Sinkler v. Siljan

Action upon Note—Protection op Bona Fide Purchaser.—The plaintiff, in an action upon a note, who took the same before maturity, for value, and without notice of any defenses against it, is protected as .a bona -fide purchaser of the note, and is entitled to recover against the maker.

Id.—Purchase por Value—Settlement op Accounts—Exchange op Notes.—Where the consideration of the note in suit was the settlement of accounts between the plaintiff and the payee of the note and the giving of another note by the plaintiff to such payee for the difference in amount, which other note is outstanding and unpaid, it is sufficient to establish a purchase for value of the note in suit.

Id.—Evidence—Testimony op Payee op Note—Impeachment—Contradictory Statements—Foundation not Laid.—Where the payee of the note testified for the plaintiff, without any foundation being , laid for impeaching his testimony, it was error to admit, against the objection of the plaintiff, evidence of other statements of the payee, introduced as inconsistent with his testimony, as to which his attention had not been called; and where such contradictory statements bore directly on a material issue, and tended to impair both the testimony of the payee and that of the plaintiff, and to lead the jury to disregard an instruction of the court to find for the plaintiff, the error was necessarily prejudicial.

Id.—Inapplicable Instructions.—Instructions in regard to inadequacy of consideration of the note in suit, and to proof of conspiracy between the plaintiff and the payee, which were wholly inapplicable to the facts and the testimony in the ease, were erroneous.

Id.—Instruction as to Putting Plaintiff upon Inquiry—Constructive Notice.—It was error to instruct the jury that if plaintiff did not inquire concerning the consideration of the note in suit, from a belief or suspicion that inquiry would disclose a defense thereto, or if circumstances were such as to invite inquiry on plaintiff’s part, the jury should find that plaintiff did not take the note in good faith, and that he was chargeable with constructive notice, if the jury could infer such notice from the relations of the parties, the circumstances of the indorsement, and the plaintiff’s means of knowledge.

Id.—Burden of Proof.—Where fraud or illegality in the inception of the note in suit is shown, the burden is east upon the indorsee to show that he purchased the note before maturity or from an innocent indorsee, for value, in the usual course of business, and when this is done, unless the evidence shows that the note was taken by plaintiff under circumstances creating the presumption that he knew the facts impeaching its validity, the burden is cast upon the defendant to show that plaintiff took the note with notice of the defendant’s equities.

Id.—Presumption of Knowledge—Pacts Putting upon Inquiry not Sufficient.—In order to create a presumption of knowledge of the facts impeaching the validity of a note claimed to have been procured by fraud, it must be shown, either directly or by circumstances, that he had notice of such \facts; and mere proof of circumstances putting a reasonable man upon inquiry is not sufficient to constitute a defense to a suit by the holder of the note for value before maturity.