Clark v. Thayer

Wells, J. The plaintiff became the bond fide holder of this note, for value, before its maturity. He was informed of the previous decease of the maker, Warren Hunt. But it does not appear that he had notice of the fact that it was an accommodation note. We do not think there is any ground for the argument that he is chargeable with implied notice; or that notice may be inferred from the circumstances of the transaction. The defendants did not seek to go to the jury upon that question; and it does not appear that the point was raised at the trial. The defendants claimed that the death of Warren Hunt, known to Clark when he took the note, defeated his right to recover upon the note, or to prove it against Warren Hunt’s estate. This single point being ruled against them, the case was reported, at the request of the defendants, for revision by this court. Upon this presentation of the case, no other question is open to the defendants here, except that which was ruled upon at the niai. We must assume that Clark was not chargeable with notice that the note was made for the accommodation of the indorsee. Clark was entitled, then, to take the note for what it purported to be, namely, as given for value, and valid between the original [218] parties. In that case, the death of Warren Hunt would not affect its negotiability, or its validity in the hands of any holder Knowledge of the death of Warren Hunt, therefore, would not affect Clark with notice of any invalidity of the note. The principle is the same as that established in Monument National Bank v. Globe Works, 101 Mass. 57. The question has been argued at the bar, whether the right of Francis W. Hunt, during the life of Warren Hunt, to negotiate the note for his own use, was a power coupled with an interest, or a mere naked power revocable by Warren Hunt at any time before it was executed, and therefore revoked by his death. But we do not consider that question to be material to the decision of the case. Even if the right of Francis W. Hunt to transfer the note had been terminated by revocation of his power in any mode, and he put it into circulation fraudulently as against the maker of the note, that would only throw' upon the holder the burden of proof, to show that he acquired the note before maturity, for value and in good faith. Munroe v. Cooper, 5 Pick. 412. Sistermans v. Field, 9 Gray, 331. Worcester County Bank v. Dorchester & Milton Bank, 10 Cush. 488. Wyer v. Same, 11 Cush. 51. For some purposes, the first negotiation for value is treated as the inception of the contract. This is so especially in relation to questions of usury; and it makes no difference that the purchaser of the note supposed he was obtaining a security already in circulation, and valid between the original parties, he having no notice to the contrary. But that rule obtains under statutes, and does not apply to ordinary transactions depending on the commercial law. By that law, the indorsee of negotiable paper before maturity, for value, in good faith, and without notice of defences, is protected against defences on grounds of want of consideration, misappropriation, and even fraud between the original parties thereto. Story on Notes, § 191. Thurston v. McKown, 6 Mass. 428. Lancaster Bank v. Taylor, 100 Mass. 18. This rule of law meets the point of the present case. The defendants fail to establish the condition on which alone the proposed defence can be open. Judgment for the plaintiff accordingly.