Indorsee v.
Maker.

Proof of indorsement.

title. (a) With respect to the proof of the maker's handwriting, and the effect of his admission, the rules which have been before laid down, in treating of the action by the payee, equally apply to this action.(1)

The indorsement is to be proved in the ordinary mode, like other hand-writing; of which enough has been already said. An admission by the indorser, though sufficient evidence of the indorsement as against him, will not be evidence of that fact against the maker. (2) A promise to pay, or offer to renew, made by the maker to the indorsee after the note becomes due, is an admission of the holder's title, and will dispense with the proof of the indorsement to him, precisely in the same manner, as such a promise by an acceptor will dispense with that proof, in an action against him by an indorsee. (3)

If the plaintiff declare as indorsee upon a note made to the payee or bearer, the indorsement need not be mentioned; however, in a case, where the declaration stated, though unnecessarily, that the payee indorsed the note to the plaintiff, Lord Ellenborough held, that the indorsement ought to be be proved.(4)

(1) See ante, p. 6.

(2) Hemmings v Robinson, Barnes. 436. Bayley on Bills, p. 223. See ante, p. 8.

(3) See infra, action by indorsee v acceptor.

(4) Waynham v Bend, 1 Camp. N. P. C. 175.

(a) In common cases of actions by the indorsee of a promissory note, the possession of the note, with the name of the promisee upon it as indorser, the hand-writing being proved, is prima facie evidence of a legal transfer; and the burthen is thrown upon the defendant, to shew circumstances which will defeat the action. .1 Mass. Rep. 291. Post p. 16, in notis. And if the note, after having been transferred and indorsed by the plaintiff, again come into his possession, he is prima facie the legal owner, notwithstanding the subsequent indorsements. Dugan et al. v The United States, 3 Wheat. 172. ̧Clark › Pigot, Salk. 126. pl. 4. Sed vide, elch v Lindo, 7 Cranch, 159. Gorgerat and Barnes v M'Carty, 1 Yeate's Rep. 94.

Maker.

When the promise to pay, contained in the note, is Indorsee v. made to the payee or his order, immediately that the order Notice of inis made to the indorsee by the indorsement, the promise dorsement. attaches; notice, therefore, of the indorsement, to the ma

ker, need not be proved, nor need it be stated; no qualification of notice was originally annexed to the promise, and none can be added.(1)

A promissory note, when once indorsed and negotiated, becomes in effect a bill of exchange, and is evidence under the common counts, of money received(a) by the ma

(1) Reynolds v Davies, 1 Bos. & Pul. 625.

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(a) Vide 6 Mass. Rep. 189. The President, &c. of the State Bank v Hurd, 12 Mass. Rep. 172. Grafton and Gore being copartners in trade, Grafton makes a promissory note payable to Cushing or order, subscribes it with the name of the firm, and writes the name of Cushing as indorser, without his leave or knowledge, and with intent to defraud any future holder of the note: he delivered it thus indorsed to a broker, who sold it to the plaintiff. It did not appear that Gore was knowing to the making or fraudulent indorsement of the note. The plaintiff recovered the amount of the note in an action against Grafton and Gore for money had and received. The objection that here being a felony, the civil remedy was merged, was over-ruled; and it is said, "in the action before us, the objection is that the plaintiff cannot maintain the action, because the money sued for was obtained from him through the instrumentality of a forgery by one of the defendants. As far forth as the objection goes against the recovery by the plaintiff as indorsee of the note, it is well founded: for to maintain the action in that shape he must prove the hand-writing of Cushing the supposed indorser, which he cannot do, as Cushing's name was forged. But we see no objection to his recovering on the money counts. Grafton received the money of the plaintiff upon a false pretence, having offered the note as indorsed by Cushing and the money so received was instantly in the eye of the law received to the use of the plaintiff. He does not claim through, or under a forgery; but merely on the ground that money was advanced by him on the faith of security, which turns out by the fraud of Grafton to be wholly worthless. Boardman v Gore and another, 15 Mass. Rep. 331. Vide Page's administrator v The bank of Alex andria, 7 Wheaton 35.

Indorsee v. Maker. Proof under common counts.

Letter from

payee as to the consideration.

ker for the use of the indorsee or bona fide holder. (1) The maker, in putting his name to the note, acknowledges that he has in his hands money of the payce, and undertakes to pay it to the person legally entitled to receive it, that is, to the person who has paid a good consideration for the note, and who has become the legal holder. (2) In other words, he makes an appropriation of so much money to be paid to the person, who shall become the holder of the note. However, it is to be observed, in a late case,(3) Lord Ellenborough expressed an opinion, that the indorsee could not recover against the maker under any of the money counts, as he was not an original party to the note, and there was no evidence of any value received by the defendant from him; but the case was not determined upon this point, and the plaintiff recovered upon the special count.

In an action by the indorsee against the maker, where the defence is, that the note has been given for an illegal consideration, letters from the payee to the maker are admissible to prove the illegality of the transaction, if they are shown to be contemporaneous with the making of the note; when the letters are once shewn to be contemporaneous with the note, they are evidence of an act done by the payee, through whom the plaintiff claims.(4)

(a) According to the settled construction of the statutes against usury, when unrestricted by any subsequent enactment, a negotiable

Maker.

