Case ID: misc_15/html/0623-01.html
Source: Caselaw Access Project
Author: {"author": "Van Wyck, Ch. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Sanford B. Stifter, Respondent, v. William Boggs, Appellant.
    (City Court of New York—General Term,
    February, 1896.)
    Negotiable paper—Evidence — Fraud.
    In an action upon a promissory note by a transferee thereof against the maker, where the defense is fraud in its inception or diversion, the- defendant may prove such fraud or diversion without showing that plaintiff had knowledge thereof, and upon such proof being given the burden rests upon the plaintiff of showing the bonafides of his holding.1
    
      Appeal from judgment in favor of the plaintiff.
    
      Thos. McAdam, for appellant.
    
      Edwin F. Stern, for respondent.
   Van Wyck, Ch. J.

The action is upon two promissory "notes made by defendant to order of one Tuple, who indorsed same to plaintiff. Defendant’s ■ alleged defense was that these notes were obtained from.him by fraud. The record shows that plaintiff’s attorney tried the cause upon the theory that, after he had marked the notes in evidence, the defendant could not make any proof of the alleged fraudulent obtaining of the notes by the payee until he first proved that plaintiff had knowledge of the fraud, or showed that the. notes came, into plaintiff’s possession after maturity. However, he now concedes that defendant could first show the fraud, and that then the burden would be shifted to the plaintiff to show.-that he obtained the notes before maturity for value; and he now concedes that if the defendant made proper effort to prove his affirmative defense of fraud, was prevented from doing so and excepted, then that defendant is entitled to a ' reversal and new trial.

The court ruled, in addressing defendant’s counsel: “ You must first show that the plaintiff had knowledge of the defense or show that they (the notes) came into possession of plaintiff after maturity,” to which defendant excepted, and again, when » defendant was endeavoring to prove the circumstances under which the notes were obtained from him, the plaintiff’s counsel said to the court: “ He cannot show any knowledge on the part of Mr. Stifter” (plaintiff), and defendant’s counsel frankly said “ I cannot show any absolute knowledge on the part of the plaintiff.” The court: “Then I sustain the objection.” “ Exception taken.”

If a promissory note is obtained from the maker, by fraud or. diverted from the purpose for which, it was given, and is sued upon by a holder from the payee, and the maker defendant makes proof of the fraud or diversion, the. .plaiptiff then must make proof of the bona fides of his holding, and the burden to-do so is upon him.

Judgment reversed and new trial ordered, with costs to appellant to abide the event.

McCarthy and Suhuohman, JJ., concur.

Judgment reversed and new, trial ordered, with costs to appellant to abide event.