87

88

against an agent collecting (and entitled to part of) the note, but misappropriating the entire proceeds. So, against a trustee who has disposed of the paper in violation of his trust, although the plaintiff had already recovered possession of the note from the indorsee. So, trover will lie against an agent who receives a note to negotiate and pay the proceeds to the principal, but turns it over to another agent, by whom it is negotiated and misappropriated."" The pledgee of a note may have trover against any one who carries it off surreptitiously. And where such wrongful taker has obtained judgment on the note, the owner may sue him in trover, or in assumpsit for money had and received. If the depositary of a note, although himself the maker, wrongfully withholds it from the owner, the suit should be in trover, and not in assumpsit."3 And, if the maker has obtained it by fraud, the holder may bring an action of trover for it.94

91

92

Trover against Indorsee.

§ 1681. Trover will lie in favor of the payee or acceptor against a holder, to whom the bill has been transferred by the plaintiff's agent without even apparent authority.95 So, an accommodation acceptor may, in trover, recover an acceptance fraudulently obtained

87 Boyle v. Levings, 28 Ill. 314. 88 Badger v. Hatch, 71 Me. 562; Haas v. Sackett, 40 Minn. 53, 41 N. W. 237. 89 Murray v. Burling, 10 Johns. (N. Y.) 172. Or though the maker is insolvent. Pratt v. Boyd, 17 Ind. 232. If the agent has collected the note, he may be sued for money had and received. Hodges v. Lathrop, 1 Sandf. (N. Y.) 46. 90 Laverty v. Snethen, 68 N. Y. 528. But see H. S. Benjamin Wagon & Carriage Co. v. Merchants' Exch. Bank, 63 Wis. 470, 23 N. W. 592.

91 Though he held subject to a prior pledge, and the pledgee had recovered the amount due him. Knight v. Legh, 4 Bing. 589. And it is not necessary that the plaintiff should have had actual possession of the note, if he is entitled to it. Nininger v. Banning, 7 Minn. 274 (Gil. 210).

92 Robertson v. Dunn, 87 N. C. 191.

93 Tucker v. Jewett, 32 Conn. 563.

94 Thayer v. Manley, 73 N. Y. 305, 8 Hun (N. Y.) 551; Boyer v. Fenn, 18 Misc. Rep. 607, 43 N. Y. Supp. 506. But he could not bring replevin for a note obtained by duress. Olson v. Thompson, 6 Okl. 74, 48 Pac. 184.

95 Byles, Bills, 412; Cranch v. White, 1 Bing. N. C. 414; Wilcox v. Turner, 46 Ga. 218.

97

by the drawer, and pledged to one having notice of the fraud.** So, trover lies for a bill fraudulently negotiated by an agent against one who purchased it after maturity, or who obtained it under a blank indorsement, but without valuable consideration, or under a restrictive indorsement "for account of" the plaintiff," or as security for a usurious loan.100

Trover for Lost Bills.

§ 1682. The legal owner of a lost bill may have an action of trover against the finder,101 or against a purchaser with notice.102 So, too, for lost bank notes,103 or a lost check,104 So, the owner and payee of a check may recover bank notes paid for it by the drawee, without proving to whom they were paid, against one who admits himself to be a finder of the notes.105 In like manner, an action of trover lies, without previous demand and refusal, against one who possesses himself improperly of a bill stolen from the plaintiff,! or against one who receives payment, even in good faith, of such stolen bill, under a forged indorsement.107

106

96 Smith v. De Witts, 6 Dowl. & R. 120; Evans v. Kymer, 1 Barn. & Adol. 528.

97 Goggerley v. Cuthbert, 2 Bos. & P. (N. S.) 170. So, for stolen United States treasury notes. Vermilye v. Express Co., 21 Wall. 138. So, against a purchaser after maturity from a pledgee who transferred the bill fraudulently after payment of the debt secured. Wood v. McKean, 64 Iowa, 16, 19 N. W. 817. Or against the purchaser after maturity of a note which had been lost and was not indorsed. Weathered v. Smith, 9 Tex. 622.

