Black v. Tarbell

WiNslow, J. The appellant contends that Black is not a. bona fide holder before due of the note in suit; and consequently that there can be no recovery on it, because it is. accommodation paper. He says, in brief, that, if it be held. [393] that the liability of Black as indorser upon the several notes which he indorsed is a continuous one, then such liability commenced December 28, 1892, when he indorsed the first note; and that, having received the note in suit January 13th, after his liability was fixed, he cannot be held a Iona fide holder, as he neither advanced money nor incurred liability on the strength of the note, but only held it as collateral to a pre-existing liability. Bowman v. Van Kuren, 29 Wis. 209. On the other hand, he argues that if Black's liability as indorser was not continuous, but was a new and distinct liability arising at the time of each separate indorsement, then he must be held to have received the note in suit as collateral on the 16th of March, when he indorsed the last note; and, the note in suit being then past due, he is not a bona fide holder, and the defense that it was given only for accommodation may be successfully made. / We do not decide the question whether the transferee of accommodation paper must be a bona fide holder before due in order to recover upon it. Conceding this to be the case, we think that the facts show the plaintiff to be such a holder. We regard the plaintiff’s liability as accommodation indorser upon the three notes which he indorsed as a continuous liability, beginning when he indorsed the first note, and ending when he paid the last one. The debt represented by the note was never paid. The second and third notes were simply renewals and not payments. There was never a moment after the plaintiff’s first indorsement when he was not liable-for the payment of the entire debt. There was no hiatusf no time when it could be said that his liability was at an end. True, there was a change in túne when it fell due, but. his agreement to pay Lappen’s debt in case happen did not pay it remained the same, without break or change in essential character, continuously from first to last. Now, if the plaintiff had received the collateral note in suit after his indorsement was made and his liability fixed,, [394] no other fact appearing, he would not be a bona fide holder for value. But it affirmatively appears that, in consideration of the receipt of this collateral, he definitely extended the duration of his liability, and so the case comes within the first rule laid down in Bowman v. Van Kuren, 29 Wis. 219. The note was transferred, not only as collateral to a pre-existing obligation, but in consideration of a definite extension of the duration of such obligation. This malees the plaintiff clearly a bona fide holder for value before due, and precludes the defense which thé defendant attempts to make here. Body v. Jewsen, 33 Wis. 402-409. By the Court.— Judgment affirmed.