Goodman. Simonds. of exchange by the third endorsee against the first endorsers, the bill had been protested for non-acceptance while in the hands of the second endorsee, and that fact appeared on the face of the bill when received by the plaintiff. In delivering the judgment of the court, Chief Justice Taney said: "A person who takes a bill which upon the face of it was dishonored cannot be allowed to claim the privileges which belong to a bona fide holder without notice. If he chooses to receive it under such circumstances, he takes it with all the infirmities belonging to it, and is in no better condition than the person from whom he received it. There can be no distinction between a bill transferred after it is dishonored for non-acceptance, and one transferred after it is dishonored for non-payment." In Fowler v. Brantly, 14 Pet., 318, the note sued on was in a peculiar form prescribed by the Branch Bank at Mobile, when desired to be discounted for accommodation, made payable to the cashier or bearer, signed by the defendants, with a written order, also signed by them, to credit a person who was their factor, and to whom the note was sent to be offered for discount. The bank refused to discount it, and the figures "169" were written in pencil on its face, according to the usage of the bank in such cases. The factor sold the note, and applied the proceeds to his own use, and it was received by the plaintiff from a subsequent holder, in part payment of a precedent debt. Held, that "the note carried on its face circumstances of suspicion so palpable as to put those dealing for it before its maturity on their guard, and as to require at their hands such inquiry into the title of those through whose hands it had passed. Failing to be thus diligent, they must abide the consequences their negligence imposed, and could not recover, though they had not, in fact, knowledge of the fraud." In Sanford v. Norton, 14 Vermont R., 228, A. D. 1842, Redfield, Judge, delivering the judgment of the court, said: "When it is shown that a note or bill was without consideration, or void in its inception, being obtained by force or fraud, or had been lost, this does so far impeach the title of the holder as to impose upon him the obligation of showing that he paid value, and in many cases that he was guilty of no want of ordinary care in taking it. Gill v. Cubitt, which has reference to lost notes, turns upon the point of their being taken without due caution. Some of the later cases, in regard to this particular point, seem to have receded a little from this case; but the doctrine of Gill v. Cubitt is in the main adhered to, and we do not well see how any other rule could consist with any tolerable regard to justice." The Supreme Court of Illinois, in McConnell v. Hodson, 2 Gilm., 640, and Russell v. Haddock, Goodman v. Simonds. 3 Gilm., 233, A. D. 1846, held, that where a party is about to receive a bill or note, and there are any suspicious circumstances accompanying the transaction, or within the knowledge of the party, as would induce a prudent man to inquire into the title of the holder or the consideration of the paper, he will be bound to make such inquiry; and if he neglects so to do, he takes the paper subject to any defences of the prior parties. The case of Mathews r. Poythess, 4 Georgia R., 287, A. D. 1848, is the next in the order of time. It is the first and only reported case in which an American court has held the late doctrine of the King's Bench. The conclusion of the court in that case is, that the title of the purchaser is not defeated by the want of such caution on his part as a careful or prudent man would take in his own affairs, nor by gross negligence; that it may be defeated by proof of mala fides in the purchaser; that mala fides is notice actual or constructive of the fact that the security is not the property of the person who offers it, and a privity with or participation in the fraud upon the true owner; and that the want of proper caution, or any fact that legitimately goes to show such notice, privity, or participation, may be submitted to the jury, subject to the direction of the court." The extreme doctrine of this case, if established, would be very acceptable, no doubt, to those dealers whose usual business is ordinarily conducted behind a screen, who, if allowed to keep their own secrets, will take the risk of proof of notice and privity with or participation in the fraud or robbery, by which the paper was obtained, and, if it should happen in any case that such proof could be made, he could and would bring his suit in the name of some confederate against whom the proof could not be made. Fair dealers need no concealment, and the experience of half a century in this country has demonstrated that the rule first laid down in Ayer v. Hutchins, 4 Mass. R., 470, while it has led to greater caution in receiving bills and notes, has not restrained the circulation of negotiable paper among fair dealers. It has promoted the administration of justice, without prejudice to the interests of commerce. In the same year, (1848,) the subject was again under consideration of the Supreme Court of Louisiana, in the case of the Louisiana State Bank v. The New Orleans Navigation Co., 3 La. An. R., 294, when it was held that express notice is not necessary to charge the holder with what the law considers to be notice of any defect or infirmity in a note or bill, so as to let in a defence against a holder for value; it is sufficient if the attending circumstances are of such a positive and pointed character as to cast a shade upon the transaction, to put the holder upon inquiry. In Ohio, in 1853, it was held in McKeeson v. Stans Goodman v. Simonds. bury, 3 Ohio R., N. S., 156, that although a bona fide holder of negotiable paper, received before due for a valuable consideration, shall be protected against the defences which the maker might have against the payee, yet in this case, as in every other, it is the duty of every person to use ordinary care and prudence in his transactions, to prevent their operating to the prejudice of the rights of others; and where the transfer is fraudulent, the holder, claiming under such a transaction, is bound to show that he acted honestly and without knowledge of the fraud. In the case of Holbrook et al. v. Mix, 1 E. D. Smith R., 152, New York Court of Common Pleas, 1851, the defendant endorsed the note sued on for the accommodation of the makers, from whom it was obtained by false and fraudulent representations, by one Beach, who, being indebted to the plaintiffs, enclosed the note to them in a letter, requesting them to pass the note to his credit, saying, that as he understood it would be contested, he did not endorse it. The plaintiffs passed the note to his credit, less the interest. It was held that the plaintiifs had not received the note in due course of trade, and that the circumstances under which it was received deprived the plaintiffs of all