98 Fancourt v. Bull, 1 Bing. N. C. 681.

99 Treuttel v. Barandon, 8 Taunt. 100.

100 Keutgen v. Parks, 2 Sandf. (N. Y.) 60.

101 But an equitable owner could not bring trover. Garvin v. Wiswell, 83 Ill. 215.

102 Lovell v. Martin, 4 Taunt. 799.

103 Abrahams v. Bank, 1 S. C. 441. So, trover lies against a corporation for bank notes detained by its agent. Yarborough v. Bank, 16 East, 6. And the receipt of part of the amount from the defendant is no waiver, but reduces the damages pro tanto. Burn v. Morris, 2 Cromp. & M. 579.

104 Down v. Halling, 6 Dowl. & R. 455, 4 Barn. & C. 330, and 2 Car. & P. 11. 105 Greenstreet v. Carr, 1 Camp. 551.

106 Beckwith v. Corrall, 2 Car. & P. 261.

107 Johnson v. Windle, 3 Bing. N. C. 223, Shaffer v.

McKee, 19 Ohio St.

Bona Fide Holder of Stolen Bill.

§ 1683. Where negotiable securities are stolen, the owner may pursue them, and the proceeds of them, until they reach the hands of a bona fide holder for value before maturity.10 But trover will not lie for them against such holder,109 although he may have purchased directly from the thief.110 But a bona fide holder, who has received them by way of collateral, will only be protected as such to the extent of the debt secured.111 Where an agent has collected the security, and paid it over in good faith to his principal, the amount cannot be recovered from him.112 The owner of stolen bank notes, in like manner, cannot recover them in trover from a bona fide purchaser.113

But, where a negotiable instrument has been fraudulently disposed of by the owner's agent, and an action is brought by the owner against the holder, proof of the fraud will throw on the holder the burden of proving his good faith.114 So, in an action of trover for a lost note, the burden as to good faith is thrown upon the defendant by proof of the loss,115 the fact of good faith being for the jury to determine.116

526.

Although he has received the payment as collecting agent, and has paid it over in good faith to his principal. Johnson v. Bank, 6 Hun (N. Y.) 124. Case v. Association, 4 N. Y. 166.

168 Newton v. Porter, 69 N. Y. 133; 109 Collins v. Martin, 1 Bos. & P. 648; Black River Ins. Co. v. New York State Loan & Trust Co., 73 N. Y. 282. Especially where the loss was due to the plaintiff's own neglect. Morrison v. Buchanan, 6 Car. & P. 18. So, where a collateral note was freely surrendered by the pledgee "to be made good" before 3 p. m., and was fraudulently returned by the pledgor to the maker, who was ignorant of the agreement. Citizens' Nat. Bank of Baltimore v. Hooper, 47 Md. 88.

110 Jones v. Nellis, 41 Ill. 482; Murray v. Lardner, 2 Wall. 110; Dutchess Co. Mut. Ins. Co. v. Hachfield, 73 N. Y. 226.

111 Baldwin v. Ely, 9 How. 580. And see § 1731, infra.

112 Simpson v. Garland, 76 Me. 203. So, an interest coupon. Spooner v. Holmes, 102 Mass. 503.

113 Lowndes v. Anderson, 13 East, 130, 1 Rose, 99; Miller v. Race, 1 Burrows, 452; Snow v. Sadler, 11 Moore, 506.

114 Merchants' & Planters' Nat. Bank v. Trustees Masonic Hall, 62 Ga. 271. And see § 1026, supra.

115 Nicholson v. Patton, 13 La. 213; Matthews v. Poythress, 4 Ga. 287.

116 Solomons v. Bank, 13 East, 135, note; King v. Milsom, 2 Camp. 5;

Damages in Trover.

119

§ 1684. The damages recoverable in an action of trover are measured by the value of the bill at the time of its conversion.117 The actual value is to be considered, and that is prima facie the amount due for principal and interest on the bill.118 And it has been held that interest should be reckoned up to the verdict.1: The face value is a general indication of the actual value, but may be modified by reason of payment on account, insolvency of the maker, or other lawful defense, diminishing the value, or affecting the validity, of the bill.120 Its nominal value may be recovered, if shown to be available as such to the owner, although the maker may have no property within reach of execution.121 And where a bill is deposited by a bankrupt to secure another person as surety on the bankrupt's bond, and the depositary refuses to surrender it to the assignee on his tender of the bond canceled, and afterwards raises upon it a sum equal to half its face, he will be liable to the assignee in trover for the whole face of the bill.122 But where an accommodation maker recovers in trover against the payee for a fraudulent diversion, after satisfying the note in the hands of a bona fide holder by a transfer of land, his damages will be measured by the value.

