Court Opinion

ID: 8257368
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:33:11.636121+00
Date Added: 2024-06-11T16:43:02.708919
License: Public Domain

FisheR, J.,
delivered the opinion of the court.
This was a bill filed by the drawer of an inland bill of exchange, which had been accepted by the drawee, and indorsed by the payee to an innocent party for a valuable consideration, to enjoin such party from collecting the bill from the acceptor. The bill was drawn, payable to the order of the payee, thirty days after date, and was delivered to him for the purpose of procuring the drawee’s acceptance, with the understanding that, when the bill was accepted, it should remain in the hands of a third party, until the drawer could ascertain, whether the payee would be indebted to the drawer on account of certain matters which had been submitted to arbitration by the said parties. Instead of leaving the bill in the possession of the third party, after its acceptance by the drawer, the payee transferred it, in due course of business, to Michie. The question for decision is, whether the acceptor can set up, as a defence, the fraud practised by the payee upon the drawer of the bill. The 'acceptor, being the party primarily liable on the bill, could only set up as a defence against a suit by the indorsee of the payee, some matter originating between the acceptor and payee, before notice to the former of the assignment of the bill. This being the attitude of the case, it follows that the drawer can insist on nothing which the acceptor could not interpose as a defence to defeat a recovery by the holder. The rule would be different, perhaps, if the holder *188sought to hold the drawer liable. Of this, however, we are not required to intimate an opinion.
Decree affirmed.