Francia v. Joseph

3 Edw. Ch. 182

• Court: New York Court of Chancery
• Decided: February 19, 1838
• Status: Published

Opinion

The Vice-Chancellor :

By delivering the note of Mel & Co. to Oddie, the complainants did not part with the right of property in the note. It was still their note in Oddie’s hands, until he parted with it for the purpose and in the way for which' 'It was intrusted to him, namely, that of procuring it to be discounted for the complainants’ use. Any other disposition or appropriation which Oddie might make of the note was a breach of trust on his part and a fraud on the complainants.

The proofs very clearly show that the note was delivered to Oddie for the specific purpose of procuring it to be discounted and of bringing the money to the complainants, and he had no right or authority, therefore, to appropriate it to himself or to pledge or hypothecate it for his own debt or purposes. It satisfactorily appears also, that Oddie did hypothecate it with the defendants as collateral security for a pre-existing dojff of two thousand dollars, which he owed to them. This was the only consideration on which the transfer and delivery of the note to ^ the defendants took place. The latter made no fresh advances, nor did they part with any goods or other thing of value on the strength and credit of the note at the time of receiving it. Hence they are not bona fide holders of this note as if received in the course of trade or business for valuable consideration within the rule established in Bay v. Coddington, 20 J. R. 637, and followed in subsequent cases, (Wardell v. Howell, 9 Wend. 170; Rosa v. Brotherton, 10 Wend. 85 ; and Smith v. Van Loan, 16 Wend. 659.) True, the defendants say they granted forbearance or time to Oddie for the payment of the two thousand dollars and were diverted from the immediate pursuit of their remedy against him, which they would have taken if they had not got hold of this note or if they had received notice from the complainants that the note belonged to them. But, this is not enough to give them a right to hold it. In Wardell v. Howell it was expressly held that such circumstances did not constitute that valuable consideration which the policy of the law requires in order to give\fte holder a title against him who has been defrauded out of the bill or note. So, I think the circumstance of their returning to Oddie the Burrówes note is not enough. It was not paying a present value as a consideration for the note of Mel & Co. They gave up the one note because they deemed the other two which they received sufficient security for their debt.

Again, the taking a judgment by confession against Oddie in favor of the complainants at the time of his failure is relied on. But it does not appear that the amount of the note in question was included in the judgment or that the complainants have thereby obtained any satisfaction for it. This objection therefore is of no avail.

Decree, that the defendants deliver up the note, with costs to the complainants to be taxed.