Boles v. Harding

• Decision Date: 25 February 1909
• Parties: BOLES v. HARDING et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

201 Mass. 103

87 N.E. 481

BOLES v. HARDING et al.

Supreme Judicial Court of Massachusetts, Suffolk.

February 25, 1909

COUNSEL

P. H Kelley, for plaintiff.

Frank C. Chamberlain and Albert H. Chamberlain, for defendant Whitman.

OPINION

BRALEY J.

It is sufficiently plain that the defendants issued and delivered the check to an impostor who falsely claimed to represent an association of 'freight handlers' to which they wished to make a donation. But while not conceded, the undisputed evidence would support a finding that the plaintiff was a holder for a valuable consideration, without notice or knowledge of any facts which would impair its validity. If this were the only defense, it would follow that upon proof of their signature he could recover, although between the original parties the check was procured through fraud and misrepresentation, as the defendants were estopped from denying the existence or the capacity of the payee to indorse. Pettee v. Prout, 3 Gray, 502, 63 Am. Dec 778; First National Bank of Rochester v. Harris, 108 Mass. 514; Robertson v. Coleman, 141 Mass. 231, 4 N.E. 619, 55 Am. Rep. 471; White v. Dodge, 187 Mass. 449, 73 N.E. 549; Fillebrown v. Hayward, 190 Mass. 472, 480, 77 N.E. 45, and cases cited; Rev. Laws, c. 73, §§ 18, 25, 69, 74; chapter 173, § 86.

But if there was evidence of the signature of the makers, the issuance of the check and the good faith of the plaintiff, the answer having aptly raised the issue, there could be no recovery without proof of the genuineness of the indorsement by the payee, for until this appeared the check would not have been negotiated, and the exceptions fail to disclose any testimony from which this essential fact could have been found. Bryant v. Abington Savings Bank, 196 Mass. 254, 81 N.E. 997; True v. Dillon, 138 Mass. 347; Estabrook v. Boyle, 1 Allen, 412; Dana v. Underwood, 19 Pick. 99; Rev. Laws, c. 173, § 86. The plaintiff, however, relies upon the well-settled rule that where an instrument containing all the other elements of negotiability is knowingly made payable to the order of a fictitious or nonexisting person, the instrument becomes negotiable without indorsement, and is to be treated as if in terms made payable to bearer. Dana v. Underwood, 19 Pick. 99; Bryant v. Eastman, 7 Cush. 111; Shaw v. Smith, 150 Mass. 166, 167, 22 N.E. 887, 6 L. R. A. 348, and cases cited; Gibson v. Minot, 1 H. Bl. 569; Gibson v. Hunter, 2 H. Bl. 187, 288; Bennett v. Farnell, 1 Camp. 130, 133, note, 180.

In England since the bills of exchange act of 1882 (St. 45 & 46 Vict. c. 61, § 7, subd. § 3) proof of knowledge by the maker who issues the instrument that the payee is fictitious or nonexistent is not required. A lawful holder may treat the instrument as payable to bearer, whenever it appears that the name of the payee is inserted merely as a pretense, without any intention that payment should be made in conformity with the promise, whether the name be that of an existing or a nonexisting person. Bank of England v. Vagliano Brothers, [1891] A. C. 107, 153; Clutten v. Attenborough, [1897] A. C. 90. But under our negotiable instruments act, formerly St. 1898, p. 494, c. 533, § 9, now Rev. Laws, c. 73, § 26, as well as at common law, while the same rule as to what constitutes a fictitious payee obtains, the bearer as such cannot recover unless it is shown that the maker knew of the fiction. Gibson v. Hunter, 2 H. Bl. 187, 288; Phillips v. Mercantile National Bank, 140 N.Y. 556, 35 N.E. 982, 23 L. R. A. 584, 37 Am. St. Rep. 596; Shipman v. Bank of State of New York, 126...