6 FCAS 194 - Combs v. Hodge

¶1This decision embraces the settlement of *195a point of law of general interest and importance everywhere, viz.: That certificates of the debt of Texas, endorsed by the parties to whom issued, and placed by them in the hands of an agent to be transferred on the books of Texas, could be by that agent sold to a bona fide purchaser without notice, so as to vest in him the absolute title to them. Its importance arises from its applicability to transactions in stocks generally.

[NOTE. Complainant appealed to the supreme court, which reversed the decree of the circuit court, and remanded the cause with directions to allow the parties to amend the pleadings, and to take testimony if they should be so advised.[The ground of the reversal, as stated by Mr. Justice Campbell, was that the protection of the law merchant to the holder of negotiable paper taken in the course of business for value did not extend to certificates like those in question, but, assuming that defendant’s intestate was a holder for value, the answer failed to state the consideration paid to Love, or the time, ’place, and circumstances of the contract. Further, it appeared that complainant had not authorized the sale or transfer of the stock, and if there was a power of attorney authorizing Love to sell, as contended by defendant, it was incumbent on the latter to show the absence of collusion. Combs v. Hodge, 21 How. (62 U. S.) 897.]