
    Gorgerat et al. versus M'Carty.
    THIS was an action brought by the indorsors, the payees against the acceptor of a Bill of Exchange ; which was drawn in France, and had been several times indorsed, and judgment was confessed by the defendant, subject to the opinion of the Court,—whether possession of the bill and protest was sufficient evidence, without further proof, that the plaintiffs had paid the subsequent indorsee ? Or, was prima facie evidence of such payment, sufficient, unless contrary evidence was produced, on the part of the defendant ? The cause was argued on the 15th September, 1791, by Rawle and Duponceau, for the plaintiffs, and by Ingersoll for the defendant.
    For the plaintiffs it was urged, that upon general principles, the possession of the bill and protest, in this country, as well as in England, is sufficient evidence of the property ; that the bill, however, was a French bill, and in France, the possession would be deemed conclusive. Ordon. Louis 14. Act. 11 ; and that the objection was too late after a judgment confessed, when the matter must be treated as if before a Jury of Inquiry. Lovelace 154. 278. In mercantile cases a greater latitude of evidence is always admitted, than in cases of any other description. Thus, the protest of a bill is sufficient proof of a demand of payment. If, indeed, the possession of a foreign bill is not regarded as the best evidence of the plaintiff’s property, the resulting inconveniences to commerce would be injurious in the highest degree. Commissions must issue in every action on a bill of exchange, to establish payments in every different place, in which the different indorsees may chance to reside. It is true, that there is no authoritative precedent ; for, the case in Ld. Raym. 742, is a mere loose note, made on the report of a few merchants, and the decision (which clearly proves too much, if any thing, to wit, that the receipt ought to be on the protest) may have been given under circumstances of suspicion ; but the universal silence on the subject, strengthens the principle that arises from the spirit of commercial negociation, and public convenience. The defendant’s contract is to pay the amount of the bill to the payee, or any subsequent indorsee. There is internal evidence in the bill itself, that it had passed into the hands of the different indorsees; and, therefore, the plaintiff’s recovering the possession, affords a strong presumption of their having paid a valuable consideration for it; and fraud ought not to be inferred. The original parties to a bill are the drawer and payee; but an indorsor engages in the transaction, perhaps, without their knowledge or consent; and, consequently, less evidence should be required from the payee, than from the indorsor. But the possession of the bill and protest is evidence of an authority to demand its contents. 1 Dall. Rep. 193 : It is prima facie evidence of property; and, as such, must be conclusive until it is contradicted. 5 Burr. 2688.
    For the Defendant, it was answered, that in this action the declaration must state, that the plaintiffs had paid the indorsee, nor would the omission to do so, be cured by a verdict. Doug. 617. If it is material to alledge the fact, if must be material to prove it ; and the general rule is, that the party must produce the best evidence in his power. The possession of the bill and protest is merely presumptive ; and, from the very nature of the transaction, better proof must be in the power of the party. Even the acknowledgement of the obligor will not be received to prove his own bond ; the attesting witnesses must be examined. In Ld. Raym. 742 the case occurred ; and it was there decided, that possession of the bill and protest was not sufficient, without producing a receipt from the subsequent indorsee ; and this rule not only remains uncontradicted, but is recognized, in Lovelaj, 177, where the author describes the proof to be given in an action like the present. With respect to the argument arising from the place where the bill was drawn, it is enough to observe, that though the lex loci may regulate the nature of the contract, it cannot prescribe the nature of the evidence to be produced in our Courts in support of it.
    The Judges now (Jan. 1792) delivered their opinions seriatim as follows:
   BRADFORD, Justice.

This is an action brought against the acceptor of a bill of exchange, which had been several times specially indorsed, and the plaintiffs are the first of those indorsors. At the trial the plaintiffs gave no direct proof of payment to the last indorsee, insisting that possession of the bill and protest was sufficient, or at least prima facie evidence of it. Whether it be so, or not, is the point in question.

It seems to be fully settled in Death versus Serwonters that by a special indorsement of a bill of exchange, the indorsor parts with his right and discharges the acceptor as to any payment to him ; and that he can regain his property only by taking up the bill, and making payment to the last indorsee. The same doctrine is laid down in Brunetti and Lewin, reported in Carthew 130, and afterwards on error in Lutch. 896. where it is held, “ that if the bill has been specially indorsed by the " plaintiff, he cannot recover, unless at the trial there be evidence of payment to the last indorsee.”

This payment, therefore, is a material part of the plaintiffs’ case. They state it as such in their declaration ; and rightly ; for, it is clear, from the case of Brunetti and Lewin, that if it were not stated, the omission would be fatal. Being a material fact it must be proved.

The plaintiffs do not appear to deny this ; but they contend, that possession of the bill is prima facie evidence of property in it. This is the case with bills payable to bearer, and sometimes when the bill is payable to order. But, among bills payable to order, there is a familiar distinction between those which are specially indorsed, and those which are indorsed in blank. Possession of the latter is evidence of title ; and Ld. Mansfield assigns the reason in Peacock versus Rhodes, Dougl. 611. " Bills indorsed in “ blank, says he, are considered as bills payable to bearer: “ Both pass by delivery : And possession proves property in both " cases.” But bills specially indorsed do not pass by delivery; and, therefore, possession does not prove property in them.

