Court Opinion

ID: 6427543
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:05:16.503845+00
Date Added: 2024-06-11T15:52:03.429484
License: Public Domain

Holmes, C. J.
These are actions for the conversion of two certificates of indebtedness of the city of Boston, payable to William Seollans, and transferable only at the office of the city treasurer. On the back of each was an assignment in blank, executed and acknowledged by William Seollans, (see Pub. Sts. c. 77, § 6,) by virtue of which, coupled with a delivery of the instruments, the plaintiff became the owner. On the most favorable evidence for the plaintiff, as we must take the case, the plaintiff went to one Gage of the' firm of Gage and Felton, bankers and brokers, and said that he would like to leave the certificates in the firm’s safe-keeping. Gage consented and asked for the certificates, and the plaintiff handed them to him. *352Gage went into the next room where the safe was, and returned in a short time with a large envelope, upon which was written the plaintiff’s name and the words “ Private Property.” Gage then put the certificates into the envelope, sealed it, and carried it into the safe. Later the certificates were pledged by Gage and Felton for their debt, and were sold at auction in due course by the pledgee, and bought in the usual course and in. good faith by the defendant. The case already has been before the court. 173 Mass. 275. The difference between its present aspect and that upon which the court has passed is that at this trial evidence was offered, in accordance with an intimation in 173 Mass. 279, of the usage of those engaged in the business of buying and selling such securities, which was intended to show that by their general understanding and practice such an indorsement in blank enabled the bearer to give a good title to a bona fide purchaser. The court ruled, however, that the only question for the jury to consider was another issue, which now is immaterial, as the jury found for the plaintiff upon it, and the defendant excepted.
A blank indorsement of such an instrument signifies that some person is expected to have the right to fill in the blank. On its face it does not indicate who that person is. By itself it is ambiguous. If, however, the general understanding of all concerned gives it a certain meaning, then it has that meaning by the same convention that gives a certain meaning to spoken or written words. The combination of words and blank is a sign as truly as a completed sentence, — a sign which conveys an idea as definitely as if the word' “ bearer ” had been written in. The extent to which the owner shall be estopped by permitting the sign to remain upon the instrument in that form may be enlarged or limited by considerations of policy more or less articulate. No doubt, if such an instrument were stolen from the owner and indorser before his indorsement had become effective by a transfer or before the instrument had been put into other hands, even a bona fide purchaser would not get a title, and a different rule would be applied from that which is established in the interest of the currency with regard to bank notes used as money, and which might be extended to other bills and notes which are negotiable in the true sense. Knox *353v. Eden Musee Americain Co. 148 N. Y. 441. 1 Morawetz, Corp. (2d ed.) § 190. See Wyer v. Dorchester Milton Bank, 11 Cush. 51; Worcester County Bank v. Dorchester Milton Bank, 10 Cush. 488 ; Wheeler v. Guild, 20 Pick. 545, 553 ; Spooner v. Holmes, 102 Mass. 503, 508. But if the owner of the instrument intrusts it to another, he does so charged with notice of the power to deceive which he is putting into that other’s hands, and if deception follows he must bear the burden. Colonial Bank v. Cady, 15 App. Cas. 267, 278, 285, 286. Jarvis v. Rogers, 13 Mass. 105 ; S. C. 15 Mass. 389. McNeil v. Tenth National Bank, 46 N. Y. 325. Burton’s appeal, 93 Penn. St. 214. Pennsylvania Railroad’s appeal, 86 Penn. St. 80. Mount Holly, Lumberton, Medford Turnpike Co. v. Ferree, 2 C. E. Green, 117. National Safe Deposit, Savings & Trust Co. v. Gray, 12 App. D. C. 276, 287. 1 Morawetz, Corp. (2d ed.) §§ 185-192. See White v. Duggan, 140 Mass. 18, 20 ; Union Credit Bank v. Mersey Docks Harbour Board, [1899] 2 Q. B. 205; Pence v. Arbuckle, 22 Minn. 417. In this case, as in some others, it cannot be said that the owner is free from all obligation to contemplate the possibility of wrong-doing by a third person. See Glynn v. Central Railroad, 175 Mass. 510, 511.
