53 Iowa 517 | Iowa | 1880
It seems to- us that the purpose and intent of this section is-to include all things or choses in action, except negotiable
Section 2760 of the Eevision provided that: “In case of an assignment of a thing in action, the action by the assignee shall be without prejudice to any set-off or other defense existing before notice of the assignment; but this section shall not apply to negotiable instruments transferred in good faith and upon valuable consideration before due.”
It was held under this section in Richards v. Daily, 34 Iowa, 427, that in an action by the indorsee of a promissory note received after maturity the maker cannot plead a set-off existing in his favor against the payee and growing out of a transaction not connected with the note, and that the holder in such case tabes the note discharged of all independent matters, and subject to such equities only as inhere in, or are connected with, the note itself.
Without entering iiito a discussion of the soundness of the reasoning of that opinion or the correctness of its conclusion, it is sufficient to say that § 2546 of tire Code is widely different from § 2760 of the Eevision of 1860. By the 'latter a set-off or other defense was allowed; by the former the defendant is permitted to set up “ any counter claim, defense or cause of action, whether matured or not, if matured when plead, existing in favor of the defendant and against the
We think no importance should be attached to tbe use of tbe word “ assignment ” instead of “ indorsement ” in tbe statute under consideration. An assignment of a thing in action may be by parol or in writing. Switzer v. Smith & McGowan, 35 Iowa, 269; Conyngham v. Smith, 16 Id., 47 L. That a promissory note is a thing in action need not be discussed. Tbe rule requiring a. party who purchases dishonored commercial paper to make inquiry of tbe maker is a wholesome one, and in no sense impairs tbe value of negotiable instruments, in tbe bands of an innocent holder who acquires them for value and before maturity. ' We. think under tbe evidence in this case tbe cause of action set up by tbe defendant should have been set off against tbe note upon which tbe action is founded.
Reversed.