Court Opinion

ID: 8793884
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:02:03.231409+00
Date Added: 2024-06-11T17:03:30.923873
License: Public Domain

HUNT, Circuit Judge
(after .stating the facts as above). [1,2] Examination of authorities demonstrates that defendant cannot avail himself of his attempted defenses, for it is well settled that an accommodation maker, even if he is known to be such by the holder of a negotiable note in due course, is yet liable. It has been said by the Supreme Court of the United States in Israel v. Gale, 174 U. S. 391, 19 Sup. Ct. 768, 43 L. Ed. 1019, that it is elementary that mere knowledge that paper has been drawn for an accommodation does not prevent one who has taken it for value from recovering thereon. The decision of the Supreme Court in Israel v. Gale was in affirmance of the decision of the Circuit Court of Appeals of the Second Circuit in Israel v. Gale, 77 Fed. 532, 23 C. C. A. 274. There the case was by a receiver of a national bank upon a promissory note and upon a defense that the note was made and delivered without consideration and merely for accommodation. Israel v. Gale was also followed by Judge McPherson, sitting in the Circuit Court of the Eastern District of Pennsylvania, in Earle v. Enos, 130 Fed. 467, and again the rule was sustained that the fact that a bank which has discounted an accommodation note has done so knowing of its character does not give to the maker the defense of want of consideration. Randolph on Commercial Paper, § 1020.
These cases are enough, and of course the recognition of the rule as stated by the Supreme Court will be accepted as conclusive.
The motion of the receiver to strike out the answer is therefore well taken upon the legal ground stated. Let the motion be granted, and judgment entered as prayed for.