Court Opinion

ID: 3611721
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:55:42.760513+00
Date Added: 2024-06-11T07:45:34.488083
License: Public Domain

That the plaintiff was the owner of the bonds on the 12th of September, 1865, and that on the evening of that day, they were stolen from his trunk is not disputed. It is equally true that printed notices of the theft, giving the numbers of the bonds, were left at the defendant's bank, between nine and ten o'clock the following morning. The defendant's bank opens for business at half past nine o'clock in the morning, and the cashier is generally there at nine, and he does not remember to have seen on the thirteenth of September the notices of the robbery left at the bank that morning, although he was there at nine o'clock. This may be accounted for from the fact that the defendant bought and sold bonds, without any regard to notices of theft left at the office. Between the thirteenth and eighteenth of September the bonds in question were purchased by the defendant, and on the eighteenth were sent to Washington for their conversion, and registered bonds for a like amount were issued to the defendant on the twenty-first of that month.
If there was any evidence tending to show mala fides on the part of the defendant in purchasing the bonds, all the cases agree that it presented a question of fact for the jury, and ordinarily their verdict would be conclusive. (Goodman v.Simonds, 20 Howard [U.S.], 343, et. seq.; Goodman v.Harvey, 4 Ad.  Ellis, 870.) The fact was not disputed, that as soon as the plaintiff discovered his loss he made prompt and vigorous efforts to give notice of the fact. The police of New York were notified the same evening of the robbery, and hand bills, describing by numbers and amounts the stolen bonds, and offering a reward for their recovery, were printed and ready for distribution on the following morning as early as six o'clock. These handbills were extensively *Page 305 
distributed, but for the present case it is sufficient to say that two or three notices or handbills, before, or at least as early as nine o'clock on the morning of the thirteenth of September, were left at the defendant's bank — one on the desk of the cashier, and another on a desk opposite. If there is any conflict of evidence on this point, we must assume that the jury, as they had the right to do, found that the fact was as claimed by the plaintiff. We must, therefore, assume, as a fact, that a notice of the robbery, and a description of the stolen bonds, were given to the defendant, through its cashier and one other of its officers, at least as early as nine o'clock on the morning after the bonds were stolen. Nothing material to the present question occurred until the plaintiff's banker received from the Treasury Department at Washington, a letter dated September 23d 1865, advising him, that, on the nineteenth of September, two of the stolen bonds were presented for conversion by the defendant for account of F. George Adams, and registered bonds of a like amount were issued to him on the twenty-first. On being shown this letter the plaintiff at once called at the defendant's bank, — saw its cashier, showed him the letter from the Treasury Department, advised him of the theft, and demanded the bonds. The cashier said, "you can't have them." The plaintiff then remarked, "I sent you a printed notice of the robbery the next morning." The cashier replied that, "they did not care for the notice. We don't care for notice." And the plaintiff left without further satisfaction.
The facts as above stated are as favorable to the plaintiff as a jury upon the evidence would be authorized to find. When the plaintiff rested a motion in the form of a nonsuit, was made upon the ground that, "the legal presumption is that the person from whom the defendant received the bonds was himself a bona fide
holder and not the thief." This motion was properly denied. Ordinarily it might be assumed that the mere possession of negotiable commercial securities carried with it the legal presumption that the actual possessor was a bona fide holder and owner. In this case it was clear *Page 306 
that the bonds in question were stolen from the plaintiff, and there was at least some evidence tending to show that the defendant had notice of the theft.
A question was, therefore, made for the jury, and the verdict must be conclusive, unless something shall be discovered rendering a new trial necessary, for the reason that the jury had been erroneously instructed, or that evidence had been erroneously admitted.
The cashier of the defendant testified in substance that he told the plaintiff, that they could not pay any attention to notices of thefts, and that the defendant bought and sold bonds without any regard to these notices left at the office. No record was kept of them, and no instructions were given to the clerks that such notices should be called to the attention of the cashier.
The defendant then offered to prove:
1. That these government securities were payable to bearer. That the amount in circulation was so great, and the amount stolen and lost is so great, and the notices of such thefts and losses so frequent, that it is utterly impossible, without stopping their business, for defendants to take notice of, and keep track of, these lost and stolen bonds.
