N.

Y.-Lee Bank v. Kitching, 20 N. Y. Super. 664, 11 AbbPr 435.

pay the note by the sale of a pledged note,17 or that an indorser has deposited with the holder sufficient to pay the note.18

[ 1062] R. Set-Off and Counterclaim-1. General Rules.10 Subject to the general rules relating to set-off and counterclaim,20 and the doctrine of estoppel,21 actions on notes form no exception to the rule that on a proper showing a party should be allowed to counterclaim or set off demands which he may have against plaintiff.22 However, there is considerable conflict as to the right to interpose a

dorsed note is given as part of the purchase price of land, the vendor also retaining a lien therefor, he is not required to exhaust his lien before collecting of the indorser. Levy v. Wagner, 29 Tex. Civ. A. 98, 69 SW 112.

Tex.-Williams V. Rosenbaum, (Civ. A.) 79 SW 594. Wash.-German American Bank v. Wright, 85 Wash. 460, 148 P 769. N. B.-Simonds v. Travis, 13 N. 14.

N. S.-Arthur v. Yeadon, 29 N. 379.

B.

S.

[a] Illustrations.-(1) It is no defense to a suit on a note that plaintiff has the note of a solvent third party as collateral security for the note sued on, and that the collateral is of greater value than the amount due on the note in suit. Carson v. Buckstaff, 57 Nebr. 262, 77 NW 670. (2) So where a note and mortgage were deposited as collateral security for a debt of an indorsee of the note, and it appeared that the mortgage was a second mortgage, which furnished no security in fact, the holder of the collateral was not required to foreclose the mortgage before suing the indorser of the note. German American Sav. Bank v. Hanna, 124 Iowa 374, 100 NW 57. (3) It is no defense to a suit on notes, brought on a default in the payment of interest, that a chattel mortgage was given to secure such interest, and that this has not been foreclosed, there being no waiver of the right to sue on such default. Winch v. Bolton, 94 Iowa 573, 63 NW 330. (4) A holder of a note may sue an indorser without first resorting to his remedy under a mortgage securing the same. Williams v. Rosenbaum, (Tex. Civ. A.) 79 SW 594. (5) A corporation made a note to a trust company for which stock was deposited as security, a portion of it belonging to plaintiffs. Thereafter plaintiffs paid the trust company and sued on the note. It appeared from the answer that the trust company had, without right, demanded additional securities, and it was alleged that plaintiffs had converted the stock. It was not alleged as a setoff or counterclaim, nor that it was of any value, nor that defendant had sustained any damages. The answer presented no defense. Wills v. Rowland, 117 App. Div. 122, 102 NYS 386. (6) It is no answer to an action on a note, that plaintiff had possession of lands of defendant given as security for the note and had an opportunity of receiving from them as rent more than sufficient to pay the note, unless it is shown affirmatively that plaintiff actually received such rent. Simonds v. Travis, 13 N. B. 14. [b] The facts that a holder of accommodation paper lives in a different state than the accommodation maker and holds collaterals to which the latter, under the nature of the case, could not be subrogated, do not prevent the former from recovering against the latter without first exhausting the collaterals. Maffat v. Greene, 149 Mo. 48, 50 SW 809.

[c] Vendor's lien.-Where an in

13. Ambler v. Ames, 1 App. (D. C.) 191. "In a suit upon a promissory note it is entirely immaterial that collateral security given for the note has not been returned or accounted for to the debtor. If the security has been used and proceeds realized from it, it is, of course, competent for the defendant so to show, and to claim credit upon the indebtedness to the extent of such proceeds. But it is no defense to a suit at law that collateral security has not been returned or accounted for, especially when such collateral security has become worthless." Ambler v. Ames, 1 App. (D. C.) 191, 196.

[a] A fortiori, recovery on a note cannot be defeated because plaintiff failed to deliver collateral, where, although the maker had given plaintiff an order for the collateral, the holder of it refused for an undisclosed reason to honor the order. Bryceland Lumber Co. v. Kerlin, 137 La. 1, 68 S 192.

