ..promisee as payable at the day, and paid as if, in terms, pay

Judgment must be reversed and a new trial granted.

All concur.

Judgment reversed.