defendant that evidence is admissible in such a case to show that the first holder under such circumstances appropriated the acceptance to a use other than that for which it was delivered to him, and that proof of such a misappropriation is sufficient to impeach the title of a subse quent holder for value, even though it came into his possession before maturity in the usual course of business.

Where the supposed defect or infirmity in the title of the instrument appears on its face at the time of the transfer, the question, whether the party who took it had notice or not, is, in gen eral, a question of construction, and must be determined by the court as matter of law. An drews v. Pond, 13 Pet., 65; Fowler v. Brantly, 14 Pet., 318; Brown v. Davies, 3 T. R., 80. But it is a very different matter when it is proposed to impeach the title of a holder for value by proof of any facts and circumstances outside of the instrument itself. He is then to be affected, if at all, by what has occurred between other parties, and he may well claim exemption from any consequences flowing from their acts, unless it be first shown that he had knowledge of such facts and circumstances at the time the transfer was made. Nothing less than proof of that character can meet the exigencies of such a defense, if it be true that a party who acquires commercial paper for value in the usual course of business, may if it was acquired before maturity and without notice of any defect in the title, hold it free of all equities between the antecedent parties to the instrument.

Indorsees of negotiable bills of exchange and promissory notes enjoyed the benefit of that rule for ages before any attempt was made to annex any qualification to it, unless it appeared that the consideration was illegal, or that the instrument was fraudulent in its inception, or that it had been lost or stolen before it came to the possession of the holder. Hinton's case, 2 Show.. 247; Anonymous, 1 Salk., 126; Miller v. Race, 1 Burr., 452; Grant v. Vaughan, 3 Burr., 1516; Peacock v. Rhodes, 2 Doug., 633; Lawson v. Weston, 4 Esp., 56.

Attempt was subsequently made to qualify that right of a bona fide holder, and to establish the rule, that if the indorser of the instrument had no valid title to the same, and that if such facts and circumstances were known to the indorsee at the time of the transfer, as would have caused a person of ordinary prudence to suspect that the indorser had no right to transfer the instrument or to use the same for his own benefit, then the holder, as against the acceptor or maker, is not entitled to recover. Gill v. Cubitt, 3 B. & C., 466.

Though the modified rule was never satisfactory, yet it must be admitted that it was followed for a time in many jurisdictions. But it is unnecessary to discuss that topic, as the case referred to has been distinctly overruled in the tribunal where it was decided, and has not been considered an authority there for more than forty years. Goodman v. Harvey, 4 Ad. & E., 870.

Abundant authority for that proposition is found in the cases already cited, and Mr. Chitty says that the old rule of law, that the holder of bills of exchange, indorsed in blank and transferable by delivery, can give a title which

he does not possess, to a person taking the same bona fide for value, is again re established in its fullest extent. Chit. Bills, 12th ed., 257. Speaking upon that subject, the Supreme Court of Massachusetts said that it was once held that the holder of a bill of exchange or promissory note fraudulently put in circulation must show that he had used due and reasonable caution in taking it; but the court proceeds to say that it has since been definitively adjudged that if he took the instrument in good faith he is entitled to recover on it, and that even gross negligence is not tantamount to fraud, though it may be given in evidence as tending to prove that charge, that the burden of proving good faith is all the burden which the law imposes on such a holder. Worcester Bk. v. Dorchester Bk., 10 Cush., 491. Conclusive support to that conclusion is found in the authorities which the court cite for that purpose among which are the following: Goodman v. Harvey [supra]; Arbouin v. Anderson, 1 Ad. & E. (N. S.), 504. We must hold, said Lord Denman, in the case last cited, that the owner of a bill of exchange is entitled to recover upon it if he has come by it honestly, and that that fact is implied prima facie by possession; that, to meet the inference so raised, fraud, felony, or some such matter, must be proved. Smith v. Sac Co., 11 Wall., 146 [78 U. S., XX., 104].

Instruments of the kind are intended for circulation, and Shaw, Ch. J., says that the law is so framed to give confidence and security to those who receive them, for valuable consideration, in the ordinary course of business, when payable to bearer or indorsed in blank, so as to be transferable by delivery; and he adds that, in general, a party taking such an instrument under such circumstances has only to look to the credit of the parties to it, and the regularity and genuineness of the signatures and indorsements. So that if such a bill or note be made without consideration, or be lost or stolen and afterwards be negotiated for a valuable consideration, in the usual course of business, to one who has no knowledge of those facts, his title is good, and he shall be entitled to receive the amount. Wheeler v. Guild, 20 Pick., 550.

Title and possession in such a case are, in general, considered one and inseparable, and it will be presumed that a party thus in possession of such an instrument holds it for value until the contrary appears, and the burden of proof is on the party impeaching his title. Collins v. Martin, 1 Bos. & P., 648; Bk. v. Hoge, 35 N. Y., 68; Phelan v. Moss, 67 Pa., 63; Raphael v. Bk., 17 C. B., 171.

