Jackson et al. v. Steamboat Magnolia. tion to the decree is independent of any consideration whether the river is subject to tides, or is navigable from the sea. This decree derives no strength from the legislation of Congress, but a strong argument is to be deduced from the act of 1845 in opposition to it. The learned author of the opinion in Delovio v. Boit, and in the case of the Thomas Jefferson, (Justice Story,) has the reputation of being the author of the act. He proposed to bring under the judicial administration of the United States, cases that did not belong to the jurisdiction of the admiralty under the authoritative exposition of the Constitution by this court. The first suggestion of the feasibility of such a law is to be found in the opinion given in the case of the Thomas Jefferson, in 1825, and is enough to relieve this court from the imputation of having decided that case without a proper appreciation of the magnitude of the question. The act of 1845 involves the admission, that cases arising on waters within the limits of the United States other than tidewaters were cases at common law, and that a jury, under the seventh amendment of the Constitution, must be preserved. It was framed on the hypothesis that Congress might increase the judicial power of the United States, so as to comprise all cases arising on, or which related to, any subject to which its legislation extended. It is apparent that this court in 1847, and afterwards in 1848, when the suits of Waring v. Clark, and the New Jersey Navigation Co. v. The Merchants' Bank, were so elaborately discussed, were wholly unconscious of the fact that this act contained a recognition of any jurisdiction in admiralty, additional to what had been previously exercised. The only inference that can be drawn properly from the act of 1845, in my opinion, is, that Congress recognised the limit that the decisions in the earlier cases in this court had established for the admiralty and maritime jurisdiction, and its own incapacity to confer a more enlarged jurisdiction of that kind. I have performed my duty, in my opinion, in expressing at large my convictions on the subject of the powers of the courts of the United States under the clause of the Constitution I have considered. There have been cases, since I came into this court, involving the jurisdiction of the court on the seas and their tidewaters, the lakes, and the Mississippi river. I have applied the law as settled in previous decisions, in deference to the principle of stare decisis, without opposing any objectionthough in a portion of those decisions the reasons of the court did not satisfy my own judgment. I consider that the present case carries the jurisdiction to an incalculable extent beyond any other, and all others, that have heretofore been pronounced, Goodman v. Simonds. and that it must create a revolution in the admiralty administration of the courts of the United States; that the change will produce heart-burning and discontent, and involve collisions with State Legislatures and State jurisdictions. And, finally, it is a violation of the rights reserved in the Constitution of the United States to the States and the people. 20h 843 L-ed 934 108 TIMOTHY S. GOODMAN, PLAINTIFF IN ERROR, v. JOHN SIMONDS. 22121 Where an accepted and endorsed bill of exchange was placed by the drawer as 5wa784 7wa 735 9wa550 9wa552 9wa559 10wa 202 10wa671 11wa150 11wa158 14wa448 16wa389 16wa518 19wa166 20wa 90 20wa 162 21wa359 22wa594 92 381 This court again says, that a bona fide holder of a negotiable instrument for a valu- 21wa328 able consideration, without notice of facts which impeach its validity between the antecedent parties, if he takes it under an endorsement made before the same becomes due, holds the title unaffected by these facts, and may recover thereon, although as between the antecedent parties the transaction may be without any legal validity. 92 841 94 382 94 286 94 754 95 478 95 181 97 24 Where a party is in possession of a negotiable instrument, the presumption is that he holds it for value, and the burden of proof is upon him who disputes it; an 95 483 exception being where the defect appears on the face of the instrument. It is a question of fact for the jury, whether or not the holder had knowledge of 100 247 defects existing antecedently to the transfer to him. The English and American cases examined. 