Case ID: mart-ns_4/html/0383-01.html
Source: Caselaw Access Project
Author: {"author": "Mathews, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

HERRING vs. LEVY.
    
    Appeal from the court of the first district.
    The insolvent ⅛ bound to put the creditor on his hilan, and is n«ex< used from havilg kLw-ledge of the en-dm-see to whom the note was transferred.
    Merchants’ books are not in themselves 6“» vMepee against merchants.
    Merchants’books are evi-aence, on proof of" the clerk’s hand writing & his death; but extracts from emareno
   Mathews, J.,

delivered the opinion of the1 . . . , . . , court. I his suit is brought by the endorsee „ - ; , , ^ or a negotiable note, against one of the makers. It was executed by Reynolds & Levy, who, at , . tile tune of making it, were trading under a , ¶ , , , general partnership, and was made payable , r" . r J to one Isaac Riley, by whom it appears- to have : been regularly transferred, by endorsement, . to the present plaintiff.'

__ tí* t t i he defendant opposes the payment, on the ground of a surrender of property and ... „ i ,. _ , . discharge trom the creditors of his late firm, From. the. record of proceeding, had in the cession of goods, it appears, that the note now sued on was placed to the credit of the original payee, and that he received a just dividend of the insolvent’s estate, proportioned on the amount of said note. But it is contended, on the part of the plaintiff! that Riley ceased to have any interest in the debt previous to the proceedings in the concurso and filing of their bilan by the bankrupts; and, that as he, the plaintiff, does not appear as a cre-|n ^oge proceedings, he has a right to enforce payment from the present defendant, who is now solvent. Judgment rendered in favor of the plaintiff, in the court below, from which the defendant appealed.

The case seems to present two principal .questions for decision: first, whether, as the insolvents did not know into whose hands the note now in contest had fallen, they are not freed from further obligation on it, by representing it as a credit to the payee, who recognized that representation, and received a dividend thereon. The second question arises out of several exceptions taken to opinions of the judge a quo, by which he rejected evidence offered on the part of the defendant, attempted to be established by the testimony of a person who was clerk to Riley, and by extracts taken from the books of accounts of the latter, relating to the commercial dealing between him, and Reynolds Sr Levy.

As to the first of these questions, we are of opinion that persons who issue negotiable, paper, must take .the risk, in ..case of insolvency, of ascertaining the bona fide holder .and ⅛⅛-neglect in so doing, and placing him on their hilan, is not cured by exhibiting the debt due to the original payee, when the note has bt oil regularly transferred to another person. Admitting this principle to be correct, the defendant attempted to show, on the trial below, that no absolute transfer of interest and ownership had taken place of the note now in question ; but that it had only been endorsed over to the plaintiff as collateral sécurity on an obligation long since discharged by Riley, the payee, which destroyed the right of the appellant both in law and equity. ,. To prove these facts, extracts from the commercial books of Riley were offered, supported by the testimony of his clerk, as above stated, which were rejected by the district court, and exceptions taken, Ac.

it has been already settled by a decision of tins court, (col. 2, 508) that merchants5 books are not in themselves evidence against other merchants. That decision was made on a construction of the provisions of our Civil Code on this subject, and we still consider it correct. In France, the commercial code of that country has, in some degree, changed the ancient principle, founded in reason, and . consecrated' by the Roman law," as Tcmllier, expresses himself, p. 534, vol, 8, by which the doctrine was taught, that no person could make a title for himself, or constitute a debtor by bis own proper authority. The care and strictness under which books are to be admitted in contests between merchants, as evidence, and the many guards provided by the new jurisprudence, to prevent fraud in the manner of keeping such books, goes far to remedy any evil whsch might otherwise have resulted from this innovation in jurisprudence]

In support of the doctrine contended for by the counsel of the defendant, we have been referred to many decisions made by the courts of different states of the Union. From these decisions, it would seem that a custom of receiving merchants’ books as evidence, in some of the states, has assumed the force of law. In this state there is no such i ule established, either by express law, or custom. According to the rules of evidence, received as correct in the tribunals of England, founded either on commercial or common law, when books of account have been kept by a clerk, who may have died before he was required to prove the delivery of goods, on proof of the cofries being ⅛ his hand writing, the books , , , „ „ , are admitted as evidence in tavor or the merchant. See Phillips' £⅛., p. 194. The rules of evidence, as recognized in our courts of jus-lice, are, it is true, adopted in a great degree from English authorities; and although in the case above stated, merchants’ books ought probably to be received in evidence, the rule cannot with propriety be extended to the reception of extracts from such books. We are therefore of opinion that the court below w,as correct in rejecting the extracts of accounts from the books of Riley, so far as their authenticity depends on the entries of clerks proven to be dead.

The testimony of the clerk, Adams, could not properly have been excluded on the ground of incompetency in the witness; but allowing it to be admissible, and giving to it all the weight to which it is legally entitled, it does not help the cause of the appellant. The witness proves nothing arising from his own knowledge, which can be admitted to disprove the absolute transfer of the note to the plaintiff, by the written contract, created by the endorsement. On that subject, he only states that the entry in the deposit account against Herring, which relates to this note, is in h>s hand writing, and of course it is to be presumed that it was ordered by his employer, w|j0 ⅛ not at liberty in that way to make a title for himself.

Morse for the plaintiff, Pierce for the defendant.

ft is therefore ordered, adjudged, and tie-creed that the judgment of the district court be affirmed, with costs, ;