Contracts ¡ MBE-tested
William Birdsall, Jr., and others v. Salem T. Russell
29 N.Y. 220¡New York Court of Appeals¡1864¡NY
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Opinion
William Birdsall, Jr., and others v. Salem T. Russell
In an action to recover the possession of bonds, by one claiming to be the owner, against a person who alleges that he purchased the same in the ordinary course of business, in good faith andâwithout notice of any claim of the plaintiff to such bonds, the plaintiff, to entitle him to recover, is bound to establish two facts, viz; 1st. That the bonds belong to him; and 2d. That the circumstances under which the defendant purchased them were not such as to protect his title.
What will be deemed sufficient proof of identification and ownership in such a case.
What marks of alteration and defacement upon bonds and interest coupons are sufficient to discredit them in the market, and deprive the holder of the protection of a bona fide purchaser of negotiable paper.
Constructive notice is a legal inference from established facts; and when the facts are not controverted, or the alleged defect or infirmity appears on the face of an instrument, and is a matter of ocular inspection, the question is one for the court: Whether, under a conceded state of facts, the law will impute notice to the purchaser is not a question for the jury.
The purchaser of a bond or other negotiable instrument in open market, and ' in the usual course of business, is not bound to make a close and critical ⢠examination to escape the imputation of bad faith in the purchase. â˘
The numbers of bonds are not an integral part of the bonds themselves; and it would be a violent and unjust presumption to assume that a change in the mere numbering of a bond or other quasi negotiable instrument offered for sale in the usual course is, as a matter of law, notice, or any intimation, even, of a larceny of it.
The rights of a purchaser are not to he affected by constructive notice, unless it clearly appears that the inquiry suggested by the facts disclosed at the time of the purchase, would, if fairly pursued, result in the discovery of the defect existing, but hidden at the time.
There must appear to be, in the nature of the case, such a connection between the facts disclosed and the further facts to be discovered, that the former may be said to furnish a clueâa reasonable and natural clueâto the latter. /
This action was brought in the superior court of the city of New York, in December, 1861, to recover from the defendant the possession of two bonds, being first-mortgage bonds of the Toledo, Norwalk & Cleveland Bailroad Company, each dated September 1, 1851, payable August 1, 1863, for one thousand dollars each, with interest at 7 per cent, payable semi-annually, and each with twenty-four coupons for the interest annexedâsaid bonds and coupons being numbered respectively Nos. 225 and 238. The allegation in the complaint was that they were wrongfully taken from the* plaintiffs, and had come into the possession of the defendant, who, after demand, wrongfully detained them. The answer put in issue all the allegations of the complaint, except the demand and refusal, and set up that the defendant purchased the bonds on the 7th of December, 1860, in the ordinary course of business, in good faith and without knowledge or notice of any claim of the plaintiffs to the same. The cause was tried on the 17th of April, 1863, before his honor Justice Robertson and a jury. At the close of the plaintiffsâ evidence the judge refused to. submit the case to the jury, and ordered a dismissal of the complaint. On the trial the following facts were proved, namely: In 1852, the Toledo, Norwalk & Cleveland Railroad Company issued 525 bonds for $1,000 each, numbered consecutively from No. 1 to No. 525. Each bond had twenty-four interest coupons attached, payable semi-annually, in February and August. These were paid at the Corn Exchange Bank in the city of New York, and as they were paid were sent to the office of the company at Cleveland. It was proved at the trial that, as a general rule, the coupons attached to each bond bore the same number with the bond; but it was also proved by the plaintiffsâ witnesses that some of the coupons paid at the Corn Exchange Bank and returned to the company had no numbers wpon themâthe space for the insertion of the numbers being left blank. It was also proved that Mr. George S. Coe, of the city of New York, the trustee of the mortgage given to secure these bonds, signed the whole series of blank bonds in the city of New York, and sent them to the office of the company at Cleveland, where the blank bonds were afterwards filled up by the officers of the company. There were also some blank sheets of the bonds, over and above the 525 issued, received from Mr. Coe by the company, which were defaced and kept in the office for a time. The whole series of bonds and coupons were filled in, and the numbers inserted by a Mr. Kettridge or by a Mr. Baldwin, under the supervision of Kettridge.' Kettridge was examined as a witness for the plaintiffs. The plaintiffs, on November 2d, 1860, owned five of these bonds', numbered respectively 336, 337, 338, 339 and 340. On that day, as usual with them, they deposited their tin box containing the bonds, in their bank,.'since which time they have not seen the box, nor have they ever found the bonds, unless, as claimed by them, the two bonds in suit are two of those thus missing. Immediately upon ascertaining the loss, the plaintiff- notified the company, giving the particulars of the bonds, with their numbers. In the month, of December, 1860, the defendant, without any knowledge of the plaintiffs, or of their ever having lost or owned any of these bonds, purchased in the usual course of business of Thomas Denny & Co., brokers, in Wall street, in the city of New York, two of the bonds of the above-mentioned issue, bearing the numbers 225 and 238, paying the fair market value at the time. In February, 1861, duplicate coupons of four numbers, among which were the numbers 225 and 238, were presented and paid by the Corn Exchange Bank. In August, 1861, the company having been notified of the loss of the plaintiffsâ bonds, and of the presentation of duplicate coupons, at first refused to pay the defendantâs coupons for August, but referred the matter to William M. Yermilye, a director of the company residing in New York. The result was that the defendantâs coupons for August, 1861, were, by order of the treasurer, paid to him. In making this payment the coupons for Februaiy, 1862, were by mistake cut off and cancelled, and returned to the company at Cleveland. The secretary, discovering the error, sent them back to the defendant with an endorsement reviving them, and they were exchanged for the August coupons. Four of the coupons presented in August, 1861, were duplicates, and among them were the Nos. 225 and 238. It was admitted on the trial that there were then in existence two other bonds 'of the same numbers with, and in all respects similar to these bonds of the defendant in controversy in this action. No evidence was, however, offered as to the condition of these other two bonds, or of their state or appearance, or any particulars in relation to them. All that appears in the case on this point is that it was admitted that there were in existence two other bonds bearing the same numbers, and similar to the defendantâs bonds. The plaintiffsâ counsel proved that on the 5th November, 1860, they issued handbills stating the loss of their bonds, describing them by their numbers 336, 337, 338, 339 and 340, and distributed them in the brokersâ offices and other places where the bonds were likely to be offered. These handbills were not, however, in any manner