101 564 102 33 102 88 41 Surrendering collateral securities previously given, and affording increased indul-102 gence as to time, furnish a sufficient consideration for the transfer of new col-102 444 laterals. 107 158 41 26 10f 248 30f 415 35 f 704 427 36 THIS case was brought up, by writ of error, from the Circuit 15 841 Court of the United States for the district of Missouri. Goodman was a citizen of Ohio, and Simonds of Missouri. The suit was brought by Goodman, upon the following bill of exchange: EXCHANGE FOR $5,000. CINCINNATI, O., Sept. 12, 1847. Four months after date of this, my first of exchange, (second unpaid,) pay to the order of John Sigerson five thousand dollars, value received, and charge the same to account. Your ob't serv't, Mr. John Simonds, St. Louis, Mo. WALLACE SIGERSON. Upon the face of the bill was written, "Accepted, John Simonds:" and endorsed upon the same was the following: Goodman v. Simonds. "Pay to T. S. Goodman & Co., or order; John Sigerson." "Pay W. Nesbit & Co., or order; T. S. Goodman & Co." "Pay Timothy S. Goodman, without recourse to W. Nesbit & Co." Two of these parties, viz: John Sigerson and Simonds, lived in St. Louis, and the other two, viz: Goodman and Wallace Sigerson, in Cincinnati. The bill of exchange was sent from St. Louis to Wallace Sigerson; at Cincinnati, endorsed by John Sigerson, and accepted by Simonds, but without date, and without the signature of the drawer. The narrative of the transactions which led to the possession of the bill by Goodman is given in the opinion of the court. Upon the trial, there were several rulings of the court, but the one upon which the case came up to this court was the following, viz: The defendant asked the court to give the following instruction to the jury: "The defendant moves the court to instruct: If the jury find, from the evidence in the cause, that Wallace Sigerson never had any interest in the bill sued on, nor in the proceeds thereof, nor any authority to use the same for his own benefit, and did dispose of the same for his own benefit to T. S. Goodman & Co., and the plaintiff was at the time one of said firm, and when the bill was so transferred to said firm such facts and circumstances were known to the said Goodman as caused him to suspect, or that would have caused one of ordinary prudence to suspect, that said Wallace had no interest in the bill, and no authority to use the same for his own benefit." To the giving of which by the court the plaintiff objected, and the court gave to the jury that instruction amended so as to read as follows: Same instruction, as amended by the court: "And by ordinary diligence he could have ascertained that said Wallace Sigerson had no interest in said bill, and no authority to use the same for his own benefit, then they will find for the defendant." To the giving of which, as thus amended, the plaintiff objected, and excepted then and there to the giving of the same to the jury. Under this instruction, the jury found a verdict for the defendant, and the plaintiff brought the case up to this court. It was argued by Mr. Pugh for the plaintiff in error, and by Mr. Geyer for the defendant. Mr. Pugh made the following points: Goodman v. Simonds. I. The title of a holder of negotiable paper, acquired before it was due, for valuable consideration, is not affected by the fraud of a prior party, in the absence of actual notice, without proof of bad faith on the part of the holder. 1. This was the original rule declared in England. (Miller v. Race, 1 Bur. R., 452; Price v. Neal, 3 Bur. R., 1355; S. C., 1 Blackstone, 390; Grant v. Vaughan, 3 Bur. R., 1516; S. C.,. 1 Blackstone, 485; Anonymous, 1 Ld. Raymond, 738; Peacock v. Rhodes, 2 Douglas, 633; Lawson v. Weston, 4 Espinasse, 56; Morris v. Lee, 2 Raymond, 1396; S. C., 1 Strange, 629.) 2. This rule was afterwards varied, and it was declared that the title of the holder of negotiable paper would not be protected, where it had been acquired under circumstances which ought to have excited the suspicions of a prudent and careful man. (Gill v. Cubitt, 3 Barn. and Cress., 466; Down v. Halling, 4 Barn. and Cress., 330; Snow v. Peacock, 2 Car. and Payne, 215; Beckwith v. Corral, 2 Car. and Payne, 261; Snow v. Leathem, 2 Car. and Payne, 314; Slater v. West, 3 Car. and Payne, 325; Strange v. Wigney, 6 Bing., 677.) 