US SUPREME COURT DECISIONS

Where an accepted and endorsed bill of exchange was placed by the drawer as collateral security for his own debt in the hands of his creditor, and when the creditor came to sue the acceptor, the court instructed the jury

"That if such facts and circumstances were known to the plaintiff as caused him to suspect, or that would have caused one of ordinary prudence to suspect, that the drawer had no interest in the bill and no authority to use the same for his own benefit, and by ordinary, diligence he could have ascertained these facts,"

then the jury would find for the defendant -- this instruction was erroneous.

The facts of the case examined to ascertain whether or not there was sufficient evidence to go to the jury upon these points.

This Court again says that a bona fide holder of a negotiable instrument for a valuable consideration, without notice of facts which impeach its validity between the antecedent parties, if he takes it under an endorsement made before the same becomes due, holds the title unaffected by these facts and may recover thereon although, as between the antecedent parties, the transaction may be without any legal validity.

Where a party is in possession of a negotiable instrument, the presumption is that he holds it for value, and the burden of proof is upon him who disputes it, an exception being where the defect appears on the face of the instrument.

It is a question of fact for the jury whether or not the holder had knowledge of defects existing antecedently to the transfer to him.

The English and American cases examined.

Surrendering collateral securities previously given and affording increased indulgence as to time furnish a sufficient consideration for the transfer of new collaterals.

Goodman was a citizen of Ohio, and Simonds of Missouri.

The suit was brought by Goodman, upon the following bill of exchange:

"EXCHANGE FOR $5,000"

"CINCINNATI, O., Sept. 12, 1847"

"Four months after date of this, my first of exchange, second unpaid, pay to the order of John Sigerson five thousand dollars, value received, and charge the same to account."

"Your ob't serv't,"

"WALLACE SIGERSON"

"Mr. John Simonds, St. Louis, Mo."

Upon the face of the bill was written, "Accepted, John Simonds," and endorsed upon the same was the following: chanrobles.com-red

Page 61 U. S. 344

"Pay to T. S. Goodman & Co., or order; John Sigerson."

"Pay W. Nesbit & Co., or order; T. S. Goodman & Co."

"Pay Timothy S. Goodman, without recourse to W. Nesbit & Co."

Two of these parties, viz., John Sigerson and Simonds, lived in St. Louis, and the other two, viz., Goodman and Wallace Sigerson, in Cincinnati. The bill of exchange was sent from St. Louis to Wallace Sigerson, at Cincinnati, endorsed by John Sigerson, and accepted by Simonds, but without date, and without the signature of the drawer.

The narrative of the transactions which led to the possession of the bill by Goodman is given in the opinion of the Court.

Upon the trial, there were several rulings of the court, but the one upon which the case came up to this Court was the following, viz.:

The defendant asked the court to give the following instruction to the jury:

"The defendant moves the court to instruct:"

" If the jury find from the evidence in the cause that Wallace Sigerson never had any interest in the bill sued on, nor in the proceeds thereof, nor any authority to use the same for his own benefit, and did dispose of the same for his own benefit to T. S. Goodman & Co., and the plaintiff was at the time one of said firm, and when the bill was so transferred to said firm such facts and circumstances were known to the said Goodman as caused him to suspect, or that would have caused one of ordinary prudence to suspect, that said Wallace had no interest in the bill, and no authority to use the same for his own benefit."

To the giving of which by the court the plaintiff objected, and the court gave to the jury that instruction amended so as to read as follows:

Same instruction, as amended by the court:

"And by ordinary diligence he could have ascertained that said Wallace Sigerson had no interest in said bill, and no authority to use the same for his own benefit, then they will find for the defendant."

To the giving of which, as thus amended, the plaintiff objected, and excepted then and there to the giving of the same to the jury.

Under this instruction, the jury found a verdict for the defendant, and the plaintiff brought the case up to this Court. chanrobles.com-red

Page 61 U. S. 356