In order to defeat the rights of a bona fide holder for value of a promissory note, which it is claimed was procured by fraud, it must be shown, either directly or by circumstances, that he had notice of such infirmity.

Proof of such facts and circumstances as would have put a reasonable man upon inquiry in relation thereto are not sufficient to constitute a defense to a suit by the holder. Lake v. Reed, 29 Iowa, 258; Gage v. Sharp, 24 Iowa, 15.

Adjudged cases to support those propositions are very numerous, and it is equally well settled that where a negotiable bill or note is given in evidence duly indorsed, the legal presumption is that such indorsement was made at the date of the instrument, or at least antecedently

Actual possession of a negotiable instrument, payable to bearer or indorsed in blank, is plenary evidence of title in the holder "until other evidence is produced to control it;" but if to an action on the same "the defendant pleads that it was illegal in its inception, and that the plaintiff took it without value, the illegality being proved, the onus is cast upon the plaintiff to prove that he gave value." Smith v. Braine, 16 Ad. & E. (N. S.), 250; Bailey v. Bidwell, 13 Mees. & W., 73.

Proof of gross negligence is not sufficient to overcome the prima facie presumption of title arising from possession; but if it be alleged and proved that the instrument had its inception in illegality or fraud, a presumption arises from that proof that the plaintiff took it without value; or, in other words, it so far shifts the burden of proof, that, unless the plaintiff gives satisfactory evidence that he gave value for the same, the defense will prevail. Fitch v. Jones, 5 El. & Bl., 246; Harvey v. Towers, 6 Exch.,

660.

Where there are circumstances, in the nature of fraud or illegality, which can properly be

left to the jury, proof of those circumstances by

the defendant will cast on the plaintiff the onus of showing that he gave value for the bill or note. Hall v. Featherstone, 3 Hurls. & N., 287; Millis v. Barber, 1 Mees. & W., 432.

Negotiable instruments are expressed to be for value, and, if payable to bearer or indorsed in blank, they pass by delivery from hand to hand, clothed with that presumption; nor is that presumption overcome, where the suit is in the name of a subsequent holder, by proof that the indorsement was for the accommodation of the maker.

If it appears that the bill or note was obtained by fraud, or that it had been stolen before it came to the possession of the holder, then the presumption may arise that the holder did not pay full consideration for it, because in such a case it is probable that the person obtaining the instrument would pass it away for less than its full value. But where there is only the simple fact that it was an accommodation bill or note, then the inference is that the holder did give value for it, because that was the very object for which the instrument was given. Percival v. Frampton, 2 Cromp. M. & R., 183; Seybel v. Bk., 54 N. Y., 291.

Decided cases, almost without number, support that proposition; but if the note or bill is founded in fraud, or was fraudulently obtained and put in circulation, the indorsee must prove that he paid value for it before he can recover the amount. Tucker v. Morrill, 1 Allen, 528; Mather v. Maidstone, 1 C.B. (N. S.), 287; Sistermans v. Field, 9 Gray, 337; Brush v. Scribner, 11 Conn., 390.

Tested by these several considerations, it is clear that there is no error in the record.

Judgment affirmed.

KER, Appts.,

District of Columbia.

The appellees filed a bill of interpleader in the court below, for the distribution of the proceeds of certain personal property. A decree was entered giving preference to the claim of the Freedman's Savings Bank over the claim of the appellants. Whereupon this appeal was taken.

The case is fully stated by the court.
Mr. Walter D. Davidge, for appellants.
Mr. Enoch Totten, for appellees.

Mr. Justice Clifford delivered the opinion of the court:

Landlords leasing real property in this Dis trict have a tacit lien upon such of the personal chattels of the tenant upon the premises as are subject to execution for debt, commencing with the tenancy, and continuing for three months after the rent is due, and until the termination of any action for such rent brought within said three months. 14 Stat. at L.. 404; Fowler v. Rapley, 15 Wall., 328 [82 U. S., XXI.. 35]: Webb v. Sharp, 13 Wall., 14 [80 U. S., XX., 478].

Sufficient appears to show that the executors of Alpheus Middleton, deceased, and Benjamin Beall, the owner of the other undivided half, on the 5th of March, 1867, leased the hotel at the corner of Pennsylvania Avenue and Sixth Street West, then known as the Clarendon Hotel, to George W. Bunker and William H. Crosby, for the term of five years from the first day of April next ensuing, at the yearly rent of $4,000, payable in monthly installments the last day of each month, with the proviso, that if the rent, or any part thereof, shall be in arrear and unpaid for the space of thirty days, the tenancy, upon notice thereof being given in writing to the lessees, shall cease and determine,

and the same shall be and become a tenancy at will, determinable as prescribed in the Act of Congress.

