Salley v. Terrill

• Decision Date: 10 December 1901
• Citation: 95 Me. 553,50 A. 896
• Parties: SALLEY v. TERRILL.
• Court: Maine Supreme Court

50 A. 896

95 Me. 553

SALLEY

v. TERRILL.

Supreme Judicial Court of Maine.

Dec. 10, 1901.

(Official.)

Report from supreme judicial court, Penobscot county.

Action by Wayland H. Salley against Isaac A. Terrill on an order on the defendant, and indorsed to plaintiff. Case reported, and judgment for defendant.

Argued before WISWELL, C. J., and STROUT, SAVAGE, POOLER, POWERS, and PEABODY, JJ.

M. Laughlin, for plaintiff.

W. H. Poweli, for defendant.

STROUT, J. This is an action to recover the contents of an order drawn by Charles E. Hurd upon defendant, payable to the order of Harry Carter, and by him indorsed to plaintiff. Plaintiff presented it to defendant for acceptance, which was refused. Defendant was engaged in a lumbering operation, and Hurd was in his employ. Among his duties was that of keeping the time of the men, and when one was discharged to draw an order on defendant for the amount due. Blank orders were furnished by defendant to Hurd for this purpose.

Plaintiff claims to hold defendant upon the ground that, as Hurd was the agent of defendant, authorized to draw orders of this kind, his signature was in law and effect the signature of defendant, and, thus being an order upon himself, it operated as an accepted order, or as a promissory note. That such would be its legal effect is conceded by counsel. Bank v. Joy, 41 Me. 568; Rev. St c. 1, § 6, par. 21.

Hurd testified, and his testimony is uncontradicted, that "he wrote the order simply as a matter of practice"; that he left it on his table at the camp "among some papers and other stuff"; that he was called away a few moments, and on his return he "took all the papers and everything, and burnt them up," and supposed the order was thus burned, but later, remembering the order, he asked Carter, who had been near when the order was written, if he had seen it while he was absent, and he said he had not; that the order did not represent the amount due Carter, and was not delivered nor intended to be delivered to Carter by Hurd, or by bis authority. The inference is plain that the possession of the order by Carter was obtained wrongfully and by theft.

The order was drawn and dated November 14, 1898, and was purchased by plaintiff December 17, 1898. Ordinarily, such lapse of time before presentation of a demand order would be sufficient to show that it was dishonored when plaintiff received it; but as it purported to be given to an operative in the forest, who might not be able to present it earlier, if there was evidence upon the point, the delay might not be regarded as unreasonable.

Waiving this point, the question recurs whether a negotiable paper, drawn and signed, but not delivered nor intended to be delivered to the payee, the possession of which is obtained by the payee by theft, can create a liability of the maker or drawer to a bona fide holder for value without notice. It is familiar law that one in possession of chattels by theft can convey no title to an innocent purchaser, but coin and bank bills are excepted from the rule. As to those, even if feloniously obtained, the holder can convey a good title to an innocent purchaser.

To favor commerce, the law makes an exception also as to negotiable paper, and permits the bona fide indorsee without notice to acquire title from a person who had none in himself. Where by fraud and without negligence one is induced to sign a promissory note under the representation and belief that it is a paper of another character, and delivers it to the payee, the innocent in dorsee before maturity may recover of the maker. Prom the many cases supporting this doctrine that might be cited we refer only to Nutter v. Stover, 48 Me. 166; Kellogg v. Curtis, 65 Me. 59. So, when the maker of negotiable paper deposits it with a third, to be delivered on a certain contingency, or for a specific purpose not apparent upon the paper, and such third party violates the trust, and wrongfully makes delivery, the bona fide indorsee before maturity, and without notice, may recover from the maker. But in ail these cases the instrument was either delivered to the payee by the maker or by his agent, and came into his possession as a complete and executed contract.

In the case before us, where the order had never been delivered, and therefore had no legal inception or existence as an order, the question is whether there is any liability upon it to an innocent indorsee for value. As is said in Burson v. Huntington, 21 Mich. 415, 4 Am. Rep. 497: "The wrongful act of a thief or a trespasser may deprive the holder of his property in a note which has once become a note or property by delivery, and may transfer the title to an innocent purchaser for value. But a note in the hands of a maker before delivery is notproperty, nor the subject of ownership, as such. It is in law but a blank piece of paper. Can the theft or wrongful seizure of this paper create a valid contract on the part of the maker against his will where none existed before? There is no principle...