John D. Cheever, Appellant v. the Pittsburgh, Shenango and Lake Erie Railroad Company, Respondent

Summary

The Court reversed the General Term's dismissal of the plaintiff's first two causes of action, holding that the plaintiff was a bona fide holder of the corporate notes for value without actual notice of the president's fraud, and therefore could enforce the notes. The majority applied the presumption that the relations shown on the face of negotiable paper are accurate unless actual notice or bad faith is proven. Justice Bartlett dissented, arguing that the president's use of the notes for personal benefit should put the holder on inquiry and defeat his claim.