At common law, publication is, of itself, neither indispensable nor (where notice is required) sufficient notice. 206 Such notice should, however, be given; and the absence of it was formerly held to amount to negligence on the owner's part, to outweigh that of the purchaser, where both were at fault.207 But it is now immaterial upon this ground, since no negligence of a purchaser will affect the bona fides of his title, except so far as it amounts to evidence of bad faith.

Action on Lost Bills-New Promise.

§ 1692. Where a bank bill payable to bearer is lost, even an indemnity can afford no protection to the maker, if there are no means of identifying the bill. In such case no recovery can be had on mere circumstantial evidence of its destruction, e. g. of its probable loss in the Chicago fire.208 So, if a note is destroyed by the plaintiff himself fraudulently or without explanation, he cannot recover either on the paper itself or on the original consideration.209 But where a bank note has been cut in two for transmission by mail, and one-half is lost in the mail, the owner may recover against the bank on the half retained, since the bank could not be further liable on the other half to another as a bona fide holder.210 And the bank cannot set up in its defense against the owner that it had announced it would not pay its notes under such circumstances.211 Suit on a lost note may be brought by an assignee of the debt

206 Byles, Bills, 380; 2 Daniel, Neg. Inst. 468. And see § 1023, supra. 207 Byles, Bills, 379; Chit. Bills, 290; 2 Daniel, Neg. Inst. 469; Snow v. Peacock, 3 Bing. 406, 11 Moore, 286; Strange v. Wigney, 6 Bing. 677. So, where the notice was actually misleading, e. g. by stating the loss of a pocketbook, and that its contents were of no use to any one but the owner. Beckwith v. Corral. 2 Bing. 445, 11 Moore, 335.

208 Tower v. Bank, 3 Allen (Mass.) 387.

209 Blade V. Noland, 12 Wend. (N. Y.) 173; Booth v. Smith, 3 Woods, 19 Fed. Cas. No. 1,649; McDonald v. Jackson, 56 Iowa, 643, 10 N. W. 223. But he may recover on a bank note that has been fraudulently destroyed by his servant. Hagerstown Bank v. Adams Exp. Co., 45 Pa. St. 419. Or on a note destroyed carelessly by one to whom it was offered for sale. Homberg v. Kikhaffer, 43 Minn. 205, 45 N. W. 154.

210 Hinsdale v. Bank, 6 Wend. (N. Y.) 378; Patton v. Bank, 2 Nott & McC. (S. C.) 464; State Bank v. Aresten, 4 Ill. 135.

211 Martin v. Bank, 4 Wash. C. C. 253, Fed. Cas. No. 9,156.

secured by it.212 But the owner of a note which is in the hands of an adverse holder cannot sue on it as lost.213 Where a bill is lost, and, upon indemnity being given, a subsequent promise of payment is made, the owner may recover at law upon such promise.21+ But even an express promise to pay is of no effect without some new and binding consideration.215

Indemnity Required.

§ 1693. In general, no recovery can be had on a negotiable instrument which has been lost, without indemnity to the party li able.216 And the bond required in such case must be executed by the holder himself, as well as his surety,217 and should be given to all the defendants, although some of them have not been served with process in the action.218 Where a bill is lost in the mail, to sustain a recovery against the indorser the holder should demand a new bill of the drawer, and tender indemnity to the indorser.219 So, indemnity is required, upon proof in bankruptcy,220 or foreclosure of a collateral mortgage securing a lost note,221 or in suit upon a lost acceptance,2 or a certificate of deposit payable on return of

222

But see West Philadelphia

212 Sauter v. Leveridge, 103 Mo. 615, 15 S. W. 981. 213 Read v. Bank, 136 N. Y. 454, 32 N. E. 1083. Nat. Bank v. Field, 143 Pa. St. 473, 22 Atl. 829. 214 Williamson v. Clements, 1 Taunt. 553.

215 Davis v. Dodd, 4 Taunt, 602.

216 2 Daniel, Neg. Inst. 470; 1 Edw. Bills & N. § 422; 2 Pars. Notes & B. 288; Story, Prom. Notes, § 107; Miller v. Webb, 8 La. 516; Nalle v. Conrad, 30 La. Ann. 503; Freeman v. Boynton, 7 Mass. 483; West Philadelphia Nat. Bank v. Field, 143 Pa. St. 473, 22 Atl. 829; Wiedenfeld v. Gallagher (Tex. Civ. App.) 32 S. W. 248. So, by statute in ILLINOIS (Hurd's Rev. St. c. 98. § 14); MARYLAND (Pub. Gen. Laws, art. 13, § 11); MICHIGAN (How. Ann. St. § 7519); MINNESOTA (Gen. St. § 5737); NEW JERSEY (2 Gen. St. p. 2605; §7); NEW YORK (Code Civ. Proc. § 1917).