brought home to the defendant, and the court excluded them. The counsel also offered to show that the same notice was published on the 6th and 7th of November, 1860, in three of the daily papers published in the city, which were usually taken at the office of the defendant's brokers, and that in one of said papers the said brokerâs business card was published on the next page of the paper to that containing the said notice. The same witness who proved that Denny & Co. took the papers also proved that he never saw the notice or heard of the loss, although it was his business to receive and attend to all such notices. The court excluded evidence of- the newspapers. The counsel then offered to prove, by a police detective, that the numbers of the bonds and coupons held by the defendant had been altered. The court excluded the evidence, on the ground that the witness was not an expert. The plaintiffsâ counsel also insisted that the court should submit to the jury, as a question of fact, whether the defendantâs brokers, from the condition and appearance of the bonds when purchased, had not notice sufficient to put them upon inquiry as to the title to said bonds. The court decided that there was nothing in the appearance of the bonds fairly calculated to put a purchaser upon inquiry, and refused to submit that question to the jury. The only evidence on the subject of the appearance of the bonds in question, was the following: Mr. Luce, .the treasurer of the company, states that when he examined the bonds in the winter of 1861, he âhad supposed they must be counterfeits, but that on seeing them, there appeared to be no evidence of their being counterfeits.â He also says that he âheld them up to the light to examine them,â and that he discovered a â thinness of the paper where the number is, the brightness of the ink with which the numbers are made, and the paper pasted on the back,â which pieces of paper he had previously stated were â pasted on the back of one of the bonds and some of the coupons.â He also says that he âwas not at that time at all positive in his views concerning the bonds.â He also says that â he did not blame Mr. Vermilye for paying the coupons in August, 1861, after examining the bonds, and that he did not see how he could have done anything else,â and that â with the limited knowledge possessed by Vermilye, and which he possessed himself at the time,- he should have, paid them himself.â He also states that in the interview with the defendant one reason why he did not wish to give the defendant any information was â because he was not certain himself as to the fact of the alteration of the numbers.â The- above was all the evidence that was offered as to the condition or appearance of the bonds. The plaintiffsâ counsel having rested, the defendantâs counsel moved that the complaint be dismissed, which motion was granted, after an inspection of the bonds by the court. On a motion for a new trial, made at the general term, the court, on the 26th of December 1863, (Robertson, J., dissenting), made an order directing a new trial, from which the defendant appealed to this court.
W. C. Russell for the appellant (defendant).
I. There was no evidence in the case tending to prove that the two bonds in suit ever belonged to the plaintiffs. The plaintiffsâ bonds bore the numbers 336, 337, 338, 339 and 340âthe defendantâs bonds, the numbers 225 and 238. Our bonds are admitted to be genuine, the only defect alleged being in a supposed, alteration of the numbers. But,
1. There is no competent proof in the case that any such alteration of the numbers has taken place.
(a.) If this was the fact, it was susceptible of direct proof, the absence of which was of itself sufficient to defeat the plaintiff. Mr. Kittridge, the secretary of the company, the very man who, by his own testimony, filled up and numbered the whole series of bonds, was examined by the plaintiffs, as were also Mr.'Boalt, the president; Mr. Luce, the treasurer; Mr. Coe, the trustee, and Mr. Yermilye, the resident director of the company; all of them1 necessarily familiar with the handwriting in which the bonds were filled up and numbered, yet none of them venture to assert, even as a matter of belief, that the numbers on our bonds, then open before them for examination, had been in fact altered; nor was the question put to them by the plaintiffsâ counsel.- Nor were the other two bonds, of the same number with those in suit, shown to any of the above( witnesses, or any attempt made.to show that the numbers upon them were in the handwriting of the officers of the company. Under these circumstances, to have allowed a police officer to guess, or a jury to conjecture, that, the numbers on our bonds had been altered, and that those upon the other two had not, would have been a gross violation of the salutary rule that the best evidence of which the nature of the case admits must be given, and would have worked great injustice to the defendant.
(5.) The existence of two other bonds bearing the same numbers with, and similar to the bonds in controversy, does not tend to prove that the defendantâs bonds are not the genuine and original Nos. 225 and 238. They were not produced,, except for the purpose of showing their existence, nor was any evidence offered in'ielation to them,' and for aught that appeared in the case, they may have been altered or spurious. There is an entire absence of proof on this point, the consequences of which must fall upon the plaintiffs. The point taken by the counsel, on the argument below, that these two other bonds were not â impeached as to their appearanceâ by the defendant, and that he â does not challenge them for any apparent defects,â is clearly unsound. The plaintiffs were bound to make out their own case, and the defendant was under no obligation or necessity to impeach the bonds referred to, until something was shown giving to them, at least prima facia, a better character than the bonds held by him.
(c.) The appearance of duplicate coupons, numbered 225 and 238, did not tend in any manner to prove that the defendantâs bonds had. been in any respect altered. The duplicate coupons were not offered in evidence, nor was any testimony given in respect to them, nor any means afforded to the court'or jury of determining whether the defendantâs coupons, or the alleged duplicates, were the altered ones. On this point, also, there was an entire absence of proof.
2. Admitting, for the purpose of the argument, that the numbers on the defendantâs bonds have been altered, there is an entire absence of proof that they have been so altered from' any of the bonds belonging to the plaintiffs. The proof is that duplicatĂŠ coupons have appearedâduplicates only in the numbers. Duplicate bonds of the same numbers are admitted to be in existence,- but, as before stated, there was no proof as to their condition or appearance, and no presumption on the point under consideration can be per mitted. The duplication of the coupons may have arisen in several ways wholly unconnected with the plaintiffâs bonds or coupons.
(a.) Coupons from any other of the 525 bonds may have been altered.
(5.) The numbers of defendantâs coupons, if altered, may have been altered in the office of the company, in the original issue, to correct a clerical error in the numberingâa thing not unlikely to happen in the numbering of a series of 525 bonds and 12,600 coupons. The plaintiffâs witnesses insist that there were no duplicate bonds, but they say nothing as to duplicate coupons. That mistakes were made in this matter of the numbering of the coupons is shown by the testimony as to the coupons paid which had no numbers.
(c.) These duplicate coupons may have been taken from some of the overplus of blank bonds in the office of the company.
