Barnet v. Offerman

[133] The opinion of the Court was delivered by Huston, J. The opinion of the court embodies all the testimony given in the cause, or at least all that we have of it. The books all say, and the world says, that perfect fairness and punctuality are the life of mercantile business. And on this ground a promissory note, or in this state a note payable at a bank and without defalcation, is recoverable, without regard to the state of accounts between the maker and payee at its maturity. This in case it has been discounted at bank, or is in the hands of a bona fide holder. But if the man to whom the note is payable still holds it when it becomes due, and sues on it, he cannot recover unless, on the state of accounts between him and the maker, so much is due at that time; nor can he recover if there was no consideration, or the consideration has failed. In short, in his hands it is as liable to objection as any other demand ; but in the hands of a bona fide holder, no defence can be made on any of these grounds, because the maker has agreed to pay it without regard to these matters, and the world so understand it. In modern times, much of the mercantile paper is not given in the real transaction of business, but a man who is not able to lend money to a friend, draws a note payable to him, or indorses one drawn by him, and thus enables him to raise money, to make a purchase or pay a debt. It would be useless to inquire into the policy or effect of these accommodation notes, and equally so to recite what has been said by judges as to them. Nor would it. be expedient to review all the decisions made as to them, under different circumstances. They are now in general use, and if the law arising on the facts of this case is settled, we have only to ascertain it. I have said, good faith is the basis of mercantile paper. This ought to be carried throughout, and apply to all the parties; and it is not in good faith that the payee of a note made to him two or three months ago, but which he has not used, should after it is due assign it, not bona fide, but for his own use, and thus enable himself, by falsehood, to recover it. If the maker of the note is willing still' to lend him his name, let him do so; but if he is not willing, if circumstances have changed, and it may be contrary to the maker’s inclination or convenience to do so, why should a man be enabled to sue and recover money from one who never owed him any thing, who has been his friend, and who may be seriously injured ? The law is settled, that whether the note is business paper and evidence of a real debt, or accommodation paper made by drawer or indorser to oblige the other, when it comes to the possession of a bona fide holder, he need not show that he gave a consideration for it, and that he is presumed to be honestly the owner of it; it lies on the other party to prove that he is not honestly the owner, or that he came to the ownership in such tvay as to affect him with all the equity which the maker had against the person from whom the present bolder got it. The judge repeated that possession of such a note as this was evi [134] dence of ownership, and that some evidence must be given to take off this presumption, or some evidence to take the case out of the . general rule; and that the burthen of this proof lay on the defendant. “ Where a transfer of a bill is made after it is due, whether by indorsement, or mere delivery, it is settled that at least it is to be left to the jury upon the slightest circumstance to presume that the indorsee had notice of the fraud, or was acquainted with matters which would have affected its validity, had it remained in the hands of the person from whom he received it.” Chitty on Bills 126, 127, 7th ed. And in page 69 of same book, the American authorities are many of them collected, in which it has been decided, that as between the maker and payee, either want of consideration or failure of consideration may be set up, and that each may be set up, not only by the original parties, but also against a holder claiming by indorsement or delivery after the note became due. To these cases I will add one, Cromwell v. Arrot, 1 Serg. & Rawle 180; in which ease C. J. Tilghman says: “a jury is bound to presume notice of some objection. The passing such a note after due being out of the ordinary course of business, is, of itself, sufficient to put the person on inquiry.” The case in 1 Taunt. 224 has been cited ; it perhaps stands alone; it was decided on a demurrer to a plea; held bad. Much of what was said by the judges was not to (he point trying; it was directly overruled by Lord Ellenborough, 1 Camp. 19; and in the text and notes to Chilty, 8th ed., will be found a host of cases contrary to it. In the same book will be found, that where evidence has been given to raise a doubt whether the note is the property of the holder or payee,, it is all for the jury. There are cases which say that if property in the holder is disputed, notice must be given to him to prove how he became possessed of the note, and that he gave a valuable consideration for it; admit this, still in this case the evidence was gone into by both sides, and no objection to the testimony; they left all the facts and conclusions from facts to the jury; and so the court told them. Judgment affirmed.