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necessary steps with all reasonable diligence to secure a speedy
resort to that court in behalf of the surety ; as the consequences
of delay would justly fall upon the holder, so far as the indorser
or any other party standing in that relation upon the paper is
concerned, (j)



SECTION III.

RIGHTS AND LIABILITIES OF FINDER.

Having considered so far the duties of the owner upon the
loss or theft of his note, we will turn to the respective rights
and liabilities of the finder, the assignee of the finder, and the
loser. The finder of a lost bill or note has no title to it whatso-
ever, as against the real owner. Accordingly, trover may be
maintained against him by the owner for the note itself, or for
its amount, for in this respect, mercantile paper is like any other
property, (/t)

But to maintain this action, the note must be traced, and its
identity ascertained ; the question of identity being left with the



until the loss was proved in an action, and security found against its reappear-
ance."

(j) Smith V. Rockwell, 2 Hill, 482.

(k) Anonymous, 1 Salk. 126, 3 Salk. 71 ; Lucas v. Haynes, 1 Salk. 1.30, 2 Ld.
Raym. 871 ; Greenstreet v. Carr, I Camp. 551 ; Adkins v. Blake, 2 J. J. Marsh, 40.



2b4 KOTES AND BILLS. [CIL IX.

jury.(/) It lias also been held, that, in such cases, it is not
enough for the plaintifT to prove his own title, and that after-
wards the defendant converted it, but so much suspicion must be
thrown upon his conduct in the transfer, as to render it neces-
sary for him to prove consideration. For the legal jjresuniption
is that the holder of a note is not its finder, but its transfciee for
value. (w) But when there is no question as to the conversion
by the finder, the loser may recover without tlic strongest proof
of his own title. (w)

The question may also be asked, bow far a finder of bills or
coin, who has used them, is liable to the owner for their value.
We should say decidedly, that he is fully liable, unless he can
show that he did all that could reasonably be asked, by the use
of proper means, and by delay, to preserve them for the owner ;
and only when all these means were unavailing, had used them.

And we should say further, that even then he would be clearly
liable to the owner, but the value of the services or expense in-
curred by finding, or perhaps in trying to find an owner, should
be deducted from the amount of the note. The general rule
must be, that the finder should be liable to the owner, so far as
he could be made so without being prejudiced by the finding and
proper use of the bills or coins, and no further.

The finder, however, has no lien in any case,(o) (as in the
civil law,) but a finder of other property than bills, as is held by
high authorities, may maintain assumpsit for his reasonable and
proper expenses on account of the thing found. (/?) If so, in an

(?) Burn V. Morris, 2 Cromp. & M. 579.

(m) King v. Milsom, 2 Camp. b.

(n) Greenstreet v. Carr, 1 Camp. 551 ; Holiday »• Sij;il, 2 Car. & P. 176. It was
proved in Greenstreet v. Carr, that the defendant liad piclced up a pocket-book contain-
ing the notes ; and the only question raised was, whether there was sufficient evidence
that they were the property of the plaintiffs. A banker's clerk swore that he had de-
livered those notes in payment of a check payable to '' R. Greenstreet or bearer" ; but
he could not state to whom. This was held to be prima facie evidence of property,
and plaintiff recovered. In Holiday v. Sigil, Abbott, C. J. said to the jury : " The
question to be considered is, whether you are satisfied that the plaintiff lost this note,
and that the defendant found it; for if you are, the plaintiff is entitled to your ver-
dict I should observe that it is scarcely possible for a plaintiff, when his property is
stolen, or accidentally lost, to prove the loss by direct evidence ; and therefore, that
must in almost all cases be made out by circumstances."

(o) Binstead v. Buck, 2 W. Bl. 1117 ; Nicholson v. Chapman, 2 H. Bl. 254.

