Court Opinion

ID: 4927352
Source: CourtListenerOpinion
Date Created: 2021-09-24 00:58:42.176319+00
Date Added: 2024-06-11T08:13:21.225984
License: Public Domain

The opinion of the Court was delivered by
Siummv J.
The plaintiii’s are joint owners of a negotiable promissory note purchased before it became pa 'able. One of *106tliem is a holder for value without, notice; the other with notice, but deriving his title through others who were bona fide holders without notice. . As between the original parties the note' may be regarded as made without consideration. Andrews, who was the first and an innocent indorsee for value, did not endorse it, when he disposed of it, and he was properly admitted as a witness. Whitaker v. Brown, 8 Wend. 490. He could have collected it, for the want of consideration could not be set up against him. A knowledge of the fdcts acquired afterward would not affect his rights. He had not only a legal right to hold and collect it, but to negotiate it. •And the' maker could not impair that right by giving notice, that it was made without consideration. Nor would he be injured by a transfer to one having a full knowledge of the facts; for his position would not be more unfavorable than before.
Bayley states, that the want of consideration cannot be insisted upon “ if the plaintiff, or any intermediate party between him and the defendant, took the bill or note bona fide and upon a valuable, consideration.” Bayley, 550, ed. by Phillips & Sewall.
The case of Thomas v. Newton, 2. C. & P. 606, was assumpsit on a bill drawn by Wilson on the defendant and accepted, and by-him endorsed to Dandridge and by him to the plaintiff. The defénce was a want of consideration. Lord Tenterden says, “if the defendant shrews, that there was originally no consideration for the bill, that throws it on the plaintiff to shew that he gave value for it, or that value was given for it by Dandridge; for if either the plaintiff or Dandridge gave value for it, the plaintiff may recover; otherwise the defendant is entitled to' recover.”
In Solomons v. The Bank of England, 13 East, 135, note (b),.it appeared, that the bank note had been obtained fraudulently from Batson & Co., who informed the bank of it. The plaintiff as holder claimed payment of the bank, and it was refused. He had received the bill of Hendricks & Co.; .and it did not appear’, that he paid value for it before notice. Lord Kenyon says, “ upon this evidence I think Solomons must be considered to be in the same situation as Hendricks *107& Co.” But. as it did not appear, that they were holders for value without notice, the plaintiff did not recover.
In Smith v. Hiscock, 14 Maine R. 449, where a negotiable promissory note had been indorsed bona fide and for value before it was payable, the C. J. says, “ the want of consideration is not an available defence against a subsequent holder, to whom it may have been passed after it. was due. The promise is good to the first indorsee free from that objection; and the power of transferring it to others with the same immunity is incident to the legal right which he had acquired in the instrument. By the first negotiation the want of consideration between the original parties ceases as a valid ground of defence.”
If the relations between the maker and holder only were to be considered, the want of consideration would be a good defence against one, who did not purchase for value, or who did so after it was once due. And yet it has been decided, that one so situated may avoid that defence by shewing, that it could not have been interposed against a prior holder. The same principle appears to be equally applicable to a holder who has purchased with notice. If the relations between himself and the maker only were to be considered lie could not recover. But purchasing of one who had no notice he must be considered to be in the same situation and as entitled to the same protection.

Defendant defaulted and judgment for amount due on the note.