14. Taggard v. Curtenius, 15 Wend. (N. Y.) 155. To same effect Moore v. Prussing, 165 Ill. 319, 46 NE 184; Girard F. & M. Ins. Co. v. Marr, 46 Pa. 504. But see Quaker City Nat. Bank v. Hepworth, 21 Pa. Super. 566 infra this note [a] (3).

ment was confessed, that the debtor's property was sold by the sheriff and bought in by the trustee, and that the bank's trustee conducted the debtor's business afterward for over a year, the maker of one of the indorsed notes has a right, in a suit on such note by the bank, to show that the note was an accommodation note, and that the bank knew that it was an accommodation note, and also to show what the property bought in by the trustee was worth, what it sold for, what was done with the proceeds, and in general to prove, if possible, that the bank had received, or ought to have received, if the business had been properly conducted by the trustee, satisfaction for the note out of the debtor's property. Quaker City Nat. Bank v. Hepworth, 21 Pa. Super. 566.

15. Amoskeag Bank v. Robinson, 44 N. H. 503. See also Bellows v. Lovell, 4 Pick. (Mass.) 153 (where the plea was held bad on demurrer).

[a] Attachment or garnishment.The summoning of the maker of a check on a bank, payable to order, as trustee in a foreign attachment of the payee, after dishonor of the check by the bank on its presentment by an indorsee, does not affect his liability thereon to the indorsee. Rochester First Nat. Bank v. Harris, 108 Mass. 514. Compare Brown v. Fisher, 35 Ind. A. 549, 74 NE 632 (where the maker had been summoned in a garnishment proceeding, and the answer was held to be insufficient).

16. St. Paul, etc., Grain Co. v. Rudd, 102 Iowa 748, 71 NW 417. 17. Burrall v. Jones, 20 N. Y. Super. 404.

18. State Bank v. Blakey, 35 Tex. Civ. A. 87, 79 SW 331.

19. In action against joint makers see Set-Off and Counterclaim [34 Cyc 727 et seq].

20. See Set-Off and Counterclaim [34 Cyc 618].

21. Mandeville v. Union Bank, 9 Cranch (U. S.) 9, 3 L. ed. 639 (holding that a bank which becomes the indorsee of and discounts a nonnegotiable note made to a third person containing the declaration that it is negotiable at the bank which discounts it takes the instrument discharged of any set-off between the maker and the payee, on the doctrine of estoppel, without regard to whether the note is negotiable).

[a] Illustrations.-(1) It is no defense to an action on a note by the payee against the makers that the makers were the officers of a corporation, and applied to the payee for a loan to the corporation, agreeing to give their own notes as security, on condition that the payee would take the building and leases of the corporation and operate the same honestly, and would first look for payment from the rents and profits of said property, and that, in accordance with such agreement, payee, through his agent, took possession of the property, but so mismanaged it that loss instead of profit resulted, there being nothing to show what income the property would have yielded if properly managed, nor the amount of loss sustained by his mismanagement. Moore v. Prussing, 165 Ill. 319, 46 NE 184. (2) It is not a valid defense to an action on a note, that it, with other securities equal in amount, had been indorsed and delivered to the indorsees Colo.-Rocky Ford First Nat. Bank as collaterals for a loan, which se- v. Lewis, 57 Colo. 124, 139 P 1102 curities had been by them exchanged (holding that, where a note given to and ultimately found worthless, un- a bank by a depositor was transless it is also shown that there has ferred after maturity to plaintiff, been a loss to the owners of the col- and at the time the bank failed the laterals because of the exchange. maker had a balance on deposit Girard F. & M. Ins. Co. v. Marr, 46 greater than the amount due on the Pa. 504. (3) But where a debtor of note, such deposit was a valid couna bank confesses judgment to a terclaim as against the transferee trustee for the bank, to secure the of the note, under Code Civ. Proc. bank for all the debts which he owes § 63). it, including indorsed notes, and the bank has knowledge that the judg

[a] This rule does not apply where the note is declared negotiable, not at the bank which discounts it, but at the payee bank. Stadler V. First Nat. Bank, 22 Mont. 190, 56 P 111, 74 AmSR 582.

