54 Cal. 107 | Cal. | 1880
This is an action of an indorsee against the maker of a promissory note.. The defense is, that there was no consideration for the making or for the indorsement and transfer of the note. The Court found that there was no consideration for the execution or delivery of the note; but further found “ that on the 12th day of July, 1874, and before the maturity of said note, the said Bolinger (the payee) indorsed and delivered said note to the plaintiff as security for a pre-existing debt of about nineteen hundred dollars, due from said Bolinger to said plaintiff.”
In the absence of any finding or evidence that the plaintiff had notice of the want of consideration as between the maker and payee, the only question to be determined is, whether the plaintiff, in good faith, in the ordinary course of business, and for value, acquired the instrument indorsed to her ? In other words, is she an indorsee within the definition of § 3123 of the Civil Code?
It is urged, on behalf of the defendant, that the element of value for the indorsement is wanting, and that the transfer of the note as security for a pre-existing indebtedness of the indorser to the indorsee does not fulfill the requirement of the law in respect of value. In this State, that cannot be regarded as an open question. It has been held in Payne v. Bensley, 8 Cal. 266; Robinson v. Smith, 14 Id. 98; Naglee v. Lyman, 14 Id. 454; Frey v. Clifford, 44 Id. 342, and Davis v. Russell, 52 Id. 611, that a pre-existing indebtedness of the indorser to the indorsee constitutes a valuable consideration for the indorsement and transfer of a negotiable instrument. We do not think that subd. 28 of § 14 of the Civil Code, as originally adopted, changed the rule which had previously prevailed upon this question. Besides, it is our understanding that the clause relied
The order granting a new trial is affirmed.
Thornton, P. J., and Myrick, J., concurred.