217 Howe Mach. Co. v. Avery, 16 Hun (N. Y.) 555.

218 Higgins v. Watson, 1 Mich. 428.

219 Riggs v. Graeff, 2 Cranch, C. C. 298, Fed. Cas. No. 11,826.

220 Ex parte Greenway, 6 Ves. 812.

221 Yerkes v. Blodgett, 48 Mich. 211, 12 N. W. 218.

222 Meeker v. Jackson, 3 Yeates (Pa.) 442; City of Bloomington v. Smith, 123 Ind. 41, 23 N. E. 972.

225

the certificate,223 or a note payable to A. or bearer.224 So, on a stolen coupon, payable to bearer,2 or on a note lost with a blank indorsement,226 or even, it has been held, without any indorsement, since the payee might otherwise obtain it and transfer it again.2

Indemnity Unnecessary.

227

§ 1694. Where an action is brought on a lost instrument, and it is afterwards found and produced at the time of trial, indemnity need not be given.225 So, it is not necessary, where the lost note was nonnegotiable.229 And this has been held to be the case, also, where it was specially indorsed, and therefore, in effect, not negotiable.230 And it has been held not to be necessary, where the note is barred by the statute of limitations,231 or where it was overdue, and therefore subject to defense, at the time of the loss. 23: Ꭺ question has been raised whether indemnity is necessary in case of the loss of half a bank note in the mail. But the weight of au

223 Welton v. Adams, 4 Cal. 37; Schmidt v. Bank, 153 Mass. 550, 27 N. E. 595.

224 Adams v. Edmunds, 55 Vt. 353.

225 Hinckley v. Railroad Co., 129 Mass. 52; Rolston v. Railroad Co., 21 Misc. Rep. 439, 47 N. Y. Supp. 650; Id., 29 Misc. Rep. 656, 46 N. Y. Supp. 383.

226 Fales v. Russell, 16 Pick. (Mass.) 315.

227 Lewis v. Petayvin, 4 Mart. N. S. (La.) 4.

228 Smith v. Rockwell, 2 Hill (N. Y.) 482.

229 Wright v. Wright, 54 N. Y. 437, affirming 59 Barb. (N. Y.) 505; Allen v. Reilly, 15 Nev. 452; Coon v. Bonchard, 74 Mich. 486, 42 N. W. 72; Rolston v. Railroad Co., 21 Misc. Rep. 439, 47 N. Y. Supp. 650; Wofford v. Holmes Co., 44 Miss. 579.

230 Dudman v. Earl, 49 Iowa, 37; Lamson v. Pfaff, 1 Handy (Ohio) 449; Kirkwood v. Bank, 40 Neb. 484, 58 N. W. 1016; Id., 40 Neb. 497, 58 N. W. 1135; Palmer v. Carpenter (Neb.) 73 N. W. €90.

231 Either at the time the note is lost (Moore v. Fall, 42 Me. 450) or at the time of trial (Torrey v. Foss, 40 Me. 74).

232 Brent v. Ervin, 3 Mart. N. S. (La.) 303; Mowery v. Mast, 14 Neb. 510, 16 N. W. 839; Swatts v. Bowen, 141 Ind. 322, 40 N. E. 1057; Means v. Kendall, 35 Neb. 693, 53 N. W. 610; Kirkwood v. Bank, 40 Neb. 484, 58 N. W. 1016; Id., 40 Neb. 497, 58 N. W. 1135. Although necessary, if lost before maturity, Elliott v. Woodward, 18 Ind. 183.

thority seems to be in favor of requiring indemnity to the bank in such case,233 although some cases hold to the contrary.234

A distinction has also been made between lost bills and bills that have been destroyed, as regards the need of indemnity. In Massachusetts, and other states which follow the same rule, an indemnity is necessary to support a recovery on a note which has been destroyed.235 But in New York such notes are not within the statute requiring an indemnity to be given.236

Tender of Indemnity.

238

§ 1695. The plaintiff, who sues on a lost bill or note, should tender an indemnity bond, on the risk of having to pay costs.237 But the failure to make such offer before commencing suit will only affect his right to recover damages and costs.2 On filing a bill in equity, indemnity should be proffered in the bill, under the direction of the court, but need not be formally tendered at the beginning of the suit.239 A court of common law has, in general, no power

233 Mossop v. Eadon, 16 Ves. 430; Bank of Virginia v. Ward, 6 Munf. (Va.) 166; Farmers' Bank v. Reynolds, 4 Rand. (Va.) 186; Bullet v. Bank, 2 Wash. C. C. 172, Fed. Cas. No. 2,125; Armat v. Bank, 2 Cranch, C. C. 180, Fed. Cas. No. 535; Commercial Bank v. Benedict, 18 B. Mon. (Ky.) 307; Allen v. Bank, 21 N. C. 3; Murdock v. Bank, 2 Rob. (La.) 112; Little v. Association, 2 La. Ann. 1012.