(d.) The duplicate coupons may have been forged, and as they were not produced, and their genuineness proved, no presumption adverse to the title of the defendant-can be permitted founded on their existence. Any one of these explanations of the alleged alteration would have been entirely consistent with the facts as proven, and left the case without any competent proof upon which the jury could have found in favor of the plaintiffs. If, upon this testimony the case had been left with them, they would have been compelled to decide it upon mere conjectureânot upon testimony. The learned justice was clearly right in refusing to submit the case to the jury on this point, upon the testimony offered. It was not a case of insufficient proof merely, but one of an absence of proof; one in which a verdict for the plaintiff should have been set aside as unsupported by evidence. There was, therefore, no evidence to go to the jury as to the identity of the defendantsâ bonds with those lost by the plaintiffs.
II. The seciu'ities sued for are negotiable instruments, to which a good title could be acquired by a purchaser, in the usual course of business for value and without notice, even against the former owner.
1. The bonds are made negotiable in express terms, on their face, being payable to bearer, and transferable by delivery, like notes of hand, payable to bearer.
2. Repeated decisions, of the courts of this and other states establish this. (State of Illinois v. Delafield, 8 Paige, 527; S. C. 2 Hill, 177; Gould v. Town of Venice, 29 Barb. 452; Morris Canal & B. Co. v. Fisher, 3 Amer. Law Reg. 423; White v. Vermont & Mass. R. R. Co. 21 How. U. S. R. 525; Bank of Rome v. Village of Rome, 19 N. Y. 20; Brainerd v. N. Y. & H. R. R. Co. 25 N. Y. 496.)
III. The defendant is a bona fide holder of the bonds in question, having purchased them in the usual course of business, and without any notice of any defect either in the bonds themselves or in the title of the party from whom he purchased them.
IV. The defendant, when he purchased, had no actual notice ofâany defect. None such was claimed on the trial, nor is any such shown in the case. If his title is to be defeated it will be by the application of the doctrine of constructive noticeânotice imputed to him by law against the fact and truth of the case.
V. The doctrine of constructive notice is entitled to but little favor, and should be construed strictly, particularly when sought to be applied to a purchaser for value and without any actual notice. In such case the question becomes one of fraud or malafides on the part of the purchaser, charging him with gross negligence amounting to a fraudulent intent. (Williamson v. Brown, 15 N. Y. 354-364; Ware v. Egmont, 31 Eng. Law & Eq. R. 89.)
VI. The defendant, when he purchased, had not any constructive notice of any defect of title to the bonds.
1. The handbills gave him no such notice, and were properly excluded by the court. They did not indicate the loss of any bonds of the numbers 225 and 238, but of bonds of entirely different numbers. Even if seen by the purchaser they were therefore calculated rather to put him off his guard than to warn him of the real risk of the case. But they were not in any manner brought home to the defendant. They were not delivered to him or to his brokers. Both the witnesses who testified to their distribution proved this.
2. The newspapers gave him no such notice, and were properly excluded. The proof was that the papers referred to were taken in Denny & Coâs office in November, 1860, but there was no proof that they were left there on the particular day of the publication; and the same witness states that he was the person before whom all such notices were placed in the course of their business, and that he never saw any such notice. These newspaper notices also, like the hand-bills, gave notice of the loss of other bonds, and were calculated, if seen by the defendant, to -mislead him. (Vernon v. Manhattan Co. 17 Wend. 524; S. C. 22 Wend. 182.) In this case Ch. Justice Jones charged the jury that the delivery of a newspaper containing a notice of the dissolution of a partnership, was not notice of a dissolution, and he was sustained by the supreme court and the court of errors. Cowen, J., says: âI cannot allow that the mere taldng of a newspaper stuffed-with notices will make a case for a jury.â
VII. Neither the defendant nor his brokers, at the time of the purchase, had any notice of a want of title in the seller of the bonds, from anything proved, as to the appearance or condition of the bonds; nor were they, within the proper meaning of the term, â put upon inquiry,â and the court properly withheld this question from the jury. . â˘
1. This was a question of law for the court, and not of fact for the jury.
(a.) The facts were undisputed; there was no conflict of testimony, and though the evidence, as to the appearance of the bonds, was slight, it was not in any manner controverted. The question presented by it, then, was clearly what was the legal effect of the testimony, as to charging the purchaser with implied notice. The plaintiffsâ counsel claimed that under the facts, as proved, the law imputed notice to the purchaserâthe defendantâs counsel insisting that, admitting the facts to be as stated by the witness, their legal effect upon the title of the defendant was a question of law for the court. The very statement of the point, as urged by the plaintiffs, demonstrates that the question was strictly one of legal inference. (Williamson v. Brown, 15 N. Y. 354; Vernon v. Manhattan Co. 22 Wend. 197; Opinion of Verplanck, Senator; Morvatt v. Hairland, 3 Dayâs Rep. 353; Ware v. Egmont, 31 Eng. Law and Eq. R. 89; See language cited under fifth point; Demeyer v. Souza, 6 Wend. 436; Stuart v. Simpson, 1. Wend. 376.)
(5.) The defect alleged in this case was apparent upon the face of the instrument; it was a matter of acculai inspection, and as such peculiarly the province of the court and not of the jury. In Goodman v. Simonds, (20 How. U. S. Rep. p. 365), the court say: âWhere the supposed defect or infirmity in. the title, to the instrument appears on its face at the time of the transfer, the question whether a party who took it had notice or not, is in general a question of construction, and must be determined by the court as a matter of law; and so.it was determined in Anderson v. Pond, (13 Peters, 65), and the same doctrine was adopted and enforced in Fowler v. Braulty, (14 Peters, 318,â) &c. (Ayer v. Hutchins, 4 Mass. 370; Wiggin v. Bush, 12 Johns. R. 306; Cone v. Baldwin, 12 Pick. 545; Brown v. Taber, 5 Wend. 566.)
(c.) The cases cited by the plaintiffsâ counsel on the argument below (Snow v. Peacock, 3 Bingham, 406, and Prin gle v. Phillips, 5 Sand. 157), and it is believed all the cases that can be cited, in which this question has been submitted to a jury, were cases in which there was a conflict of testimony, and the question presented itself as a mixed question of law and fact; and where the circumstances from which the notice was sought to be inferred were circumstances extraneous to the instrument itself, the title to which was in question. (Goodman v. Simonds, 20 How. U. S. Rep. 366.)
(d.) The question presented was not in any sense one as to the greater or less weight, of the evidence, but was purely one as to its relevancy to raise the legal inference sought to be deduced from it. In any of its aspects, then, it was purely a question of law, which the court was bound to decide.
