made by deed inter partes. I think there can be no doubt that the plaintiff's acquired a good title to the note in this case and are entitled to recover against the maker.

It is in evidence that the maker paid the note to the assignee, but in doing so he paid the note to one whose title was not perfect for want of possession, of course doing so at his own risk of the note coming up in other hands, against which he has secured himself by indemnity from the assignee.

It is perhaps proper that I should state that I see no grounds to doubt the bona fides of the plaintiff. He did not run great risk in taking the note as it was taken for land for which he did not give a deed. Also, Anstee was introduced to him by a person whom he knew and relied upon, and the impression I formed from the conduct and appearance of Mr. Jenks in the box was entirely in his favour.

My judgment will therefore be for the plaintiffs.

The defendant afterwards moved for a rule nisi, to set aside the verdict, which was refused.

The defendant appealed.

The case was argued on the 9th September, 1880 (a). Boyd, Q.C., for the appellant. Under section 16 of the Insolvent Act of 1875, the note sued upon became vested, by virtue of the writ of attachment and proceedings thereunder, in the assignee, who was the only person who could endorse such note, and the alleged endorsation of Anstee, being after the writ of attachment had issued, and without the consent of the assignee, could convey no title to the plaintiffs. The cases referred to by the learned Judge of the County Court are cases where delivery was a sufficient transfer, and do not apply to an instrument such as the present where an endorsement by the payee is necessary to a perfect transfer, and where, as in this case, the writ of attachment vested all the rights of the insolvent, including the right to transfer, in the assignee; nor is the instance of the stolen note put by the learned Judge at all analogous, since no title in the note declared upon, if it had been stolen, could pass, as an endorsement in writing was necessary to perfect the transfer. The contract of the appellant was made entirely in Canada, and their contract was to pay to an order

(a) Present.-Moss, C.J. A., BURTON, PATTERSON, and MORRISON, JJ. A.

valid by the law of Canada, the lex fori, which in this case is also the lex contractus, and must govern. No satisfactory evidence was given as to the law of Michigan. He cited Arden v. Watkins, 3 East 317; Thomason v. Frere, 10 East v.418; Turquand v. Vanderplank, 10 M. & W. 180; Ashurst Bank of Australia, 4 W. R. 171; Roe v. Royal Canadian Bank, 19 C. P. 247, 20 C. P. 351; McDonald v. Georgian Bay Lumber Co. 24 Gr. 356; Smith v. Chandler, 3 Gray 392; Lebel v. Tuckett, L. R. 3 Q. B. 77; Cloyes v. Chapman, 27 C. P. 22; Perkins v. Beckett, 29 C. P. 395; Story's Conflict of Laws, sec. 420, 7th ed.; Willis v. Freeman, 12 East. 656; Smith v. De Witts, 6 D. & R. 120; Smith v. Marsack, 6 C. B. 486; Parsons on Promissory Notes, p. 153; Story on Promissory Notes, 7th ed., secs. 102, 103, 122, 123.

Ferguson, Q.C., and W. Macdonald, for the respondents. Having given value for the note and taken it without any notice of the defect, the respondents acquired a good title to the note, and are entitled to recover against the makers. If one who has stolen a note can confer a good title, as the authorities prove, it cannot be held that a title to a note cannot be acquired from an insolvent by one who takes it in good faith, and in ignorance of the insolvency.

It was shewn by an expert at the trial, that the note. being in Michigan when the writ of attachment issued would not be affected by it, and that as the payee was there at the time of the endorsement, by the laws of that state the plaintiffs obtained a valid title to the note. Such being the case, they are clearly entitled to succeed in an action. thereon in our Courts. They cited Harvey v. Turner, 6 Ex. 656; Daniel on Negotiable Instruments, 2nd ed. 675; Parkyn v. Moon, 7 C. & P. 408; Cross v. Currie, 5 App. R. 31; Story's Conflict of Laws, sec. 417; Roe v. Smith, 15 Gr. 344; Culver v. Benedict, 13 Gray 7; Hunter v. Potts, 4 T. R. 182; Simpson v. Fogo, 9 Jur. N. S. 403, Ogden v. Saunders, 12 Wheat. 213; Wallace v. Hardacre, 1 Camp. N. P. 45.

71-VOL. V. APP. R.

September 25, 1880. BURTON, J. A.-The law is as the learned Judge has laid it down, in the case of negotiable instruments; when they are once in due course of circulation, they then resemble cash, and persons, whether they have a property in them or not-if they appear to have it can make a valid transfer of them to an innocent party. The fallacy of his reasoning is in treating this note as in course of circulation; and not being in due course of circulation, it loses the protection which otherwise arises in favour of an indorsee.

