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bonds, and, in addition, must state whether the bonds were coupon or registered.

--same subject.

Duplicates of bonds which are mutilated, defaced, or indorsed, so as to be unsaleable, may be obtained under another law hereinafter set forth without giving a bond of indemnity. (See page 68.)

3.

COUPON BONDS, HOW TRANSFERRED.

Decisions of the courts as to transfer of bonds before maturity.

Coupon bonds. These bonds, with the semi-annual or quarter-annual

coupons attached, are payable to bearer, and the legal title thereto passes by delivery, like bank bills and legal-tender notes. The Government pays them to the bearer who holds them in good faith, without investigating how previous holders acquired their title.

The Supreme Court of the United States has recognized and settled the following principles as applicable to coupon bonds :

"The possession of such paper carries the title with it to the holder. "The possession and title are one and inseparable.' The party who takes it before due for a valuable consideration, without knowledge of any defect of title, and in good faith, holds it by a title valid against all the world. Suspicion of defect of title, or the knowledge of circumstances which would excite such suspicion in the mind of a prudent man, or gross negligence on the part of the taker at the time of the transfer, will not defeat his title. That result can be produced only by bad faith on his part. The burden of proof lies on the person who assails the right claimed by the party in possession. Such is the settled law of this court, and we feel no disposition to depart from it.' (Murray v. Lardner, 2 Wallace, 110; Thomson v. Lee County,

3 Wallace, 327; Texas v. White, 7 TVallace, 735.) Different rule ap

"These rules were fully discussed in Murray v. Lardner, plicable to bonds (cited above.) We held in that case that the purchaser of

coupon bonds before due, without notice and in good faith, is unaffected by want of title in the seller, and that the burden of proof, in respect to notice and want of good faith, is on the claimant of the bonds as against the purchaser. We are entirely satisfied with this doctrine." But these rules have never been applied to matured obligations.

over-due.

Purchasers of notes or bonds past due take nothing but the actual right and title of the vendors. The bonds in question were dated January 1, 1851, and were redeemable after the 31st of December, 1864. In strictness, it is true they were not payable on the day when they became redeemable; but the known usage of the United States to pay all bonds as soon as the right of payment accrues, except where a distinction between redeemability and payability is made by law, and shown on the face of the bonds, requires the application of the rule respecting over-due obligations to bonds of the United States which have become redeemable, and in respect to which no such distinction has been made.' (Texas v. White, 7 Wallace, 735; Texas v. Hardenberg, 10 Wallace, 68.)

of coupons.

The Supreme Judicial Court of Massachusetts has made Title of holde rs the following decision as to the title of holders of coupons:

“But in the opinion of a majority of the court the coupons in question do not stand upon the same ground as chattels. They were negotiable promises for the payment of money, issued by the Government, payable to bearer and transferable by mere delivery, without assignment or indorsement. They are therefore not to be considered as goods, but as representatives of money, and subject to the same rules as bank bills or other negotiable instruments payable in money to bearer. The rule of caveat emptor does not apply to them. It is now well settled that the bearer of a bank bill which has been stolen from the bank may recover the amount from the bank, unless it is proved that he did not take it in good faith and for a valuable consideration; and that his knowledge of suspicious circumstances is immaterial, unless amounting to proof of want of good faith.” (Spooner v. Holmes, 102 Mass., 503.)

And the Supreme Court of the United States has declared Coupons detackthat

ed from bonds

Bonds with coupons, payable to bearer, are negotiable securities, and pass by delivery, and in fact have all the qualities and incidents of commercial paper. It is not necessary that the holder of coupons, in order to recover on them, should own the bonds from which they are detached. The coupons are drawn so that they can be separated from the bonds, and, like the bonds, are negotiable; and the owner of them can sue, without the produc

tion of the bonds to which they are attached, or without being interested in them.” (Thomson v. Lee County, 3 Wallace, 331.)

4.

DESTROYED AND DEFACED BONDS.