22. Ark. Dutton v. Million, 114 Ark. 330, 169 SW 1183.

Del-Otis El. Co. v. Ford, 27 Del. 286, 289, 88 A 465 [quot Cyc].

389.

Oh.-Loomis v. Eagle Bank, 1 Disn. 285, 12 Oh. Dec. (Reprint) 625; Ross v. Johnson, 1 Handy 388, 12 Oh. Dec. (Reprint) 198.

Pa.-Young v. Shriner, 80 Pa. 463. S. C.-Cain v. Spahn, 26 S. C. L. 258.

Tenn.-Sykes Banking Co. v. Morris, 2 Tenn. Ch. A. 236 (holding that defendant cannot set off claims held by him against one of those through whose hands the note passed to plaintiff).

Tex.-Selkirk V. McCormick, 33 Tex. 136; Smith v. Turney, 32 Tex. 143; Johnson County Sav. Bank v. Renfro, 57 Tex. Civ. A. 160, 122 SW 37: Henderson v. Johnson, 22 Tex. Civ. A. 381, 55 SW 35.

W. Va.-Grafton First Nat. Bank v. Danser, 70 W. Va. 529, 74 SE 623. Ont.-Smith v. Nicholson, 19 U. C. Q. B. 27.

N. W. Terr.-O'Brien v. Johnston, 3 Terr. L. 50.

[a] Illustration.-The maker of a note cannot, as against an indorsee before maturity, for value, and without knowledge or notice of any defense thereto by the maker, recoup the damages by him sustained in consequence of a breach of warranty by the payee in the sale of merchandise to him, in payment for which the note was given. Holden v. Phoenix Rattan Co., 168 Mass. 570, 47 NE 241.

[b] "An existing set-off," as used in the statutory provision providing that an indorsee takes a note subject to any existing set-off of which he has notice, means a set-off actually available at the time of the acquisition of the instrument; a possibility of a future set-off is not sufficient. Stites V. Hobbs, 2 Disn. (Oh.)

571.

dorsee.37 Set-offs subsequently acquired, even though arising out of a previous transaction, cannot be set up;38 but this rule does not apply to equities not constituting set-offs which grow out of the original transaction or subject matter of the contract between the parties to the note and are not discovered until after the transfer.39

[ 1065] 4. Between What Parties Available. It is also well recognized by the courts that a claim, to be available as a set-off, must arise between other than intermediate parties. If the instrument has been indorsed several times, the maker cannot, in an action by the holder, set off a claim which he may have against a prior indorsee,10 unless so allowed by a contract between the parties founded on

Frenzel v. Miller, 37 Ind. 1; Huber v. Egner, 61 SW 353, 22 KyL 1800; Wickliffe v. Moore, 9 KyL 357; Burns v. Stephenson, 9 Ky. Op. 602; Redmond v. Stansbury, 2 Mich. N. P. 124. See Barker v. Barth, 192 Ill. 460, 61 NE 388 [aff 88 II. A. 23]; Huston V. Centerville First Nat. Bank, 85 Ind. 21 (both cases recognizing the rule).

[a] Statute.-Martin v. Trobridge, 1 Vt. 477. But see Sherwood v. Francis, 11 Vt. 204 (where F executed his note to H payable to his order, which note was indorsed to S and notice given to the maker; before notice of such indorsement, F, with H as his surety, signed a note to B, which note F had agreed to pay prior to notice, but did not pay until after notice; and it was held that such payment by F did not constitute such a claim against H, the original payee, as to enable F to offset it against S, the indorsee, under the statute of 1793).

Ky.-Carlton v. Smith, 110 SW 873, 33 KyL 647; Hunt v. Martin, 2 Litt. 82. Mass.-Backus v. Spaulding, 129 Mass. 234; Baxter v. Little, 6 Metc. 7, 39 AmD 707.