There is nothing in the judgment delivered in Shaw v. Spencer, 100 Mass. 382, contrary to what we have said. The customary understanding as to the significance of an indorsement in blank could not relieve the taker from notice of a trust expressed on the face of the document, and of the consequence that the trustee had no power to pledge the instrument for his private debt. So very possibly in the case of an indorsement by the executor of a registered holder. Colonial Bank v. Cady, 15 App. Cas. 267. But see Wood’s appeal, 92 Penn. St. 379. Or by a guardian. O'Herron v. Gray, 168 Mass. 573. Perhaps it may be as well to add that the usage supposed does not create a new class of negotiable instruments or attempt to enlarge the city of Boston’s promise, as was attempted in Partridge v. Bank of England, 9 Q. B. 396. It simply fixes the meaning of an ambiguous expression, for the purpose of determining whether it is open to the former owner to deny that the property in the paper and the equitable benefit of the promise have passed to another.
It follows from what we have said that if there was evidence *354in this ease that the plaintiff intrusted the instruments to Gage, and if there was evidence from which the jury would have been warranted in finding the supposed usage proved, the case should have been left to them upon those issues also, and the defendant’s exceptions must be sustained.
There was evidence of the alleged usage. Witnesses testified that certificates indorsed as these were “ would be regarded as bearer’s certificate passing by delivery from hand to hand ”; that they “ would be regarded as bearer’s property the same as a coupon bond ”; that they “ were considered negotiable.” It is true that on cross-examination the witnesses admitted that if an unknown person came in with such instruments for sale they should take some measures to find out that they were dealing with a responsible man, but, apart from the fact that it always is for the jury to decide how far an absolute statement on direct examination shall be cut down by any qualification or contradiction elicited by the other side, Purple v. Greenfield, 138 Mass. 1, 7, the jury would have been warranted in regarding these admissions as simply expressing the natural caution of respectable business men who wished to avoid the possibility of question or of having anything to do with a questionable affair. See Danvers Bank v. Salem Bank, 151 Mass. 280, 284; Hinckley v. Union Pacific Railroad, 129 Mass. 52, 58, citing Miller v. Race, 1 Burr. 452; also 2 Thomp. Corp. § 2589.
But my brethren are of opinion that there was no evidence that the instruments were intrusted to Gage. It may be assumed that a delivery of possession for custody is a sufficient intrusting. See Hatfield v. Phillips, 12 Cl. & Fin. 343, 360; S. C. 14 M. & W. 665, 670. On the other hand if the certificates had been handed to him in a sealed envelope, they would not have been intrusted to him, and opening the envelope would have been like a carrier’s breaking bulk. The modern decisions have followed the ancient suggestion that in such cases there is no delivery of the contents of the enclosure. Choke in Y. B. 13 Ed. IV. 9, pl. 5. 3 Inst. 107. 1 Hale P. C. 504, 505. Belknap v. National Bank of North America, 100 Mass. 376, 381. My brethren consider that the bailment to Gage in the form which it finally took was a bailment of the envelope under seal. In their opinion the transaction cannot be divided, and it does *355not matter in what form it began. It was not complete until the plaintiff saw the envelope sealed, after having asked Gage to put an insurance policy into the envelope with the bonds, thus showing that he contemplated and assented to the sealing up which he saw was about to take place. They think it plain that after the plaintiff had seen the envelope sealed and placed in the safe and had departed Gage would not have been at liberty to open the envelope, if, for instance, he found it more convenient for safe-keeping to put the bonds away unenclosed. I have not been able to bring my mind to think that the jury were not at liberty to take a different viety, but upon that point I stand alone.
An exception was taken to the admission of the checks made by Gage and Felton payable to the order of Scollans. By way of contradicting the defendant’s evidence that the plaintiff’s account with Gage and E'elton was short and that these instruments were delivered to him as security, the plaintiff testified that he lent them money on one or two occasions, which was repaid by their checks. These checks were dated in August, a month when by the defendant’s evidence the plaintiff was heavily indebted to Gage and Felton. They tended as far as they went to corroborate the plaintiff’s case, and were admissible as against a merely general objection.
We see no reason for not allowing the ordinary rate of interest after the plaintiff acquired a claim for money against the defendant.

Exceptions overruled.