2. And, further, that the defendant dealt largely in government bonds similar to these, and that they are received and paid out as money by bankers and brokers generally. That very large amounts, amounting to several millions, have been stolen and advertised. That notices are being constantly thrown in their bank, of such thefts, with lists, numbers and descriptions, and that it would be impracticable to deal in government securities if they are bound to take notice of such notices.
3. The defendant further offered to prove that United States securities, like those in suit, pass from hand to hand by delivery, are received and paid out by banks, bankers and brokers as money, are bought and sold daily in the markets in parcels varying from $1,000 to $500,000, and that they are always paid for in cash on delivery. *Page 307 
4. As a separate proposition, the defendant, in connection with the last above proposition, offered to prove that printed notices of loss of such and other securities, by theft or otherwise, are daily, and frequently each day, thrown or brought into the offices of dealers in such securities, and that it is impracticable, in the ordinary course of business, to make a comparison between such notices and the securities purchased and delivered.
These offers of evidence were all rejected and the defendant excepted.
The learned judge at the trial submitted the case to the jury on a charge, to portions of which the defendant took the following exceptions:
1. To the part of the charge that "the theft having been proven, it devolves on the defendants to show that they purchased these bonds which are payable to bearer, and, therefore, pass by delivery, giving value for them."
2. To that portion of the charge given as follows: "He (the plaintiff) claims that immediately upon discovering his loss, and on the same evening that it occurred, he notified the police and caused circulars to be printed, one of which has been produced before you, advising the public of the misfortune, and cautioning them against purchasing the stolen securities, and he insists that the evidence shows that early on the next morning, and before the usual hour of business, some of these circulars had been delivered at the defendant's place of business, by means of which they either had, or with reasonable care and attention might have had notice of the loss, and if he be correct, then he will be entitled to your verdict."
3. To the following: "Did the notice ever reach the defendant? If it did, and they chose to disregard it, then they are not purchasers in good faith, because, if they purchased after notice, or willfully shutting their eyes against notice, the law considers the purchase to be made in bad faith. In other words, a purchase after notice implies bad faith." *Page 308 
4. To that part as follows, "If, however, you conclude that the circular was delivered, and that it came to the notice of the defendants, or might have done so but for their own act, and that notwithstanding that the defendants saw fit to buy these bonds, then they are not owners of them in good faith and your verdict must be for the plaintiff, because the law does not permit parties to buy and retain stolen property, upon the plea that to take notice that it has been stolen would so interrupt their business as to render it impracticable to conduct it."
We have thus presented for decision questions of some interest and importance, if not of difficulty.
It has already been suggested that there was evidence sufficient to sustain the verdict of the jury. No one doubts but that, if the defendant had actual notice that the bonds it purchased had been stolen from the plaintiff, he should recover. It is precisely the same thing if the evidence authorized the jury to say that they were not purchased in good faith. Upon this question there is really no dispute of fact. Notices of the theft were left at the defendant's bank, before banking hours, on the morning after the robbery. This is not controverted, but the defendant says that it pays no attention to such notices, and buys bonds regardless of them. And the cashier does not remember to have seen the one in question. Upon this evidence, I think the jury had the right to find the same verdict they would have been authorized to find if the defendant had put a sign in front of its office to the effect that "Stolen bonds are here bought and sold upon liberal terms, without any regard to notice of the fact that they have been stolen." If the defendant did not hang out such a sign, it certainly acted upon the idea that such a sign might suggest to the army of robbers who have stolen bonds for sale. Such a principle, I think, will not be generally approved, and the finding of the jury should not have been disturbed. A case may be supposed where an offer of proof, apparently admissible, may be ruled out.
If, in an action upon two promissory notes, one for $300 *Page 309 
and the other for $200, the plaintiff had proved the signature of the maker, and the defendant should offer to show that the addition of the amount of the one note to the other did not make $500, I think a court might properly reject the offer as entirely without sense or reason, for some things may be assumed as matters of common knowledge. When, therefore, the defendant proposed to prove, in this case, that it was impracticable to conduct business if compelled to pay attention to notices of stolen bonds, the proposition was simply absurd, for persons of the commonest knowledge of the business of banking would say, without hesitation, that the employment of a single additional clerk, at a moderate salary, would enable the bank to keep an accurate account of all notices of stolen bonds left at the bank, either in or out of the hours of actual business. With an extensive and, it may be assumed, a profitable business, the employment of an additional clerk could not be regarded as fatal to the success of the defendant or scarcely an impediment to its prosperity, and yet of the last importance to those who are so unfortunate as to have whole fortunes carried away in the night by burglars and thieves.