Caveats of lost

Persons often forward to the Treasury Department caveats and stolen bonds. of lost and stolen coupon bonds, but the only advantage gained

thereby is, that when those bonds, or the coupons, come in for redemption, the Department notifies the claimants who have filed the caveats of the presentation of the bonds, and furnishes the names of the parties presenting them, in order that the loser may have all the information within the reach of the Government which may possibly enable him to discover the parties who fraudulently obtained them. Beyond

this the Government can afford no relief. Numbers, &c., of

There are great advantages in holders carefully taking bonds should be the numbers, dates, denominations, issues, and series of taken and kept by holders. their coupon bonds, and preserving them in some place apart

from the bonds themselves; because in case of destruction of the bonds, by fire or otherwise, duplicates may be obtained under a law of Congress passed June 1, 1872, and unless such memoranda are kept, it is difficult, if not impossible, to describe coupon bonds which have been destroyed, with sufficient accuracy to obtain the benefits of the law. The facts as to the title of registered stock, but not as to coupon

bonds, may be gathered from the records of the Department. Defaced and de- The following is the law for the issue of duplicates of stroyed bonds.

destroyed or defaced bonds:

AN ACT TO PROVIDE FOR THE ISSUE OF BONDS IN LIEU OF DESTROYED OR

DEFACED BONDS OF THE UNITED STATES.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That whenever it shall appear to the Secretary of the Treasury, by clear and unequivocal proof, that any interest-bearing bond of the United States has, without bad faith upon the part of the owner, been destroyed, wholly or in part, or so defaced as to impair its value to the holder, and which bond shall be identified by number and description, the Secretary of the Treasury shall, under such regulations and with such restrictions as to time and retention for security or otherwise as he may prescribe, issue a duplicate of such bond, having the same time to run, bearing like interest as the bond so proved to have been destroyed or defaced, and so marked as to show the original number of the bond destroyed and the date thereof:

Provided, That where such destroyed or defaced bonds shall appear to have been of such a class or series as has been or may, before such application, be called in for redemption, instead of issuing duplicates thereof they shall be paid, with such interest only as would have been paid if presented in accordance with such call.

SEC. 2. That the owner of such destroyed or defaced bond shall surrender the same, or so much thereof as may remain, and shall file in the Treasury a bond in a penal sum double the amount of said destroyed or defaced bond, and the interest which would accrue thereon until the principal thereof is due and payable, with two good and sufficient sureties, residents of the United States, to be approved by the Secretary of the Treasury, with condition to indemnify and save harmless the United States from any claim upon the said destroyed or defaced bond.

Approved June 1, 1872.

This act applies to both registered and coupon bonds, Applies to regiswhile the act of March 3, 1871, printed on page 61, applies only to those which are registered.

The regulations and instructions of the Treasury Depart- Regulations and ment for the issue of duplicate bonds under the foregoing act are the same as those under the law for the issue of duplicates of lost registered bonds, which are set forth in full on pages 61-64. Those instructions must be carefully followed, specifying, however, whether the bonds are coupon or registered.

It will be seen that the law makes no provision for the Duplicates of lost issue of duplicates of lost coupon bonds, as it does of those coupon bonds not

provided for. which are registered, for the reason that the former are payable to bearer and pass by delivery, and the bona fide holders acquire a legal title thereto; while as to the latter, the lost registered bond, like a certificate of shares in a corporation, only designates the owner, and the record of it in the Register's office, where alone it can be transferred, is still evidence of the payee's title.

and coupon bonds.

instructions.

Duplicates of de faced bonds.

The foregoing act, so far as it relates to defaced bonds, seems to apply especially to those which are defaced or mutilated under such circumstances or in such manner as to excite suspicions of their genuineness, or as to render it possible that there may be other claimants thereto. The provisions of the last clause of section 7 of the act of June 30, 1864, chapter 172, were sufficient to authorize the issue of duplicates for bonds which were so mutilated, defaced, or indorsed as simply to render their acceptance by purchasers in the market somewhat objectionable, on account of the appearance of the bonds, but without raising any suspicions against their genuineness or the title of the holder thereto. That law is as follows:

Sec. 7. And be it further enacted, That

* * * * And for all mutilated, defaced, or indorsed coupon or other bonds presented to the Department, the Secretary of the Treasury is authorized to issue, upon terms and under regulations as aforesaid, and in substitution therefor, other bonds of like or equivalent issues.

When new bonds are issued under this act as a substitute for those which are mutilated, defaced, or indorsed, no bond of indemnity is required. If any part of the bonds are missing, duplicates can be obtained only under the laws and regulations herein before set forth.

5.

CONVERSION OF COUPON BONDS TO REGISTERED STOCK.

Conversion of Under the following law holders of coupon bonds can have coupon to regist the same converted into registered stock of the same loan, tered bonds.

without any charge therefor, by transmitting them to the Secretary of the Treasury at their own expense and requesting such exchange; but registered stock cannot be converted into coupon bonds:

Law of Congress.

ACT OF JUNE 30, 1864, CIIAPTER 172. Sec. 7. And be it further enacted, That the Secretary of the Treasury is hereby authorized to issue, upon such terms and under such regulations as he may from time to time

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