2. The question of law thus presented was properly decided by the court.
(a.) There was nothing in the appearance of the bonds when purchased, to suggest the idea that the seller had no title to them. It is conceded that in the body of the instruments, including the signatures and seal of the company, and the certificate of the trustee,, they were in all respects, the genuine obligations of the company, and were in the usual and proper condition. The only thing unusual upon them was that pieces of paper were pasted on the back of one of the bonds and some of the coupons, and on being held up to the light, the paper, where some of the numbers were, appeared to be thin and worn. Ho purchaser is bound to make such a critical examination as this of negotiable instruments offered in the market for sale. He would ordinarily examine the signatures and seal and the body of the instrument, to ascertain if it were genuine. To this extent he may reasonably be held; to exact more would be unreasonable and impracticable, and would injuriously embarrass all negotiations of this nature.
(6.) Even if the purchaser had seen such marks upon the bonds as would indicate that the numbers had been altered, this would be no notice of any defect or irregularity in the bonds themselves or in the sellerâs title to them. The numbers are no integral part of the bonds themselves any more than are the numbers on bank-notes or checks, placed upon them for the purpose of registration or other convenience, with which'the purchaser has no concern, and .as to which he is not bound to inquire. They might have been changed or wholly erased, or cut off by a previous holder without in any manner impairing them as the legal obligations of the company and the proper subjects of sale in the market. It is confidently submitted that it would be-a most violent and unjust presumption to assume that a change in the mere numbering of a bond or other negotiable instrument offered for sale in the usual course, is as matter of law notice, or any intimation, even, of a larceny of the bonds.
(c.) The true rule as to the meaning of the term â put upon inquiryâ is, that the rights of a purchaser are not to be affected by constructive notice, unless it clearly appear that the inquiry suggested by the facts disclosed at the time of the purchase, would, if fairly pursued, result in the discovery of the defect existing, but hidden at the time. There must, appear to be, in the nature of the case, such a connection between the facts disclosed and the further facts to be discovered, that the former, may be said to furnish a clue to the latter. (Williamson v. Brown, 15 N. Y. 354; Howard Ins. Co. v. Halsey, 4 Sandf. 578.) The hidden facts to be. discovered in this case, upon the plaintiffâs theory, was the loss of these bonds by the plaintiffs, and their title to reclaim them. Surely, the mere knowledge that the numbers on these bonds had been changed gave the purchaser no clue whatever, which, if followed up, would necessarily, or even probably, lead to a discovery of these facts. There is no natural or logical connection between them; nor is there any evidence in the case that will warrant any such conclusion.
(d.) The evidence on the part of the plaintiffs clearly shows that, as matter of fact, the mere alteration of the numbers, if any, could not, and did not suggest the idea that these were the plaintiffsâ bonds, or that there was any defect in them. The parties through whose hands these bonds passed.before the defendant purchased them were brokers and bankers of large experience. They saw nothing suspicious in their appearance, for they purchased and paid for them. Mr. Luce, the treasurer of the company, the only witness who testifies as to the appearance of the bonds, examined them in the defendantâs office after the purchaseâhaving at the time full knowledge of the number of the whole issue, the mode of numbering and regisistering the coupons, the loss of the plaintiffsâ bonds, and the strange appearance of duplicated couponsânone of which knowledge was possessed by, or within the reach of, the defendant when he purchased. Mr. Yermilye, the resident director of the company, a broker of large experience and the highest standing, with the like knowledge, also examined them, and after such examination paid the coupons. Both these gentlemen, with their suspicions aroused in regard to these bonds, made a careful and critical examination of these bondsâsuch an examination as no purchaser can or is bound to make, and reported them in all respects regular, and the coupons for August, 1861, were paid. Mr. Luce was not even sure that there had been any alteration of the numbers, nor whether such alteration had not been the result of a clerical error. In the face of facts like these, proven by the plaintiffs as part of then* case, it cannot be pretended, with any show of reason or fairness, that this defendant, purchasing in the ordinary course of business, 'was bound at his peril to see, or could in fact suspect, what all these other parties thus failed to ascertain in regard to these bonds. We claim, therefore, that the plaintiffsâ evidence disproved, as matter of fact, that there was anything in the appearance of these bonds when the defendant purchased them calculated to excite the suspicion or notice of any prudent purchaser.
VHL As the case stood when the plaintiffs rested, the defendant was entitled to judgment.
The order of the general term appealed from was erroneous and should be reversed, and judgment of a dismissal of the complaint should be granted, with costs.
W. A. Butler, for the respondents (plaintiffs).
I. The sole question before the court on this appeal is whether any error was committed by the court below in ordering a new trial for the purpose of submitting the facts to a jury. The inquiry at' the general term below was, whether the facts proved at the trial would, if uncontroverted, have justified a verdict for the plaintiffs. The determination of this question in the affirmative is conclusive, provided there was any evidence, however slight, to support it. There is such evidence, and the order should be affirmed. (Code of Procedure, § 11; Hoyt v. Thompsonâs Executor, 19 N. Y. 207âsee opinion of Comstock, J., pp. 211, 212; Miller v. Schuyler, 20 N. R. 522, 525.) The remarks of Johnson, Ch. J., in the last cited case, are precisely in point here. This appeal presents â a case on which the general term may well have differed from the judge at special term, in regard to this question of fact. Our duty, therefore, is to affirm the judgment. The true course for the defendant to have followed would have been to have submitted to the new trial, and then, if unsuccessful, to have appealed. Having chosen to stipulate, according to the Statute, they must abide the consequences.â (Page 525.)
H. There was no error in the determination by the court below- in respect to the question of fact, touching the identity of the two bonds, in the possession of the defendant, with two of the five bonds originally belonging to and stolen from the plaintiffs. The evidence on this point was not only sufficient to go to the .jury, it incontrovertibly established the identity of the bonds.
1. The 525 bonds of the entire issue, being identical in date, amount, and terms, could only be distinguished and known apart by their numbers. These numbers furnished the sole means of identification. They were a material part of each bond, and their integrity was essential to each bond, so far as its identity as one of the series was concerned.
2. The plaintiffsâ evidence showed:
(a.) That but one bond of this issue, bearing the numbers 225 and 238 respectively, was ever issued by the company.
(5.) That during the ten years after such issue only one bond and accompanying coupons of the numbers 225 and 238 respectively was ever heard of, or seen, or paid upon, until after the theft of plaintiffsâ bonds, numbers 336-340.
(c.) That bonds of the numbers 225 and 238 respectively, other than those held by the defendant, are in existence, one of them having been produced at the trial by the plaintiffs, and the existence of the other admited. It was produced at the first trial.
