43 Vt. 375 | Vt. | 1871
The opinion of the court was delivered by
The pre-existing debt of Lane to the plaintiff .was a good consideration for the note, both as to Lane the principal, and as to Hard the surety ; especially as it appears that the note was delivered and accepted in payment of that debt. Not only was the original debt against Lane extinguished by the note received in payment, but the credit was extended sixty days, the period the note had to run. An agreement by a creditor with a third person to forbear the collection of a debt against his debtor for a specified time, is a good consideration for the promise of such third person to pay the debt. But it is urged in behalf of the defendant Hard, that as Lane, by false and fraudulent representations, induced Hard to sign the note, and as Lane at that time was and ever since has been insolvent and destitute of property, the plaintiff has suffered nothing by relying on the note, and therefore Hard ought not to be held liable. Hard, by signing the note and entrusting it with Lane to be delivered, gave to Lane an apparent authority to use the note, for the purpose to which it was applied, and the plaintiff was justified in accepting it as he did upon the faith that Lane had such authority from Hard. The note in the hands of Lane was complete, and payable in terms to the plaintiff, and in fact executed both by Hard and Lane for the purpose of being delivered to the plaintiff. The case therefore differs from that class of cases where the note was incomplete, and perverted by the principal to a use different from that to which the paper itself indicated it was designed, and in violation of the agreement with the surety. In this case the plaintiff having a debt against Lane overdue and having applied to him for payment, Lane thereupon procures the note in question
But it is insisted that it does not appear that the plaintiff took the note bona fide and without notice of the fraud practiced upon the surety to induce him to sign. On this point we are referred by the defendants’ counsel to cases on the question of the burden of proof in relation to the consideration paid by the plaintiff, and the circumstances under which he acquired title to the instrument, in actions by an endorsee against the maker, when the defendant proves what would constitute a defense as against the payee. In what cases, and to what extent, the burden of proof is thrown upon the plaintiff by proof of such defense, does not appear to be very clearly settled by the books; at least the decisions on the question are far from uniform. In many cases the question depends upon the character of the defense interposed. The cases cited by defendants’ counsel are mainly upon the burden-of proof upon the question whether the endorsee was holder for valuable consideration. But it is unnecessary to define the rule on that subject, as the plaintiff is not an endorsee, and is not necessarily subject to the same rule. So far as the question of consideration is concerned, the case shows that the plaintiff was a holder for value, as already stated. Among the cases cited by the defendant is Paton v. Coit et al., 5 Mich., 505, action by endorsee of bill of exchange against acceptor. The defense was illegality of the consideration for the acceptance, the statute in terms making such paper illegal and void, and forbidding any action to be maintained upon it “ except when brought by a bona -fide holder who has received the same upon a valuable and fair consideration without notice or knowledge,” §•c. The court held that as the amount of consideration given by the plaintiff was an affirmative fact peculiarly within his own knowledge, and being necessary to bring the, plaintiff’s case within the exception of the statute, it should be.
Judgment affirmed.