(/;) In Reeder v. Anderson, 4 Dana, 19-3, the court said: "It seems to us that there,
is an implied request from the owner to all other persons, to endeavor to secure to him



CH. IX.] RIGHTS AND LIABILITIES OF FINDER. 265

action upon lost bills, such expenses would probably be set off
against the owner's claim. We do not perceive why a greater
deduction than this should be made, for the money has been
used by the finder, and is plainly so much had and received to
the use of the owner.

Where no question is made as to the expenses of the finder,
he is liable for the full value of the bill which he has sold to a
purchaser, or received payment of from the acceptor. (^) And
this is true, though payment of full value, in due course of
business, to a finder or thief, vests complete property in the
purchaser or discounter who takes the bill without knowledge
of the loss or theft, (r)

The finder cannot sue the acceptor or maker for the amount
of the note, but he probably has enough property in it as con-
structive bailee, to sue anybody who tortiously converts it,
except the owner ; but this point, so far as notes and bills are
concerned, has not been adjudicated.

The thief of a stolen note has obviously no property or title in
it himself,(5) although one ignorant of the theft may derive title
from him. A bailee who tortiously converts the note or bill left
in his keeping has no title to it, and may be sued in trover, or in
case for money had and received. (/) And it makes no differ-
ence, in such cases, whether the owner was himself the bailor, or
whether his clerk or agent performed the act of bailment and as-
sisted the detention.

lost property, which he is anxious to retrieve ; and that, therefore, there should he an
implied undertaking to (at least) indemnify any person who shall, by the expenditure
of time or money, contribute to a reclamation of the lost property." See alsoi/ic<«7n in
Nicholson v. Chapman, 2 H. Bl 2.54.

(q) Holiday v. Sigil, 2 Car. & P. 176.

(r) See post, p. 268, et seq.

(s) Martin v. Bank of U. S., 4 Wash. C C. 2.53.

(t) Fancourt v. Bull, 1 Bing. N. C. 681 ; Knight v. Legh, 4 Bing. 589 ; Paterson v.
Hardacre, 4 Taunt. 114; Haynes v Foster, 4 Tyrw. 65 ; Cranch v. White, I Bing.
N. C. 414 ; Bleaden v. Charles, 7 Bing. 246 ; Evans v. Kymer, 1 B. & Ad. 528 ; Marston
i;. Allen, 8 M. & W. 494 ; Palmer v. Richards, 1 Eng. L. & Eq. 529 ; Garlock r. Geort-
ner, 7 Wend. 198. In Bleaden v. Charles, A, the plaintiff's debtor, deposited witli the
defendant, as a security for goods sold, a bill accepted hy plaintiff, for which plaintiff
had received no value. A afterwards paid for the goods, and asked for the restoration
of the bill ; but the defendant indorsed it for value to B, who sued the plaintiff and
recovered. Held, that the plaintiff might recover the amount of the bill in an action
for money paid to the use of the defendant, but not the costs of the action by B against
plaintiff. See Collins v. Martin, 1 Bos. & P. 648.

VOL. II. 23



2t3li KOTES AND BILLS. [CH. IX.

On similar ground trover will lie l)y the bona fide holder for
full value, who must he the real owner, against a hanker, who,
receiving the hill to he cashed, detains it for the reason that it
has heen stolen, (y) The same tiling is true if the maker of a
note wrongfully seizes and detains it when presented to him for
payment. (/^;) .So, if a hill he lost hy the drawee, to wliom it has
heen delivered for acceptance, the payee may have trover for its
recovery, (a;)

The mala fide assignee of the finder, or the rohher of negotiable
paper, acquires no title to it as against the owner, or any party
legally claiming under him. And, speaking generally, whoever
had knowledge of the failure of his assignor's title in a note,
takes no stronger title therein himself. Hence, a lost or stolen
note may always be pursued into the hands of its mala fide
transferee, (y) either by trover or assumpsit, or by an action for
money had and received, (s) But the notes must be traced, and



(v) De la Chaumette v. Bank of England, 9 B. & C. 208, 2 B. & Ad. 385 ; Miller
V. Race, 1 Burr. 452.

