State Bank v. McCoy.

it is now settled, according to the dictate of good sense and common justice, that a contract made by a person so destitute of reason as not to know the consequences of his contract, though his incompetency be produced by intoxication, is void as between the parties. 2 Kent's Com. 452. As was said by PARKE, B., in Gore v. Gibson: "Where the party, when he enters into the contract, is in such a state of drunkenness as not to know what he is doing, and particularly when it appears that this was known to the other party, the contract is void, and he cannot be compelled to perform it." But if the drunkenness of the maker, when known to the payee and taken advantage of by him, or when so complete as to suspend the use of the reason and understanding, renders the note void in the hands of the payee, the question recurs whether it avoids it in the hands of an indorsee for value, without notice of the maker's condition when he gave the note, and of the fraudulent circumstances under which it was obtained? There is no case which so decides. But it is contended that drunkenness is a species of insanity, and, therefore, a contract made by one, when in such a state of drunkenness as not to know what he was doing, should, like the contract of an insane person, be regarded as absolutely void. But the contract of an insane man is not, under all circumstances, an absolute nullity. As was said in La Rue v. Gilkyson, 4 Barr, 375, an insane man, like an infant, is liable on his executed contract for necessaries; and it was more than intimated in Beals v. See, 10 Barr, 56, that he would be liable for merchandise innocently furnished to his order by a person unapprised of his infirmity. But if, as ruled by Lord TENTERDEN, C. J., at Nisi Prius, in Sentance v. Poole, 3 C. & P. 1 (14 Eng. Com. Law, 419), the note of an insane person, or of one perfectly imbecile, which he has been induced to sign by fraud and imposition, is void in the hands of an innocent indorsee; it does not follow that a note given by a person in a state of intoxication is void in the hands of a holder for value, without notice of the maker's condition when it was given. There is this difference between the cases. Insanity or total imbecility is a permanent state or condition of the mind, disabling one from taking care of himself. Drunkenness is a temporary disability, voluntarily produced. Insanity is a misfortune- drunkenness is a vice. No man voluntarily does an act necessarily producing madness in order that he may become insane. But men drink in order that they may get

State Bank v. McCoy.

drunk. And when they thus temporarily deprive themselves of the use of their reason, and voluntarily expose themselves to fraud and imposition, the law may wisely refuse to treat them with the same tenderness that it does those unfortunate beings who are deprived of their understanding, by some providential dispensation; and it may properly hold them to a different measure of responsibility for the consequences of their acts. If a man voluntarily deprives himself of the use of his reason by strong drink, why should he not be responsible to an innocent party for the acts which he performs when in that condition? It seems to me that he ought, on the principle that where a loss must be borne, by one of two innocent persons, it shall be borne by him who occasioned it. As between the contracting parties, where one of them is so drunk as not to know what he is doing, the contract is doubtless void, especially if the other is apprised of his condition, and, if not willfully or culpably blind, he must know it. As was said by PARKE, B., in the case already quoted: "A person who takes an obligation from another under such circumstances is guilty of actual fraud." But if there is nothing to give notice of the intoxication, or to put one upon inquiry, as where a contract is made by letter or message sent by post or telegraph, and is executed in good faith by the party receiving the order, if the other party should refuse to perform the contract on the ground that he was totally drunk when he sent the order or entered into the contract, it is clear that, on the principle already stated, the defense ought not to avail. Why, then, should the maker of a note be allowed to set up against an innocent holder the defense of drunkenness? But there is another and controlling reason for holding the maker liable to the indorsee in such case, founded on principles of public policy and the necessities of commerce. The exigencies of trade require that there should be no unnecessary impediments to the ready circulation and currency of negotiable paper, but that it should be left free to pass from hand to hand like bank notes, and perform the functions of money, untrammeled by any equities or defenses between the original parties. If then, it should be held that the drunkenness of the maker avoids his note in the hands of the indorsee, it is obvious that such a rule would greatly clog and embarrass the circulation of commercial paper, for no man could safely take it without ascertaining the condition of the maker or drawer when it was given, although there might be nothing suspicious in its appearance or unusual m VOL. VIII. -- 32

State Bank v. McCoy.

the character of the signature. It is evident that it would be a less evil to exclude the defense of drunkenness, though it might occasionally work individual hardship, than to clog the circulation of commercial paper, to the great inconvenience of the public, by admitting such a defense. If fraud and imposition in obtaining a note will not avoid it in the hands of an innocent indorsee - because such a rule would render commercial paper less valuable and convenient as a medium of exchange-why should the drunkenness of the maker? Why should drunkenness be a defense if there has been no fraud or imposition? And if there has, and this is the ground of the defense, why should it not avoid the note in the one case as well as in the other? If, then, drunkenness is no defense as against the indorsee, without notice of the maker's condition, was the bank guilty of gross negligence in taking the note, under the circumstances, without inquiry of the maker? There was nothing suspicious in the appearance of the note, or in the character of the signature, nothing to indicate that it was the note of a drunken man. So far as appears from the evidence, the signature was the usual and ordinary one of the maker. If it had the appearance of being written by a drunken man, the bank might have been put upon inquiry. The fact that the bank was informed that the note was given for a patent hay-fork, and purchased it, with other notes, amounting in the aggregate to about $3,000, for fifty cents on the dollar, and took from the payees a guaranty that it should realize that amount out of the notes, was no evidence that the bank was guilty of gross negligence in taking the note without inquiry. But if the evidence had made out a case of gross negligence on the part of the bank, that alone would not have been sufficient to defeat its title to the note. As shown by Mr. Justice READ, in Phelan v. Moss, 67 Penn. St. 59 (5 Am. R. 402), there must have been proof that the bank took the note mala fide or with notice of the fraud. As there was no such evidence, the court erred in not affirming the plaintiff's second, third and fifth points.