(d.) That at the next coupon day after the theft of the plaintiffsâ five bonds, duplicate coupons of the numbers 225 and 238 for the first time appeared, and that neither bonds nor coupons of any one of the numbers of plaintiffsâ bonds have appeared at any time since the theft.
(e.) That the two bonds, 225 and 238, held by the defendant, and which were in evidence and capable of inspection by the jury, and of comparison with the other bonds of the same number, bore marks in connection with their numbers which might lead to the conclusion, from mere inspection, that the numbers had been changed.
3. On this state of facts every reasonable presumption that there were two bonds originally issued bearing the number 225 and two bonds bearing the number 238, was excluded; and the fact of a fraudulent alteration of other original numbers into those numbers was demonstrated. Every reasonable presumption was also excluded that such alteration had been accomplished in any other way than by erasing the original numbers from two of the plaintiffsâ bonds and substituting the numbers 225 and 238, inasmuch as the numbers of the plaintiffsâ bonds were the only missing numbers, and they disappeared from the series contemporaneously with the appearance of the new and duplicated numbers. It was' for the jury, weighing these presumptions in connection with the actual appearance of the defendantâs bonds, to say whether or not Ids were the altered and substituted bonds.
4. The two bonds, numbered 225 and 238, other than the defendantâs, were both in evidence. ThĂŠyâwere wholly unimpeached as to their appearance. The defendant did not challenge them for any apparent defects. This fact, coupled with the suspicious aspect of the defendantâs bonds, and the other facts and circumstances above detailed, presented a case which would have fully justified the jury in finding that the two bonds in question were two of the five bonds originally owned by the plaintiffs. They could not reasonably have come to any other conclusion.
III. There was no error in the determination of the. court below in respect to the question of fact, touching the actual appearance of the bonds as tending to put the defendantâs brokers, as prudent men,.upon inquiry. The evidence was sufficient to go to-the jury, and the judge, at the trial, instead of deciding that question of fact by his own inspection of the bonds, should have submitted it, with proper instructions, to the jury.
1. The court could not properly take this question of fact away from the jury unless the bonds bore no suspicious marks. But that they did bear such marks was in evidence and undisputed, and the bonds themselves were in evidence, and no attempt was made by the defendant, by any cross-examination of the plaintiffsâ witnesses or otherwise, to show that the questions put to the witness Luce, which assumed, and his answer which corroborated, the fact of ajiparent alterations, were not fully borne out by the appearance of the bonds.
2. The claim of the plaintiffsâ counsel to submit to the jury the question whether the condition and appearance of the bonds, the patches of paper thereon, and the thin and rubbed appearance of the paper where numbers occurred, was sufficient to put brokers on inquiry, was fully justified by the evidence, and the error of the judge at the trial was in assuming the province of the jury and weighing the sufficiency of the evidence himself, instead of leaving it to the jury. It is well settled that in cases of dispute as to the title to personal property, where there is any evidence to warrant a jury in inferring actual notice from circumstances or appearances, even though very slight opposing proof would repel the presumption, the question of good faith is for the jury. The question of fact whether a prudent broker, accustomed to dealing in this description .of securities, which are known and negotiated only by their numbers, would have been put on inquiry by such marks as appeared in connection with the numbers on these bonds, was peculiarly one for the jury; especially as the slightest inquiry of the agents of the company, or the bank which paid the interest, would have led to a discovery of the facts. (Snow v. Peacock, 3 Bing. 406; Strange v. Wigney, 6 Bing. 677; Easly v. Crocker, 10 Bing. 243; Bayner v. Foster, 4 Tyrwhitt, 65; Lord Hood v. Kendall, 17 Com. Bench, 260; Gardner v. Ryerson, 19 How. 108; Dows v. Rush, 28 Barb. 157; Pringle v. Phillips, 5 Sand. 157, and cases cited in the opinion of Duer, J., p. 163, et seq; Fowler v. Brantly, 14 Peters, 318; Williamson v. Brown, 15 N. Y. R. 354âand see cases referred to in Justice Barbourâs opinion.)
3. The dissenting opinion of the learned judge who tried the cause contains an elaborate analysis of the evidence, which would have been, in the main, quite appropriate by way of comment to the jury. It is an argument to justify his own finding of fact in favor of.the defendant. It clearly shows that there was some evidence, though he did not think it sufficient to justify a verdict for the plaintiff, or even a submission to the jury. But the other judges at the general term, and the'judge before whom the cause was first tried, thought otherwise. The opinion shows conclusively, as the court below have determined, that the true course was to submit the case to the jury with suitable explanations. Even if the judge was satisfied that the jury could only have found as he did, it was none the less his duty to leave the question of fact to them. (See Small v. Smith, 1 Denio, 583, per Beardsley, J., p. 589.)
4. The suspicious papers themselves, which were before the jury, not being before the court on this argument, the case cannot be brought within the rule which sustains a non-suit where there is no evidence which would have.supported a verdict, or where the verdict is against the clear weight and effect of the evidence. (Smith v. Sanger, 3 Barb. 360, 369; Demyer v. Souzer, 6 Wend. 436; Rudd v. Davis, 3 Hill, 287; Storey v. Brennan, 15 N. Y. 524.)
IY. If the ruling of the judge at the trial in this action, and the reasoning of his opinion, are sustained, there is" no case in which the mutilation or defacement of a genuine negotiable instrument can be held to be a circumstance sufficient to put a prudent person on inquiry as to the title ' of the possessor. But the rule of law which, by recent enlargement in the interest of commerce, concedes to the railroad securities with which the market is flooded, and which are capable of identification and separation only by means of their numbers, the character and protection of negotiable paper, should not be stretched so far as to permit the thief and the forger to tamper with the sole indicia of title by which they can be traced, and then, with the evidence of alteration apparent upon their face, to put them in circulation, without requiring of those who deal in them at least ordinary caution in observing and examining their numbers. Title to a chattel cannot be derived through a thief. The exception in favor of negotiable paper does not extend to instruments like the bonds in question, if, as in this case, they have been feloniously altered and bear on their face suspicious marks. (Andrew v. Dietrich, 14 Wend. 31; Robinson v. Dauchy, 2 Barb. 20; Brown v. Peabody, 3 Kern. 626; Pratt v. Adams, 7 Paige, 615, 640; Canal Bank v. Bank of Albany, 1 Hill, 287; Talbot v. Bank of Rochester, 1 Hill, 295; Graves v. Am. Ex. Bank, 17 N. Y. 205.)