Minn.-Linn v. Rugg, 19 Minn. 181. N. Y.-Elwell v. Dodge, 33 Barb. 336.

N. C.-Neal v. Lea, 64 N. C. 678. Oh. Whims v. Grove, 1 Oh. Cir. Ct. 98, 1 Oh. Cir. Dec. 59.

Okl.-Johnson v. Acme Harvesting Mach. Co., 24 Okl. 468, 103 P 638. Or.-French v. Haltenhoff, 73 Or, 244, 144 P 480. S. D.-Fillmore State Bank V. Hayes, 16 S. D. 365, 92 NW 1068 (statute).

Tex. Henderson V. Johnson, 22 Tex. Civ. A. 381, 55 SW 35. Va.-Davis v. Miller, 14 Gratt. (55 Va.) 8.

N. S.-McDonald v. Neville, 16 N. S. 191. Ont.-Thorne v. Haight, (Hil. T. 6 [b] Necessity of indorsee giving Vict.) 1 Robinson & J. Dig. 565. notice.-Under the procedure of Ala- [a] Illustration-A subsequent bama it is not necessary that the holder of a nonnegotiable note is not assignee of a note by indorsement or liable to the maker for damages delivery should himself give notice from an independent contract beto the maker of his acquisition of the tween the maker and the original instrument to exclude set-offs ac-payee, where such liability has in no quired subsequently to the assign- way become attached to the note ment. Such set-offs cannot be urged while in the original payee's hands, if the maker is informed of the trans- and the same cannot be set up as a fer by any party who knows of the counterclaim against such subsefact. Crayton v. Clark, 11 Ala. 787. quent holder. Johnson v. Acme Har[c] Exception.-A defense or set-vesting Mach. Co., 24 Okl. 468, 103 P off, to be available against an as- 638. signee of a note, must have existed [b] A judgment, rendered against before notice of the assignment, al- the payee before the indorsement though such defense and set-off may and in favor of the maker may be sometimes be allowed on equitable set off against the judgment of the grounds independent of the statute, indorsee against the maker, under and the party seeking to make a de- the statutes of Maine. Burnham v. fense or set-off in equity beyond that Tucker, 18 Me. 179. To same effect given by the statute must affirma- Lewis v. Brooks, 12 Metc. (Mass.) tively show the existence of the 304 [appr Lewis v. Brooks, 9 Metc. facts necessary to raise the equity. 367] (under St. [1839] c 121 Henderson Nat. Bank v. Lagow, 3 § 1). KyL 173.

35.

Rosenthal v. Rambo, 28 Ind. A. 265, 62 NE 637 (statute); San Francisco First Nat. Bank v. Nye County, (Nev.) 145 P 932 (statute).

[d] Contra, where the suit is brought by the indorsee in the name of the payee. Harris v. Hanna, Tapp. (Oh.) 41.

33. Tillou v. Britton, 9 N. J. L. 120; Grafton First Nat. Bank V. Danser, 70 W. Va. 529, 74 SE 623.

34. Gary v. James, 7 Ala. 640;

payee to the use of the assignee, to set off the full amount of the payee's note, and not merely the amount paid by him therefor. Barker v. Barth, 192 Ill. 460, 61 NE 388 [aff 88 Ill. A. 23].

36. U. S.-Harrisburg Trust Co. v. Shufeldt, 87 Fed. 669, 31 CCA 190: Fossitt v. Bell, 9 F. Cas. No. 4,958, 4 McLean 427.

Iowa.-Campbell v. Rusch, 9 Iowa 337. But see Downing v. Gibson, 53 Iowa 517, 5 NW 699 (where, under a later statute, the only requisite to the availability of a counterclaim as set-off is that it be acquired by defendant before notice of the transfer).

37. Parker v. Kendall, 3 Vt. 540. To same effect Bliss v. Houghton, 13 N. H. 126 (construing Vermont statutes).

38. Davis v. Neligh, 7 Nebr. 84. 39. Kyle v. Thompson, 11 Oh. St. 616. To same effect Andrews v. McCoy, 8 Ala. 920.

V.

