Liability of Transferor of Negotiable Paper Without Endorsement, 5 Nov 1857

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Liability of Transferor of Negotiable paper without endorsement.

Case stated by CharM. [Blackfud?y], of Lynchburg

Nov. 5. 1857

C sells to D the negotiable note of A, endorsed by B, but without endorsing it himself. At maturity, the note is protested, & D sues A & B, It turns out that the signature of A is a forgery (committed by B), and that B is insolvent, & was [?], so at the time of the transfer of the [?], D in [?] the note having relied on the known insolven cy of A. D having used all due diligence in his suit, {& having} failed to [?] the money of A because of the forgery, & of B because of his insolvency, and the question now is whe ther C is responsible to him? {for the signatures}

No fraud is imputed to C who was entirely ig norant of the forgery- He is not a licensed [?], but acts in that capacity so far as to buy [?] many notes, for o ther persons on commission. Whether in this case, be acted for himself, or another, is not stated.

I am of opinion that C is responsible for the genuineness of the signatures of the note he sells whe ther he acts for himself or for another, with or without a li cense, unless he disclosed his principal, & professed to be acting [?] for him.

The leading case is Jones [?] Ryde & 5 [?]/ 487 (C 13. 1814).

The defendants were bill-brokers, [?] sessed of a Navy [bill?] purporting to be for [?]1884 ,, 16 ,, 10, which they sold to the plaintiffs without [?]. The bill turned out to have been altered, (of which, however, the defendants were ignorant) [?] the amount of [?]844 ,, 16 ,, 10, and government repudiated it for all but that sum. The action was brought to [?] the difference.

Gibb C J.- "The ground of the defendants resistance is that the bill is not endorsed; and that whensoever instruments are transfered without endorsement, the negotiator professes not to be answerable for their validity." x x "But his declining to endorse the bill does not rid him of that responsibility which attach es [on?] him for putting off an instrument as of a [certain?] description, which turns out not to be [?] as he represents it. The defendant has in the present [?] put off this instrument as a Navy bill of a cer

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tain description: it turns out not to be a navy bill of that amount, & therefore the money must be [considered?] bank".

Heath Jr. " I am of the same opinion. If a person gives a forged bank-note, there is nothing for the money; it is no payment. In the case of of Cripps v Reade (6 J R 606), the defendant sold a term [?] [?] himself to be the personal representative of the deceased, without executing any assignments x x "Ld [Kenyon?] C J said" "the money had been paid under a mistake, & that the action for money had and received, would lie to [?] it back."

[Cham?] J - concurred.

Dallas J - "I have no doubt whatever, of the plain tiff's right to recuse[?]. The case fall, not only [?] the general principle - that when a man has paid more than the thing is eventually with, & the [?] duction fails, he may recuse it back, but also [?] within the [?] authority of [C?] Reade."

Cripps v Reade 6 TR 606 (RB 1796)- Its purport has been already stated.

Young v Cole 3 Binglo. N.C. 724 [32 Eng C & R, 302] (CB, 1837).

Plaintiff sold for defendant, from Guatemala bonds of £ 264 each, defendant being the agent of an undisclo sed principal. The bonds required a stamp in order to make them valid, & that was wanting is those in question. [?] having paid on the percent to defendt, was next day called on by the vendor? to refund, because the bonds wanted the stamp, (of the necessity for which all the parties had been [pre?] igno rant), & be refunded accordingly, & now brought an [?] [?] defendt for money had & received.

Tindal C. J - "It appears to me that the sum for which the verdict has been given, is properly called money recd the defendant to the rise of the plaintiff." "He delivered money to the defendt in an understanding that the [?] he had received from the defendt were real Guatemala bonds, such as were saleable on the Stock exchange. Seems therefore, that the consideration on which the [?] [?] [?], money has failed as completely as if the defendant had contracted to sell foreign [goods?] [? ?]

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ed one counters instead. It is not a question of warranty: but whether the defendant has not delivered something which, though resembling the article contracted to be sold, is of no value."

Park J- concurred. [Bosaupuet?] J- concurred. [Coltman?] J.- concurred.

Fuller & als u fruith & al 1 Car. & P 197, [11 Eng. Cd. R. 366]. ([?]P. 1824).

Action was to recuse amount of [?] bill of Exchange which had been [?[ by [?] for defendants as agents for one Simpson, to whom they paid [on?] the proceeds [?] before notice of the forgery. Bill was endorsed by [?] & ano ther, but not (it would seem), by defendts.

