Page:Harvard Law Review Volume 12.djvu/364

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HARVARD LAW REVIEW.
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344 HARVARD LAW REVIEW. port that an opportunity to slip in might present itself, or if she approach a blockaded port to take a pilot for a neighboring port, or if she appear before a blockaded port for the alleged purpose of inquiry there is a breach of the blockade. The Gute Erwartiuig, 6 C. Rob. Adm. 182; The Charlotta Christine, 6 C. Rob. Adm. 101 ; The Cheshire, 3 Wall. 235. Thus the decision reached in the principal case, although the acts are extreme, is well founded upon authority. The position of the " Newfoundland " in loitering four night hours within ten miles of a blockaded port near enough to signal the shore and watch an opportunity to slip in was in itself an act of breach of the blockade and gave rise to a prima facie presumption of guilty intent. And as no innocent explanation of her acts was proved, the con- demnation was entirely proper. If blockade is to be maintained to-day, the law must be stricter for a steamer than it was for the sailing ship in the past. Forged Indorsements of Negotiable Instruments. — A notable instance of the effect of equitable principles upon the law of negotiable instruments was the decision by Lord Mansfield in the case of Price v. Neal, 3 Burr, 1354. In that case the defendant was an indorsee of a bill for value in due course, and was without notice that the signature of the drawer was a forgery. In like ignorance the plaintiff, who was the drawee, paid the face value of the bill to the defendant. On learning the facts, he sought to recover back the amount paid by him. The court, in holding that no recovery could be had, said " there is no reason to throw off the loss from one innocent man upon another innocent man." Courts have almost universally supported the decision as well as the prin- ciple on which it rests, namely, that when two innocent parties have been thus defrauded, one will not be deprived of the legal title to the money which he has received in order that the other may be made whole. See the article by Professor Ames, 4 Harvard Law Review, 297. There is, however, a well recognized distinction between this and another class of cases, which is illustrated by a recent decision of the Supreme Court of Nebraska. First Nat. Batik v. Farmers^ e^ Merchants' Batik., 76 N. W. Rep. 430. There a loan company was induced by the fraudu- lent representations of an agent to draw a check payable to a person who was in fact non existent. The agent received the check for delivery to the ostensible payee, but forged the name of the payee and made deliv- ery to the defendant, who then collected the amount of the check from the bank on which it was drawn. The court held that the bank could recover back the amount, although the defendant paid value for the check and re- ceived it in good faith. Here the court was, as in Price v. Neal, supra, dealing with two innocent parties. Yet there is this difference. In this case the check remained the property of the drawer until delivery should be made by the agent to the person intended as payee ; upon the trans- fer, therefore, to the defendant under the forged indorsement, the latter became liable to the true owner, the drawer, for a conversion of the check ; however innocent, he was a wrongdoer. The money thereafter received by him in dealing with the property of the drawer was wrong- fully gained, and he became a constructive trustee for the drawer. Now, if the drawer in this case had been an indorsee in due course and had been so deprived of his property, he could still have recovered against the drawee, since the fact that payment was made to the wrong person