Court Opinion

ID: 4930424
Source: CourtListenerOpinion
Date Created: 2021-09-24 01:06:46.023335+00
Date Added: 2024-06-11T08:14:27.189596
License: Public Domain

Cutting, J.
This suit is brought to recover the amount due on the defendant’s note to one Jacob Dodge, an insolvent assignor, to the plaintiffs, his assignees under the statute of 1844.
The defence set up is a failure or a partial failure of consideration, and the question presented is, whether such defence is open to the defendant, the note having been thus transferred before its maturity.
According to the law merchant, for the security of negotiable paper, the innocent endorsee of a note before it becomes due, without notice and for value, holds it unaffected by any equitable considerations as between the antecedent parties. If there can be a lingering doubt as to the truth of a proposition so long and well established, such doubt must *273bo removed on consulting the authorities cited by the plaintiff’s counsel.
But in order to give the indorsee such rights, the note should have been indorsed in the regular and usual course of trade. Assignments of negotiable paper by operation of a bankrupt law of the United States, or of an insolvent, or an assignment law of the state, cannot be said to have been made in the regular course of trade. The assignees in such cases can represent only the rights and seek the remedies of the insolvent. According to the agreement of the parties, the action must stand for trial.