Mattoon v. McDaniel

Dryden, Judge, delivered the opinion of the court. This was a suit by Mattoon, the endorsee of three negotiable promissory notes against McDaniel, the maker. The Parkville and Grand River Railroad Company, a corporation created under the laws of the State, was the payee of the notes, and endorsed them to the plaintiff, one after, and the other two before due. The defendant plead a special plea of fraud, but which he abandoned; and, for a further defence to the action, he pleaded that before the endorsement of the notes the railroad company, the endorser, had received and paid out, in this State, as well bank notes under the denomination of five dollars, as also the notes of non specie-paying banks, contrary to the provisions of the 4th and 5th sections of the law of 1855 concerning illegal currency; and averring notice to the plaintiff of these violations of the law, and of the defendant’s purpose to rely upon them for his defence at the time the plaintiff accepted the endorsements. The court, on motion of the plaintiff, struck out the answer and rendered judgment for the plaintiff for the amount of the notes, and the defendant appealed to this court. Negotiable promissory notes are on the same footing as inland bills of exchange, and the same rules of law govern the rights and liabilities of the parties to the security in the one case as in the other. When the endorsee of such note takes it past due, or if before due with notice, he takes it subject to all equities that attached to it in the hands of the payee. These equities, however, are such only as are connected with the note itself, and not such as grow out of distinct and independent transactions. (Gullett v. Hoy & Orton, 15 Mo. 399; 10 Barn. & Cress. 558; 10 Mes. &Welsby, 696; Story on Bills of Ex. § 220.) While it may be conceded that in an action, in the name of the payee, on these notes, the defence here sought to be [141] qet up could have been sustained, yet the matter of the defence having no connexion with the notes, or with the transaction out of which they grew, is not available as against the plaintiff, the endorsee. It is unnecessary to give an opinion, and we therefore give none, upon the question raised as to whether the defence given by the “ illegal currency ” act can, in any case, be made to an action by any assignee of the offending corporation, or whether the defence is not limited to actions by such corporation. No error was committed in striking out the answer, and the judgment of the Circuit Court will be affirmed. The other judges concur.