Court Opinion

ID: 8270580
Source: CourtListenerOpinion
Date Created: 2022-10-16 19:31:43.715114+00
Date Added: 2024-06-11T16:43:30.066896
License: Public Domain

Dixon, J.,
(dissenting.) Some of the bonds involved in this controversy were attached, as collateral, to a note purporting to have been made by one Jasper, dated July 5th, 1882, payable, with interest, on demand, to the order of the maker, at the City Bank. The note described the bonds as being attached to it as collateral. It came, with the bonds, from the City Bank to the First National Bank, on October 11th, 1882, for collection, and was retained by the latter bank until December 1st, 1882, without action. These circumstances make it plain to' me that when the note came to the *529Eirst National Bank it was not to be regarded as immature commercial paper in which the assignee would acquire a better title than the assignor had. The note had been outstanding about one hundred days, had been in the possession of the bank in which it was payable, and was transmitted by that bank to the First National, ostensibly for collection, but of course for some other purpose, inasmuch as collection would require a return of the note to the City Bank. The banks both evidently treated the note as a mere evidence of debt, and not as commercial paper with the quality of perfect negotiability. In this condition of things the contract of the purchaser was, not that it should receive an absolute title to the debt appearing to be due on the note, but that it should receive only such a title to that debt as the vendor had. This title was void.
With regard to the bonds attached as collateral to this note, the contract of the purchaser was that it should receive them to secure its title to the debt evidenced by the note. It cannot claim to have taken them for any purpose outside of the note, because, on the face of the papers and in the assignment itself, they were annexed to it. Since, therefore, the First National Bank took no title to the note, in a transaction wherein it was notified that the apparent title might be void, its right to the bonds is equally defective, and interposed no obstacle to the title of the real owner, the Fifth Ward Savings Bank.
The court having charged that the title of the First National Bank to these bonds was valid, the judgment should be reversed.
For affirmance—The Chancellor, Chief Justice, Depue, Parker, Reed, Yan Syokel, Clement, Cole, McGregor, Paterson. 11.
For reversal—Dixon. 1.