Smith v. Popular Loan & Building Ass'n

Mr. Justice Trunkey delivered the opinion of the court, Febuary 2d 1880. The affidavit of defence sets forth facts which show that the defendant’s endorsement of the note in suit was induced by falsehood ; that he gave it on the assurance that the note would- be paid on a mortgage, for which he was already liable; and that the drawer and payee fraudulently gave the note to the plaintiff. The facts are clearly stated, and reveal actual fraud by the drawer in the obtaining and use of the endorsement. This case is ruled by Hutchinson v. Boggs & Kirk, 4 Casey 294, which establishes that an affidavit of defence, alleging such facts as show that the note was obtained from the defendant by misrepresentation and negotiated in fraud of his rights, is sufficient to prevent judgment being entered for want of a proper affidavit of defence. Where a negotiable note was obtained from the maker under false pretences, and fraudulently put in circulation by the payee, the holder of the note, in order to recover, must show a purchase for value before maturity, without notice of the fraud. An affidavit of defence distinctly setting out the facts, from which the fraud is a direct and natural inference, is sufficient: Hoffman v. Foster & Co., 7 Wright 137. See Albietz v. Mellon, 1 Id. 367. Judgment reversed and procedendo awarded.