Court Opinion

ID: 6695746
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:50:03.350902+00
Date Added: 2024-06-11T16:01:13.957062
License: Public Domain

Hoke, J.
I concur in the disposition made of this appeal for the reason that it does not appear that defendants have pursued the method of adjustment provided and stipulated for by the contract nor that they have made any reasonable effort to do so. I cannot assent to many of the other propositions appearing in the principal opinion as now stated. There is no doubt of the position that, under section 2208 of our statute on negotiable instruments and under general principles of law applicable without and before the provision of any statute, an indorsee plaintiff, presenting a note, is presumed to be a holder in due course, and that, according to the terms of this law and except in cases where a defendant has become unimpeachably bound in the instrument, before any defect in the title to such paper arose, the statutory presumption holds unless and until the title of some one who negotiated the paper has been properly and sufficiently assailed; but the statute here is only dealing with presumptions, and rebuttable presumptions, and the general principle remains that, when the facts are all disclosed, to sustain the position of holders in due course, the claimant must have paid value. In the present case the plaintiff has undertaken to show this, and, from his own proof, has established the fact that it is not a holder for value and has not paid anything for the note it holds and seeks to recover on. It simply gave the payee credit on his bank account, and there is no evidence that payee was in its debt or that the money or any *66part of it bad ever been checked out, or that plaintiff, if it fails to recover, is or is likely to be out of pocket one cent by reason of its alleged purchase. These are the facts as developed by plaintiff’s own proof, and, as in such case the great weight of authority and, to my mind, the correct view is against the position that plaintiff may be considered a holder in due course, shutting off either defenses or counterclaims. 7 Cyc., 929, and cases cited; 6 A. and E. (2 Ed.), p. 298; McKnight v. Parsons, 136 Iowa, 390; Warman v. Bank, 185 Ill., p. 60; Drivers Bank v. Blue, 110 Mich., 31. In the citation from 6 A. and E., supra, the doctrine is stated as follows: “Where a bank discounts paper for a depositor who is not in its debt, and gives him credit upon its books for the proceeds of such paper, it is not a bona fide holder for value, so as to be protected against infirmities in-the paper, unless, in addition to the mere fact of crediting the depositor with the proceeds of the paper, some other and valuable consideration passes. Such a transaction simply creates the relation of debtor and creditor between the bank and the depositor; and so long as that relation continues and the deposit is not drawn out, the bank is held subject to the équities of prior parties, even though the paper has been taken before maturity and without notice.”
The subject is not pursued, because the judgment is affirmed on other grounds, but, owing to the importance of the question discussed, I consider it well to state what I conceive to be the correct position.