Y. The defendant having, by his present appeal, declined to submit the question of fact to the decision of a jury, this court should not disturb the conclusions of the general term on that question. The order appealed from should be affirmed, and judgment final rendered for the plaintiffs, with costs.
[MAJORITY â Hogeboom, J. Wright, J.]
Hogeboom, J.
The plaintiffs sue to recover of the defendant two mortgage bonds of the Toledo, Norwalk & Cleveland Railroad Company. To entitle them to recover, they were bound to establish two facts: 1st. That the two bonds found in possession of the defendant belonged to the plaintiffs. 2d. That the circumstances under which the defendant purchased the bonds were not such as to protect his title. On neither of these points is the evidence very satisfactory.
1. There were no marks about the plaintiffsâ bonds tending specially to identify them or to distinguish them from other bonds of the ⢠same company, except the numbers. The plaintiffs lost five bonds, numbered respectively from 336 to 340, inclusive. These numbers did not agree with those found in possession of the defendant, which were 225 and 238. This is the first circumstance to show a want of identity. To account for this discrepancy it is claimed that the numbers had been altered from some two of those owned and lost by the plaintiffs. And this alleged alteration is claimed for two purposes: 1st. To aid in the identification of them as the plaintiffsâ bonds. 2d. To show that the defendant received them under suspicious circumstances. It is perhaps not improbable that the coupons had been altered, but the proof of the alteration is not very strong or satisfactory. The evidences of alteration relied on were that on one of the bonds and both of the coupons pieces of paper were pasted behind the numbers. On being held up to the light they presented an appearance of thinness of the paper and brightness of the -ink where the numbers occurred, as if made on erasures and written anew. It is also claimed that the paper at these places appeared to have been rubbed. Whether these appearances were so suspicious as to deprive the defendant of the character of a honafide purchaser will be presently considered. The question now is how far, in connection with other circumstances, they tended to establish the identity of these bonds with those belonging to the plaintiffs. The principal ground for claiming this identity is _that when the payments for semi-annual interest on the bonds next succeeding the date of plaintiffsâ loss became due, no coupons were presented for payment answering to the numbers of the plaintiffsâ bonds, but duplicates of five other numbers, 224, 225, 234, 238 and 455 were presented and paid. Such duplicates had never before appeared. There were also produced duplicate bonds numbered 225, 238; that is, one of each of said numbers besides those held by defendant of corresponding numbers. There was also evidence tending strongly to show that no duplicate bonds or coupons were ever issued by the company. This was substantially the case made by the plaintiffs. But there were other circumstances to be considered. Alteratians in the bonds and coupons were not necessarily evidence of fraud. The bonds might have been altered as to their numbers by the officers of the company, before they were issued. There is no proof that they were not. There is no proof that the two bonds produced on the trial numbered 225, 238, corresponding with similar numbers held by the defendant had not been altered, or bore more the appearance of genuineness than the others. There is no proof that the bonds and coupons lost by the plaintiffs ivere themselves free from suspicious marks, or may not be still outstanding with their true and original numbers. The proof of alteration is not marked or decisive. Some of the bonds were issued without all the coupons attached to them being numbered. The officers of the company were not themselves certain of the fact of alteration. The New Ydrk director, to whom the matter was referred, paid the August coupons to the defendant at the next succeeding date after the first presentation of duplicate coupons, notwithstanding he examined the bonds and the company had been notified of the supposed fraud or larceny. There was no proof to show that the numbers inserted in the defendantâs bonds were not in the handwriting of the officers of the company, or of the particular officer who filled in the bonds originally. The judge, at the trial, inspected the bonds, and we may perhaps conclude that he was not satisfied they had been tampered with. The proof of identification, and the plaintiffsâ ownership of the bonds in suit, is by no means complete. Possibly there was enough to justify and require the submission to the jury of this question of fact. And this makes it necessary to consider the other question in the case.
2. Were there such marks of alteration and defacement upon the bonds and coupons as should discredit them in the market, and deprive the defendant of the protection of a tona fide purchaser of negotiable paper.
The character of the alleged alterations has been already referred to:âthe thinness of the paper where the numbers were, its rubbed appearance, the brightness of the ink, the patches upon the back. .The court, after an inspection of the bonds, held that these appearances were not sufficiently decisive of fraudulent alteration, and dismissed the complaint. I think his decision was correct, or at least should not be reversed, for the following reasons:
(1.) The fact of alteration is consistent with the genuineness and validity of the bonds. It is not shown when the alterations were made, nor that they were not made before the bonds were issued, nor that they are not in the handwriting of the officers of .the company.
(2.) The alterations (if any) are in immaterial particulars. The numbers are not an indispensable part of the bonds or coupons, and from that circumstance would not be likely to attract the attention of practical men.
(3.) We are not in a situation to say that the evidences of alteration and erasure may not have been wholly indecisive and unsatisfactory. This question must turn very much upon the appearance of the bonds and the coupons. .They cannot well be adequately described by witnesses; at least they are not so. If the signs of alteration were very slight-r-if the paper was only slightly thinner or slightly rubbed, or the ink only a little brighter, and all this may have been so, they may not have been sufficient to attract the attention of even a cautious and prudent observer. As to the patches on the back, they might not have been likely to be discovered, o'r might appear to have been made to cover an accidental rent in the paper. The evidence, so far as it stands upon the oral or written testimony of the.witnesses, is not of that character or strength that enables us to say that the court erred in holding it insufficient to support a verdict.
(4.) But stronger than all, in my opinion, is the objection that we have not the benefit of an inspection of the papers, and are, therefore, without a portion of the means which the court below enjoyed in passing judgment upon the case. I think it a mistake to say that the bonds (if not the coupons also) were not before the court and jury.
The first witness, Birdsall, speaks of them as the two bonds now shown him. It is stated in his testimony that the bonds in question and the coupons annexed to them are as follows, (giving copies thereof). It is then stated âthe following coupon was also read in evidence, the same having been detached from, the bond, but admitted to belong to it. The question is put to the witness, Hays: 'â˘* Look at those numbers on the coupons and state whether or not they have been altered.â It is evident, also, from the testimony of Coe, that the bonds were submitted to his inspection. The plaintiffsâ counsel refers to the condition and appearance of the bonds, in his claim to go to tie jury, in- opposition to the motion for a non-suit. And the case further states that âthe court, after an inspection of said bonds, refused to submit any question of fact to the jury.â .
