Sturges' Sons v. Metropolitan National Bank of New York ex rel. Field

Citations

• 49 Ill. 220

Syllabus

<p>1. Bill of exchange—rights of the drawer as against a party holding the equitable title—who had notice of the fraud by which the bill was obtained. D, the president of the Producers’ Bank of Chicago, sold to F & Co a bill of exchange for $10,000, drawn by the bank, on the Corn Exchange Bank of New York. On the same day, D bought of S & Co, their draft for a like amount on the National Park Bank of New York, giving his check lor the same, which was presented the next day for payment and dishonored, the Producers’ Bank having failed. S & Co immediately stopped payment of their bill, by a telegram to that effect, addressed to both the Park and Corn Exchange Banks, and which was received before S & Go’s bill reached New York. F & Co, fearing that their bill purchased from D. would be dishonored, called upon him, when he informed them that he had that day telegraphed to the Corn Exchange Bank, to turn over S & Co’s draft to the Metropolitan Bank, for the benefit of E & Co, and which the bank did, immediately upon the receipt of the bill, and then presented it to the Park Bank for payment, which was refused. Held, in an action by the Metropolitan Bank, for the use of F & Co, against S & Co, to recover on their bill,—</p> <p>1st. That by the endorsement to the Metropolitan Bank, F & Co only acquired an equitable title to the bill.</p> <p>2d. That this action having been brought by the endorsee of the bill, who was not a holder for value, for the use of F & Co, the proceedings upon their face show, only an equity in F & Co, and they having never acquired the legal title to the bill, could not maintain an action at law upon it.</p> <p>3d. That F & Co, at the time the assignment of the bill was made to the bank for their use, having had notice of the fact that D fraudulently obtained it from S & Co, they thereby became affected by the same equities existing between the original parties to the bill.</p> <p>2. Same—party receiving—bound to make inquiry. The rule is, that whe