Snyder v. Riley

Gibson, C. J. It has been for some time settled, though it was at one time more than doubted, that an endorsee of over-due paper takes it exclusively on the credit of the endorser, and subject, even without proof of mala fides, to all intrinsic considerations that would affect it between the original parties; but where the time of the transfer is not admitted, and there is not, as there seldom can be, direct evidence of it, how is it to be established ? The principle which raises a presumption of consideration for the transfer, raises a presumption, also, that it was made in the usual course of commercial business, and, consequently, before the day of payment; for, as Lord Ellenborough said, in Tinson v. Francis, 1 Camp. 19, “ after a bill or note is due, it comes disgraced to the endorsee, and it is his duty to make inquiries concerning-it, if he takes it.” But the contract of endorsement, being without date and without witnesses, is so peculiarly susceptible of fraudulent practice upon the drawer, by precluding, perhaps, a just defence on original grounds, that the presumption of fairness primarily applicable to it is not only of the slightest kind, but open to be blown away by the slightest breath of suspicion. How easy it may have been for the payee, in this instance, knowing, perhaps, that he could not recover in his own name, to slip the note into the hands of an endorsee at the end of three years; and how tempting to the latter would be the opportunity thus to receive payment of a desperate debt, may be readily conceived. There must be many such temptations in commercial affairs ; and before a holder can fold his arms, and take his stand on the basis of the presumption, it surely ought to appear that there are no unusual circumstances connected with the transaction; for every thing which does not naturally fall in with the current of mercantile dealing, is ground of suspicion. . And yet, strange to say, I have seen no case, in which the onus probandi was actually shifted by the force of circumstances; for Lewis v. Parker, 4 Adol. & Ellis, 838, which is the only one in which the point was touched, turned on the form of the issue. The defendant had pleaded that the bill was endorsed after it was due, and it was determined that the burden of proving the affirmative was upon him; but what evidence of fraud or suspicion was necessary to shift it, was not determined. Of a kindred character, is Low v. Burrows, 2 Adol. & Ellis, 483, [169] in which Lord Denman said: “As to the evidence, unless suspicion had been raised to the extent of a prima facie case, there was no answer to the action.” But it is agreed on all hands, that when such a case has been actually made, the defendant may make the plaintiff show when and how he became the holder. Were there not circumstances to make out such a case in the instance before us ? In the first place, the plaintiff’s demand, if an honest, was a stale, one — a most suspicious circumstance in a case of commercial credit which is founded on peculiar and exact punctuality of payment. Though the defendant had publicly repudiated the note, it was not put in suit for three years from the day it became due; and if the plaintiff was the holder of it all that time, he ought at least to give some reason for his forbearance. In the next place, payment was not demanded at the bank of Northumberland, at which the note was made payable in the body of it — not only a circumstance of suspicion, but one which, if taken as a distinct and independent point of defence, would have embarrassed the plaintiff very seriously, and perhaps fatally. Again, it does not appear that the note was protested, as is usual in such cases, or notice of dishonour given to charge the endorser; which would have been a measure of prudence if he were not insolvent; and if he were, that would be an additional circumstance. Finally, the plaintiff refused to let the defendant inspect his books, a fact hardly reconcilable to honesty of purpose and fair dealing. All, or any of these circumstances, proved or conceded, would be sufficient to cast the burden of proving the time and consideration of the transfer on the other side, and to let in the evidence of want of consideration between the original parties. It certainly was in the plaintiff’s power to show the actual truth; and had he failed to satisfy the jury that he had taken the? note for value, and in the regular course of mercantile business, he would have left them to find as if the cause was depending between the drawer and endorser. Judgment reversed, and a venire facias de novo awarded.