Court Opinion

ID: 7060466
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:20:16.075371+00
Date Added: 2024-06-11T16:12:09.131800
License: Public Domain

On. Petition fob, a Rehearing.
Gavin, C. J.
Counsel for appellant have filed quite an earnest petition for rehearing, in which they assail the proposition of the original opinion that the appellee, if a bona fide assignee by indorsement for value, took the *336certified check freed from any equities existing between the original parties. They assert the opinion to be in direct conflict with the case of Parke v. Roser, 67 Ind. 500.
We have examined the case carefully, as we did in the former hearing, and are unable to see the slightest conflict between the holding in this case and the decision in that. There no such question as here presented was under consideration. That case simply holds that the certifying bank does not guaranty the genuineness of the body of the check, following the Marine Bank v. Nat’l City Bank, 59 N. Y. 67.
This was the only question before that court for its determination. A careful re-examination of the brief of counsel for appellants shows that they themselves did not controvert their liability, if the appellee was a bona fide holder for value and by indorsement. Their claim was that there was no legal and valid indorsement, and that therefore the check was subject to equities, relying upon Freund v. Importers, etc., Bank, 76 N. Y. 352, and kindred cases.
To show their position upon this subject, we quote from their brief, somewhat in addition to what was set out in the original opinion:
“It follows, therefore, that Stockton, Gillespie & Go. could countermand payment at any time of this check, so long as it remained out in the hands . of the thief, or any other person taking it with notice. Or to put the proposition from the other side, until the check comes in due course of business to the hands of a bona -fide holder for value without notice, neither the maker or the banker can be compelled to pay a check given for stolen cattle, or otherwise invalid.”
In support'of their claim, appellants quoted also the *337following from the case of Goshen Nat’l Bank v. Bingham (118 N. Y. 349), 23 N. E. Rep. 180:
“It is too well settled by authority, both in England and in this country, to permit of questioning, that the purchaser of a draft or check who obtains title without an indorsement by the payee holds it subject to all equities and defenses existing between the original, parties, even though he has paid full consideration, without notice of the existence of such equities and defenses.” (Citing very many cases.) “The reasoning on which this doctrine is founded may be briefly stated as follows: The general rule is that no one can transfer a better title than he possesses. An exception arises out of the rule of the law merchant as to negotiable instruments. It is founded on the commercial policy of sustaining the credit of commercial paper. Being treated as currency in commercial transactions, such instruments are subject to the same rule as money. If transferred by indorsement, for value, in good faith and before maturity, they become available in the hands of the holder, notwithstanding the existence of equities and defenses which would have rendered them unavailable in the hands of a prior holder. * * * The bank did certify that it had the money, would retain it, and apply it in payment, provided the check should be indorsed by the payee. * * If the check had been transferred to plaintiffs by indorsement, the defendant would have had no defense, not because of the doctrine of estoppel, but upon principles especially applicable to negotiable instruments.”
Our own Supreme Court, in the case of Born v. First Nat’l Bank, 123 Ind. 78, referred to in the original opinion, expressly says that the certifying bank becomes bound for the payment of the check it certifies, there being in that case no question involved as to the genuine*338ness of the check in all its parts. This shows, as in fact do all the cases, that the literal interpretation given by counsel to some of the argumentative language used in the case of Parke v. Roser, supra, is not justified.
Filed June 24, 1893.
The decision in the original opinion was intended to be, and we still think was, kept strictly within the facts of this particular case, going no further than was required in order to dispose of the merits of the cause.
After careful consideration, we are still satisfied that the proposition announced, of which complaint is made, is in harmony with the authorities cited and the many cases upon which they are founded.
The petition for rehearing is, therefore, overruled.