November Howe, The arrangements between the bank and the payee 1876. afford no defence to the maker. The pledge having Term. been given up, it is as to him as if it had never existed. He is not liable to the bauk; and when he has paid Knox & Co and satisfied the plaintiff, he is completely discharged from the note; and no one who is or ever was in- Carrington terested in it can have any cause of complaint." V. Ould & Bartlett & V. The case of Richardson v. Lincoln, 5 Metc. R. 201, sustains the same doctrine of a constructive delivery. Same. There Chief Justice Shaw, who it will be agreed is good authority, said: "In this case the note was in the keeping of Mr. Williams, as the attorney of the promisee, and he was then his agent. But when Richardson, the promisee, negotiated the note to his daughter, and left it in Mr. Williams' custody for her use, he thereby consented to hold it for her, and became her agent, and brought an action on it in her name, which she sanctioned by original order or subsequent ratification. This is abundant proof of actual transfer and constructive delivery, and makes her holder and endorsee of the note, although she never saw it." And in another place the learned chief justice says: "A constructive delivery is sufficient; and even in case of the sale of goods deposited in the hands of a third person, a contract of sale, with an order on the depositary to deliver them to the vendee, is a good constructive delivery. In Mitchell v. Byrne, 6 Rich. R. 171, the controversy was between attaching creditors on the one hand, and certain plaintiffs claiming to be holders of the bill for value on the other. The important question was to determine when the plaintiff's became such holders. The bills had been mailed to the plaintiffs, but had not reached them on the day of levying the attachment, the 5th December 1850. The supreme court of South VOL. XXVIII-2 November 1876. Carolina held, that so soon as the bills were mailed to Term. the plaintiffs they became the owners thereof, with immediate right of action thereon, and that it was not Knox &Co necessary that the plaintiff, at the time of commencing his action, should have the possession of the bill. It Carrington is sufficient that he is the owner. Howe, V. Ould & v. Bartlett & If in that case the court, at the instance of the atRobins taching creditors, had interfered and prevented the Same. plaintiffs getting possession, it can hardly be supposed that this act would defeat a title previously acquired. If by the mailing the plaintiffs become the owners, then no act of a third person could defeat the rights. thus acquired. The case of the King v. Lambton et als., 5 Price 428, 444, 2 Eng. Exch. R. 276, affirms the same doctrine as the South Carolina decision. The case of Lysaght v. Bryant, 67 Eng. C. L. R. 46, is, perhaps, a stronger authority upon the same subject. There Lysaght & Smithell carried on business in partnership. Being indebted to Lysaght, the elder, one of the firm, who acted as agent of the creditor, with the concurrence of his partner, endorsed a bill of exchange in the name of the firm, and placed it amongst the securities which he held for the treditor; but the fact was never communicated to the creditor. He was not informed either of the indorsement or of the deposit of the bill among securities held for his benefit; and yet it was decided that this was a good endorsement by the firm to the creditor. This decision was made by the unanimous opinion of the judges of the common pleas. Numerous decisions in reference to deeds show the reluctance of the courts to permit mere technicalities with respect to delivery to defeat the intent of the parties, and the manifest justice of the case. Thus in Hedge v. Drew, 12 Pick. R. 141, it was held that a de November livery of the deed by a father to a third person for the 1876. use of a daughter, and her subsequent assent to it, was Term. a good delivery to pass real estate. Howe, V. Robins In Dargan v. Richardson, 1 Cheves' Law R. 197, the Knox &Co plaintiff, as security for one Long, had paid money on Ould & his account. Long being about to leave the state, ad- Carrington dressed a letter to the plaintiff making an assignment Bartlett & to him of all his goods as an indemnity. After the date of the letter, but before it reached the plaintiff, Same. attachments were levied upon the goods. It was held that the assignment was good against the attaching creditors. And in Hutchison & wife v. Rust, 2 Gratt. R. 394, the deed was acknowledged before a justice, but retained in the possession of the grantor. And yet this court held it a good delivery, it being manifest that the grantor intended to hold it for the benefit of the grantee. According to all the authorities the delivery of a deed is complete when the grantor has parted with his dominion over it, with intent it shall pass to the grantee, if the latter assents to it by himself or his agent. I do not say there is a perfect analogy between deeds and negotiable instruments. But as between the endorsee for value, or one claiming to be such, and a third person, asserting a mere statutory lien, substantially the same rules should apply to both classes of in struments. The transfer of negotiable paper is not by force of any statute, but is regulated purely by usage, and that usage is founded on convenience. The reasons, or one of the reasons for requiring the delivery of such securities in order to confer a perfect title, is that it would be very inconvenient to separate the evidence of ownership from the bill or note itself. The maker, upon paying the same, has the right to demand the sur V. November Term. Howe, V. Robins V. Same. 1876. render of the bill or note, for his own protection. Otherwise he could never pay with entire safety. Besides he would never know whom to pay where the Knox &Co possession is separate from the title. It will thus be seen that one ground of the rule is the security of the Ould & Carrington maker. Another is the unrestricted circulation of Bartlett & such paper, so that the bona fide holder for value may be secure in his title and his possession. These rules of the law merchant requiring delivery are of course moulded to suit the convenience and necessities of mankind. When the reason for requiring actual delivery ceases, the rule no longer applies. If, for example, the note is in possession of one as an agent or attorney, who acknowledges the title of another, the owner may negotiate it as effectually as though he had the actual possession, and the transferree will acquire a perfect title although he may never see the note. No one will contend that in such case a loss of the note by robbery, or by fire, or even by the adverse claim of another, would defeat the title of the transferee. It is his note that is stolen, or destroyed, and not that of the seller. Whether, therefore, the purchaser or endorsee has acquired such possession, actual or constructive, as is sufficient for all the purposes of the transfer, must always depend upon the particular circumstances of each case. If, in the case before us, Strong had gone with Ould & Carrington to the bank and requested the latter to hold the note for the benefit of the former, the note would have been fully negotiated. There is no doubt but the owner may pledge the bill or note, and then negotiate it, subject only to the lien of the pledge. The transferree must of course have the possession or control of the paper when payment is demanded or a recovery is had. As already stated the bank asserted no 1876. November Howe, Ould & Robins V. Same. claim to the note at the time; it recognized the transfer and the title of the purchaser. So that the Term. case presented is one in which the pledgee so far from asserting a lien waives it in favor of the endorsee. Knox & Co How then does the mere existence of an attachment V. prevent the operation of these principles of law. It Carrington certainly cannot affect the result as between Ould & Bartlett & Carrington and the maker. The latter cannot complain. By the terms of his contract he is answerable to the payee or to his order, and according to its legal effect to the order of any other holder. His obligation is to pay the holder, whoever he may be, at the ma- . turity of the note in 1876. Besides, the maker has had his day in court, and is no longer concerned in the decision. The transfer of title is complete as to him, as to Strong, and as to the bank, and was so complete on the 8th June 1866, the day of the transfer. If the transaction between these parties on that day was complete, leaving nothing to be done as between them to vest the title, the existence of the attachment could not affect the title unless Ould & Carrington at that time had notice of it. They would have obtained actual possession of the note long ago but for the interference of the court at the instance of the attaching creditor. In determining the rights of the parties, however, one must look not to what has since occurred, but to the facts as they existed on the day the transfer was made, and the bank notified. The attaching creditors cannot by invoking the aid of the court to wrest the note from the bank, and thus prevent its recovery by the endorsee, change the rights and obligations of the parties as they previously existed. My opinion therefore, is, that Ould & Carrington were, on the 8th of June 1866, endorsees for value without notice of the attachment. However |