Court Opinion

ID: 7189722
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:55:41.799625+00
Date Added: 2024-06-11T16:16:09.408214
License: Public Domain

Taliaferro, J.,
dissenting. In my opinion there is presented in "this case an instance of the correctness of the rule which declares that •where one of two innocent parties must sustain a loss it should fall upon the one by whose negligence or want of prudence the loss arose.
The bank was the agent of the plaintiff to collect the note. A person ¡unknown to the teller of the bank presented himself one month before the note was due, and paid it in full, principal and interest, up to the vfcime of its maturity. The teller, on receiving payment, delivered the note to this unknown person without placing upon it any cancel mark ¡receipt or indication of any kind showing that it was paid. There was nothing upon the note in any manner calculated to cast suspicion upon its genuineness as a negotiable instrument. It was negotiated very ,soon after it was paid. Jacob, finding it to be a mortgage note, having nearly a month to run before it became due, and there being no circumstance that could have given rise in his mind to suspicion, or that was calculated to put a prudent man on his guard when he took it, advanced ,his money upon the faith of receiving a valid and sufficient security. *440Hoyle was the holder of this note of Cazabat’s and of two other mortgage notes given to him by the wife of Cazabat for the price of property purchased by her. These two notes, with the one in relation to-which this controversy has arisen, were transferred by Hoyle to Jacob with subrogation of mortgage rights. No attempt was made on the trial of the case in the court below to ascertain how Hoyle come by the note in question, or to show anything at all impugning his good faith,, much less that of Jacob. The plaintiff seems to have rested satisfied that the note having been paid to him it was necessarily paid as to-everybody else, acting upon the elementary principle that a debt is extinguished by payment. But, although this is true as between the maker and a bona fide holder, it is not always so as to others. And I think the authorities are to this effect.
Mr. Story, in his work on promissory notes, section 384, says: ‘‘ Although as between the real bona fide holder and the maker the payment, whenever or however made, will be a conclusive discharge from the obligation of the note, yet as to third persons it may be far otherwise, for payment means payment in due course and not by anticipation. If, therefore, a promissory note is paid before it is due to any holder, and afterwards, and before its maturity, the same is passed to any subsequent bona fide holder the latter is still entitled to full payment thereof at its maturity, for payment of the note before it becomes due is no payment or extinguishment of the debt as to such persons.”' Parsons on Bills and Notes, volume 1, pp. 279, 280.
I think the judgment of the lower court should be reversed, and a judgment rendered in favor of the intervenor.