Russell & Washburn v. Splater

The opinion of the court was delivered by Redfield, J. The note in suit was negotiated to one George Coffin, while current, who purchased it for full value, in good faith, by cancelling a pre-existing debt to the full amount of the note. As between the original parties there’ is a good defence to the note. Coffin is the plaintiff in interest. Does Coffin stand as a bona fide purchaser for value ? In Dixon v. Dixon et al. 31 Vt 454, this very question was before the court, and the court, Barrett, J., held distinctly that, “ it is well settled that a note, received in payment of a pre-existing debt, is received and held upon valuable and valid consideration.” In Quinn v. Hard et al. 43 Vt. 375, Hard signed the note as surety for Lane, and was induced thereto by false and fraudulent representations of Lane. Lane delivered the note to Quinn in payment of a pre-existing debt; and the court, Peck, J., say: “ The pre-existing debt oí Lane to the plaintiff, was a good consideration for the note, both as to Lane the principal and Hard the surety; especially as it appears that the note was accepted in payment of that debt.” This note was negotiable on its face; and Niles, the payee, had 276 the possession and apparent authority to negotiate it; and Coffin, having purchased it for “ valuable and valid consideration,” stands on higher equity than the defendant, who has, apparently, authorized Niles to put the note in circulation, among innocent purchasers. In the case of Atkinson v. Brooks, 26 Vt. 674, Redfield, Ch. J., says: “It seems now to be pretty generally conceded, that one who takes a note or bill, indorsed while current, in payment and extinguishment of a pre-existing debt, must be regarded as a holder for value.” The case of F. M. Bank v. Hathaway, 36 Vt. 639, is not an exception to the general rule. The note in that case was not negotiable, and the case was decided on special grounds, and in no way conflicts with the general rule and general current of authorities. We think that the refusal of the court to charge as requested by the plaintiff as to Coffin being a Iona fide holder for value, was error; and for this reason the judgment of the county court is l’eversed, and cause remanded.