Benoist v. Siter, Price & Co.

• Decision Date: 31 October 1845
• Parties: BENOIST & HACKNEY v. SITER, PRICE & CO.
• Court: Missouri Supreme Court

9 Mo. 657

BENOIST & HACKNEY

v.SITER, PRICE & CO.

Supreme Court of Missouri.

October Term, 1845.

ERROR TO ST. LOUIS CIRCUIT COURT.

SPALDING & TIFFANY, for Appellants.

I. The court erred in giving the instruction asked for by the plaintiffs below. 1. That instruction assumes that the defendants knew that the note in question belonged to plaintiffs; and that they knew this at the time they credited Anderson with the proceeds of said discounted note. 2. It assumes that said note at the time it was discounted, belonged to the plaintiffs. 3. It places the point of protection to the defendants below at the passing to the credit of Anderson, the proceeds of the note on the books of the defendants; whereas it should have been at the payment over of such proceeds. For if they took the note and gave Anderson the proceeds of the discount, they are not liable to plaintiffs even though they should have been notified of plaintiffs' ownership of the note immediately after, and before the defendants made their entries in their books. 4. The instruction is involved, and calculated to mislead the jury. 5. It authorizes a recovery by plaintiffs' if the defendants ever knew that the note had belonged to plaintiffs, no matter at what time it belonged to them, provided they knew at the time they credited Anderson with the amount that said note did not belong to him.

II. The instruction asked by defendants should have been given. It submitted to the jury the questions of fact, and confined the knowledge of the defendants of plaintiffs' ownership of the note which should make them liable, at the proper point, to wit: before, or at the time of accounting to Anderson for the proceeds of the note.

III. The two instructions are not identical, as is apparent in comparing them.

IV. If they were substantially of the same effect, yet as they are circumstantially different, the latter should have been given, as it was the law of the case, and the court, by rejecting it, probably prejudiced the case before the jury.

V A negotiable note or bill, passed by the holders before due to a bona fide purchaser, without any notice of the holder's want of title, belongs to such purchaser, even though the holder might have no interest in it whatever. Chitty on Bills, 222, 221; Story on Bills, 209-10.

VI. The motion for a new trial ought to have been sustained.

GAMBLE & BATES, for Appellees.

I. The instruction given on the part of the appellees was lawful and proper, in view of the testimony in the cause, and,

II. That there was no error committed in refusing the instruction moved on the part of L. A. Benoist & Co. 1. That the instruction given was right, seems susceptible of the plainest kind of demonstration. The matters of fact being submitted to the jury, they have found that L. A. Benoist & Co. at the time they gave the credit to Anderson--that is when they discounted the note--“knew that the note was not the property of Anderson,” and at the time that they received the proceeds, “knew that said note belonged to the plaintiffs.” If with a knowledge of these facts, they be not liable to this action, it must be because they could lawfully buy a note from a man who they knew did not own it, and lawfully receive and keep to their own use, money which they knew at the time belonged to other people. That there was sufficient testimony in the cause on which to base the instruction is equally clear. And first it is plain from the testimony of several witnesses, that L. A. Benoist & Co. knew that Anderson was a collecting agent for Siter, Price & Co., Anderson himself testified that he told them so; and that in point of fact, he did not sell them the note, but lodged it in their bank for collection. When due, Anderson, avowedly as the agent of Siter, Price & Co. still controlled it: As such he held negotiations with the drawers and gave them time, while L. A. Benoist & Co. did not act as owners, nor treat Siter, Price & Co. as their indorsers. If then, they had really claimed to be owners, and acted as such, if not constrained by a prudent regard for their own interest, at least mercantile usage, good faith and common fairness to the other parties to the transaction, would have required them to deny Anderson's agency, to protest the note for non-payment, and give notice to the indorsers in Philadelphia. If that had been done, Siter, Price & Co. would have been warned that their agent instead of collecting their note had faithlessly sold it, and being warned, they as business men would have promptly looked after their own interests and might have saved not only the amount of that note, but some thousands more now lost in Anderson's bankruptcy. Again--the note was never assigned to anybody. The indorsement of Siter, Price & Co. and of John J. Anderson, are still in blank. There is nothing in full on the back of the note but the receipt of L. A. Benoist & Co. Now a blank indorsement is not per se a transfer or assignment; it is but a power. The payer when he takes it up may write a receipt over the name; and before payment, a bona fide holder may fill it up to himself. The blanks were not filed by either Anderson, or L. A. Benoist & Co. Neither of them pretended to be a bona fide holder. Nobody questioned the title of Siter, Price & Co. until Anderson's downfall was seen to be inevitable, and then there was a scramble for his assets. And again--it is in proof that Anderson had extensive dealings with L. A. Benoist & Co. and was largely their debtor. Their business relations were constant and confidential, and hence with the sagacity belonging to the trade of banking and brokerage, they must have understood his pecuniary situation, and have foreseen his bankruptcy. In this view it is not hard to account for the fact, that when he left the note for collection, they thought fit (unknown to him and as he swears against his intention), to pass the note on their books, through the forms of a regular discount, and without paying a dollar, credit the proceeds to his account, against a debt then dangerously large, and now hopeless of payment. This nominal discount of the note and giving credit to Anderson's account, it is apparent was the exclusive and one-sided act of L. A. Benoist & Co. Anderson testifies that it was not his intention to have it so, and that he had no knowledge of the fact until long afterwards. But even if he had concurred in all that was done, still the legal and honest result would remain the same. For Benoist, having knowledge of the facts as stated in the instruction, any bargain between him and Anderson, whereby Siter, Price & Co. would lose title to their note, and be deprived of money honestly theirs, would be a fraud too palpable and gross for the law to tolerate. They could not be allowed to cheat Siter, Price & Co. out of their money, by any private arrangement between themselves, and this would undoubtedly be the case if Benoist, knowing the facts, be allowed to keep the money. Anderson having the fiduciary possession of the note, with a blank indorsement (which is but a power to transfer) might abuse his trust and pervert his power by making a valid transfer to a bona fide purchaser for a valuable consideration without notice. But any other transfer would be fraudulent and void. 2. The instruction prayed by the defendants was well refused. The main principle involved in the refused instructions,-- i e., the knowledge by Benoist, that Anderson did not, and that Siter, Price & Co. did, own the note--is identical with the instruction given, and therefore need not be repeated to the jury. But besides this, it was rightly refused, because it contained expressions ingeniously interwoven which were calculated to mislead the jury. For instance, the instruction assumes that Benoist & Co. were not liable unless it appear to the jury that the note was the property of the plaintiffs, “and that the defendants had notice thereof before said Anderson received the proceeds of said discount.” If the word notice was designed to have a meaning more extended than, or different from knowledge, it was calculated to mislead and was wrong. The word before would alone make the instruction...