The last indorsee may transfer his right either by indorsement, or by accepting payment from the indorsor. If the first had been the case, and the present plaintiffs had claimed as his indorsees, it is clear, they must have proved his hand writing. Possession would have been no evidence of that: Why then should it be evidence of payment ? The one is as material as the other, and it is as easy to prove a receipt, as to prove an indorsement.

But the case of Mendez versus Carreroon, if it be law, goes the whole length of determining this question. It was doubted at the bar; but I agree with the rest of the Court, that there is no ground to suspect its authority. It is neither denied, nor doubted, nor is its principle shaken, in any subsequent cases. On the contrary, it has all the support we can reasonably expect, that of being handed to us, in our abridgments and elementary treatises, as established law .

If this case needed any confirmation, it strikes me that the same principle is to be discovered in Pigot and Clark, reported in Salk. 126. and 12 Mod. 192. There the plaintiff, who was the payee, had indorsed the bill, and afterwards brought this action against the acceptor. It was objected, that the plaintiff’s right had been transferred by the endorsement; and that he could not maintain the action; but the Court held, that the indorsement, being in blank, did not necessarily import a transfer ; and they add " but if the blank had been filled up, the indorsee alone could have maintained the action.” This at once distinguishes a special from a general indorsement; and proves that the possession of a bill, specially indorsed, is no evidence of a right to its contents.

But the plaintiffs rely on the case of Morris and Foreman determined in this Court, where it is said the Court held, that " the possession of a bill of exchange is evidence of an authority to “ demand it contents.” This is but a short note of the case, without any state of facts; and seems to me more extensive than the principle of the case will warrant. I have examined the record, and enquired in the facts of that cause, and that the decision may be understood I will state them. It was an action between the original parties, brought by the payee against the drawer, upon a bill drawn under a particular agreement, respecting the damages in case of a protest. Morris remitted this bill to London on his own account, to his correspondents Clifford and Tysot, who had no interest whatever in its contents ; but with this indorsement: Pay to the order of Clifford and Tysot.” The bill being protested, this action was brought; and the indorsement appearing on the bill and protest, the defendant moved for a non-suit, insisting that the action could be brought only by the indorsee; but the Court held that the action was maintainable in the name of the plaintiff. Under all the circumstances before them, the Court, doubtless considered the indorsement as a mere authority to receive the money for the plaintiff’s use, and not as a transfer of the interest. In this view it is no more than what was ruled long ago in Dehers versus Harriot. Show. 164. There the plaintiff had indorsed the bill as follows : “ Pray pay to D. value on my " account.” And it was objected that the plaintiff’s interest was transferred by the indorsement. But it being proved that Dhad no interest in the monies; and the indorsement being " on the plaintiff’s account,” it was held, that no interest passed, and the action was sustained. In strictness, perhaps, it ought to appear on the face of the indorsement whether it was intended as a transfer, or an authority ; but be this as it may, the principle which governed in the case of Morris and Foreman, does not in any degree interfere with the present decision.

The inconveniences, which might result from establishing so strict a rule of evidence, were strongly urged, and struck me forcibly on the argument ; but, on a close inspection, they will disappear, or be found to be balanced by opposite advantages. The payee may avoid them if he will, by a general indorsement, which is now the most common, and is said to be the most proper one. The difficulty suggested, of tracing payment to the several indorsees, may be avoided by a general receipt of the last indorsee on the protest.

Besides it is a real benefit to the mercantile world, that bills may be thus restrained. It is a desirable security against accidents and fraud ; even bank bills, generally payable to bearer, are framed in this manner for distant remittances. Being made payable to order and specially indorsed, the payment can be to no one but the indorsee. If the acceptor pays a bill, specially indorsed, to any but the indorsee, it is clear from the case cited by Judge Yeates, as also from Doug. 617. that he must pay it over again. To admit that possession is any evidence of right in this case, would be to make all bills, in effect bills payable to bearer ;—would multiply losses, and encrease the temptations to theft.

Upon the whole, I am fully satisfied, that as the plaintiffs gave no evidence of payment to the last indorsee, they were not intitled to a verdict, and that judgment must be entered as in case of a non-suit.

Yeates, Justice, concurred, and delivered his reasons at large.

Shippen, Justice,

I also concur. I acknowledge that, on the argument, I thought differently, from an apprehension that the course of mercantile negociations might be obstructed ; but, on considering the case immediately after the Term, I was fully satisfied, that both on principle and by law, the mere holding a bill of exchange, cannot entitle an intermediate indorsee to call upon the acceptor for payment.

Upon principle it cannot be; because, when a man indorses an accepted bill, he parts with all his right to the indorsee, for a valuable consideration, and, as to him, the acceptor is discharged ; the right of calling upon the acceptor can never be regained, but by taking up the bill from the last indorsee, and paying him the money. Some evidence of this payment must be necessary; otherwise, one who finds, or steals, the bill, might sue the acceptor, and he would be answerable again to the last indorsee, who never having received satisfaction would surely recover from the acceptor. The usage, on enquiring, I find to be now, what it appears to have been in Lord Holt's time, that when the last indorsee receives the money from an intermediate indorsee, he gives a receipt upon the protests, which always accompanies the bill, and shews who has the legal and equitable right to sue the acceptor.

