Court Opinion

ID: 7278339
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:02:56.740422+00
Date Added: 2024-06-11T16:18:57.597566
License: Public Domain

Mr. Justice Van Orsdel
delivered, the opinion of the Court:
It will be observed that much of this amounts only to an averment of the belief of the affiant, without a tender of proof of the facts. In other words, proof of defendant’s belief would not bring him within the requirements of the rule, which provides that a defendant shall file, along with his plea, “an affidavit of defense denying the right of the plaintiff as to the whole or some specified part of his claim, and specifically stating also, in precise and distinct terms, the grounds of his defense, which must be such as would, if true, be sufficient to defeat the plaintiff’s claim, in whole or in part.”
An attempt to defeat a negotiable instrument in the hands of a third party for value imposes a heavy burden upon the one assailing its validity. Nothing short of guilty knowledge or wilful ignorance of the fraud or deception used in its procurement is sufficient to defeat the holder of the right of recovery. The following rigid rule was laid down by this court in Huichins v. Langley, 27 App. D. C. 234, quoting from Hotchkiss v. National Shoe & Leather Bank, 21 Wall. 354, 22 L. ed. 645. A “party who takes negotiable paper before due for a valuable consideration, without knowledge of any defect of title, in good faith, can hold it against all the world. A suspicion that there is a defect of title in the holder, or a knowledge of circumstances that might excite such suspicion in the mind of a cautious person, or even gross negligence at the time, will not defeat the title of the purchaser. That result can be produced only by bad faith, which implies guilty knowledge or wilful ignorance, and the burden of proof lies on the assailant of the title.”
Measuring the affidavit of defense in the present case by this rule, it would fail, but for the following averment: “That I am credibly informed and believe, and expect to prove at the trial, that the plaintiff became the holder of said promissory note, if holder at all, in bad faith and without any belief that it was a valid obligation of mine, and that the plaintiff did not receive my note in the regular course of business.” This constitutes a tender to prove that plaintiff received the note in bad *165faitli, with guilty knowledge of the invalidity of the note, and that he did not receive it in due course. This averment, taken in connection with the other averments of the affidavit tending to show close intimacy between plaintiff and the original payee, as well as knowledge of payee’s methods of transacting business, we tliink is sufficient to justify us in sending the case to trial.
This holding is in conformity with our interpretation of the proper application of the 73d rule, as stated by Mr. Justice Robb in Codington v. Standard Bank, 40 App. D. C. 409, as follows: “As we have many times suggested, the object of the 73d rule is to promote justice by preventing, so far as possible, fictitious defenses. It was, of course, never intended as a substitute for a trial. If, therefore, the court upon reading an affidavit of defense is convinced that it has been made in good faitli, and that a doubt exists as to the right of plaintiff to recover, summary judgment ought not to be entered. Lawrence v. Hammond, 4 App. D. C. 467; St. Claire v. Conlon, 12 App. D. C. 161; Patterson v. Barrie, 30 App. D. C. 531; Columbia Laundry Co. v. Ellis, 36 App. D. C. 583.”
The judgment is reversed, with costs, and the cause is remanded for further proceedings not inconsistent with this opinion. Beversed and remanded.