Bank of Commerce v. Barrett, Carter & Co.

McCay, J. This was a suit upon a promissory note. The note expressed upon its face, to be “ to pay to the order of Thos. G. Barrett, five hundred dollars, “ in consolidation of National Express and Transportation Company, value received.” On the trial, the Court charged the jury that the words on the face of the note were notice, to the party buying it, of the consideration, and sufficient to put him up on inquiry as to whether or not the consideration had failed. [129] The bona fide purchaser of a note not due, who has no notice of a failure of consideration, cannot be defeated by snch a plea. Notice of the consideration alone, is nothing. Why should that affect him ? That the note was given for money, or a horse, er a house, is wholly immaterial. How can the knowledge that a note was given for a horse, he notice that the horse has proven worthless ? One can, perhaps, imagine a ease in which the mere knowledge of the consideration would involve also the knowledge of its failure— as when the failure was matter of universal notoriety, or was caused by the party charged, etc., but so far as appears, this is not such a cause. Nor is the other point in the charge, that the knowledge of the consideration is sufficient to put the party up on inquiry, good law. Such a rule would largely restrict the negotiability of commercial paper, and has, so fax' as we know, no authority to support it. Judgment reversed.