The case of Mendez v. Carreroon, in Ld. Raym. 742. does not stand alone : In 1 Lutw. 888. the same principle appears in an adjudged case, upon a writ of error. The Court say, that when the payee has once indorsed the bill, the acceptor is entirely discharged as to him, unless he becomes again intitled to receive the money by an actual payment to the indorsee.

Some later cases have the same aspect, and no case appears to the contrary.

M‘Kean, Chief Justice,

after recapitulating the facts, and authorities, proceeded in the following words :

The acceptor of a bill of exchange is only liable to the last indorsee; for, all the prior indorsers have parted with their interest in it, are presumed to have received a valuable consideration for it, and can, therefore, have no right to the money a second time. But if the last indorsee protests the bill for non-payment, and afterwards receives back the money from a prior indorsor, such indorsor acquires a new title to receive the money from the acceptor, by such payment: So that at the time this action was commenced, the defendant was liable to no person but the last indorsee; or to the prior indorsor, who had paid him. This is by the custom of merchants, as appears in the case of Death v. Serwonters, Lutwyche. 888. and Lewin v. Brunetti. 898. The plaintiffs have accordingly alledged, that they paid the subsequent indorsee, but offered no proof of it, except to produce the bills and protests. This is not sufficient; they should have produced a receipt from the last indorsee, or some witness, or evidence of payment. The usual evidence in such case is a receipt at the foot of the protest. 1 Ld. Raym. 742. In that case the merchants, who had been sworn respecting the custom, were of opinion, that this was the only evidence; but we think with Lord Holt, that if payment be any way proved, it is sufficient. If the defendant should pay the plaintiff the amount of the bills, and the last indorsee should hereafter sue him, what can prevent him from recovering the money ? The defendant cannot prove that he had been paid by the plaintiff, who may have come into possession of the bills by trover, bailment for a special purpose, or by fraud. Why was the action not brought in the name of the last indorsee ? If it had, the holding of the bills might have raised a presumption, that the plaintiffs were agents for him. The case in Ld. Raym. is in point: There the plaintiff not only had possession of the bill, but he had been sued by the subsequent indorsee, and a judgment was against him. What might be admitted as prima facie evidence in other cases, will not do in such a case as this, since the custom among merchants is opposed to it as appears from all the writers and collectors of cases, from the report by Ld. Raym. until the present time. There is a case referred to, in 3 Term. Rep. p. 127. which also confirms this doctrine.The acceptor of a bill of exchange is only liable to the last indorsee; for, all the prior indorsers have parted with their interest in it, are presumed to have received a valuable consideration for it, and can, therefore, have no right to the money a second time. But if the last indorsee protests the bill for non-payment, and afterwards receives back the money from a prior indorsor, such indorsor acquires a new title to receive the money from the acceptor, by such payment: So that at the time this action was commenced, the defendant was liable to no person but the last indorsee; or to the prior indorsor, who had paid him. This is by the custom of merchants, as appears in the case of Death v. Serwonters, Lutwyche. 888. and Lewin v. Brunetti. 898. The plaintiffs have accordingly alledged, that they paid the subsequent indorsee, but offered no proof of it, except to produce the bills and protests. This is not sufficient; they should have produced a receipt from the last indorsee, or some witness, or evidence of payment. The usual evidence in such case is a receipt at the foot of the protest. 1 Ld. Raym. 742. In that case the merchants, who had been sworn respecting the custom, were of opinion, that this was the only evidence; but we think with Lord Holt, that if payment be any way proved, it is sufficient. If the defendant should pay the plaintiff the amount of the bills, and the last indorsee should hereafter sue him, what can prevent him from recovering the money ? The defendant cannot prove that he had been paid by the plaintiff, who may have come into possession of the bills by trover, bailment for a special purpose, or by fraud. Why was the action not brought in the name of the last indorsee ? If it had, the holding of the bills might have raised a presumption, that the plaintiffs were agents for him. The case in Ld. Raym. is in point: There the plaintiff not only had possession of the bill, but he had been sued by the subsequent indorsee, and a judgment was against him. What might be admitted as prima facie evidence in other cases, will not do in such a case as this, since the custom among merchants is opposed to it as appears from all the writers and collectors of cases, from the report by Ld. Raym. until the present time. There is a case referred to, in 3 Term. Rep. p. 127. which also confirms this doctrine.

Let judgment be entered for the defendant, as in case of a non-suit. 
      
      
         Luch. 888.
     
      
       Carth. 130.
     
      
       L. Raym. 743.
     
      
       4 Vin. 265. Cun. Bill. Ex. Dig. of Cas. K. B. Law. Dict. Lovelass. Kidd.
     
      
      
         12 Mod. 193.
     
      
      
         1 Dall. Rep. 193.
     
      
       2 Burr. 1227.
     