Court Opinion

ID: 8504965
Source: CourtListenerOpinion
Date Created: 2022-11-23 01:26:11.913107+00
Date Added: 2024-06-11T16:50:50.807833
License: Public Domain

Woods, J.
This is an action brought by the indorsee of a promissory note, made by the defendant to Mudgett, and by Mudgett indorsed to the plaintiff for value, before it was due, and without any notice on his part that it had been given for any illegal consideration or purpose.
The defence is, that the note was given in considera*278tion of an agreement to suppress a prosecution which had been instituted against one Pease, for an alleged crime, and that the note is therefore void, even in the hands of ' an indorsee who has taken it under the circumstances that have been described.
That a note given for such consideration is void, as between the original parties to it and to the consideration, and even in the hands of one who has notice at the time of taking it, of the illegality of the transaction in which it originated, or who holds it for the benefit of another in whose hands it would for such a cause be invalid, or who has taken it after its dishonor, is well established by numerous .cases in this State. Hinds v. Chamberlain, 6 N. H. Rep. 225; Shaw v. Spooner, 9 do. 197; Williams v. Little, 11 do. 66.
, But the general rule is, that negotiable paper that has passed to innocent holders, for good consideration, in the ordinary course of business, is not subject to objections founded upon the illegality of the consideration for which it was given, and which would have avoided it in the hands of the original holder.
Upon that ground it was'held in Clark v. Ricker, 14 N. H. Rep. 44, that a note given in consideration of an agreement by the payee to forbear to prosecute further the maker of the note for adultery, although void between the parties to the consideration, was good in the hands of an innocent indorsee, for value, and without notice.
This general rule is said by Mr. Justice Story to have but one exception; and that is, when a statute prohibiting a particular class of contracts makes notes and bills, given in consideration of such, absolutely void. Of these cases there are but few, the general policy which favors the free circulation of negotiable paper having to a great extent restrained the making of such statutes. Story on Notes, sec. 192.
The judgment must, according to the agreement of the parties, be for the plaintiff.