claim to be regarded as bona fide holders for value, without notice of the fraud. It is a well-established principle, that whatever is notice enough to excite attention, and put a party on its guard and call for inquiry, is notice of everything to which such inquiry might have led. When a person has sufficient information to lead him to a fact, he shall be deemed to have notice of it. (Kennedy v. Green, 3 Mylne and K., 719; Sugden V. and P., 1052.) "The principle of the doctrine of constructive notice is, that when a person is about to perform an act by which he has reason to believe that the rights of a third party may be affected, an inquiry into the facts is a moral duty, and diligence, an act of justice. Hence, he proceeds at his peril when he omits to inquire, and is chargeable with a knowledge of all the facts that by a proper inquiry he might have ascertained. This neglect is followed by all the consequences of bad faith, and he loses the protection to which his ignorance, had it not proceeded from neglect, would have entitled him." (Per Duer, J., in Pringle v. Phillips, 5 Sand. R., 157.) "Nor is constructive notice an arbitrary doctrine, or an unwise attempt to enforce by law a rule of morality. It is founded upon a deep knowledge of human nature, and is justified by the soundest reasons of public policy. It will rarely happen that a knowledge of the fraud, or other fatal vice, by which Goodman v. Simonds. the title he received was infected, can be brought home to the purchaser by positive evidence; yet to release him in all cases from the obligation to inquire, is to determine that, in all cases, such evidence shall be given. On the other hand, when it is manifest to the minds of a jury that just grounds of suspicion existed, we may be certain, as a general rule, that the suspicion was felt by the purchaser, and that he chose not to inquire, because he was resolved not to know. Constructive notice may doubtless operate, in some cases, to defeat the title of deceived and innocent purchasers, but its general effect is to reach those who meant, by their voluntary ignorance, to cover their fraudulent intent; and it is in truth so essential to the protection of deceived and innocent owners, that to abolish it would be to encourage, if not by the promise, yet by the certain hope of impunity, dishonesty, collusion, and fraud." (Ibid.) The decisions which have been cited of all the courts of England in bank prior to 1834, and of the American courts at all times, with a single exception, are but the application of the general principles to particular cases. That principle applied to this case is decisive against the plaintiff, as well upon the undisputed facts proved at the trial as those found by the jury. It was proved beyond controversy that the plaintiff took the bill with a full knowledge of several facts and circumstances, each one of which has been held sufficient to charge a holder of negotiable paper with notice of defects or infirmities in the title. He took the bill which he had refused to discount, from his debtor, known to be insolvent, merely as a pledge to secure a desperate debt. (See Eagan v. Threlf et al., 5 Dowl. and R., 326; Bay v. Coddington, 5 J. C. R., 54.) He received it with a knowledge that it had been a long time in the hands of his debtor in blank, while he was in pecuniary difficulties. (Hatch v. Searles, 31 English Law and Eq. R., 219.) He not only knew the bill to be falsely dated, but he himself filled the blank with the false date it bore. (Wiggin 2. Bush, 12 John. R., 305.) He attempted to pass it off, not only without the endorsement of his firm or his own, (Holbrook v. Mix, 1 E. D. Smith R., 112,) but gave a false reason for refusing to endorse. Neither the plaintiff nor his firm had authority to sell the bill for another; on the contrary, they had stipulated not to dispose of it, nor put it into circulation before the maturity of the notes of their debtor; the demand by the debtor of such a stipulation was alone sufficient to put the plaintiff and his firm on their guard. Under these circumstances, the plaintiff cannot complain if he is held to have taken the bill subject to the defences of the defrauded acceptor. The facts found by the jury admit of no other conclusion Goodman v. Simonds. than that the plaintiff either had actual notice that the drawer had no title or interest in the bill, and no authority to dispose of it for his own use, or that he had a suspicion of the fact, and abstained from inquiry for the purpose of avoiding notice; which would be sufficient to establish a charge of guilty knowledge, even in a criminal case. If it appeared that a party charged with receiving stolen property of any kind, knowing it to be stolen, had received it "with a knowledge of facts and circumstances which caused him to suspect, or would have caused a person of ordinary prudence to suspect, that it was stolen, and that he could have ascertained the fact by the use of ordinary diligence," he could not have escaped conviction on the plea that he had taken it to secure a debt which had become desperate by insolvency of the debtor, and "was not bound to take care of the interest of third persons." The same state of facts appearing in a transaction requiring good faith and due diligence on the part of the holder, by the commercial law which he invokes, cannot be less than proof of notice of everything which might have been ascertained by the use of ordinary diligence. Mr. Justice CLIFFORD delivered the opinion of the court. This was a writ of error to the Circuit Court of the United States for the district of Missouri. Timothy S. Goodman, a citizen of the State of Ohio, complained in the court below of John Simonds, a citizen of the State of Missouri, in a plea of trespass on the case upon promises. The declaration was filed on the first day of March, 1854. It contained two counts-one upon a bill of exchange, and the other upon an account stated. At the April term following, the defendant appeared and pleaded the general issue, which was joined, and several special pleas in bar of the action. The special pleas were held bad on demurrer, and at the October term, 1855, the parties went to trial on the general issue. Robert M. Nesbit, a witness called for the plaintiff, testified that he was a notary public of the county of St. Louis; and that, as such, on the fifteenth day of January, 1848, he presented the bill in suit for payment to John Simonds, the acceptor, who refused to pay it, and that he afterwards gave due notice of the presentment and refusal to both endorsers. And the witness further testified, that he was well acquainted with the signatures of all the parties to the bill, except that of the drawer, and that they were genuine. Whereupon the plaintiff read in evidence the bill of exchange described in the first count of the declaration, together with the endorsements thereon, as they appear in the record. W. Nesbit & Co. were merely nominal hold |