Welton v. Adams & Co.

Mr. Justice Heydeneeldt delivered the opinion of the Court.

Mr. Ch. J. Murray concurred. When this case was first argued, I came to the conclusion that a certificate of deposit was a non-negotiable security, and, upon that hypothesis, it was very clear that, like all other unnegotiable paper, whoever claims it, must do so in the name of the payee, and, consequently, the defense of “payment to the * depositor,” would be valid '[40], against all others. After a re-argument of the cause, I am satisfied that my first opinion was incorrect.

The common use of this kind of security is of recent, origin, and they have, therefore, not been made the subject of judicial decision, as far as I can discover. An examination into their specific character, shows that, although differing in form from a promissory note, yet they have all of its important incidents. Each contains a promise by one person to pay another person, absolutely and unconditionally, a certain sum of money, at a time specified therein. The rules of law, in reference to all securities, ought to be applied according to the nature of the security, and not be influenced by the name by which the paper is commonly [41]known. I have, therefore, no longer any doubt that these certificates of deposit must be, as far as negotiability is concerned, placed upon the same footing as promissory notes. These latter were, I think, very clearly negotiable at common law, independent of the Statute of Anne; but if there are any doubts as to that position, they are solved by the provisions of our statute. (See Compiled Laws, 146.)

This brings us to the main question raised upon the record, whether the maker of a negotiable security has a right to require indemnity against all future claims, when it is alleged that the paper has been lost or destroyed.

Upon this point the American authorities are conflicting. Some hold that, upon proof of the destruction of the paper, no indemnity ought to be demanded. In England, a suit at common law cannot be brought, but a resort must be had to the Court of Chancery, which always decrees indemnity. The same rule as to indemnity prevails in France, except in the case of paper unnegotiable.

It is undeniable that, upon the payment of a note or bill, the maker or acceptor has a right to its possession, as a voucher of its payment. Can this right be taken away without an equivalent ? It is said, that proof of its destruction is a sufficient assurance that it can never after-wards appear. But, when we reflect upon the uncertainty and fallibility of all human testimony, it looks unjust [41] to force the risk of its reappearance upon a *party totally innocent of fault, and who has not bargained with a view to any mischance which may, in the future, result to his injury. I think that there never can be, to him, that assurance of the loss or destruction of the paper, as should force him, against his will, to take the peril, ■either of defending an action thereafter, or of repaying the amount. The negligence or misfortune of the holder ought not to give him the right of casting such a burden upon the maker.