I do not deem it necessary to consider the question whether the court or the jury, in passing upon the case, would have had a legal right to judge for themselves by inspection of the appearances of defacement and alteration as being sufficient or otherwise to put the purchaser upon inquiry. It sufficiently appears that the court, in granting the motion, did, without objection on either side, inspect the papers, and in all probability decided the case, in part, upon the result of such inspection upon his mind. These papers, as is obvious from the opinions of the judges of the superior court, were not before them, and they are not before us. We are, therefore, as was the general term of the superior court, deprived, in part, of the means and instruments of evidence which the trial court enjoyed of arriving at a correct conclusion on the matter in question, and with this partial view of the case cannot safely say, and are not perhaps entitled to say, that the trial court was in ' error. It'was required of the plaintiffs alleging error to have occurred in the trial of the cause to have affirmatively shown it. It was competent for him, if necessary for the purposes of justice, to have procured the original papers to be sent up to the court above;, .and not having done so, we are not at liberty to say, upon this incomplete view of the case, that â manifest error hath intervened.â The only remedy left for the plaintiffs, in my opinion, is a new action.
The judgment of the general term of the superior court should be reversed, and judgment ordered dismissing the complaint, with costs.
Wright, J.
The exceptions taken at the triai were directed to be heard in -the first instance at a general term. The principal, and only one insisted Ăłn, was to the decision of the judge dismissing the plaintiffsâ complaint. The general term ordered a new trial, on the ground that this ruling was erroneousâholding that the case should have gone to the jury. ⢠The action was to recover the possession of two bonds (in terms payable to bearer transferable by deliv cry), for $1,000 each, issued by the Toledo, Norwalk & Cleveland Railroad Company, alleged to be detained by the defendant. The bonds had been purchased for the defend ant by his brokers, in December, 1860, in the usual course â˘of business, and without actual notice of any defect in them, or in the title of the seller. The plaintiffs claimed tho/ they were the owners of the bonds. If, therefore, ther< was evidence tending to prove the plaintiffsâ ownership anc the'defendantâs purchase of them in bad faith, it was erroj to withhold the case from the jury.
â It seems to me that "when the case was rested, the testimony failed utterly to show title in the plaintiffs to the bonds in question; and if the jury had given them a verdict, it would have been the result of mere speculation and conjecture. They were the owners, in the fore part of November, 1860, of five bonds of $1,000 each of the Toledo, Norwalk k Cleveland Railroad Company, bearing the numbers 336, 337, 338, 339, and 340; which bonds were left at the Fulton Bank in a box, and the box was afterwards lost or stolen. The bonds in suit of a similar description, which were admitted to be genuine, bore the numbers 225 and 238. Of course, to make any case on the part of the plaintiffs, it was necessary for them to show that the latter were two of their bonds that had been lost or abstracted. The bonds issued by the company were alike in all respects except the numbering; but those in suit were numbered differently from those formerly belonging to the plaintiffs. The theory of the plaintiffs was, that the defendantâs bonds were two of their lost bonds, which had been altered in these numbers. Was there any evidence to go to the jury as to the identity of the bonds which were the subject of the action with those lost by the plaintiffs?
If the defendantâs bonds were the genuine and original tĂos. 225 and' 238, there could, of course, have been no pretense tho,t they ever were the property of the 'plaintiffs. Et was then primarily essential to show that the numbers had been altered. This was a fact susceptible of direct proof, but none was given. There would have been no difficulty whatever in proving by the secretary of the company, who filled up and numbered the whole series of bonds, or by others familiar with his handwriting, that the numbers on the bonds had in fact been altered. The bonds were open for examination on the trial; they had been seen and examined before the trial by some of the officers of the company; the person who numbered them was one of the plaintiffsâ witnesses, yet no questions were asked or attempt made to prove by them that the numbers upon the bonds were not in the handwriting of the person originally numbering the series. All the evidence introduced, bearing in the remotest' degree on the question of alteration, was this: The series of bonds when issued were numbered consecutively, from No. 1 to No. 525; there was no duplicate numbers either of bonds or coupons issued; for some ten years after issue, no duplicate coupons had been seen by the companyâs paying agent in New York; in February, 1861, duplicate coupons of the numbers 225 and 238 appeared and were paid by the Corn Exchange Bank, and returned to the company; and there were in existence two other bonds numbered 225 and 238. This did not tend to prove that the numbers on the defendantâs bonds had been altered, or that they were not the genuine and original Nos. 225 and 238. Had it been shown that the numbers upon the other two bonds, admitted to be in existence, were in the handwriting of the officers of the companyâor any proof whatever given that they were not altered or spurious; or had it been shown in any way that the duplicate coupons, numbered 225 and 238, which had appeared and been paid, were genuine and not altered onesâthere would have been something for the jury. But, in these respects, there was an entire absence of proof. Under the circumstances, it would have been a mere matter of conjecture with the jury, that the numbers on the defendantâs bonds had been altered and those upon the other two had not; and that the bonds in suit were not the genuine and original Nos. 225 and 238, but those produced on the trial simply to show their existence, and in relation to which no evidence was offered, were.
If, however, it were admitted that the numbers on the defendantâs- bonds had been altered, was there really any evidence that they had been so altered from any of the bonds belonging to the plaintiffs? The proof showed, as has been stated, that the bonds issued were numbered consecutively from 1 to 525, and that there was but one bond of each number. There was also evidence tending to show that for nearly ten years after such issue only one bond and accompanying coupons of the numbers 225 and 238 respectively, was ever seen by the company, or its agents, or paid upon; that when the coupons of 1st February, 1861, were paid by their agents, and returned'to the company, they amounted to $105 (the amount of their coupons) more than the entire sum due for coupons maturing at that date, counting as outstanding the numbers 336, 337, 338, 339 and 340 (the numbers of the plaintiffsâ bonds), which were not returned as paid; that on examination by the company it was discovered that there were duplicate coupons returned of the numbers 225, 238 and 455; that in August, 1861, duplicates of numbers 224 and 234 were returned to the companyâs office from their paying agent in New York, making five duplicate coupons, duplicating the numbers 224, 225, 234, 238 and 455; that the coupons numbered from 336 to 340 (being the numbers of the plaintiffsâ five bonds) maturing after August, 1860, had not, asâ late as December, 1862, been returned; and that bonds of the numbers 225 and 238 respectively, other than those held by the defendant, were in existence. This was all the. proof. It undoubtedly tended to show that there were not two bonds originally issued ÂĄbearing the number 225, and bonds bearing the number 238, and that either the defendantâs bonds or the two others of like number admitted to be in existence, had been altered; but as to which of them had been altered the evidence furnished no possible clue. The two bonds, numbered 225 and 238, other than the defendantâs, were not produced except for the purpose .of showing their existence, and as to their condition or appearance there was no proof whatever. ThĂŠ evidence also tended to the conclusion that the alteration of one or the other of the two classes of bonds were alterations of other original numbers into numbers 225 and 238; but there was no proof whatever from which the jury could legitimately infer that either were two of the bonds lost by the plaintiffs from which the original numbers had been erased and the numbers-225 and 238 substituted. That there were duplicate coupons of numbers 225 and 238 returned to the company, and no coupons of the numbers of the plaintiffsâ bonds returned up to December, 1862, did not tend to show it. Coupons from any other of the 525 bonds may have been altered. Mistakes may have been made in the numbering of the coupons, a thing not unlikely to happen. Mistakes were made in this matter of numbering, as coupons, having no numbers were proved to have been paid and returned to the company. So, also, the duplicate coupons may have been forged. Nor would the fact that the coupons of two of the numbers of the plaintiffsâ bonds were outstanding in December, 1862, not having been paid or returned to the company, have justified the jury in presuming that the original numbers had been erased from any of the plaintiffsâ bonds.
