Case ID: scl_14/html/0549-01.html
Source: Caselaw Access Project
Author: {"author": "ConcocK, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Wm. Nixon ads S. English.
    4 note payable to bearer, and passed after it is due, does not carry along with it all the equities which may subsist between any intermediate bearer and the maker, it is only subject, in the hands of a bona fide holder, without notice, to the equities subsisting between the original parties.
    This was an action of assumpsit on a note of hand. Defendant offered in discount a note of hand, given by Joshua English to James English, or bearer, and by him transferred by delivery to the defendant. To this discount the plaintiff offered to set off a note given by Joshua English to the plaintiff. This last note was dated in 1818, and was barred by the statute of limitations before the commencement of this action. The second was dated November 1820, arjd became due January 1821, and it was proved to have been passed into defendants hands, after it was past due. The jury under the instruction of his honour Judge Gaillard, who tried the cause, found a verdict allowing the (second discount against the first,) the whole account for the plaintiff. And the defendant appealed on the following grounds:
    1 st. That his honor the presiding judge charged the jury that they must allow the note of Joshua English to the plaintiff, to be set off against the note to James English or bearer, which had been transferred to the defendant.
    2nd. On the ground that a bona fide holder of a note passed after due, is not bound to enquire, whether all the persons through whose hands the note had passed, without their endorsement, may not have been indebted to the drawer or indorser, at the time he received the note.
    3rd. That where a note payable to bearer is passed after due, the bearer is not bound to enquire whether the antecedent bearers of the note may not have been indebted at the time they received the note to the original drawer, and cannot be effected by such indebtedness.
    
      C. Levy,
    
    A note passed after due is liable to all equities to which it was liable when in the hands of the, original holder. Here Mrs. English and her son understood each other. One note was held as a set off to the other. The note being made payable to order or bearer can make no difference.
    
      I. G. Holmes.
    
    When Nixon received the note from Joshua English, what was Nixon bound to do? He was only bound to know whether any equities existed between the original drawer and the original payee. It cannot be requisite that the holder shall enquire of every other previous bearer, though it may have been through a hundred hand's, if any equities or discounts existed between the drawer and any anterior bearer. In a commercial country, this, in some cases might be impossible. Suppose a private banknote, payable to bearer, and any previous bearer should have been indebted to the bank, could the bank, in answer to a demand of payment, set up a debt due by such bearer to the bank?
   ConcocK, J.

This was an action brought by Sarah English against William Nixon on a note, made by the defendant to the plaintiff, dated 20th June 1821, for fifteen hundred dollars. To this the defendant pleaded in discount a note given by the plaintiff to her son. Jame.s English or bearer, for six hundred and forty three dollars and eleven cents, dated 1st November, 1S20. "Shis note it is admitted was passed after due, by JamcsEn rlish to his brother Joshua, and •by him to the defendant, by delivery, there being no endorsement on the note. To this discount the plaintiff replied anote of Joshua English’s in her hands given to her by the said Joshua for six hundred dollars, which she contended ought to be set off against her note, and that this had been agreed on between her and her sons James and Joshua. The evidence? of James English shews that Joshua bought the note of theii' mother, from him, as hfe Joshua alleged, for the express purpose of paying, or discounting it with his mother, but that instead of doing so, he passed it to the defendant in this action. On the former hearing of this case, I well recollect that it was Urged that this must have been known to the defendant. But as the case now comes up it is admit»ed that he had no knowledge of the fact; and if so, it is clear, that the note of Joshua English in the hands of the plaintiff cannot be set off against her note in the defendant’s hands.

The note of the plaintiff having been past after it was due, it passed of course subject to all the equities which subsisted between the original parties; that is, the plaintiff and her son James. And if the note, she now offers, had been James’ note, instead of Joshua’s, she would have had an undoubted right to plead it in discount. But it would be destructive of all commercial paper to say that a note payable to bearer should carry along with it all the equities which might subsist between the maker and any or every distinct holder of it. For this would necessarily impose on all who receive such notes, the necessity of going back to all who may have held it to ascertain if there were any dealings between them and the maker, which at a future time might be pleaded in discount.

1 think it is clear that the unfortunate plaintiff has been imposed on by her son, but as the defendant had no share in the fraud, he cannot be made to sustain any of the consequence of it. She must look to her son Joshua on his note.

The motion is granted.

R. Bullaniand Holmes for the motion.

C. Levy contra.