Page images
PDF
EPUB

it to Foster and Company, therefore, the defendant became. liable for a conversion, unless it shows some valid excuse. Newcomb v. Boston & Lowell Railroad, 115 Mass. 230. Alderman v. Eastern Railroad, 115 Mass. 233. The record before us does not show any laches or any act of the plantiffs which can excuse or justify this mis-delivery. They did not hold Foster and Company out to the world or the defendant as one entitled to control the property. Indeed, it is admitted that the defendant did. not know, until long after the delivery, that the plaintiffs had any connection with the property, or with Foster and Company. The plaintiffs did nothing to mislead the defendant. They had the right to rely upon the facts that they held the bill of lading, and that, according to the ordinary course of business, the goods could not be obtained except upon its production. The defendant saw fit to deliver them to Foster and Company without requiring them to produce the bill of lading, relying upon their representation that they were the holders of it. It took the risk of their truthfulness, and cannot now shift that risk upon the plaintiffs, who have done nothing to mislead or deceive the defendant. We are, for these reasons, of opinion that the defendant is liable for the value of the corn described in the first count of the declaration.

In the case of the wheat, there are some facts proved at the trial which lead us to a different result. By the bills of lading and the way-bills, the wheat was consigned to John H. Foster and Company at Boston. The fact that they did not contain the words "or order," or other equivalent words, so as to make them upon the face quasi negotiable, is not important. The bill of lading was yet the representative of the wheat, and its transfer and delivery to the plaintiffs vested in them the title to the property, as against the consignees and their creditors. But the presiding justice of the Superior Court who heard the case has found as a fact, "that it was the custom of the railroads terminating in Boston to deliver to the consignee goods 'billed straight' as it is termed, that is, billed to a particular person, not to order, when they were satisfied of the identity of the consignee, without requiring the production of the bills of lading, and to rely upon the way-bills to determine the consignee and the form of the consignment."

Under the finding, we must assume that the custom existed, and that the plaintiffs knew or ought to have known of it, It materially affects the relations and rights of the parties. Although it does not affect the question of the title of the plaintiffs as against Foster and Company, it qualifies the duties of

the defendant as to the delivery of the wheat. It justified the defendant in delivering it to Foster and Company, the consignees, at least at any time before notice that the property had been transferred. Under it, there was no laches in not calling for the bill of lading; and, in thus delivering, there was no violation of any of the terms of its contract, express or implied. Such delivery therefore was not a mis-delivery which would amount to a conversion and render the defendant liable to the plaintiffs. We are therefore of opinion that the defendant is not liable for the value of the wheat sued for.

[ocr errors]

§316. Bills of Lading as Documents of Title and Means of Pledging. The bill of lading has become a most important kind of collateral security. Observe that a pledge by means of handing over possession of a symbol instead of the actual goods can be accomplished by means of a "straight" bill of lading as well as by means of a bill of lading drawn to order or bearer, although as is illustrated in this case, the form of the bill of lading may make a difference in the carrier's liability when he surrenders goods without calling for the surrender of the bill of lading.

By the custom of merchants the delivery of an indorsed "negotiable" document of title is regarded as having superior validity over a delivery of the goods themselves. One entrusted with mere possession of goods is not thereby empowered to sell, mortgage, or pledge them, but the mercantile idea is that one entrusted with an indorsed "negotiable" document of title is empowered to transfer a good title. The mercantile theory is recognized in the Uniform Bills of Lading Act, §38, and also in the Uniform Sales Act, §38, which reads as follows: "The validity of the negotiation of a negotiable document of title is not impaired by the fact that the negotiation was a breach of duty on the part of the person making the negotiation, or by the fact that the owner of the document was induced by fraud, mistake or duress to entrust the possession or custody thereof to such person, if the person to whom the document was negotiated or a person to whom the document was subsequently negotiated paid value therefor, without notice of the breach of duty, or fraud, mistake or duress."

§317

E. NEGOTIABLE INSTRUMENTS.

GOODWIN v. ROBARTS.

Exchequer Chamber, 1875. [L. R. 10 Exchequer 337.]

[ocr errors]

COCKBURN, C. J.: Bills of exchange are known to be of comparatively modern origin, having been first brought into use, so far as it is at present known, by the Florentines in the twelfth, and by the Venetians about the thirteenth century. The use of them gradually found its way into France, and, still later, and but slowly, into England. We find it stated in a law tract by Mr. Macleod, entitled "Specimen of a Digest of the Law of Bills of Exchange," printed, we believe, as a report to the government, but which from its research and ability, deserves to be produced in a form calculated to insure a wider circulation, that [Gerard Malynes], a London merchant, who published a work called the "Lex Mercatoria," in 1622, and who gives a full account of these bills as used by the merchants of Amsterdam, Hamburg, and other places, expressly states that such bills were not used in England. There is reason to think, however, that this is a mistake. Mr. Macleod shows that promissory notes, payable to bearer, or to a man and his assigns, were known in the time of Edward IV. Indeed, as early as the statute of 3 Rich. II., ch. 3, bills of exchange are referred to as a means of conveying money out of the realm, though not as a process in use among English merchants. But the fact that a London merchant, writing expressly on the law merchant, was unaware of the use of the bills of exchange in this country, shows that that use at the time he wrote must have been limited. According to Professor Story, who herein is, no doubt, perfectly right, "the introduction and use of bills of exchange in England," as indeed it was everywhere else, "seems to have been founded on the mere practice of merchants, and gradually to have acquired the force of a custom." With the development of English commerce the use of these most convenient instruments of commercial traffic would, of course, increase; yet, according to Mr. Chitty, the earliest case on the subject to be found in the English books is that of Martin v. Boure, 2 Cro. Jac. 6, in the first James I. Up to this time the practice of making these bills negotiable by indorsement had been unknown, and the earlier bills are found to be made payable to a man and his assigns, though in some instances to bearer.

