Potter v. Bartlett

The opinion of the court was delivered by Williams, Ch. J.- — The plaintiff declares on this note as the bearer. The defence proved was in substance a payment made to the original payee of the note before it became due. In the case of Matthews vs. Hall, 1 Vt. Rep. 316, it was decided that by the principles of common law, independent of the statute, a person who was the holder,;of a note payable to bearer might maintain an action thereon/ The action must of course be governed by the principles of the common law as applicable thereto. That case was decided upon argument, and whatever doubts may have been entertained as to the law upon that subject previously, the question must now be considered as settled. In the case of Parker vs. Kendall, 3 Vt. [250] R-eP* 540, it was decided that in an action brought by the bearer, the maker could not avail himself, by a plea in oifsett, of a sum due to him from the original payee, and this would follow as a necessary inference from the first decision. If any inconven-iencies were likely to-result from this decision, the statute which was passed in 1832 has put an end to them. In an action brought by the endorsee or bearer of a note payable to order or bearer, upon the principles of the common law the maker of such a note was not permitted to show in defence any payments made before the note became due and not endorsed thereon. The person who makes and delivers such a note intends that it shall pass to any one, who may be disposed to purchase, and promises to pay the contents to any one who shall be the holder or bearer. If he could avail himself of payments made and not endorsed, it would enable a payer or holder to practice a fraud by selling or negotiating anote apparently due, but liable to be defeated by the act of the parties not appearing upon the face of the instrument. This we believe cannot be done. The bearer may maintain an action on such note without showing that he paid any consideration therefor, unless the maker can in some way impute force or fraud to him, and is not subject to any offset or equitable considerations between the original parties thereto. If the defendant can show that the note was put in circulation by fraud or force, and throw suspicion upon the title of the holder, or show that he took it after it became due, he may compel the holder to prove that he paid a consideration therefor, or took it in the regular course of business. But in the present case there was nothing to impeach the title of the plaintiff; and the evidence to prove the defence was improperly admitted. The judgment of the county court must therefore be reversed.