3. The rule was again modified, and it was held that the want of care, necessary to impeach the title of the holder of negotiable paper, must have been gross. (Crook v. Jadis, 5 Barn. and Adolphus, 909; Backhouse v. Harrison, 5 Barn. and Adolphus, 1098.) 4. Finally, the original rule was restored, and it was decided that his title would be good, unless the holder was guilty of bad faith. Lord Denman said, "We have shaken off the last remnant of the contrary doctrine." (Goodman v. Harvey, 4 Adolphus and Ellis, 870; Uther v. Rich, 10 Adolphus and Ellis, 784; Arbouin v. Anderson, 1 Adolphus and Ellis, N. S., 498; Stephens v. Foster, 1 Cromp., Mees., and Roscoe, 849; Palmer v. Richards, 1 Eng. Law and Eq. R., 529; Marston v. Allen, 8 Mees. and Wels., 494; Raphael v. Bank of England, 33 Eng. Law and Eq. R., 276.) 5. The rule is understood in this country according to the latest cases in England. (Story on Bills of Exchange, 194, 416; Hull v. Wilson, 16 Barbour S. C. R., 550; Saltmarsh v. Tuthill, 13 Ala. R., 390.) Mr. Geyer made the following points: The decision of the Circuit Court in overruling the motion of the plaintiff for a new trial not being the subject of review on a writ of error, the only questions for the consideration of this court arise on the instructions given to the jury; and these, the defendant submits, were quite as favorable to the plaintiff as the law would allow. Goodman v. Simonds. I. It having been established, by the evidence at the trial, that Wallace Sigerson, the drawer, had no interest in the bill sued on, and no authority to use, transfer, or otherwise dispose of it for his own benefit; that he transferred it to the plaintiff fraudulently, in violation of a special trust, the burden devolved upon him to prove that he acquired the bill in good faith, for a valuable consideration, in the usual course of trade; failing in that, he was not entitled to recover. (Baily v. Bidwell, 13 Mees. and W., 73; Harvey v. Towers, 6 Welsby, H. and G., p. 656; Monroe v. Cooper, 5 Pick., 412; Bissell v. Morgan, 11 Cushing, 198; Sanford v. Norton, 14 Vermont R., 228; Bertrand v. Barkman, 13 Ark., 150: Thompson v. Armstrong, 7 Ala. R., 256; Snyder v. Riley, 6 Barr. Pâ. R., 664; McKeeson v. Stansbury, 3 Ohio N. S., 156; Ware v. Boydell, 3 M. and S., 148; Beltzhoover v. Blackstock, 3 Watts, 26; Vallet v. Parker, 6 Wend., 615; Catlin v. Hanson, 1 Duer N. Y. R., 322.) II. The bill was not transferred absolutely and unconditionally, in the usual course of trade, for a valuable consideration. It was delivered to the plaintiff, and received by him, merely as collateral security for an antecedent debt, the general property remaining in the drawer, not in the plaintiff; there was no money, goods, or credit given, or liability incurred; no security or valuable right relinquished by the plaintiff, nor any new and distinct consideration of any kind for the transfer of the bill. Therefore the plaintiff was not a bona fide holder for value as against the defendant, so as to exclude the defences which he had against the drawer. (Jenness v. Bean, 10 N. H. R., 266; Williams v. Little, 11 ib., 66; Coddington v. Bay, 20 Johns. R., 637; Wardell v. Howell, 9 Wend., 170; Clark v. Eli, 2 Sandf. Ch. R., 166; White v. Springfield Bank, 1 Barb. S. C. R., 225; Stalker v. McDonald, 6 Hill N. Y. R., 93; Petrie v. Clark, 11 Sergt. and R., 388; Jackson v. Pollock, 2 Miles Pa. R., 362; Evans v. Smith, 4 Binney, 366; Napier v. Elam, 6 Yerg., 108; Nichol et al. v. Bate, 10 Yerg., 429; Kimbro v. Lyttle, 417; Van Wyck v. Norvell, 2 Humph. R., 192; Prentice v. Weisinger et al., 2 Gratton, 262; Bank of Mobile v. Hall, 6 Ala. R., 639; Andrews v. Brothers & McCoy, 8 ib., 920; Bertrand v. Barkman, 13 Ark. R., 150; Anderson v. Long, 1 Mo. R., 365; Goodman v. Simonds, 19 Mo. R., 106.) III. It was fully proved, and found by the jury, that the drawer (Sigerson) never had any interest in the bill or its proceeds, and no authority to dispose of it for his own benefit; that, at the time of the transfer, facts and circumstances were known to the plaintiff which caused him to suspect, or would have caused a person of ordinary prudence to suspect, the defect of the title and authority of the drawer, and that by ordi |