Case Name: Catharine Proctor v. Andrew M'Call
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1831-05
Citations: 2 Bail. 298
Docket Number: 
Parties: Catharine Proctor v. Andrew M'Call.
Judges: 
Reporter: South Carolina Law Reports
Volume: 18
Pages: 298–303

Head Matter:
Catharine Proctor v. Andrew M'Call.
Where possession oi' a promissory note has been obtained from the true owner by fraud, a holder, who took it with notice of the fraud, is not in-titled to the money due upon it, although the note was payable to bearer, and he paid a valuable consideration for it; and payment to such holder will not discharge the maker, if he had like notice, but he may be compelled to pay it over again.
Where a woman is deceived into a marriage with a man, who has another wife living, her consent to the alienation of her effects by her pretended husband, she being still ignorant of the former marriage, will not render such alienation valid in favour of a purchaser for a valuable consideration, if the latter, at the time of his purchase, had notice that the effects came into possession of the pretended husband in conseqeence of a fraudulent marriage.
The first wife will be presumed to be living, until seven yearshave elapsed from the time she was last heard of, unless her diath, in the mean time, be proved.
Where the transfer of a promissory note is taken from a person, not an original party to it, the note’s being past due, at the time of the transfer, is not equivalent to notice, that such person came into possession of it by fraud; unless, perhaps, inquiry of the payee would necessarily have led to a knowledge of the fraud.
There being some evidence of notice, and the question of notice not fairly submitted to the jury, new trial awarded.
Tried before Mr. Justice Earle, at Laurens, February Term, 1831.
Assumpsit, for money lent. Defence, that the loan had been liquidated by promissory notes, which defendant had subsequently paid to buna fide holders.
In January, 1824, the plaintiff lent defendant the sum of one hundred and ninety-two dollars, for which he gave her his two notes, one for one hundred and fifty, the other for forty-two dollars, both payable one day after date, to herself, or bearer. Towards the close of that year, or the beginning of the next, the plaintiff intermarried with one James Qraig, who in the year 1825, and whilst he and plaintiff were living together as man and wife, sold both the notes, the larger one to William D. Watts, at a considerable discount, the other to a Mr. Williams. Shortly after • wards Craig absconded, and plaintiff learned that he had another wife in Ireland, who was still living: she, in consequence, gave notice to defendant not to pay the notes except to herself; and also gave public notice by advertisement, that she claimed them as her property. A copy of the advertisement was posted on the store of Watts, but as the notes had already been bought by Watts, and by Williams, defendant paid them respectively, the amounts due on them.
It was proved at the trial, that Craig had lived with a woman in Ireland, as her husband, for thirteen years previous to 1822 ; and that this woman was still living in 1824. The plaintiff also offered, in evidence, the declarations of Craig, that his first wife was alive in 1825, after his marriage with plaintiff; but the Court held them to be inadmissible. It was further proved, that rumors had for some time prevailed in the neighbourhood, and had come to the knowledge of Watts, previously to, his trading for the note, that Craig had another wife living in Ireland. And it did not appear, that the plaintiff had heard of these rumors, until after Craig had absconded.
Charles Snow, a witness, testified, that he was present, and saw plaintiff deliver the notes to Craig, who immediately went out to dispose of th<5m, as witness understood, with plaintiff’s approbation. Several witnesses were introduced to destroy Snow’s credit with the jury.
The presiding Judge charged, that the possession of negotiable paper was prima facie evidence of ownership ; and therefore Craig’s possession of the notes in question was an apparently good authority in him to transfer them. That he was besides united to the plaintiff by a marriage in fact; that she acknowledged him to be her husband, and held him out to the world as such: and that it did not lie in the mouth of either of them to repudiate the other, and deny the legality of the marriage, to the end of defeating the vested rights of third persons, acquired by dealing with them in the character of husband and wife. That if the plaintiff had not lost the notes, and they had not been taken from her by theft, or robbery, and Watts and Williams were bona fide holders, they were intitled to recover from the maker: and that as to the right to the money, as between them and the plaintiff, it was immaterial whether they purchased the notes before or after they were due; although as they were due, the maker might have set up any defence, which he could have made against the original payee. That moreover, if Snow was to be believed, Craig had acquired possession of the notes, by a volun tary delivery from the plaintiff for the purpose of disposing of jjis crec|^ had been assailed, but the evidence was scarcely sufficient to discredit him. That however was for the jul'y t0 decide.
The jury found for the defendant; and the plaintiff moved to set aside their verdict, and for a new trial, on the following grounds:
1. That the Court erred in rejecting the declarations of Craig, that he had a wife living in Ireland in 1825, when he married the plaintiff.
2. That the Court erred in charging that it was immaterial whether Watts purchased the note before or after it became due.
3. That Watts purchased under circumstances so suspicious, as to place his right on no better footing, than that of Craig, from whom he purchased.
