Case Name: Elizabeth W. Ketcham, as Administratrix, Etc., of John B. Ketcham, Deceased, Respondent, v. Rafael R. Govin, Appellant
Court: New York City Court
Jurisdiction: New York
Decision Date: 1901-06
Citations: 35 Misc. 375
Docket Number: 
Parties: Elizabeth W. Ketcham, as Administratrix, Etc., of John B. Ketcham, Deceased, Respondent, v. Rafael R. Govin, Appellant.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 35
Pages: 375–376

Head Matter:
Elizabeth W. Ketcham, as Administratrix, Etc., of John B. Ketcham, Deceased, Respondent, v. Rafael R. Govin, Appellant.
(City Court of New York, General Term,
June, 1901.)
-Bills and notes — Wrongful diversion — Notice.
The right of a holder of wrongfully diverted negotiable paper, acquired by him for value and before maturity, to recover thereon cannot be defeated without proof of actual notice of the defect in title, or bad faith on his part evidenced by circumstances.
A dona fide purchaser of negotiable paper is not bound at his peril to be on the watch for facts which might put a very cautious man on his guard.
Motion by the plaintiff for judgment upon a verdict for $635.20 ■directed in her favor at a Trial Term of the City Court of the city •of Hew York, subject to the opinion of the said court at General Term. The action was brought by John B. Ketcham, who died pending the action, and the plaintiff was substituted as his administratrix. It was stipulated by the parties that the $2,000 check, referred to in the opinion, and which Felipe Carrion tendered to the defendant, was a forgery.
John C. Tomlinson, for appellant.
James B. Butler, for respondent.

Opinion:
Conlan, J.
The action was brought to recover the unpaid balance on a check for $704, drawn by the defendant to the order of one Felipe Carrion, and indorsed by him and delivered to the •plaintiff's intestate. The answer, admits the making and delivery of the check, and that payment of the check was stopped, and alleges that Carrion procured the check from defendant by fraud. The check in question arose out of the following transaction: One Alfredo Govin was indebted to the defendant in the sum of $1,300. Carrion, claiming to" represent Alfredo Govin, tendered to the defendant a check of $2,000 in payment, and received back the check of the defendant for $704, the difference. The check for $704 was delivered to the plaintiff's intestate, who returned his check for $618.50, leaving $85.50, which was the amount for which Carrion and Alfredo Govin were indebted to Ketcham, and this latter amount Ketcham retained. Carrion and Alfredo Govin, the latter a relative of the defendant, were partners. This transaction forms the substance of a separate defense in the answer of the defendant, and it was stipulated upon the trial that the facts, as alleged, were true. The defendant offered no evidence, and submits no brief on the argument before us. The check in question was taken by Ketcham in absolute payment, and the person who delivered the same received full value for the difference between the amount of the check and the amount of the debt owing to Ketcham, and the right of a holder of wrongfully diverted negotiable paper, acquired by ^iim for value before due, cannot be defeated without proof of actual notice of the defect in title, or bad faith on his part, evidenced by circumstances. Laws of 1897, chap. 612, § 91, 95, 96; Cheever v. Pittsburgh, S. & L. E. R. R. Co., 150 N. Y. 59; Cowing v. Altman, 71 N. Y. 435. Nor is the purchaser of negotiable paper for valué and before maturity bound at ;his peril to be on the watch for facts which might put a very cautious man on his guard. Second National Bank v. Weston, 161 N. Y. 521.
It follows, therefore, that there must be a judgment for the plaintiff, with costs, as directed at the Trial Term, and with costs of this appeal. "
O'Dwyer, J., concurs.
Motion granted, with costs.