Year: 1865

The Commercial and Financial Chronicle
of New York, has the following remarks upon
a subject which is now of peculiar interest:


''The growth of modern commerce and trade
has caused such multiplication of paper cvi-
dences Of debt that we find, for more than a
century, an exception established in the courts
in favor of negotiable instruments, Of which
possession constitutes ownership, when they
have been put Ill that state i'll which, accord
ing to the usage and custom of trade, they are
transferable like coin from one man to another
by delivery only. The first reported case in
which this point was distinctly raised is. we be-
heve, that of Miller against Race, reported
Burr, 452.


This was an action on Bank Of England
note, which was sent by mail, fell into the
hands of thief, and was the next day re-
ceived by the plaintiff for full and valuable
consideration, in the usual course and way of
his business, without any notice Or knowledge
of its having been stolen The court held
that the plaintiff had good title, even as
against the person from whom the note had
been stolen. For said Lord Mansfield, 'as
IN the case of money stolen, the true owner
cannot recover it after it has been paid away
fairly and honestly upon valuable and bona
,@s1& consideration, So bank note is con-
stantly and universally, both at home and
abroad, treated as money, and paid and re-
ceived as cash, and it is necessary for the pur-
poses of commerce that their currency should
be established and secured


We have cited this decision thus fully BE-
cause it has not only been uniformly followed
ever since in the English courts and in our
own; but the principle of it has been held to
apply to bonds and other negotiable instru,
ments which pass current from hand to hand
as representatives of money by delivery only.
And it is now laid down as a rule, that where,
by the custom of trade, any bond, note or
other instrument, is transferable by delivery,
and is also capable of being sued upon by the
holder, it is entitled to the privileges of ne
gotiable instrument, and the property in it
passes to any person wlo buys 1t IN good faith.
'.It is impossible 20 overestlmate the I'M
portance of clear definite certainty on such
points of COMMERCIAL law. Thousands of mil
lions of thes5 paper evidences of debt are
found in the channels of commerce every
where, aAd they represent large part Of our
hoatins and fixed capital The interest of all
classes of the community in these questions is
universal and absorbing, and while an easy
triumph should be denied to fraud, a perfect
security should be given to property.


'While then the ownership Of stolen bonds
can only be invalidated by satisfactory proof
that the holder has not purchased for full value
in the ordinary course of business or else that
he is guilty of fraud or dishonesty, wilful igno-
rance or guilty knowledge; it is evident that
banks, savings institutions and other corpora
tions which hold large amounts of Government
and other securities in trust ought to take more
pains to protect the public from loss. And
among the obvious methods Of doing this, so
far at least as fve-twenties, ten-forties and
other Government bonds are concerned, one
of the most important and effective is to con-
vert their coupon bonds into registered bonds.
This conversion can be effected without ex
pense by simply sending them to Washington
with written request to have them replaced
by registered securities