The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1885-04-16
The Stolen Bonds.
4 sUPREME-couRr DECISION.


A sUPREME-CoURT DECISION.
Ri chmond Dispatch, of the 10th.
The case of Thomas Branch Sc Co..
against the Commissioners of the Sinking
Fund was decided yesterday by the SUI
preme Court Of Appeals. The case was
substantially this Some years ago several
! coupon bonds with coupons attached were
converted by the holders into other bonds
of the State, under statutes authorizing
the conversion and exchange, and were
! taken in by the Treasurer of the State and
| filed away inthe Treasury for preservation.
/ They were not cancelled on their face, but
| they were noted on the bond registers IN
/ the offices of the Second Auditor and
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 or per-
sons unknown. In June, 1879. Branch &
Co., purchased these bonds from a broker
| in New Y ork.
1t was not denied by the pleadings and
was admitted by respondents counsel in
argument that Branch & Co., were bono
tide purchasers of the bonds. for value, be-
fore maturity, and without notice Of the
theft. The bonds being still not due.
Branch u Co., presented them, with I'M
matured coupons, to the Commissioners of
of the Sinking Fund and asked that they
be funded under the act of February IA,
/ 1882, called the "Riddleberger bill,'' and
an act amendatory thereof. The commits
sionerS refused to fund Them on the
ground that they had been redeemed by
the State, taken in, and afterwards stolen
by some unknown person from the Treas
urer's Office. Branch & Co., thereupon
applied to the Court of Appeals for man
damus to compel the commissioners to
/ fund the bonds under the Riddleberger
bill. The Court -four judges sitting) re-
fused to award the writ, Judge Lewis dis
senting.
OPINION OF THE COURT. A
The following Except the statement Of
! the case) is the opinion Of the court de-
livered by Judge FduatleToy:
/, We are of opinion that after these bonds,
Y with their appurtenances, had been re-
deemed by the State and taken into her
! possession and custody, they ceased to be
| her obligations and could not again be-
come such, unless she voluntarily re-delir-
cred or re-dssaed them. They had run
their career and fulfilled their mission,
and had returned to the dusty depository
Of dead matter in the Treasury, and they
had been substituted by outstanding
equivalents which represent the legal and
moral obligations 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 voluntary rede-
| livery by the State. Certainly they could
| not be reSurrected to the righteous judg-
ment Of a court of justice by robbery or
! theft @e
I In the case of Burson rs. Huntington,
q Michigan, decided in 1s70,) the court
says 1.-The wrongful act of a thief or tres
passer may deprive the holder of his prop
erty in note which has once become
note or property by delivery, and may
transfer the title to an innocent purchaser
for value, !; but note in the hands Of the
maker before delivery is not property, nor
the subject Of ownership as such. It's, in
law, but blank piece of paper. ''-Ideln,
page All.
"When 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
a bond-tide holder for value, the latter may
recover against the maker and all enaor
Sers on the paper when in the hands of the
loser, and the loser must sustain the loss.
In such case there was q complete legal
instrument. The maker is clearly liable
to pay it to some one and the question is
only to aUhonl. But in the case before us,
where the note had never been delivered,
and therefore had no legal inception or ex-
istence as note, the question is whether
he is liable to pay at all-eyen to an inno-
cent holder for value. ''-Idem, page 1874
When the maker or endorSer has him
self been deceived by the fraudulent acts OF
representations of the payee, or others,
and thereby induced to deliver or part
with the note or endorsement, and the
same is thus fraudulently obtained from
him, he must doubtless. as between him
and all innocent holder for value, bear the
consequences of his own credulity and
i want of caution. He has placed conf
dence in another, and by putting the pa
per into his hands has enabled him to APP
pear as the owner and to deceive others.
Cases Of this kind are numerous, but they
/ have no bearing upon the wrongful taking
from the muker when he never voluntarily
parted with the instrument. Much con-
fusion, however has arisen from the gen.
eral 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 q gen.
eral rule that 1t is not defense for a
maker, as against bond.fde holder, to
show that the note was wrongfully or
frudulently obtained, without attempting
/ to distinguish between cases where the
maker has actually and voluntarily parted.
with the possession of the note, and those
where he has not.i
In the case Of Hall rs. Wilson, 16 Bar
| bour, 555 the Court says: 1T may be
safely asserted upon principle as well as
authority that the note (which has been
stolen from the mdker] never had an incep-
/ Tor ,la 70 oo
| bona tide holder of it. 1t was an imperfect
instrument, srant5ng deliuery to give at III
| tally, as the promissory note of the de-
| PENDANT The holder has taken but
blank piece of paper, not promissory
note.
In the case Of BaXendale rs. Bennett, 8
Law Reports Queens Bench Division)
| 525, decided in 1881 Cromwell. j., says
1T must be admitted that the cases Of
Young u.s. Grote, Bingham, 253, Ingham
rs. Primrose, Q. b. IN. 81 50, go a long
way to Justify this judgment; but in all
| those cases, and in all the others where the
alleged maker or acceptor has been held
liable, he has voluntarily parted with the
instrument; it has not been got from him
! by the commission Of a crime. This I'M
doubleday is distinction. The defendant
| there has not voluntarily put into any
ones hands the means, for committing a
crime. But it is said he has done so
through negligence. | confess that 1
think he has been negigent-that is to say
| if he had had this paper from third per-
son. as u bailee bound to keep it with or
binary care. he would not have done SO
but then this negligence is not the proxi-
mate or effective cause of the fraud. A
crime was necessary for its completion.
Then the Bank of Ireland Us. Evans
Trustees, 5 H. i. G., 3S9, shows under
such circumstances there is no estoppel.
In the same case Brett, j.. says: In this
case [ agree with the conclusion at which
my brother Cromwell has arrived, but not
with his reasons. In this case it is true
that the defendant, after writing his name |
across the stamped paper, sent it to an
other person to be used When he sent it |
to that person If he had filed it in to any
amount that the stamp would cover the |
defendant would be liable, because he sent
1t acdtb the intention that it should be acted |
upon; but 1t acds sent back to the defendant.
and he acas then IN the same condition as if
he had neUer issued the acceptance"
That there must be delivery of the pa
per, either actually or constructively, is |
clear. First National Bank Us. Strong, ~ |
ILL.,, $50 Burson rs. Huntington, q Mich.