4. That the payments to Watts and Williams were not legal payments, and did not discharge the defendant.
A. W. Thompson, for the motion.
Cited Bayley on Bills 82, note. 3 Kent’s Com. 51; and contended, that Watts had purchased under circumstances which intitled him to no favour. Under the law merchant he could not recover; and in this case at least, that law was but the deduction of sound morals. A gross fraud had been practised upon the plaintiff, of which notice had been forced upon Watts directly, and indirectly in various ways; and yet disregarding every consideration but an exorbitant pecuniary profit, he had aided Craig to consummate his fraud upon a poor, helpless, and friendless woman, whose hopes and happiness he had already blasted. It was a case in which a jury could not have failed to find a verdict for the plaintiff, if it had been fairly submitted to them. It was not fairly submitted, and a new trial must be granted.
Young, contra,
There was no proof that Craig’s first wife was living when he married the plaintiff; and had there been, still there was no proof that Watts or Williams knew of it, before they purchased the notes. Watts indeed had heard rumors to that effect, but the rumors were current in the neighbourhood, and must have reached the ears of plaintiff. If she did not ohoose to regard them, it was unreasonable to require that Watts should. Watts and Williams had purchased in open market, for valuable consideration, from one whom plaintiff had authorized to dispose of her interest in the notes; and there was neither law nor justice for permitting her to recall that authority. Toland ■v. Murray, 18 Johns. 25. Coddington v. Bay, 20 Id. .637. Peacock a. Rhodes, Doug. 633. Miller a. Race, 1 Bur. 452. Grant v. Vaughan, 3 Id. 1516. ^ ,

Opinion:
Harper, J.
delivered the opinion of the Court.
It is true that the holder of a note, or bill, payable to bearer, or indorsed in blank, is prima facie the owner, and payment to him will be good. If a bill, or note, be lost, or stolen, or, by equal reason, obtained from the true owner by fraud, payment will be good, if the maker, or drawer had not notice of the circumstances. If he 'have notice, however, he pays at his peril, if it shall turn out, that the holder had no title. Lovell v. Martin, 4 Taunt. 799. If the pretended husband Craig, imposed him self on the plaintiff as a single man, and got possession of the notes in consequence of the fraudulent marriage, that would give him no title to them. And if defendant had paid them, knowing that he had obtained them by virtue of the pretended marriage, when he had a former wife living, he would be compelled to pay them over again. If Watts took the notes, knowing the same circumstances, though for a valuable consideration, he could have no better title than Craig, and the same rule would apply to the defendant making payment to him.
There is no doubt but that the defendant had sufficient knowledge at the time he made payment to Watts; and the case turned on the question, whether Watts had notice at the time he received the transfer. There was some evidence of this, and we think it ought to have been submitted to the jury.
I do not think the circumstance of Watt's receiving the transfer after the note became due, of itself sufficient to affect him with notice in a case of this sort. It is said, that in case of a bill lost after it becomes due, the true owner may sue at law, without offering an indemnity, because the party could never be compelled to pay it to a holder, who became such after it was due. Chitty on Bills, 172-3. But it has never been decided, I believe, if he should pay it to a holder who acquired it when due, without actual notice, that he would be compelled to pay it over again. If he could, it must be on the ground, that the bill being presented after due by a person, who was pot the original payee, it was his duty to inquire, and ascertain, how he came by it. But it would seem much more reasonable, to rer quire the payee or true owner to give notice of the loss to the party liable to pay. The person taking the transfer of a bill, or note after due, from a party not an original party to it, may, perhaps, in case of a lost note, be bound to inquire into his title. But in this case, it does not appear that Watts could have obtained information by inquiring. The plaintiff probably was not aware of the fraud that was practised on her by Craig, and would have acquiesced in the transfer; and so it would be in other cases of fraud not yet discovered. This circumstance might, however, have gone with the other evidence to the jury-
The presiding Judge states that he charged the jury, that if Watts was a bona fide holder, he was intitled to receive payment. This was undoubtedly correct; but it does not seem to have been fairly submitted to the jury, that Watts' bonafides depended on his having notice, that Craig had a former wife living, and acquired the notes by his pretended marriage. The Judge states, that he told the jury, that Craig was "united to the plaintiff by a marriage in fact; that she acknowledged him as her husband, and held him out to the world as such; and that it did not lie in the mouth of either to repudiate the other, and deny the legality of the marriage, to the end of defeating the vested rights of third persons, acquired by dealing with them in the character of husband and wife." If the plaintiff had not been united to Craig by the form of marriage, or had known that he had another wife living, and held him out to the world as her husband, these remarks would be perfectly just; she would be estopped by her fraud on the community. But they cannot apply, when she was herself the subject of imposture ; and we think were calculated to mislead the jury. If Craig, in virtue of his pretended marital rights had sold her personal property, other than negotiable papers, would her legal title have been divested ?
If the testimony of the witness Snow, were credited, and the plaintiff were shewn to have delivered the note to Craig for the express purpose of being sold, that'could make no difference, if she was induced to do so by fraud, and in confidence that he was her husband. The question would still be, whether the purchaser had sufficient notice of the .fraud.
We do not think it necessary to give any opinion as to the admissibility of Craig's declarations. If his first wife was shewn to be living in 1824, the presumption is that she continued to live, unless her death were shewn, or seven years had elapsed without her being heard of. The motion for a new trial is granted.