42 Pa. Super. 246 | Pa. Super. Ct. | 1910
Opinion by
This was an action by the indorsee of a negotiable promissory note against the maker. It is not denied that the note in suit, which was dated May 20, 1908, and called for the payment of 11,000, in three months after its date, was a negotiable instrument; nor that it was regularly discounted by the plaintiff bank on July 9, 1908, before maturity, for value, and in the regular course of business. The sole question presented by this record is, Was there any evidence of any notice to the plaintiff, at the time of the discount, of any fact which as between the plaintiff and the maker would destroy the negotiable character of the instrument and convert it from an absolute unconditional promise to pay, into a conditional obligation against which the maker might set up any defense that would have been available to him had the action been against him by the payee in the note?
It appears that in February of that year the maker of the
The evidence further discloses that after the machine company had received these notes it endeavored to have at least several of them, and perhaps all of them, discounted by the plaintiff bank, and that in seeking to effect this arrangement the machine company exhibited to the president of the plaintiff bank the contract, the material parts of which we have quoted. The plaintiff bank then agreed to discount one note dated March 20, 1908, and calling for the payment of $1,000. The discount was made on March 26, and the note remained in the hands of the plaintiff bank until its maturity, when it was forwarded for collection and duly paid by the maker without objection on June 26. Meantime, on April 24, the bank discounted another note of this series, dated April 20, for a like sum, and this note was likewise retained by the bank until its maturity, and was paid by the maker without objection on July 20.
On July 9, the plaintiff bank made a third discount, of the note in suit, which was already stated was dated on May 20. When this note matured it was also forwarded for collection, but the maker declined to pay it, and this action followed. The maker alleges that as between him and the payee, there was a breach of the latter’s contract of guaranty, in that the machine would not do the work stipulated for in his contract, and because this contract had been, prior to the discount of
We cannot attribute any such effect to the mere inspection of the written contract by the president of the bank, even if by reason of that fact the bank is visited with full knowledge of every fact in the agreement stated. It undoubtedly showed that there had been a legitimate commercial transaction between the payee and the maker, and that the notes were therefore given for value, and were not the mere accommodation paper of the maker. It further showed that the maker did not intend to retain in his own hands the purchase money, until it had been actually demonstrated that the machine was up to the guaranty, because the contract provided that he was at once to give his promissory notes for the purchase money. And the paper further bears internal evidence that it was within the contemplation of both of the parties that these notes would be, or at least might be discounted, because it is stipulated that the maker shall not only give notes but give them “-with discount.” We are unable to see anything in this contract, then, which would indicate to the plaintiff bank, after it had been read, that the maker’s obligation to pay his notes, even in the hands of an innocent third party, was to be conditional upon the performance of the machine. On the contrary, having taken an express guaranty from the seller, and at the same time having given promissory notes with discount, instead of retaining the purchase money or part of it in his own hands, the natural inference would be that he intended to rely, if the occasion arose, on the guaranty he had taken and the financial ability of the manufacturer to make good that covenant. And it certainly cannot be said that the record exhibits any evidence that there existed, in fact, any defense to the payment'of the note in suit at the time it was discounted, viz.: July 9, 1908, because ten days thereafter the defendant paid without objection the note of April 20, previously discounted.
In Craig v. Sibbett & Jones, 15 Pa. 238, Gibson, C. J., said: “There is no plausible pretext for refusing to pay this bill; for it is not pretended that the plaintiffs below, who discounted it in the regular course of their business, did any act which was not consistent with perfect good faith. They knew it was drawn against flour supposed to have been
In the light of these decisions and many others which might be cited, we can reach no other conclusion than that the learned court below was right in holding that the defend-, ant, in the offer which was refused, presented nothing which would enable him to successfully defend against the payment of his own negotiable note which had been discounted by the plaintiff before maturity, for value, in the usual course of business, and without any notice of any defense then existing which, could be set up by the maker. The assignment of error is therefore overruled.
Judgment affirmed.