Abbott C. J. "The only question of fact in this case, is, whether the defendants paid [?] the money to Simpson before they had notice of the forgery: but I am of opin ion, in point of law, that they are liable, whether they did so or not". My opinion therefore, is that the [?], in this case, are entitled to a verdict."

[Gampertz?] v Barttett 2 El. & Bl. [75 Eng C L. R.] 849 (QB. 1853).

Action for money had [?]. Defendt sold [pet?] an unstamped bill of Exchange, purputing to be [?] abroad, & which both parties believed to have been to drawn. Defendt did not endorse the bill & it was a sale outhunt recourse. The bill turned out to have been made in England, & to be unavailable for want of stamps, & the parties pursing bankrupt, [?] brought their actions.

Lord Campbell [?]- "Having heard the argument, I think that the action in [?], on the ground that the article does not answer the description of that which was sold, [?] a foreign bill." "I think, therefore that the money paid for it may be [?] as paid in mistake of [facts?]. The law is, I think accurately laid down in the passage cited from Addion on Contracts. If, being what was sold, the bill was valueless because of the insol vency of the parties, the sender would not be answerable; but he is answerable if the bill be [?]."

The passage cited from Addison & their [sanct?] is from [?]. Cents (2 Ed) 162. It is as [?]- "So if a man into the money market, with a bill of Exchange, or a

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promissory notes, & gets it [?] without putting his own home on the bank of it, he is not bound to refund the money he receives, if the parties to the bill or note [?] insolvent, & the bill is [?]; but, if it is not the bill or note of the par ties where names appear on it, if it is a [?] document or a forgery, then the money received in Exchange for it [cana?] be lawfully retained. If the party who negotiates it, does [?] [eaduse] it, he does not subject himself to that responsibility which the endorsement would being upon him; but his de clining to endues the bill, does not rid him of that respon sibility which [?] on him for putting off an instru ment as of a certain description which turns out not be [?] as it is represented to be. Where Bank of England notes are taken, the party negotiating them is not, for not profess to be answerable that the Bank of England shall pay the notes, but he is answerable for their [?] [?] as they purport to be."

Coleridge & Wightman J.- Concurred

Edmund v Digges 1 [Grat.?] 359, (1845).- Ret (Digges), exchanged with defend other bank [?] for $400 of [?] notes of the Ms [?] Bk of Alexandria, which at the time were passing currently at par. The same day the Mechanics Bank stopped payment, [?] it did not appear that defendant knew or suspected that [?] [?] event was [?] to occur. Their action was brought to seems that amount.

Baldwin J- (delivering opinion of Court)- "Those who ino culate (bank notes) are not understood as thereby giving any assurance of the credit, punctuality or solverncy of of the [makers?]; in regard to all which the receiver exerci ses his own judgement, or relies upon that of others in when he has confidence. There is but a single [gl?] [?] which those who circulates the money of that or any other kind can be understood to [?], [trait?], that it is what [?] purports to be, genuine & not counterfeit."

Lyons v Miller 6 [?]. 439, (1849). Defendant as agt for an undisclosed principal, transferred to [pet?] for value ble consideration, without enduring it, a note which [?] to be a forgery, [?] defendant behind it to be genu ine.

Baldwin J- (delivering opinion of Court)- "By dev ring to endorse, the defendant [?[ the responsible an endorses; but he would not without an [underst-]

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or agreement to that effect, amid the responsibility of warranting the genuineness of the instrument. That is a guaranty which the law imposes upon the transfer, a valuable consideration, of bills, bank a promissory notes, & other assurances for money, though without en dorsement. The person so {endorsing} transferring [?] plisdly undertakes that the instrument in genuine, in other and that it is what it purports to be; and if it turns out to be a forgery, there is a failure of the consid eration, which subjects [beim?] to the re-payment of the money he had received. Nor is it maternal [thes] the person making the transfer, receives the conside ration for his own use, or for the use of another; in less he is acting as an agent, & discloses [?] only his agency, but the name of the principal for whom [be?] is acting."

These cases leave no room to doubt the [?] ness of the conclusion [?] Stated. They are [corroborated?] also by the following cases, which need not be [?] per [?] set forth- [rig?]

Johnson v Johnson & [Bo?] & Pul. 162 (CB. 1802). Gardiner v Gray 4 Camp. 144, ( NP. L [?]. 1815). Bridge v Wain 1 Stark. 504. ( NP [?] & KB. 1816). Sec also Byles on Bill 252; 2 Parsons' Conts. 134.

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