Dutchess County Insurance v. Hachfield

This action was brought to recover the possession of five bonds, issued by the city of Poughkeepsie, for the sum of $1,000 each. They were payable in blank, with the addition, following the blank, of the terms, ‘‘ his executors, administrators, or assignees,” etc. And these terms, following the space left for the insertion of the name of the payee or holder, were sufficient to render them negotiable, under the mercantile law of the State, as it now seems to be settled.^[6]

The evidence showed that these bonds had been feloniously stolen from the plaintiff, their lawful owner, shortly before they were purchased by the defendants. And that imposed the obligation upon them, of proving, to the satisfaction of the jury, that their purchase was made for value, and in good faith, before they could establish a title to the bonds, superior to that of the plaintiff, as the preceding owner.^[2] Where fraud or illegality in the negotiation of commercial paper is shown, the law presumes a want of consideration in the transfer. It supposes that “ the original party, not being able to sue upon the instrument himself, has handed it

Proof was given by the defendants, tending to overcome the presumption, arising out of the circumstance that the stolen bonds were found in their possession, by showing that they were purchased by them for a valuable and adequate consideration, without notice of any infirmity in the title of their vendor. And it is upon the disposition, which the court made at the trial of the questions arising upon this proof, that the main effort is made by defendants’ counsel, to sustain their present appeal.

After the charge had been delivered to the jury, the defendants’ counsel requested the court to instruct them, that if “ Hachfield & Co. purchased these bonds in the open market, for full value, and in the usual course of business, without notice or suspicion, they were not bound to make a close and critical examination, in order to escape the imputation of bad faith in the purchase.” The court declined to charge this proposition, and left it to the jury to say how much of an examination they were to make; and the defendants excepted to the refusal. This exception is the only one required to be considered in connection with the charge of the court, because the preceding request, though in the main correct, was finally coupled with an untenable proposition, and, for that reason, properly refused. The proposition presented by this exception seems to be faultless. For, if the defendants did, as it contemplated, purchase the bonds in the open market for value, in the usual course of business, without notice or suspicion, then they were not bound to make either a close or critical examination, either of the bonds, or into their history, in order to escape the imputation of bad faith in the purchase. The terms made use of, did not complete or finish the idea pointed at by the words notice or suspicion; 'but as the whole controversy hinged upon the ques

There was nothing in the charge, which avoided the effect of the refusal to submit this proposition to the jury. That was still more unfavorable to the defendants’ title. For it required them to satisfy the jury, that the bonds were purchased by them in the ordinary course of business, “ and that they did not procure them in such a shape as would put a prudent man upon inquiry ; ” and that “they bought them and paid for them, without reason to suppose that there was anything wrong about them.” “That where parties act in good faith, in the purchase of securities, in the open market, without any attending circumstances which would call for inquiry, or put a party upon his guard, the purchaser would be protected,” etc. And it was further added: “ If you find from the evidence and the surrounding circumstances, that Hachfield & Co. bought these bonds in good faith, without any reason to suppose that Kendrick had wrongfully come into possession of them, then they are protected.” These were the prominent portions of the charge, stating what the defendants were required to establish, in order to succeed in their defense. And they

A new trial cannot be ordered for misdirection in the charge, for the simple reason that it is not one of the grounds which, under the Code, can be considered, in support of a motion made for that purpose upon the minutes of the court.^[6] For that reason, the effect of these directions is no otherwise before the court on the present appeals, than they are appropriate for consideration upon the effect of the refusal to charge as requested by the defendants. In that respect, they have been examined, to show that the proposition declined, was not included in anything which had been said. And, as it had not previously been submitted to the jury, and was right and proper" for their consideration, the court should have charged it, when the request was made. The refusal to do so was