The general rule of the Common Law is, that except by a sale in market overt no one can give a better title to personal property than he has himself.

At an early date an exception was established in the case of bank bills, upon principles of commercial policy, and especially on the ground that bank notes pass from hand to hand like coin. This same principle was extended to bills and promissory notes, in Grant v. Vaughan, 3 Burr. 1516. And in Peacock v. Rhodes, 2 Doug. 633, the same learned Judge, who decided the previous cases, laid down again broadly the rule that there was no distinction between bank notes and any other commercial paper; and in Goodman v. Simonds, 20 How. 343, the following propositions are affirmed, viz., that the possession of such paper carries the title with it to the holder; and that the party who takes it for value, without knowledge of any defect of title, and in good faith, holds it by a title valid against all the world.

At the time of the insolvency this note had not been put in circulation, and when the insolvency intervened the payee's right to pass the property by indorsement ceased. The plaintiff has to make title through that indorsement, and as the payee had no authority to make it, he necessarily fails.

It may at first sight appear to be somewhat incongruous that a party taking a note from a thief may be entitled to recover, and that this plaintiff should fail; but the incongruity will be found to be apparent rather than real. If the

note in this case had been stolen from the payee or his assignee before indorsement, the party taking it from the thief could not have recovered, because it was not in a condition to pass from hand to hand by delivery; if, on the other hand, it had been indorsed in blank and stolen in that condition, the bona fide transferee from any party appearing to be the holder, would be entitled to recover-because by leaving it in that state, he virtually indorsed to the ultimate bona fide holder, whose right could not be affected but by notice.

We have nothing to do with the law of the State of Michigan, which cannot affect the rights of the assignee, or the liability of the defendant upon this note, which was made and was payable in Ontario, and was part of the assets of the insolvent at the time of his insolvency, and vested in his assignee. The title thus acquired in the case of negotiable paper payable to bearer, and of which the assignee fails to acquire the actual possession, is liable to be defeated by a transfer and delivery to a bona fide purchaser, but in a case like the present his indorsement was requisite to transfer the property.

I am of opinion, therefore, that the judgment was erroneous, and should be reversed; and that a rule should have issued, and should be now made absolute, to set aside the verdict and enter it for the defendant, with costs.

PATTERSON, J. A.-It was shewn at the trial, by admission or by the evidence of witnesses, that Anstee had lived in the county of Wellington, and that the note in question was made there on 1st April, 1879, and fell due at six months, or on 4th October, 1879. About the end of August, 1879, Anstee, who was in debt, absconded and went to Michigan, having the note with him. On the 4th September, 1879, a writ of attachment in insolvency issued against him in the county of Wellington, and on 16th October following John Smith was appointed assignee of his estate and effects in the insolvency proceedings. This is a rather bald statement of the proceedings in insolvency,

containing no information of anything done upon the writ before the 16th October. I find a somewhat fuller statement in a special plea which contains the allegation that the writ was addressed to one David Simpson, an official assignee. No question has been made before us, either in argument or by the formal notice given of reasons against the appeal, of the insufficiency of the proof of the insolvency proceedings. On the contrary, the argument has proceeded on the assumption that the attachment was operative from its date, or at all events from some time before the 1st of October; and it is apparent, from the absence of reference to the subject in the judgment of the learned Judge of the County Court, that there was no dispute about it. For our purposes, therefore, we must take the fact to be, that there were valid proceedings in insolvency prosecuted from the time of the issue of the writ.

Then we learn from the evidence and from the judg ment delivered, that Anstee went to one of the plaintiffs in Michigan, and bargained with him for the purchase from the plaintiffs of some land in that State, for the price of $1,280, taking a written agreement for the sale of the land, and paying $1,200 of the price by indorsing to the plaintiffs several promissory notes, one of which was that now in question. The plaintiffs took the note innocently, and without any notice of the insolvency proceedings. It was delivered to them on the 1st day of October. It does not appear when Anstee wrote his name on the note, as the plaintiff who received it from him did not see him write his name-the name being already written when the note was produced to him.

The principal question argued before us was, the validity of the indorsement, under these circumstances, to transfer the property in the note to the plaintiffs.

The judgment delivered in the Court below is occupied with the same question. The learned Judge there arrived at the conclusion that although the proceedings in insolvency would vest in the assignee all the property of the insolvent, including negotiable instruments, yet the prin