But about this period-that is to say, at the close of the sixteenth or the commencement of the seventeenth century—the

practice of making bills payable to order, and transferring them by indorsement, took its rise. Hartmann, in a very learned work on bills of exchange recently published in Germany, states that the first known mention of the indorsement of these instruments occurs in the Neapolitan Pragmatica of 1607. Savary, cited by Mons. Nouguier, in his work, "Des Lettres de Change,' had assigned to it a later date, namely, 1620. From its obvious convenience this practice speedily came into general use, and, as part of the general custom of merchants, received the sanction of our courts. At first the use of bills of exchange seemed to have been confined to foreign bills between English and foreign merchants. It was afterwards extended to domestic bills between traders, and finally to bills of all persons, whether traders or not. Chitty, Bills (8th ed.), p. 13.

In the meantime, promissory notes had also come into use, differing herein from bills of exchange: That they were not drawn upon a third party, but contained a simple promise to pay by the maker, resting, therefore, upon the security of the maker alone. They were at first made payable to the bearer, but when the practice of making bills of exchange payable to order, and making them transferable by indorsement, had once become established, the practice of making promissory notes payable to order, and of transferring them by indorsement, as had been done with bills of exchange, speedily prevailed. And for some time the courts of law acted upon the usage with reference to promissory notes, as well as with reference to bills of exchange.

In 1680, in the case of Sheldon v. Hentley, 2 Show. 160, an action was brought on a note under seal by which the defendant promised to pay to bearer £100, and it was objected that the note was void because not payable to a specific person. But it was said by the court: "Traditio facit chartam loqui, and by the delivery, he (the maker) expounds the person before meant, as when a merchant promises to pay to the bearer of the note, any one that brings the note shall be paid." Jones, J., said that "it was the custom of merchants that made that good."

In Bromwich v. Lloyd, 2 Lutw. 1582, the plaintiff declared upon the custom of merchants in London on a note for money payable on demand, and recovered; and Treby, C. J., "said that bills of exchange were originally between foreigners and merchants trading with the English. Afterwards, when such bills came to be more frequent, then they were allowed between merchants trading in England, and afterwards between any traders whatsoever, and now between any persons, whether trading or

not; and therefore the plaintiff need not allege any custom, for now those bills were of that general use that upon an indebitatus assumpsit they may be given in evidence upon the trial." To which Powell, J., added: "On indebitatus assumpsit for money received to the use of plaintiff the bill may be left to the jury to determine whether it was given for value received." In Williams v. Williams, Carth. 269, where the plaintiff brought his action as indorsee against the payee and indorser of a promissory note, declaring on the custom of merchants, it was objected on error that, the note having been made in London, the custom, if any, should have been laid as the custom of London. It was answered "that this custom of merchants was part of the common law, and the court would take notice of it ex-officio; and therefore it was needless to set forth the custom specially in the declaration, but it was sufficient to say that such a person 'secundum usum et consuetudinem mercatorum,' drew the bill." And the plaintiff had judgment.

Thus far the practice of merchants, traders and others of treating promissory notes, whether payable to bearer or order, on the same footing as bills of exchange, had received the sanction of the courts, but, Holt having become chief justice, a somewhat unseemly conflict arose between him and the merchants as to the negotiability of promissory notes, whether payable to order or to bearer; the chief justice taking what must now be admitted to have been a narrow-minded view of the matter, setting his face strongly against the negotiability of these instruments, contrary, as we are told by authority, to the opinion of Westminster Hall, and in a series of successive cases persisting in holding them not to be negotiable by indorsement or delivery.

[ocr errors]

The inconvenience to trade arising therefrom led to the passing of the statute of 3 and 4 Anne, c. 9, whereby promissory notes were made capable of being assigned by indorsement or made payable to bearer, and such assignment was thus rendered valid beyond dispute or difficulty. It is obvious from the preamble of the statute, which merely recites that: "it had been held that such notes were not within the custom of merchants,' that these decisions were not acceptable to the profession or the country. Nor can there be much doubt that by the usage prevalent amongst merchants these notes had been treated as securities negotiable by the customary method of assignment, as much as bills of exchange, properly so-called. The statute of Anne may, indeed, practically speaking, be looked upon as a declaratory statute, confirming the decisions prior to the time. of Lord Holt.

« ՆախորդըՇարունակել »