234 2 Pars. Notes & B. 313; Redmayne v. Burton, 2 Law T. (N. S.) 324; State Bank v. Aresten, 4 Ill. 135; Union Bank v. Warren, 4 Sneed (Tenn.) 167. 235 McGregory v. McGregory, 107 Mass. 543; Armstrong v. Lewis, 14 Minn. 406 (Gil. 308); Price v. Dunlap, 5 Cal. 483. So, of bank notes. Commercial Bank v. Benedict, 18 B. Mon. (Ky.) 307; Wade v. Banking Co., 8 Rob. (La.) 140. But an action will not lie on bank notes which cannot be identified, on circumstantial evidence of their destruction and tender of indemnity. Tower v. Bank, 3 Allen (Mass.) 387.

236 Des Arts v. Leggett, 16 N. Y. 582, 5 Duer (N. Y.) 156; Blandin's Adm'r v. Wade, 20 Kan. 251. So, upon a check destroyed on the day it was received. Scott v. Meeker, 20 Hun (N. Y.) 161.

237 Banque Jacques Cartier v. Strachan, 5 U. C. Prac. 159. So, in an action on a bank note of which one-half has been lost. Farmers' Bank v. Reynolds, 4 Rand. (Va.) 186.

238 Allen v. Bank, 21 N. C. 3. And this is required by statute in MICHIGAN. How. Ann. St. § 7519.

239 Exchange Bank v. Morrall, 16 W. Va. 546.

to stay proceedings until a bond of indemnity is given.240 But by statute in Great Britain it may order that the loss of a bill or note shall not be set up by the defendant, if indemnity is given.241 And a plea setting up the loss of a bill may be struck out, if the plaintiff gives indemnity and pays the costs.242 By an earlier act it was provided in Great Britain that the drawer of a lost bill may be compelled to give a new instrument, upon indemnity being given him.243 This act, however, gave no jurisdiction to common-law courts in the case of a lost bill or note.244 And a court of equity might not only compel the giving of a new bill, but enforce the payment of the lost bill.245 The statute has therefore not been generally enacted in the United States, and has not effectively enlarged the jurisdiction of the courts in case of the loss of negotiable paper.

Action in Equity.

§ 1696. Where no right of action existed at common law upon a lost bill or note, the owner might resort to a court of equity for relief. And this was his only remedy on a lost note payable.

240 Aranguren v. Schofield, 1 Hurl. & N. 494. But in Connecticut a court of law may require an indemnity bond. Bridgeford v. Manufacturing Co., 34 Conn. 546. And in Alabama execution cannot issue until indemnity is given. Code, § 32.

241 17 & 18 Vict. c. 125, § 87; Bills of Exchange Act, § 70. And the statute includes bank notes. Noble v. Bank, 2 Hurl. & C. 355; McDonnell v. Murray, 9 Ir. C. L. 495.

242 King v. Zimmerman, L. R. 6 C. P. 466; Noble v. Bank, 2 Hurl. & C. 355; McDonnell v. Murray, 9 Ir. C. L. 495; Ringrose v. Blizard, 2 Fost. & F. 375. 243 9 & 10 Wm. III. c. 17, § 3, extended to notes by 3 & 4 Anne, c. 9; Bills of Exchange Act, § 69. This statute has been enacted also in MISSISSIPPI (Ann. Code, § 3512) and NEW JERSEY (2 Gen. St. p. 2605, § 6).

244 Ex parte Greenway, 6 Ves. 812; Davies v. Dodd, 4 Price, 176; Toulmin v. Price, 5 Ves. 238; Bromley v. Holland, 7 Ves. 19, 242.

245 Byles, Bills, 384; Chit. Bills, 300; Walmsley v. Child, 1 Ves. Sr. 341; Powell v. Monnier, 1 Atk. 611; Toulmin v. Price, 5 Ves. 235; Mossop v. Eadon, 16 Ves. 430; Hansard v. Robinson, 7 Barn. & C. 90, 9 Dowl. & R. 860. 246 Byles, Bills, 383; Chit. Bills, 300; 2 Pars. Notes & B. 297; Story, Bills, § And this is true of a bank note of which one-half has been lost in the mail. Mossop v. Eadon, 16 Ves. 430. Or a note which has been destroyed. Fisher v. Mershon, 3 Bibb (Ky.) 527. Or a lost bond. Dumas v. Powell, 22

447.