Covenants were also contained in the lease by both parties. On the part of the lessees, for the payment of rent during the term and in the mode prescribed; that they would not let or sublet the demised premises without the written consent of the lessors; and for the peaceful surrender of the premises at the end of the term, or additional term. Reciprocal covenants were also made by the lessors for quiet enjoyment, for the renewal of the lease for another term of five years, if the lessees made written application for the same within the period therein specified.

Under that instrument the lessees entered into possession of the premises, purchased necessary furniture, and commenced the business of hotelkeeping, the name of the house being changed to Bunker's Avenue Hotel. At the date of the lease, Thomas M. Plowman was a silent partner with the lessees in the business; and it appears that Crosby, on the 2d of October in the following year, sold and assigned his interest in the lease and furniture to Bunker & Plowman, his copartners.

Negotiations took place for the enlargement of the hotel; and, in December following, an adjoining tenement belonging to Benjamin Beall, in his own right, was leased to Bunker & Plowman, at the yearly rent of $1,300, payable monthly, the same having previously been altered and remodeled for the purpose at great expense, and was then fitted up with the necessary furniture.

Five days after the commencement of the lease, to wit: April 6, in the same year, the les sees gave a deed of trust upon all the furniture then in the hotel to Orestes B. Dodge, trustee, to secure two notes of even date with the deed, each for $1,250, payable in nine and twelve months. When William H. Crosby sold and assigned his interest, Bunker & Plowman on the same day, to wit: October 2, in the same year, gave a deed of trust to Samuel L. Phillips, trustee, upon all the furniture then in the hotel and all additions to the same, and all furniture to be placed in the Beall tenement, then being remodeled, and also upon the demised term and any further term the grantors may obtain in the Beall property, to secure two notes of even date, each for the sum of $3,500, payable in six and twelve months, in favor of William H. Crosby, for his interest in the lease and furniture.

Bunker & Plowman, on the 17th of April following, conveyed all their leasehold interest in the tenements, then called the St. James Hotel, together with all the furniture therein, to Samuel L. Phillips, trustee, to secure a continuing credit given by Beall & Baker to the grantors, in the amount of $5,000, to continue for two years. On the 20th of December in the same year, the same grantors gave another deed of trust to Elias E. White, trustee, to secure a further indebtedness to Beall & Baker, in the sum of $3,044.77, as appears by the answer.

Two of the notes secured by the deeds of trust, each payable in twelve months, are claimed by the Savings Bank, one being secured in the first trust-deed and the other in the second, both notes having been taken by the

bank when overdue. Mention should also be made that the same grantors, on the 10th of April, two years later, assigned their leasehold interest and all the furniture in the hotel to John Spicer, and, late in the same month, put him in possession, the original lessors refusing to recognize him as tenant. Rent was subsequently paid, but was received and receipted as due from Bunker & Plowman.

Suits in attachment on two of the notes were brought for rent, on the 29th of August in the same year, and two other similar suits were instituted for similar causes, near the close of the year, in which chattels upon the premises, including both tenements, were seized, and judgments of condemnation were duly rendered.

Enough appears to show that Bunker & Plowman were indebted to Beall & Baker, under the deeds of trust executed for their benefit, in the sum of $10,000, and that it was at their instance that the trustees proceeded to enforce the deeds; that the property was sold by the trustees, under the several deeds of trust, with the consent of Spicer; and that the trustees then filed their bill of interpleader against Beall and Beall & Baker, and the Savings Bank, for the distribution of the fund.

Process was served, and the respondents appeared and filed an answer. Proofs were tak en, the parties heard, and the court entered a decree that the deeds of trust are entitled to priority of satisfaction out of the fund in the hands of the complainants as against the rents to the landlord. Such being the final decree in the Court of Appeal, Benjamin Beall and Reuben F. Baker, by special leave, appealed to this court, and assign for error the decree of the court below, adjudging that the deeds of trust are entitled to priority of payment as against the lien of the landlord.

Priority in favor of the first deed of trust cannot be claimed, unless the proposition of appellees can be sustained, that the first tenancy ended when William H. Crosby, with the consent of the lessors, sold and assigned his interest in the lease and furniture to Bunker & Plowman, or when the latter in turn assigned their leasehold interest in the demised premises and the furniture in the hotel to John Spicer. Suppose the original tenancy was unaffected by those events, it follows that the claim in favor of the first deed of trust is unfounded, as the record shows that the tenancy commenced before the deed was executed, and the recitals in the deeds showed that the chattels were upon the premises.

Without more, these remarks are sufficient to show that the court below erred in that regard if the original contract of lease continued in force unaffected by the described assignments. Grant that, and it follows that the decree under review is also erroneous in respect to the claim made in favor of the other deed of trust, for the same reason: that the tenancy commenced eighteen months before the deed was executed. Nor can the appellees derive any benefit from the fact that the deed purports also to convey chattels to be acquired in the future and placed in the hotel. Liens of the kind, arising under the Act of Congress, attach at the commencement of the tenancy, or whenever personal chattels, owned by the tenant and subject to execution for debt, are brought onto the premises. Stat