Case Name: Bank of Newton v. James M. Simmons et al.
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 1909-10
Citations: 96 Miss. 17
Docket Number: 
Parties: Bank of Newton v. James M. Simmons et al.
Judges: 
Reporter: Mississippi Reports
Volume: 96
Pages: 17–18

Head Matter:
Bank of Newton v. James M. Simmons et al.
[49 South. 616.]
Peomissost Not®. Bona fide holder. Bearer. Defense.
Payment, or that which is equivalent thereto, is the only defense to a suit, by a tona fide purchaser thereof for value, on a promissory note payable to bearer.
From the circuit court of Newton county.
Hon. James B. Byed, Judge.
The Bank of Newton, appellant, was plaintiff in the court below; Simmons and others, appellees, were defendants there. From a judgment in defendants’ favor the plaintiff appealed to the supreme court.
Lathrop & Co. sold to appellee Simmons certain rights to act as agents in the sale of patent safety sash locks, and took notes, the other appellees joining in their execution, as part payment of the purchase price for the privilege of representing them, as agents. These notes were made payable to bearer,' and were discounted by the holders, Lathrop & Co., with the Bank of Newton, without the Bank having notice of any defense whatever. It was afterwards discovered that Lathrop & Co. had sold the same exclusive privilege to numerous other parties, and that a fraud had been perpetrated upon appellees. Upon maturity, the notes in question were presented for payment, and payment refused. The notes went to protest, and this suit was brought to enforce collection. On the trial, the defense interposed was that the notes had been procured by fraud, and the court gave-numerous instructions for defendant, which told the jury that if they believed that the bank only held the notes for collection, and had not purchased the same outright, or that any of the officers of the bank had notice of the fraudulent character of the transaction, they should find for the defendant.
Wathins ■& Wathins and Foy &, Banlcs, for appellant.
Flowers & Whitfield, for appellee.
[Tbe briefs of counsel in tbis case could not be found when tbe reporter reached it, bence synopses of them is not given.]

Opinion:
Mates, J.,
delivered tbe opinion of'tbe court.
It is manifest that a fraud was perpetrated on Simmons by Latbrop & Oo., when they sold him tbe exclusive right to sell safety sash locks in Hinds county, and that be obtained nothing for bis money or for tbe execution of tbe notes; and, if tbe litigation was between Simmons and Latbrop & Co., there would be no trouble in bis defeating the payment of tbe notes. But tbe appellees were so tmfortunate as to execute to Latbrop & Co. their promissory note payable to bearer, and there is no doubt that tbe note is now owned by tbe Bank of Newton, and that the note was bought by the Bank of Newton without any notice of any defense held against it by tbe maker thereof, and bought in good faith, for value, before maturity, and in tbe usual course of business. Tbis being tbe case, there is no defense to tbe note in tbe bands of tbe Bank of Newton, an innocent bolder thereof, except that of payment. This is but tbe application of tbe familiar rule of law that, where one or two innocent parties must suffer loss, tbe loss must fall on the one whose act made it possible for tbe other to be defrauded. In tbis view of tbe case, we deem it unnecessary to discuss tbe instructions granted for tbe defendant. All of tbe instructions for defendant were wrong, not as abstract principles of law, but because there was no fact on which to base them.
Reversed and remanded.