(w) Gray v. Kernahan, 4 Const. R. 65 ; Knight v. Legh, 4 Bing. 589 ; Reynolds v.
French, 8 Vt. 85 ; Edgell v. Stanford, 6 Vt. 551. With regard to dispensing with no-
tice to produce, in suits against fraudulent or wrongful possessors of notes, see post,
p. 292, note s.

(x) Lucas V. Haynes, 1 Salk. 130, 2 Ld. Raym. 871.

(y) Clarke v. Shee, 1 Cowp. 197; s. c. nom. Clarke v. Johnson, Lotft, 756; Burn r.
Morris, 2 Cronip. & M. 579, 4 Tyrw. 485 ; Hinton's Case, 2 Show. 235 ; Fancourt v.
Bull, 1 Bing. N. C. 681 ; Cranch v. White, id. 414; Downe v. Hailing, 2 Car. & P.
11,2 Dow. & R. 455 ; Snow v. Lcatham, 2 Car. & P. 314 ; Lovell v. Martin, 4 Taunt.
799 ; Heath v. Sansom, 2 B. & Ad. 291 ; Smith v. Braine, 16 Q. B. 244; Mason v.
Waitc, 17 Mass. 560; Kingman v. Pierce, id. 247 ; Patton v. State Bank, 2 Nott &
McC. 464 ; Henderson v. Irby, 1 Speers, 43 ; Munson v. Cheesborough, 6 Blackf 17 ;
Small V. Smith, 1 Denio, 583. In Hinton's case (1682), Pemberton, C.J. said that, if
the holder of a bill " come to be bearer by casualty or knavery, he shall not have the
benefit of it." In Clarke v. Shee, Lord Mansfield declared, " where money or
notes are paid Imia fide, and upon a valuable consideration, they never shall be brought
back by the true owner ; but where they come mala fide into a person's hands, they
are in the nature of specific property." As to what is mala fides, and the evidence of
negligence, see post, p. 268, et seq.

[z) "It is true, in such a case, trover would have been the proper action; and, per-
haps, would have been the better action in this case, but for the difficulty of identify-
ing bank-notes. We do not see, however, why the action for money had and received
will not lie. The notes were paid and received as money ; and as to any want of priv-
ity, or any implied promise, the law seems to be, that where one has received the money
of another, and has not a right conscientiously to retain it, the law implies a j:Tomise
that he will pay it over." Per Parker, C. J., Mason v. Waite, 17 Mass. 560



CII. IX.] RIGHTS AND LIABILITIES OF FINDER. 267

their identity thoroughly established. (a) And it makes no dif-
ference whether tlie assignee is a discounter or a trader, that is,
whether he gave in exchange cash or merchandise.

It is only the innocent taker of bank-bills, lost or stolen, who
acquires title to them. And it may be a question, whether a re-
ceiver who knew or believed that the bills had been found, and
that the finder had done what he could to restore them, and now
honestly used them, would be regarded as an innocent taker un-
der this rule of law.

We do not know that this question has passed under adjudica-
tion. We should say, however, on principle, that whether the
payment were made in bills or in coin, a receiver who had knowl-
edge that the payor had found the bills or coin would not have
all the rights of a bona fide holder, but would be liable for their
value to the actual owner, in the same manner in which the
finder would have been, had he retained them in his own hands.

In the case of an orduiary bill, the reason for this conclusion
would be still stronger, because the finder might at once resort
to the original parties on the face of the bill, and through them
trace out the owner ; and until this was accomplished, tlic finder
could not be said to have made all possible search for the
loser.