Strange v. Wigney, 6 Bing. 677; Snow v. Leatham, 2 Car. & P. 314. §§ 1000, 1025, supra.

And see

117 Byles, Bills, 412; King v. Ham, 6 Allen (Mass.) 298. And.see § 1732, infra.

118 Booth v. Powers, 56 N. Y. 22, reversing 59 Barb. (N. Y.) 331; Potter v. Bank, 28 N. Y. 641; Mercer v. Jones, 3 Camp. 477; McPeters v. Phillips, 46 Ala. 496; Zeigler v. Wells, 23 Cal. 179; Menkens v. Menkens, 23 Mo. 252; Bredow v. Institution, 28 Mo. 181.

119 So held, as to bank notes, in Greenfield Bank v. Leavitt, 17 Pick. (Mass.) 1. And as to notes in general, in St. John v. O'Connel, 7 Port. (Ala.) 466. And the jury may include interest, though not averred in the declaration, and although no special damage is claimed. Paine v. Pritchard, 2 Car. & P. 558. 120 Thayer v. Manley, 73 N. Y. 305. And evidence is admissible tending to

show that the bill was not valid. Zeigler v. Wells, 23 Cal. 179. Or that the maker was insolvent. Latham v. Brown, 16 Iowa, 118; McPeters v. Phillips, 46 Ala. 496.

121 Rose v. Lewis, 10 Mich. 483.

122 Alsager v. Close, 10 Mees. & W. 576.

of the land transferred.123 And, in general, the damages recoverable in trover will not exceed the amount due on the bill at the time of the verdict.124 The recovery in trover and payment of the damages awarded devest the property of the plaintiff in the bill, and vest it in the defendant.125

Equity Proceedings-General Principles.

§ 1685. A court of equity has jurisdiction only where legal remedies fail.120 It may, by creditors' bill, enforce a judgment against lands of the defendants (where that is necessary), but in so doing it must preserve the successive rights of the parties to the bill.127 Where a note is secured by mortgage, however, the holder may

123 Hynes v. Patterson, 28 Hun (N. Y.) 528, affirmed in 95 N. Y. 1.

124 H. S. Benjamin Wagon & Carriage Co. v. Merchants' Exch. Bank, 63 Wis. 470, 23 N. W. 592. But, if a bond is payable in gold, its gold value is recoverable. Simpkins v. Low, 49 Barb. (N. Y.) 382. And it has been held that a special value, known to the defendant, and represented by its market value, may be recovered. Griffith v. Burden, 35 Iowa, 138.

125 Byles, Bills, 412; Willomatt, 1 C. B. 672. herd, 3 C. B. 266.

Holmes v. Wilson, 10 Adol. & E. 511; Cooper v.
From the period of the conversion. Cooper v. Shep-

126 Bank of U. S. v. Weisiger, 2 Pet. 331. Thus, it will not lie to recover the amount of a note which the defendant has wrongfully gotten into his possession, and holds against the rightful owner. Searcy v. Miller, 57 Iowa, 613, 10 N., W. 912. Nor to enforce a note in favor of the deceased payee's widow (who might sue at law in the administrator's name). Nash v. Hogan, 45 N. J. Eq. 108, 16 Atl. 433. Nor to enforce a note against the heirs of the deceased maker (the statute giving a remedy purely legal). Edwards v. McClave, 55 N. J. Eq. 151, 35 Atl. 829. Nor to enforce an agent's lien upon stock scrip for advances, when the collateral was in his own control. Whitteker v. Gas Co., 16 W. Va. 717. Nor for specific performance of an agreement to give a note for a machine purchased. Johnson v. Hoover, 72 Ind. 395. But see Henderson v. Johns, 13 Colo. 280, 22 Pac. 461, contra. And equity may enforce an indorsement made in trust for a specific purpose. Lawatsch v. Cooney, 86 Hun, 546, 33 N. Y. Supp. 775. Or the obligor's stipulation in a bond for its registration at holder's option. Benwell v. City of Newark, 55 N. J. Eq. 260, 36 Atl. 668. And a court having both law and equity powers may entertain proceedings for specific performance of an agreement to accept a bill, and award damages as at law. Larios v. Gurety, L. R. 5 P. C. 346.

127 Shenandoah Val. Nat. Bank v. Bates, 20 W. Va. 210.