I think we are to view the offers of the defendant, to prove the facts proposed, in the light of common sense at least, and if so, they were unfit to be proposed, and were for that reason, if for no other, properly rejected.
Even if the rule in Goodman v. Harvey (4 Adol.  Ell., 870) be followed, it is not apparent that the result of this case should be for the defendant. That was an action by the indorsee of a bill who had given value, and the title was disputed upon the ground that his indorser had obtained the discount of the bill in fraud of the right owner. Lord DENMAN submitted the question to the jury whether the indorsee acted with good faith in taking the bill. The jury found, substantially, that he had not, and a nonsuit was taken. Upon a rule nisi Lord DENMAN said, "The question I offered to submit to the jury was, whether the plaintiff had been guilty of gross negligence or not. I believe we all are of opinion that gross negligence *Page 310 
only would not be a sufficient answer where a party has given consideration for the bill; gross negligence may be evidence ofmala fides but is not the same thing." However shadowy the distinction between gross negligence and mala fides may appear to be, it is obvious that the question of bona or mala fides
was for the jury. That case, however, is unlike this. There, the question of bad faith was founded upon some uncertain marks of a notary upon the face of the bill, relating to its non-acceptance. Here the question is whether the defendant had notice that the bonds were stolen, and the jury found for the plaintiff upon at least some evidence of the fact.
For some reasons, before stated, I do not think that the offers of evidence by the defendant, rejected on the trial, materially affect the question. Without going into further detail, the substance of the whole is, that the defendant offered to prove that it was doing an extensive business in government bonds, and that its business was so large, and thefts so frequent, and notices so numerous that it was impracticable to pay any attention to them without stopping business. This fact, very obviously, could not have been proved, for the proposition is against the common sense of mankind. But the very proposition, if approved, involves a decision that any party may so extensively engage in the business of buying and selling negotiable bonds of the United States, for individual profit, that no attention can be paid to notices that certain of such securities have been feloniously taken from the rightful owner, and that the thief is about to negotiate them for value. If any such state of things exists, the defendant ought to curtail its business, or employ a greater clerical force. I do not agree that there is any condition of things in which a bank or broker, dealing in negotiable securities, may, for convenience or any other reason, peremptorily disregard notices of robbery, and then claim the protection due to a purchaser in good faith of bonds which have been stolen. I do not, therefore, think that the evidence offered would or should have aided a defendant who *Page 311 
proclaims as a rule of its action that it will give no heed to notices such as were given in this case.
Nor do I find any substantial objection to the charge of the judge to the jury. It was obviously a case for the jury, and they were instructed to find whether or not the notice of the theft reached the defendant, and if it did, and was willfully disregarded, then the defendant was not a purchaser in good faith, and that a purchase after notice implies bad faith. In this there was no error. Besides, I think the second and third exceptions are not well taken in point of form. Each embraces some observations of the judge which are entirely unobjectionable, and the exception must fail, even if there be in the part objected to something that was not entirely correct. The rule is too well settled to need the citation of any authority for its support, that the party excepting must lay his fingers upon the obnoxious instruction alone. He cannot couple the good with the bad in a single exception without failing altogether.
