Moore v. Baird

The opinion of the court was delivered by Strong, J. — He, who lends his own promissory note for the [139] accommodation of another, lends his credit without any restriction as to the manner of its use. As between the maker and the payee there is an available defence, but the maker connot complain of a subsequent holder when called upon to perform all he has promised. An endorsee, though he received it as collateral security, and is not therefore a holder for value, may recover the ■full amount of the note: Lord v. Ocean Bank, 8 Harris 384; and a holder for value may recover, though he knew, at the time he purchased, that it was an accommodation note, and that there was no consideration between the maker and the payee: Charles v. Marsden, 1 Taunt. 224; Fulweiler v. Hughes, 5 Harris 440. Were it not so, the purpose intended by the original parties to the paper would be defeated. In Gaul v. Willis, 2 Casey 259, a suit indeed, by the second endorsee against the maker, the holder was allowed to recover against the maker of an accommodation note the entire amount according to its tenor, though the discount at each negotiation had exceeded six per cent. He was regarded as not the less a bond fide holder for value, because he purchased for less than upon the face of the note appeared to be due. What has the maker to do with that ? He has lent his credit for the sum named in the note. Shall one who has received it as collateral, and is not therefore a holder for value at all, be permitted to recover, and a recovery be denied to him who is a holder for value, but happens to have purchased for less than the face of the paper ? Such is not the law. In the present case the plaintiff below was not only a holder for value, but he purchased without knowledge that it was an accommodation note. The defendant had, therefore, according to his own showing, no defence, and the judgment of the court below is right. Judgment affirmed.