The indorser is clearly a competent witness for the de- Indorsee v. fendant in this action, to prove payment of the money, Competency

instrument, if usurious in its original concoction, is void in the hands of a bona fide holder, although it cannot be rendered void by any transaction between subsequent parties. Munn v the Commission Comp. 15 Johns. Rep. 44. The mere circustance, however, of the order in which the names of the parties to the loan appear upon the instrument, is not the criterion for determining its validity; the question is, whether it was in the first instance employed with a view to a usurious contract: thus a note indorsed for the accommodation of the maker, who procures it to be discounted at an illegal rate of interest is void as against the maker and indorser in the hands of an innocent indorsee; for notwithstanding the indorsement, the transaction contemplated in the creation of the note, was between the maker and the person discounting it; and whether the lender's name appears upon it, or not, in no wise varies the case. Jones v Ilakes, 2 Johns. Cas. 60. Wilkie v Roosevelt, 3 Johns. Cas. 66. 206. See further, 4 Mass. Rep. 161. 5 Mass. Rep. 293. Pollard v Baylors, 6 Mumf.433. Taylor v Bruce, 1 Virg. Rep, 42. Post. p. 22. in notis. A. being justly indebted to B. gave his promissory note for the sum due, agreeing to pay interest thereon at the rate of 12 per cent. per annum. After sundry payments of interest at the rate agreed on, and of part of the principal, a new note was given for the balance of the principal due, on which only lawful interest was reserved or taken. This note, being in part paid, was also cancelled, and a third note given for the balance, This last note was indorsed; and in an action by the indorsee against the maker, it was held not to be affected by the usurious interest paid on the first note. Chadbourn v Watts, 10 Mass. Rep. 121.

But independently of statute provisions, where a negotiable instrument is voidable as between the original parties, either by its being founded on a consideration prohibited by the common law, or where it was without consideration at its commencement, it is notwithstanding good in the hands of an indorsee for valuable consideration without notice, either express or implied, of the defect or failure of consideration, as regards any other person than his own immediate indorser. As between immediate parties-those parties between whom there is a privity of contract-the want of consideration or the subsequent discharge of the debt, is a valid defence, but an indorsee, without notice, and for valuable consideration, is not affected by fraud or other transactions between the original parties. Baker and Rowlson v Arnold, 3 Caines Rep. 279. 4 Mass. Rep. 161. Thurston.v M'Kown, 6 Mass. Rep. 428. Flint v Clark, 12 Johns. Rep. 374

of witness.

Indorsee v.
Maker.

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for which he indorsed(a) the note.(1) The payee and indorser, who has become a bankrupt and obtained his cer

(1) Charrington v Milner, Peake, N. P. C. 6.

(a) It is a general rule, that although a party to a negotiable instrument is inadmissible as a witness to impeach its original validity, (Mann v Swann, 14 Johns. Rep. 270. Churchill v Suter, 4 Mass. Rep. 156.) yet he is competent to prove a discharge, payment or any other matter ex post facto to defeat the action. Woodhull v Holmes, 10 Johns. Rep. 231. White v Kibling, 11 Johns. Rep. 128. Warren v Merry, 3 Mass. Rep. 27. See further Treatise on Evidence, vol. 1. (1st Am. ed.) p. 34. n. a. (2d Am. ed. p. 34, n. b.) Where the indorser of a note was admitted as a witness to shew that he indorsed it after it fell due, the plaintiff was allowed to impeach his testimony by producing letters of the witness in relation to the transfer. Paker and Rowlson, v Arnold, 3 Caines Rep. 279. See Pleasants v Pemberton, 1 Yeate's

Towne v Jaquith, 6 Mass. Rep. 46. M'Niel v Baird, 6 Mumford, 316. So, where the defendant had written his name on blank pieces of paper, and entrusted them with his clerk for the purpose of having notes made upon them, and one, by false pretence obtained them of the clerk, and made upon them negotiable notes other than those contemplated by the defendant, and sold them to an innocent indorsee for a valuable consideration; it was held that the defendant as he was chargeable with a misplaced confidence in his clerk, ought to suffer instead of the indorsee, and that he was liable to the indorsee accord. ing to the terms of the notes. l'utnam et al. v Sulli an,4 Mass. Rep.45. See also Russel v Langstaffe, Doug.514. Clark v Stackhouse,2 Martin's Rep. 319. Mann v King, 6 Mumf. 428. So, if the payee transfer the note by a special indorsement, by which he declared that he was not to be made liable to pay the note, and at the time of indorsing it, expresses his ignorance of the consideration for which it was given in an action by the indorsee against the maker, such special indorsement will not render it necessary for the plaintiff to shew that he gave a consideration, nor will it authorise the defendant to impeach she note for want of consideration or for fraud. Russel Ball and others, 2 Johns. Rep. 50. So, where A. the debtor of P. gave a note to C. for the amount of the debt, in order to prevent its being attached by a creditor of . and before any attachment had issued, and C. indorsed the note to D. who had advanced money for A. it was held that D. not being privy to any fraud in A. could not be affected by it, and might