Hinckley v. Merchants' Nat'l Bank

• Decision Date: 08 April 1881
• Citation: 131 Mass. 147
• Parties: Henry R. Hinckley v. Merchants' National Bank
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

131 Mass. 147

Henry R. Hinckley v. Merchants' National Bank

Supreme Court of Massachusetts

April 8, 1881

Argued November 13, 1880

Suffolk. Replevin of twenty-nine interest coupons, payable to bearer, taken from five $ 1000 bonds of the Union Pacific Railway. The case was submitted to the Superior Court, and after judgment for the plaintiff, to this court on appeal upon an agreed statement of facts, in substance as follows:

Each coupon had printed on the back the number of that coupon, and on the face the number of the bond to which it was originally attached. The coupons became due on March 1 and September 1 of the years 1876, 1877, and 1878. Prior to January 26, 1876 the plaintiff was the owner of the bonds to which the coupons in suit belonged, and had deposited the bonds with the coupons attached for safe keeping in a box in the vault of the Northampton National Bank of Northampton. They were stolen from this bank in the robbery which took place there on the night of January 26 and 27, 1876. The bonds to which the coupons were attached originally were ordinary railroad bonds, payable to bearer and due in 1893.

On January 10, 1879, R. Raphael & Sons, bankers, of London, England, purchased the coupons, each being then detached from its bond, from Maurice Cohn & Company, money-changers, of London, who had bought them of their correspondent in Brussels, who had purchased them there on January 7, 1879. These purchases were all made in the regular course of business and in perfect good faith by the parties, all of whom paid full value for them, and neither of whom had any knowledge or suspicion that the coupons had ever been stolen, or that there was anything wrong about them. R. Raphael & Sons sent the coupons for collection to their agents in New York, who in their turn sent them to the defendant for collection. The statutes and judicial decisions of England and Belgium may be referred to by either party.

It was further agreed that, if the question whether the plaintiff did or did not use due diligence in giving notice of his loss was material, the case was to stand for trial on that question; otherwise, the court was to render such judgment as the law required.

Judgment affirmed.

J. C. Gray Jr. & W. C. Loring, for the plaintiff, cited Gold v. Eddy, 1 Mass. 1; Vermilye v. Adams Express Co. 21 Wall. 138; Cromwell v. Sac, 96 U.S. 51; Hinckley v. Union Pacific Railroad, 129 Mass. 52.

M. Williams & C. A. Williams, for the defendant. The interest coupons in this case have the force of promissory notes payable to bearer. Spooner v. Holmes, 102 Mass. 501. They were put into circulation by the maker, and the rule applicable to notes having an illegal inception does not apply. Before maturity, they were stolen; and if the thief negotiated them before maturity, the purchaser in good faith took a title good as against the plaintiff, and this title would pass to the purchasers in good faith after maturity. In the absence of all evidence on this point, the presumption is that the thief did negotiate them before maturity. Ranger v. Cary, 1 Met. 369. Noxon v. DeWolf, 10 Gray 343. Murray v. Lardner, 2 Wall. 110. Collins v. Gilbert, 94 U.S. 753. New Orleans Canal Co. v. Montgomery, 95 U.S. 16, 18.

Although one who takes a promissory note overdue takes it subject to all the equities to which it was subject in the hands of him from whom he buys it, yet if the note in this case was negotiated before maturity there would be no equities. Wheeler v. Guild, 20 Pick. 545. Pettee v. Prout, 3 Gray 502. Fearing v. Clark, 16 Gray 74. Smith v. Hiscock, 14 Me. 449. Washington National Bank v. Texas, 20 Wall. 72, 89. Chalmers v. Lanion, 1 Camp. 383. Fairclough v. Pavia, 9 Exch. 690.

Lord, J. Endicott, J. did not sit. Field, J., absent.

OPINION

Lord, J.

The case stated authorizes either party to offer at the argument the statutes and judicial decisions of England and Belgium. No statute either of England or Belgium has been presented to us. We cannot therefore consider such statutes, if there be such, as a part of the facts of the case; and so far as any judicial decisions of England have been cited, they are presented merely as authorities bearing upon the questions of law involved in the issue.

Upon the facts stated, the main question presented for our consideration is a very simple one. The larceny of a chattel does not change the property in the chattel. Under what circumstances the property in a stolen chattel may be changed by sale in a market overt where such markets exist, it is immaterial to inquire, for in this Commonwealth it was long ago settled that there are no markets overt. Dame v. Baldw. 8 Mass. 518.

By the law merchant, a negotiable note or bill of exchange before maturity stands differently, and a right of property in it may be acquired by an innocent purchaser, who in good faith without notice, pays value for it. ...