Trustees of Internal Imp. Fund v. Lewis

• Decision Date: 08 November 1894
• Citation: 16 So. 325,34 Fla. 424
• Parties: TRUSTEES OF INTERNAL IMP. FUND v. LEWIS.
• Court: Florida Supreme Court

16 So. 325

34 Fla. 424

TRUSTEES OF INTERNAL IMP. FUND v. LEWIS.

Florida Supreme Court

November 8, 1894

Appeal from circuit court, Leon county; David S. Walker, Judge.

Bill by Charles Edward Lewis against the trustees of the internal improvement fund to compel the payment of certain interest coupons. Decree for complainant, and defendants appeal. Affirmed.

Syllabus by the Court

SYLLABUS

1. Coupons that are payable to bearer, and that are attached to and represent the semiannual installments of interest accruing upon railroad bonds, are, in legal effect promissory notes, and possess all the attributes of negotiable paper.

2. Such coupons may be detached and negotiated separately by simple delivery, and sued on separately from the bond after the bond itself has been paid and satisfied, as well as before. Coupons once detached and negotiated cease to be mere incidents of the bond, and become independent claims, and carry interest after their maturity.

3. Where a negotiable instrument is paid before maturity, it is especially important that it should be surrendered to the payor, so that further negotiation may be prevented; for in such case, if payment is made to the original payee, and the note is not surrendered, but has already or should afterwards be transferred, before maturity, to a bona fide holder without notice, such holder can recover thereon against the maker, notwithstanding such payment to the original payee.

COUNSEL Fred. T. Myers, for appellants.

R. W. Williams, for appellee.

OPINION

TAYLOR J.

The appellee sued the appellants, as trustees of the internal improvement fund of the state of Florida, by bill in equity in the circuit court of Leon county, to compel them, as such trustees, to pay 25 interest coupons for the sum of $35 each representing the semiannual installments of interest falling due upon the 1st days of March and September in the years 1889 and 1890, and on the 1st of March, 1891, upon 5 bonds for the sum of $1,000 each, numbered, respectively, 1,075 1,233, 1,234 1,235, and 1,240, issued on March 1, 1856, by the Florida Railroad Company, under and in accordance with the provisions of the act of the legislature of Florida passed January 6, 1855, entitled 'An act to provide for and encourage a liberal system of internal improvement in this state,' the principal of which bonds was payable on March 1, 1891. The coupons sued upon, making allowance for the different dates when they respectively fall due, and their reference to the different numbers of the bonds to which they were attached, are in the following form:

'The Florida Railroad Company will pay the bearer, in the city of New York, thirty five dollars on the first day of March, 1889, for semiannual interest on Bond No. 1,075. $35. Geo. W. Call, for Treasurer.'

The bill alleges that the complainant, in December, 1882, became the holder and owner for value of said 25 coupons before their maturity; that payment thereof from said trustees had been demanded and refused. The answer admits that said bonds, with interest coupons attached, were issued under and in pursuance of said act of the legislature creating said internal improvement fund, and admits that by the provisions of said act the said interest coupons were secured and guarantied by the fund in their hands as trustees.

The answer denies that the complainant is a bona fide holder of said coupons, and that he acquired them before maturity without notice.

There was no proof, however, otherwise than that the complainant bona fide became the holder and owner of said coupons for value before their maturity. The answer further urges as a defense that prior to the time when the complainant acquired said coupons, and long before their maturity, the bonds themselves, the semiannual interest upon which is represented by said coupons, were bought and canceled by said trustees under the provisions of said internal improvement act, and said bonds became no longer an existing obligation, and ceased to bear interest.

The evidence taken shows that the complainant is a bona fide holder of the coupons sued upon, and that he became such owner for value, in good faith, before their maturity, as detached independent obligations, and without notice that the principal bonds, of which they formed a part, had been taken up or canceled. It is shown that the defendant trustees have acquired the possession and control of all the bonds from which said coupons were detached, and that they acquired possession of them about December 26, 1882, denuded of all coupons. How or from whom they were acquired is not shown, nor upon what consideration. Neither ther is it shown that said bonds were ever canceled. At the final hearing of the cause on October 9, 1890, final decree was rendered requiring the defendants, as trustees, to pay the amount of the 20 coupons then past due, together with interest thereon from the dates of their respective maturity up to the date of said decree, and interest upon the decree until its payment, and that the 5 coupons not then due should be withdrawn from the suit. From this decree the defendant trustees have appealed.

It is conceded that under the provisions of the internal improvement act,...