Shipman v. Robbins

Weight, C. J. When it is said in tbe books that tbe bolder of a negotiable promissory note, transferred after maturity, takes it as dishonored and subject to all tbe equities between tbe original parties, whether be has notice of tbe same or not, it must be understood that the equities meant are such only as attach to tbe particular note and such as between tbe parties to it, would control, qualify or extinguish any rights arising thereon. Equities between tbe parties to tbe note arising from other and independent transactions between them, are not available against tbe note in tbe bands of tbe assignee. In one case it is said that the true test is, could tbe payee at tbe time be transferred tbe note, have maintained a suit thereon against the maker. Furnis v. Gilchrist, 1 Sand. S. C. 53, and see Story on Promissory Notes section 178, note 2; Campbell v. Rusch, 9 Iowa 337. A set-off is not a defense to tbe plaintiff’s action on tbe note. However much defendant might establish by his set-off, tbe plaintiff’s right to recover the amount due on tbe note would remain the same. Tbe set-off is not like payment or a defense going to tbe want or'failure of consideration, or fraud, in obtaining tbe note. These attach to tbe note itself, or tbe transaction out of which it arose, and control, qualify or extinguish tbe plaintiff’s right to recover, and therefore are available against an indorsee taking it after maturity. In tbe case of set-off tbe rule is .different. It is a demand by tbe defendant against tbe payee, arising out of an independent transaction or transactions, and upon no principle is it available against tbe bolder. Judgment affirmed.