Dunham v. Clogg , 1869 Md. LEXIS 30 ( 1869 )

Stewart, J.,

delivered the opinion of the Court.

There could have been no valid objection to the instruction given to the jury by the Court if the facts in the case justified it, but so far as we can discover by the proofs furnished in the bill of exceptions, they did not warrant the instruction. There was no evidence that the note in question was given for goods sold by Stetson 'Vaughn, as agent of C. L. Dunham, to the appellee, and that as such agent he endorsed it to Dun-ham, and that it was paid to Vaughn as such agent; but so far as the facts are disclosed by the proof, Dunham and Vaughn were strangers to the transaction between the appellee and G. D. Vaughn. If the appellee had made it appear that G. D. Vaughn was the agent of C. L. Dunham in the transaction of the sale of the shoes to the appellee, or that Stetson Vaughn, as agent of said Dunham, was authorized to employ G. D. Vaughn as a sub-agent, or that Dunham ratified or accepted the acts of G. D. Vaughn, or Stetson Vaughn, in reference thereto, and that the note sued on was given for the shoes, Dunham would have been bound by the acts of G. D. Vaughn in relation thereto. In such case Dunham or his endorsee, the appellant, after the dishonor of the note, would hold it subject to any equities the appellee, as the maker of the note, might have affecting its validity or recovery from him. The appellant was warned by the protest and took the dishonored note, subject to such equitable defence as the appellee might be entitled to under such circumstances.

Whilst it is true that the note, although overdue, might be endorsed, yet when it was transferred by endorsement, or delivery after protest, the holder took it cum onere. Anan vs. Houck, 4 Gill, 325. In such case it must be left to the jury, upon the slightest circumstance, to presume that the endorsee had notice of any equity affecting its validity. Story on Prom. Notes, see. 178; Chitty on Bills, 216, 217.

The error of the Court is not relieved by the provisions of the Act of 1862, ch. 154. That Act prevents us from reversing a judgment by reason of the assumption of a fact, on the part of the Court, unless the objection is made at the trial below. The error is not in the assumption of a fact, but predicating the instruction upon a hypothesis of facts, of which there was no sufficient testimony. 25 Md., 30, 34. There was no point made below in reference to the state of the pleadings, and we are restricted in our review to the consideration of the evidence and the instruction of the Court thereon. If •there were any mala jides in regard to the transaction of the note, affecting its validity, it must be ascertained from the testimony submitted to the jury. In the absence of fraud, the appellee having signed the note, leaving a blank for the name of the payee, the holder could fill the blank with his own name, and endorse it in blank as it was payable to order, which would give to it currency, by simple delivery, and the possession of it in such case would he prima fade evidence of title, enabling the holder to sue in his own name. The same effect is given to the note, under such circumstances, as if it had been made payable to bearer. Whiteford vs. Burckmyer & Adams, 1 Gill, 146.

The Code, Art. 14, sec. 8, provides that no judgment shall be set aside, because of the endorsement being in blank, which substantially gives to the holder the same right, from a blank as a full endorsement, and Courts will not enquire into the right of possession, unless on an allegation of mala jides, with proof to sustain it; and blank endorsements, when necessary, may be filled up at the trial. If the bona jides of this note, had been impeached by the testimony affecting C. L. Dunham, or the appellant, his endorsee after the protest, the appellee could have had the benefit thereof and a very different question would have been presented. The fact of the appellee paying G. D. Vaughn, after he had signed the note in blank, and it had passed into the hands of C. L. Dunham and the appellant, who, from anything that appears from the evidence, as we have said, were utter strangers to, and ignorant of, any such fact; could not, in justice, be used to defeat the demand of the appellant. The folly of the appellee in undertaking to pay the note to G. D. Vaughn under such circumstances, when the note was not in his possession, should not be visited upon innocent parties, so far as it appears, who had become possessed of the note without notice of any such fact. It is the misfortune of the appellee that he acted so unadvisedly. Any mala fides on the part of G. D. Vaughn occasioning* him loss, must fall rather on the party, who, by his own laches has afforded him such opportunity. If there had been any evidence of fraud on the part of C. L. Dunham, or the appellant, in the transaction, or if Dunham could have been connected with G. D. Vaughn, as we have stated, the appellant’s prayer could not have been granted; but in the absence of such testimony, we can' see no objection to it, and the hypothesis of facts enumerated in the prayer, if found to be true by the jury, did authorize them to find a verdict for the appellant, and the prayer should have been granted.

(Decided 10th March, 1869.)

Judgment reversed and procedendo awarded.