The question whether it was lawful for the bank to purchase the notes at so great a rate of discount, and if not, whether there can be a recovery on the note in suit, does not arise on this writ of error, and, therefore, we express no opinion upon it. Where the verdict is for the defendant no question of law can be properly reserved, for no judgment can be entered in favor of the plaintiff's non obstante veredicto in case of a decision in his favor. Robinson

Flower and Wife v. The Pennsylvania Railroad Co.

v. Myers, 67 Penn. St. 9. We must, therefore, reverse the judgment, and remit the record to the court below for a new trial.

Judgment reversed, and a venire facias de novo awarded.

NOTE. -Caulkins v. Fry, 35 Conn. 170, was an action by a bona fide holder against the maker of a promissory note. The defense was set up that defendant was drunk when Je made the note. It was held that "complete drunkenness not being proved,

the defense must fail. Arguendo the court said that "complete incapacity of the maker," which shows that the paper is void, is a good defense as against a bona fide holder.

In the recent case of Matthews v. Baxter, 28 L. T. R. (N. S.) 169; L. R., 8 Ex. 132 (1873), the court of exchequer held that the contract of a man, too drunk to know what he is about, is voidable only and not void, and therefore capable of ratification by him when he becomes sober. Gore v. Gibson, cited in the principal case, was held to be authority only for the proposition that a contract made by a dunken man cannot be enforced in inritum against him. Molton v. Camrour, 13 M. & W. 623, is to the same effect as Mattheus v. Baxter. See further on this subject, 1 Parsons on Notes and Bills, 275; 1 Parsons on Contracts, 383, and 1 Story's Eq. Jur., § 231-233.

The doctrine of this case, that gross negligence on the part of the bank was not enough to vitiate its title to the note, is in accordance with the authorities. See note, 5 Am. R. 266. But is in direct conflict with the decision of the supreme court of Vermont in Gould v. Stevens, 5 Am. R. 265. — REP.

FLOWER AND WIFE, plaintiffs in error, v. THE PENNSYLVANIA R. R. Co.

(69 Penn St. 210.)

Master and servant — liability of master to servant. Infant.

At a station where defendants' train of cars had stopped, the engine, tender and one car ran down to the water-tank in charge of the fireman, who asked a boy ten years old, standing there, to put in the hose and turn on the water While the boy was climbing upon the tender to comply with the request, some detached cars belonging to the train came down with ordinary force, and struck the car next to the tender, whereby the boy was thrown down and crushed to death. In an action by the parents of the boy, held, that the defendants were not liable.

ACTION by John M. Flower and wife against the Pennsylvania Railroad Company, to recover damages for the death of plaintiffs' son, a child ten years old, alleged to be occasioned by the negligence of defendants' servants. The opinion states the facts. The verdict was for defendants. Plaintiffs took out a writ of error.

Flower and Wife v. The Pennsylvania Railroad Co.

A. C. Reinoehl and O. J. Dickey, for plaintiffs in error, cited 1 Redf. on Railw. 512, 513, pl. 6-9.

H. M. North and L. W. Hall (with whom was G. F. Breneman), for defendants in error. The deceased being where he had no right to be, the plaintiffs cannot recover. Philadelphia and Reading Railroad v. Hummel, 8 Wright, 375; Same v. Spearen, 11 id. 300; Gillis v. Pennsylvania Railroad, 59 Penn. St. 129. The employer is not responsible for his servant's acts, not in the scope of his employment. Potter v. Faulkner, 1 Best & Smith, 800; Lygo v. Newbold, 9 Exch. (W. H. & G.) 302; Wilson v. Peverly, 2 N. H. 548; Thames Steamboat Co. v. Housatonic Railroad, 24 Conn. 40; Satterlee v. Groat, 1 Wend. 272; Goodman v. Kennell, 3 Car. & P. 167. If properly called to assist, the deceased was in the condition of a fellow-servant, and the defendants would not be liable for the other servant's negligence. Shear. & Redf. on Neg. 122.

AGNEW, J. It is proper this case should be examined in the light of the evidence of the plaintiffs. According to that view, the engine, tender and one freight car ran down to the water-tank to take in water. They were in charge of the fireman, the engineer having necessarily stopped off till their return. At the water station, the fireman in charge asked the son of the plaintiffs, a boy ten and a half years old, standing on the platform of the water-tank, to put in the hose and turn on the water, and then turned to clean out the ash-pan of the engine. The boy climbed up the side of the tender to put in the hose, and, as he did, some detached freight cars belonging to the train came down without a brakesman, and struck the car behind the tender, driving the tender and engine forward from six to ten feet. The boy fell from the tender and was crushed to death. Is the railroad company responsible to the parents? The case involves no public right. The accident happened at no crossing, or place where the public had a right to be. The boy was not a passenger, or one to whom the company owed a special duty. The platform of the water-tank was the private property of the company, and was used for its own purposes. The engine and tender were where they had a right to be. The track itself was the property of the company, and the detached cars were not the cause of injury, in any sense, which affected the public rights or even those of the employees of the company. They came against the car and