Maynard v. Sixth National Bank

Mr. Justice Paxson delivered the opinion of the Court It is an undisputed fact in this cause that the note in controversy was held by the plaintiff below merely as collateral security for an antecedent debt. It was not, therefore, a holder for value, and the defendants were entitled to set up aijy defense they had against the payee. Our books are full of authorities upon this point. It is sufficient to refer to Kirkpatrick v. Muirhead, 4 [253] Harris 117; 9 Harris 237 ; Lenheim v. Wilmarding, 5 P. F. S. 73. Upon the trial below, the learned judge rejected the evidence offered by the defendants, and referred to in the first, second and third assignments, for the reason that while it might be a good defense against Iioutz, it could not be set up as against the bank, unless it be first shown that the debt for which the note was taken as collateral had been paid. This was error. The bank was not a holder for value. It had paid nothing for the note, and under all the authorities, the defendants could set up in this suit, any defense they would have been entitled to make, had the action been by Houtz, it was not necessary to prove the payment of the debt for which the note had been pledged. The case was argued for the plaintiff upon the theory that the note was accommodation paper. No such fact appears in the case. The affidavit of defense was not offered in evidence. And had it been, it is'at least doubtful whether it would have helped the plaintiff upon this point. Judgment reserved and a venire faoias de novo awarded.