Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1885-04-10
THE STOLEN BONDS.
A SUPREME COURT DECISION.


An Opinion OF Importance 70 Dealers In We
sstisbie Isstrumests. Especially In Neso
table State Securities.
The case Of Thomas Branch d Co
against the Commissioners Of the Sink
ing Fund was decided yesterday by tn
Supreme Court Of Appeals. The cas-
was substantially this: Some years ag'
several coupon bonds with coupons at
tached were converted by the holder
into other bends Of the State, undel
statutes authorizing the conversion anC
exchange, and were taken in by th'
Treasurer Of the State and fled away II
the Treasury for preservation. They
were not cancelled on their face, bu
they were noted on the bond register:
in the Offices of the Second Auditor anC
Treasurer as cancelled and redeemed BY
the exchange. They were afterwards
it did not appear when-stolen from the
Treasurer's Office by some person oil
persons unknown. In June, 1879,
Thomas Branch 4 Co. purchased these
bonds from broker in New York.
1t was not denied by the pleading:
and was admitted by respondents coun'
sci in argument that Branch * Co.
were bond-fde purchasers Of the bonds,
for value, before maturity, and without
notice Of the theft. The bonds being
still not due, Branch & Co. presented
them, with unmatured coupons, to the
Commissioners of the Sinking Fund and
asked that they be funded under the
act of February IA, 1882, called the
4" Riddleberger bill," and an aci
amendstory thereof. The commits
sioners refused to fund them, on
the ground that they had been re-
deemed by the State, taken in, and
afterwards stolen by some unknown
person from the Treasurer's office.
Branch 4 Co. thereupon applied to the
Court Of Appeals for a mandamus to
compel the commissioners to fund the
bonds under the Riddleberger bill. The
Court -four judges sitting refused to
award the writ, Judge Lewis dissent
ing.
OPINION OF THE COURT.
The following Except the statement
of the case) is the opinion of the court
delivered by Judge Fauntleroy;
We are Of opinion that after these
bonds, with their appurtenances thereto,
had been redeemed by the State and
taken into her possession and custody,
they ceased to be her obligations, and
could not again become such, unless
she voluntarily re-delicered or reissued
them. They had run their career
and fulfilled their mission. and
had returned to the dust of
non-existence, and they had been
substituted by outstanding equivalents
which represent the legal and moral sb-
legations of the State. They had no
longer any legal inception or existence
as the bonds Of the State, and they
were and are as though they had never
been; and their vitality could never be
restored without intentional and yolun-
tary redelivery by the State. Ger
tainly they could not be resurTected to
the righteous judgment of court of
justice by robbery or theft
In the case Of Burson Us. Hunting
ton, 2l Michigan, decided in 1900 the
court says: 1.-The wrongful act of a
thief or trespasser may deprive the
holder Of his property in a note which
has once become a note or property by
delivery, and may transfer the title to
an innocent purchaser for value but a
note in the hands Of the maker before
delivery is not property, nor the sub
ject of ownership as such. 1t is, in
law, but a blank piece Of paper. =
Idem, page 43l.
"When a note payable to bearer,
which has once become operative by
delivery, has been lost or stolen from
the owner, and has subsequently come
to the hands Of bOnG-tide holder for
value, the latter may recover against
the maker and all endorsers on the pa
per when in the hands of the loser, and
the loser must sustain the loss. In
such case there was complete legal
instrument. The maker is clearly La
bic to pay it to some one and the
question is only to rhom. But in the
case before us, where the note had
never been delivered, and therefore had
no legal inception or existence as note,
the question is whether he is liable to
pay at all-even to an innocent holder
for value. .''-ldem, page 434.
"When the maker or endorser has
himself been deceived by the fraudulent
acts or representations Of the payee, or
others, and thereby induced to deliver
or part with the note or endorsement,
and the same is thus fraudulently OBJ
tained from him, he must doubtless, as
between him and an innocent holder for
value, bear the consequences of his own
credulity and want of caution. He has
placed confidence in another. and by
putting the paper into his hands has
enabled him to appear as the owner and
to deceive others. Cases of this kind
are numerous, but they have no bear
ing upon the wrongful taking from the
maker when he never voluntarily parted
with the instrument. Much confusion.
however, has arisen from the general
language used in the books, and some
times by the judges, in reference to cases
where the maker has voluntarily parted
with the possession, though induced
to do so by fraud, when it is laid down
as a general rule that it is not defence
for maker, as against bona-fae
holder, to show that the note was
wronsfully or fraudulently obtained,
without attempting to distinguish be-
tween cases where the maker has ac-
tually and Voluntarily parted with the
possession of the note and those where
he has not"
In the case Of Hall rS. Wilson, 16
Barbour, 555, the Court says: " 1t may
be safely asserted upon principle as
well as authority that the note (which
has been stolen from the makerl never
had an inception so as to enable any
person to become bona fde holder oft.
Ii was an imperfect instrument, rant