Had the question, therefore, of the plaintiffsâ ownership of the bonds which were the subject of the suit been left to the jury, they would have been compelled, I think, to decide it upon mere conjecture, and not upon testimony. As the plaintiffsâ bonds were lost or stolen in November, 1860, the defendant purchasing his in December following, and as what purported to be duplicate coupons of Nos. 225 and 238 (the numbers of the defendantâs bonds), were presented in February, 1861, paid and returned to the company's office, and no coupons bearing the numbers of the plaintiffsâ bonds had been paid or returned since their bonds were lost or stolen; and as two other bonds numbered 225 and 238 were shown to be in existence, the jury might have suspected or conjectured that the bonds in the defendantâs hands were the lost or stolen property of the plaintiffs; but it would have been mere conjecture. The proof was utterly defective on which to rest any legal or reasonable presumption, either that the defendantâs bonds were not the genuine and original Nos. 225 and 238, or that they ever belonged to the plaintiffs. The case, in my judgment, which the judge refused to submit to the jury, was not one of insufficient proof merely, but one of an absence of proof.
If the proof were defective and incomplete as to the plaintiffsâ ownership of the bonds, the question of the good or bad faith of the defendantâs purchase was of no importance. But I think the facts show there was no bad faith in the purchase. The defendant or his brokers, it is not pretended, had actual notice of any defect in the title of the party from whom the bonds were purchased; nor do I think upon the facts as proved, the law imputed notice to him. This question, however, was for the court and not the jury. The facts, as to the appearance and condition of the bonds, were undisputed; and the instruments were in court where the defects alleged might be seen on inspection. There was no conflict as to the facts to be settled by the jury, and the circumstances from which notice was to be inferred were not extraneous to the instruments themselves. Constructive notice is a legal inference from established facts; and when the facts are not controverted, or the alleged defect or infirmity appears on the face of the instrument, and is a matter of ocular inspection, the question is one for the court. Whether, under a conceded state of facts, the law will impute notice to the purchaser,, is not a question for the jury. Now, what were the circumstances of' the purchase which it is alleged affected the defendant with notice? There was a piece of paper pasted on the back of one of the bonds, and also of some of the coupons; and on being held up to the light, the paper where some of the numbers of the coupons were, appeared to be thin and worn. This was all. Was, there anything in this appearance of the bonds to suggest the idea that the seller had no title to them, or calculated to excite the suspicion or notice of a prudent purchaser of negotiable instruments ' offered in the market for sale? I think not. , It is not denied that in the body of the, instrument, including the signatĂşres and seal of the company and the certificate of the trustee, they were in all respects the genuine obligations of the company, and were in the usual and proper condition. All that can be claimed is, that if the defendantâs brokers had made a close and critical examination they might have discovered such marks upon them as would have indicated that the numbers had been altered. The purchaser of a bond or other negotiable instrument, in open'market and in the usual course of business, is not bound to make such an examination to escape the imputation of bad faith in the purchase. But, had the defendantâs brokers, by close inspection, been able to see marks indicating that the numbers of the bonds had been altered, it would not have been notice of any defect or irregularity in the bonds themselves, or in the sellerâs' title to them. The numbers are no integral part of the bonds themselves; and it would be a violent and unjust presumption to assume that a change in the mere numbering of a bond, or other quasi negotiable instrument, offered for sale in the usual course, is, as 'a matter of law, notice, or any intimation even, of a larceny of it. The rights of a purchaser are not to be affected by constructive notice, unless it clearly appear that the inquiry suggested by the facts disclosed at the time of the purchase would, if fairly pursued, result in the discovery of the defect existing but hidden at the time. There must appear to be, in the nature of the case, such a connection between the facts discovered and the further facts to be discovered, that the former may be said to furnish a clueâa reasonable and natural clueâto the latter. The hidden facts to be discovered in this case, upon the plaintiffsâ theory, were the loss of the bonds in suit by 'the plaintiffs, and their title to recover them. The mere knowledge that the' numbers on the bonds had been changed (conceding that their appearance disclosed. the fact), gave the purchaser no clue whatever, which, if followed up, would necessarily, or even probably, lead to a discovery of these facts. There was no natural or logical connection between them; nor was there any evidence in the case that would warrant any such conclusion. The plaintiffsâ evidence clearly showed that, as matters of fact, the'mere alteration of the numbers, if any, could not and did not suggest the idea that the bonds purchased by the defendantâs brokers were the plaintiffsâ bonds, or that there was any defect in them. They had passed through the hands of other brokers and bankers before the defendant purchased them, who saw nothing suspicious in their appearance. . Both the treasurer of the company and its agent in Hew York, after their suspicions were aroused, made a critical and careful examination of them, and reported them in all respects regular, and the coupons for August, 1861, were paid. The treasurer was not even sure that there had been any alteration of the numbers. These were facts proved by the plaintiffs, as a part of their case. â The evidence disproved, as matter of fact, that there was anything in the appearance of the bonds, when the defendant purchased them., calculated to excite the suspicion or notice of a prudent purchaser.
The order of the general term, granting a new trial should be reversed, and the judgment of the' special term affirmed.
All the judges concurred except Judges Mulles? and Seldejs?. who were for affirming the judgment of the general term. Judgment reversed,