Court Opinion

ID: 6406613
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:49:27.884305+00
Date Added: 2024-06-11T15:51:13.888052
License: Public Domain

Shaw C. J.
drew up the opinion of the Court. The law is well settled, that where an indorsee takes a negotiable security, with actual or constructive notice, that it was obtained by fraud, or would be subject to any other legal defence, in a suit commenced thereon by the payee, he takes it subject to every such defence, in any suit brought in his own name. It has also been long held, that if the security is over-due and dishonored, at the time of the indorsement, this circumstance proves such legal constructive notice, and lets in the promisor to any defence which he could make against the promisee.
In this commonwealth it has been determined in a series of cases, and is now the settled rule of practice, that a promissory note payable on demand, is payable within a reasonable time ; that after the lapse of such reasonable time, it is to be deemed over-due and dishonored; and that what is reasonable time is a question of law upon the facts proved. And it has been repeatedly decided, that in a much shorter period than eleven months, such a note will be deemed in law over-due. Field v. Nickerson, 13 Mass. R. 131 ; Thompson v. Hale, 6 Pick. 259 ; Martin v. Winslow, 2 Mason, 241.
The defendant then was entitled to make this defence in this cause, and the question is, whether he could avail himself of the admissions of Little, the promisee, made whilst he was the holder, and which would have been competent had the action been brought by the promisee. We think this evidence *94was admissible, on the principle that they were admissions m relation to the title to property which he then held. Pocock v. Billings, Ryan & Moody, 127 ; S. C. 2 Bingh. 269 ; Barough v. White, 4 Barn. & Cressw. 325 ; S. C. 6 Dowl. & Ryl. 379. This decision on the principal point, is entirely reconcilable with that of Barough v. White, and is supported by it, although the evidence was in that case rejected. This proceeded on the ground, that in England a promissory note payable on demand, is not over-due or'deemed dishonored, by lapse of time, nor till an actual demand made. Such a species of security is probably rare in England, and is regarded as a continuing security until the holder shall see fit to render it due by a demand. Here it has long been in use, and the rules applicable to it have been firmly fixed. The Court are therefore of opinion, that the admissions made by Little, whilst he was the holder of the note, were admissible evidence.

New trial granted.