It has been held, that although the allowance and approval of
a negotiable instrument, as a claim against the estate of the
maker, will not destroy its negotiability, yet it seems it would
subject it when assigned, to defences against it in the hands of
the assignor ; and if lost or stolen, or if it have otherwise come
unlawfully into the possession of a holder, it is subject to a recov-
ery from his hands, or from any holder for value, by the true
owner. (6)

The bona fide assignee for value of lost or stolen negotiable
notes and checks, has a valid and complete title in them, even
though his transferrer had no title whatever. This transferrer



(a) " If their identity can be traced and ascertained, the party has a rij^ht to recover.
It is of public benefit and example that he sliould ; bat otherwise, if they cannot be
followed and identified, because there it might be inconvenient, and open a door to
fraud. Miller v. Race, 1 Burr. 4.52 ; and in Golightly v. Reynolds, the identity was
traced through different hands and shops." Clarke v. Shee, 1 Cowp. 197; Burn t.
Morris, 2 Cromp. & M. 579 ; Mason v. Waitc, 17 Mass. 560, ante, p. 266, note z.

[h) Weathered v. Smith, 9 Texas, 622.



2Q'ii NOTES AND BILLS. [f'H. IX.

may bo tlic finder, the thief, the bailee, (c) or the tortious
agent or factor (d) of the owner. Such a holder for value,
being without knowledge of the loss, theft, or fratid when he
takes the paper, may recover the amount from the acceptor
or other parties liable, and tiie loser has no remedy wiiatever
against the holder. Tliis rule excepts negotiable paper from
the universal principle witii regard to other property, namely,
that only he who has a title himself to a personal chattel
can convey one to another. (f?) The leading case which first (/)
decisively laid down this doctrine was decided in the year
1798. (^) A bank-note, payable to bearer, was stolen from the
mail, and on the day after came into the hands of the plain-
tiff for a full and valual)le consideration, and in the usual
course of business, and without any notice or knowledge of
the bank-note being taken out of the mail. It was held, that
the plaintiff might recover the note from a clerk in tlie bank,
who had detained the note when presented for payment. Lord
Mansfield said, that " he had no sort of doubt but that this
action was well brought, and would lie against the defendant
in the present case, upon the general course of business, and
from the consequences to trade and commerce, which would
be much incommoded by a contrary determination." This
cogent reason of the " general course of business " is reiterated
by Lord Mansfield, it being precisely the reason urged by Lord



(c) See cases quoted supra, p. 265, note t.

(d) Johnson v. Windle, 3 Bing. N. C. 225, 2 Hodges, 202 ; Wookey v. Pole, 4 B. &
Aid. 1,15; Bay v. Coddington, 5 Johns. Ch. 54 ; Coddington v. Bay, 20 Johns. 637 ;
Greneaux v. Wheeler, 6 Texas, 515. So the assij^nor may be the curator of an estate.
McKinney v. Beeson, 14 La. 255.

(e) According to the same rule, it has been held, that trover will not lie against the
bona Jxde holder of an annuity ticket, which had been lost by or stolen from a former
proprietor, if such ticket has been regularly transferred to such holder, pursuant to the
statute by which it was issued. Devallar f. Herring, 9 Mod. 44. See Leer. Newsam,
Dow. & ii. N. P. 50.

{ /■) In Hinton's Case, 2 Show. 235, which was an action against the drawer of a bill
payable to bearer, it was held that the plaintiff •' must intitle himself to it on a valuable
consideration, though among bankers they never make indorsements in such case; for
if he come to be bearer by casualty or knavery, he shall not have the benefit of it " In
Anonymous, 1 Salk. 126, a bank-bill payable to A or bearer, being given to A and
lost, was found by a stranger, and transferred for value to C. HoH, C. J. held that "A
cannot maintain trover against C by reason of the course of trade, which creates a
property in the assignee or bearer." This was in the year 169S.

[g) Miller n. Race, 1 Burr. 452, 1 Smith, Lead. Cas. 2.50.



CH. IX.] RIGHTS AND LIABILITIKS OF FINDER. 269

JIolt,(//) sixty years before. It was declared by Lord Mansfield,
that, if there had been any collusion, or any circumstances of
unfair dealing, the case would have been otherwise. His Lord-
ship adds, that a bank-bill " never shall be followed into the
hands of a person who bona fide took it in the course of cur-
rency, and in the way of his business," for " a bank-note is
constantly and universally, both at home and abroad, treated
as money, as cash ; and paid and received as cash ; and it is
necessary, for the purposes of commerce, that their currency
should be established and secured." Lord Mansfield's doctrine
in this case has been adopted in numerous other cases, both
in England and in this country, (i)

The title of a bona fide holder for value of a bill acquired
before it was due being thus absolutely established, the next
great question obviously was, what shall be proof or presumptive
proof of mala fides. The earlier cases (y) seem to have nega-
tively implied, without finding it necessary to decide the ques-
tion, that undue negligence in taking a suspicious note would

(h) Anonymous, 1 Salk. 126.

