22 Iowa 399 | Iowa | 1867
Even under the English rule, if the defendant Imowingly made the note to a fictitious person or order, and the plaintiff became a holder for value and without notice of the fact that the person named as payee was a myth, he could recover. This proposition we do not understand the defendant’s counsel to deny. But he insists that this case does not fall within the above rule because, first, the defendant made the note in ignorance of the fact that the person named as payee had no existence, and because, second, the facts averred in the answer, affect the plaintiff with notice of the fact, and hence he is not a bona fide holder.
In respect to such a holder, the maker is bound, to know that the payee is a real person, or thereafter “ hold his peace.” See the very recent case of Phillips v. im Thurn, 114 Eng. C. L., 694; S. C., Id., 400; 1 Law Rep., C. P., 463, A. D. 1865. This was a case where the defense was, that the payee was a fictitious person, in ignorance of which fact, the drawer drew the bill. It was 'considered by the- court, that since the drawer would be estopped to set up the fact that the payee was a fictitious name, the like estoppel would apply to an acceptor for tiie honor of the drawer. In principle this case is strongly if not decisively against the' defense in the case at bar.
It is argued, however, by the defendant’s counsel, that the answer is nevertheless sufficient. That argument is based upon the rule, that where a note has been obtained by fraud, the burden of proof is upon the plaintiff to show that he is a lónafids holder.
Such is the prevailing, and, in our judgment, the correct doctrine. It is the unquestioned rule of the English courts — Queen’s Bench, Common Pleas and Exchequer. Of these courts, in late years, the Common Pleas has been most distinguished for its ability; and Lord Chief ■Justice Erle thus, in a recent case, states the rule and the estimation in which he holds it: “I consider it td have been' established by a long course of precedents, that, on proof being given that the bill is tainted with fraud in its inception, the burden is thrown upon the party who
And such is also the prevailing rule in this country. 2 Parsons on Notes and Bills, 438; Munroe v. Cooper, 5 Pick., 412; Gray v. The Bank, etc., 29 Penn. St., 365, and prior cases in that State referred to; Perrin v. Noyes, 39 Maine, 384; 16 Id., 465 ; Ellicott v. Martin, 6 Md., 509; Vather v. Zane, 6 Gratt., 246.
Affirmed.