The cases relied on to sustain the decision of the General Term in granting a new trial do not, I think, control this case, even if the rule supposed to be laid down in those cases be admitted to the fullest extent. It appears to have been considered that the case of Murray v. Lardner (2 Wallace [U.S.R.], 110) was decisive. In that case the bonds were stolen at Philadelphia on the night of Wednesday the 23d of February, 1859, and the theft was not discovered until the following Saturday, the 26th; and no notice of the robbery appeared in any newspaper or otherwise, in Philadelphia or New York, until the following Monday, the 28th. In the meantime, on the 24th, the day after the robbery, the bonds were sold to Murray, in New York, for full value, without notice of the robbery and without suspicion or any reason to suspect that there was any infirmity in his vendor's title. This case, therefore, proves absolutely nothing for the defendant. The case of Murray v. Lardner only affirmed the supposed principle of the decision in Goodman v. Simonds (20 How. [U.S.R.], 343 et. seq.), where Mr. Justice CLIFFORD *Page 312 
entered into a very elaborate consideration of all the authorities relating to the subject, English and American. That was not a case of stolen bonds, or of anything very nearly kindred to the one at bar. In that case, a negotiable bill of exchange had been transferred, before maturity, without notice of any defect in the title of the party making the transfer; and the Supreme Court of the United States reaffirmed, after most elaborate discussion at the bar and by the bench, the elementary principle, that "a bona fide holder of a negotiable instrument for a valuable consideration, without notice of the facts which impeach its validity between the antecedent parties, if he takes it under an indorsement made before the same becomes due, holds the title unaffected by these facts, and may recover thereon, although, as between the antecedent parties, the transaction may be without any legal validity." The instructions condemned in that case were, that if such facts and circumstances were known to the plaintiff that caused him to suspect, or that would have caused one of ordinary prudence to suspect, that the drawer had no interest in the bill and no authority to use the same for his own benefit, and by ordinary diligence he could have ascertained the facts, "then the jury should find for the defendant." In the argument and decision of this case, the whole doctrine of the law relating to the transfer of commercial paper before or after due and with or without notice, was fully and ably discussed; but it does not appear to have any precise relation to this case, now to be decided.
The case of Welch v. Sage (47 N.Y., 143), is also supposed to control this case, but the report of the case does not enable us exactly to see how far the point in judgment there affects the question before us. The action was trover, to recover the value of three $1,000 coupon bonds of the Milwaukie  St. Paul Railroad Company, payable to bearer. The bonds were delivered by the plaintiff to one Thomas, a broker, to take to the defendant, who was an officer of the railroad company, and to sell them to him. The defendant received the bonds, and refused to give them back, alleging they were *Page 313 
stolen bonds. They were demanded by the plaintiff, and the defendant refused to give them up. He made no claim himself to the bonds, but said they belonged to one Ralph. This was in July, 1868. Sage, the defendant, immediately notified Ralph, and he, on the next day, replevied the bonds from Sage, and on the 20th of October, 1868, the plaintiff was made a defendant in that suit. On the 12th of October, 1868, Welch commenced his action of trover against Sage, and the action of replevin was never tried. In respect to the title of the plaintiff, it appears that he obtained the bonds from a firm of bankers in New York, with a California bond, for which he advanced $3,500 in cash. It does not appear that he had the slightest notice or suspicion at the time, of any infirmity in the title of the bankers from whom he received them. The plaintiff in that case recovered at the circuit, as he clearly was entitled to, and an order granting a new trial was promptly reversed by the Court of Appeals.
In the case at bar, it is now reduced substantially to a single proposition. May the defendant deal in stolen bonds, with knowledge of the theft, without any regard to information on the subject or the rights of the injured party, upon the ground that, in pursuit of its own gains and profits, it is inconvenient or more expensive to respect the rights of others after due notice or the means of knowledge ? I think not. Every individual or corporation must conduct business of any kind, be it large or small, with some regard to the rights of others. If I am robbed of my property, and give due notice, any individual or corporation having notice, must deal in the stolen property at their peril. It is no answer to say that it is inconvenient or expensive. The very conditions of society, and all the maxims of the law, require that every individual in a community must yield something of his supposed natural rights to his neighbor, so that the very ligaments which bind human society together may continue unbroken.
The jury have found that the defendant purchased the bonds in question after knowledge of the theft, or after having willfully neglected or refused to pay any attention to *Page 314 
notice given. It may also be assumed that the defendant claimed to deal in stolen bonds with impunity, after full knowledge or adequate means of knowing the fact. It is not intended to deny the proposition that a party dealing in negotiable securities of any kind is not responsible for any defect of title in his vendor, unless he purchases with notice or means of knowledge of the defect, or has been guilty of some such conduct as that a jury would say that he was not a purchase in good faith. The exact line between good faith, gross negligence and bad faith, must always be fixed by a jury in every case, as it arises. A purchase, after actual notice, all agree, would be made in bad faith, and, I think, the jury in this case rightfully found that it was one of that character.
The order of the General Term of the Common Pleas of New York should be reversed, and the judgment on the verdict affirmed, with costs.
For affirmance, LOTT, Ch. C., EARL and JOHNSON, CC.
For reversal, REYNOLDS and GRAY, CC.
Judgment affirmed.