(t) The next case after Miller v. Race, 1 Burr. 452, was Grant v. Vaughan (year
1764), 3 Burr. 1516, 1 W. Bl. 485, in which the plaintiff was allowed to recover, be-
cause he took a lost note " fairly and bona fide in the course of trade, and even with
the greatest caution : he made inquiry about it, and then gave the change for it. And
there is not the least imputation or pretence of suspicion, that he had any notice of
its being a lost note." Next, in Peacock v. Rhodes (year 1781), 2 Doug. 633, Lord
Mansfield affirmed his two former decisions, and said : " The law is settled, that a
holder, coming fairly by a bill or note, has nothing to do with the transaction between
the original parties ; unless, perhaps, in the single case (which is a hard one, but has
been determined), of a note for money won at play." Lawson v. Weston, 4 Esp. 56,
decided in 1801, carried the doctrine of Miller v. Race to a great length. In Lowndes
D.Anderson, 13 East, 130, 1 Rose, 99 (decided 1810), Lord EUenborough said: "It
would be a grievous inconvenience if bank-notes could be followed in the manner now
attempted through the hands of bona fide holders for a valuable consideration, without
notice." The rest of the court concurred. In Solomons v. Bank of England, 13
East, 135, note, the same doctrine was reiterated. But when suspicious circumstances
in the tran.-;fer were shown, Lord Kenyan left it to the jury to say whether such evidence
proved the plaintiff privy to the original fraud. The doctrine of Miller v Race was
also applied to a transfer obtained by forgery, in Price v. Neal, 3 Burr. 1354, 1 W.
Bl. 390. And see Wookey v. Pole, 4 B. & Aid. 1, 15. In a late case, when an agree-
ment was made to the acceptor, to deliver up certain bills drawn in set>s, and the first
set only was given up, the other two being accidentally miscarried, it was held, that the
agreement was not performed, because the defendant would still be liable to the bona
fide holder for the value of the missing sets. Kearney v. West Granada, &c. Mining
Co., I H. & N 412, 38 Eng. L. & Eq. 327.

(j) See the cases in note i.
23*



270 NOTES AND BILLS. [CH. IX.

defeat the receiver's title. But a contrary doctrine was laid
down by Lord Kenyon,(/c) namely, that it is not enough to prove
against the receiver for value of negotial)le ])a|)er that he has
not been properly diligent in inquiring the title of his transferrer.
Actual mala fides will alone destroy his title. The next step
was taken by Lord Tentcrden, in a case to whicli we have else-
where referred ; he laid down the rule, that the title of the
holder of negotiable paper would not be protected, where he
had acquired it under circumstances which ought to have ex-
cited the suspicions of an ordinarily prudent and careful man.(/)



(k) Lawson v. Weston, 4 Esp. .56. The bill having been lost and advertised in the
newspapers, was discounted by the plaintiff, a banker, for a stranger, who was desired
to put his name on the back of the bill, and did so. No inquiry was made as to his
ownership. Accordingly, the counsel for the defendants, the acceptors, insisted that
" a banker, or any other, should not discount a bill for a person unknown without us-
ing diligence to inquire into the circumstances, as well respecting the bill as of the
person who offered to discount it." But Lord Keuijon said : " If there was any fraud
in the transaction, or if a bona fide consideration had not been paid for the bill by the
plaintiffs, to be sure they could not recover; but to adopt the principle of the defence
to the full extent stated would be at once to paralyze the circulation of all the paper
in the country, and with it all its commerce. The circumstance of the bill having been
lost might have been material, if they could bring knowledge of that fact home to the
plaintiffs. The plaintiffs might or might not have seen the advertisement ; and it
would be going great length to say that a banker was bound to make inquiry concern-
ing every bill brought to him to discount; it would apply as well to a bill for £ 10 as
for £10.000." Compare the same judge's opinion in Solomons v. Bank of England,
3 East, 13.5, note, supra, note i.

