Huntington v. Branch Bank at Mobile

ORMOND, J.

Upon the questions of law, arising out of the bill of exceptions, it is impossible we think, to distinguish this case from the case of Herbert v. Huie, 1 Ala. Rep. 18 . The counsel for the plaintiffin error, concedes, that if the note in this case, had been filled up by Lea & Langdon, to whom it was intrusted, and the Bank had acquired an interest in it, without a knowledge of the fact, that they had violated the trust reposed in them by the plaintiffs in error, that the Bank could recover; but as the Bank had knowledge that the note was in blank,it was bound to inquire into the authority of the agent to fill it up for the particular purpose, and for the amount inserted in it; yet that was precisely the predicament of the case referred to in 1 Ala Rep. There, the note was not filled up by the agent, but the blank, in violation of the faith reposed in him was handed to a thiid person, in payment of his own debt, by whom it was filled up for the amount due from the agent. The Court held that in such a case, “ an implied authority was given to the holder to fillup the note with any amount he may have advanced on it in good faith, and without the knowledge of any fact which might lead to inquiry and expose the fraud.”

The principle here decided, is fully sustained by the cases referred to by the counsel for the defendant in error, and by the most obvious reasons arising out of the transaction. When an individual intrusts another with his signature to a blank note, he certainly intends it should be filled up for some amount of money, and used for some purpose. If the sum of money and the object to which it is to be applied, are agreed on, it is obvious that the faith of the person intrusted with it, is relied on to carry the proposed design into effect. If he violates the trust reposed in him, who should sustain the loss? most certainly he who enabled the fraud to be practised. This is a fami *189 liar principle of law, and it appears to us this is a correct application of it. The supposition that the knowlegde of the fact that the note is not filled up, should put any one taking the note on inquiry as to the authority of the agent, assumes as true, the proposition to be established. It by no means follows that the possessor of a blank signature holds it under an agreement to fill it up for a particular amount, or dispose of it in a particular mode; a much more natural presumption is, that he is vested with a discretion in relation to it, and that in the language of Lord Mansfield, in Russel v. Langstaffe, cited from Douglass— “it is a letter of credit for an indefinite sum.” As therefore, the transaction may be what the holder of the blank represents it to be, or at least, as there is nothing in the mere possession of a blank note, which would lead to a suspicion of unfairness or fraud; with no propriety whatever, could an innocent purchaser be so affected with notice of the transaction as to put him on inquiry of the maker.

These remarks have been made because the counsel for the plaintiff in error strenuously insisted that the law was otherwise, and not from any belief that a rule7 of law so abundantly sustained, both by reason and authority, required an argument to support it.

But the record does not show that the Bank had the legal title to the note; without which, no action can be maintained in a Court of law. The note is made payable to Andrew Armstrong, or bearer, which, by our statute is in legal contemplation, a note payable to the order of the payee. It may be that the note is payable to the cashier of the Bank, and that by proper averments, the Bank might maintain an action on it without an assignment, but nothing of that kind appears on the record. As to this point, see the case of McWalker v. The Branch Bank, decided at the present term. For this error, the judgment must be reversed and the cause remanded.