Case Name: The Motor Finance Corporation v. M. H. Huntsberger
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1927-03-29
Citations: 5 Ohio Law Abs. 201
Docket Number: No. 20044
Parties: The Motor Finance Corporation v. M. H. Huntsberger.
Judges: Day, Allen, Kinkade, Robinson, Jones and Matthias, JJ., concur.
Reporter: The Ohio Law Abstract
Volume: 5
Pages: 201–201

Head Matter:
No. 20044
The Motor Finance Corporation v. M. H. Huntsberger.

Opinion:
MARSHALL, CJ.
1. A holder of negotiable paper in due course is defined by section 8157, General Code It is one of the elements of that definition that the purchaser must take the instrument in good faith and want of good faith is not made to appear by showing that the note was given by the maker to aid the payee in the pediormance of an executory contract of which the in-dorsee had notice and knowledge, there being no breach of the executory contract at the time of the transfer and the indorsee having-no knowledge or reason to believe that the executory contract would later be breached.
2. It is a further element of the definition of a holder in due course that at the time of the negotiation of the instrument the indorsee had no notice of any infirmity in the instrument or defect in the title of the person negotiating it. Where the consideration of a promissory note is the promise on the part of the payee to perform an executory contract made between the maker and payee concurrently in point of time with the execution and delivery of the note, such promise constitutes a sufficient consideration for the note and the indorsee thereof for full value and before maturity in good'faith of such a note regular on its face is a holder in due course if the execu-tory contract has not been breached at or prior to the time of such negotiation.
3.The purchaser of a promissory note under such circumstances does not become a guarantor of performance of the executory contract by the payee, neither is such purchaser bound to see to the application of the proceeds of the note to the performance of such executory contract.
Judgment reversed.
Day, Allen, Kinkade, Robinson, Jones and Matthias, JJ., concur.