(I) Gill V. Cubitt, 3 B. & C. 466, 5 Dow. & R. 324, 1 Car. & P. 487. The bill was
stolen during the night, and discounted next morning by a person whose name was
unknown to the broker, but whose features were known, and the latter discounted the
bill as usual without further inquiries. Abbott, C. J. asked the jury whether the plain-
tiff took the bill under circumstances which ought to have excited the suspicion of a
prudent and careful man. If so, then, though he gave its full value for it, they must
find a verdict against him. They found for the defendant. In overruling Lawson v.
Weston, 4 Esp. .56, Abbott, C. J. said : " It appears to me to be for the interest of com-
merce, that no person should take a security of this kind from another, without using
reasonable caution." Bayletj, J. said : " If there was not due caution used, the plain-
tiff has not discounted this bill in the usual and ordinary course of business I con-
sider it was parcel of the bona Jides whether the plaintiff had asked all those questions
which, in the ordinary and proper manner in which trade is conducted, a party ought to

ask A party cannot in law be considered to act bonajide, or with due caution and

due diligence, if he takes a bill of exchange from a person whose features alone he
knows, without knowing what his name is, where he lives, or whether he is a person
with whom he has been in the habit of trading." Holroyd, .J. said : If the discounter
" takes it merely because it is drawn upon a good acceptor, then he takes it at a risk (or
what ought, in the contemplation of a reasonable man, to be a risk), whether the bill bo
stolen or not : he takes it at his peril. I cannot agree with the doctrine laid down in



CH. IX.] RIGHTS AND LIABILITIES OF FIXDER. 271

The question of negligence was left with the jury, as before. (///)
Lord Tenterden's rule appears to have proceeded on the ground
that it wouhl encourage theft to say that the receiver of a note
or bill is not bound to inquire about it before taking it. Ac-
cordingly, it was held, that, though a discounter's good faith was
unquestionable, yet if he were guilty of undue want of caution
in taking it, he could not sue for its amount himself, nor defend
in the loser's suit for its recovery. (w) However, the same degree
of caution was not required in all cases, — a less degree being
expected in taking a note on a bet at a race-course than in taking



Lawson v. Weston." The verdict was aflBrmed. Gill v. Cubitt, decided in 1824, was
adopted in Eganw. Threlfall, 5 Dow. & R. 326, note a ; Down v. Hailing, 4 B. & C. 330,
6 Dow. & R. 455, 2 Car. & P. 11 ; Snow v. Peacock, 3 Bing. 406, 11 J. B. Moore, 286,
2 Car. & P. 21.5 ; Beckwith v. Corrall, 3 Bing. 444, 2 Car. & P. 261, 11 J. B. Moore,
335; Snowr. Sadler, 11 J. B. Moore, 506, 3 Bing. 610; Haynes v. Foster, 4 Tyrw.
65 ; Strange i'. Wigney, 4 Moore & P. 470, 6 Bing. 677 ; Slater v. West, 1 Dans. &
L. 15, 3 Car. & P. 325 ; Snow t'. Leatham, 2 Car. & P. 314 ; Easley v. Crockford. 10
Bing 243 ; De la Chanmette v. Bank of England, 9 B. & C. 208, 2 B. & Ad. 385. In
Down V. Hailing, Abbott, C. J. told the jnry there was no evidence that the defendants
had taken the chock fraudulently, but the question was, whether they had not acted
negligently. The jury thereupon found for the plaintiffs, and a new trial was refused
in bank. In Snow v. Peacock, Best, C. J said : " I thought, and told the jury, that it



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