40. Ala.-Goldthwaite v. National Bank, 67 Ala. 549; Bostick V. Scruggs, 50 Ala. 10; McKenzie Hunt, 32 Ala. 494; Stocking v. Toulmin, 3 Stew. & P. 35. See also Manning v. Maroney, 87 Ala. 563, 6 S 343, 13 AmSR 67.

Ill.-Favorite V. Lord, 35 Ill. 142; Root v. Irwin, 18 Ill. 147.

Miss. Savage v. Laclede Bank, 62 Miss. 586.

S. C.-Perry v. Mays, 18 S. C. L. 354; English v. Nixon, 14 S. C. L. 549. Tenn.-Hooper v. Spicer, 2 Swan

494.

But see Wyman v. Robbins, 51 Oh. St. 98, 37 NE 264 [overr Lillie v Bates, 3 Oh. Cir. Ct. 94, 2 Oh. Cir. Dec. 54] (holding that, in a suit by an indorsee of a past-due note

some new consideration.41 So in an action against an indorser a counterclaim of the maker against the immediate transferor of the holder cannot be set up.42 But it has been held that indorsers of a note may avail themselves of a counterclaim in favor of their codefendant, the maker, as a defense against their liability.43 The acceptor of a bill cannot set off against it, in the hands of an indorsee, claims against the payee subsisting at the time of acceptance.44

[§ 1066] S. Undue Influence. Undue influence is a defense as between the parties to the instrument and against persons standing in the shoes of the payee, but it is no defense against a bona fide holder in due course.46 What constitutes undue influence is governed by the general rules relating to contracts.47

49

[§ 10662] T. Other Defenses.48 Within the scope of this subdivision, and excluding certain particular defenses herein above treated of at some length,50 the defenses which are or are not available depend largely on the general law of contracts.51 The following, inter alia, have been held not good defenses: Agreement of third person to pay the note, where there was no agreement on the part of plaintiff that defendant would no longer be liable;52 that the payee had brought a former suit on the note which was discontinued without defendant's knowlagainst the maker, the latter may, under the provisions of Rev. St. § 5077, claim the note compensated for by an indebtedness due him from an indorsee intermediate between plaintiff and the payee, to the extent that one claim equals the other, where such indebtedness existed during the period in which the note was held by such indorsee, and the note and the indebtedness were then past-due; and that in such case the right is not limited by § 3173).

41. Goldthwaite V. Montgomery First Nat. Bank, 67 Ala. 549; Kennedy v. Manship, 1 Ala. 43; Cumberland Bank v. Hann, 18 N. J. L. 222.

[a] There must be some agreement, express or implied, between the holder of a note overdue and the maker, that the demands of the latter shall be set off or be considered as payment pro tanto, in order to enable defendant to set up such demands or payments in an action against him by the indorsee of such note. Cumberland Bank v. Hann, 18 N. J. L. 222.

42. Arrangoiz v. Frazer, 2 Hilt. (N. Y.) 244.

Right of indorsers to set up counterclaim arising out of execution of instrument see supra § 1002.

43. Iroquois Door Co. v. Leavenworth Apartment Co., 77 Misc. 462, 137 NYS 122.

44. Red River Iron Co. v. Henderson, 6 Ky. Op. 183.

45. Geddes v. McElroy, (Iowa) 154 NW 320; Bade v. Feay, 63 W. Va. 166, 61 SE 348; Lewis Furniture Co. v. Campbell, 21 Man. 390.

[a] Where the indorsee of a note sues, it is competent for the representative of the estate of the payee to take on himself the defense of the suit at the trial. As a defense, he may show that the indorsement of the note was procured by the undue influence of the indorsee over the payee, and that the note belongs to the payee's estate. A right to rescind a transfer of personal property survives to the transferor's executor. Coon v. Dennis, 111 Mich. 450, 69 NW 666.

edge;53 dismissal of the action as to the security and the indorser;54 erroneous interpretation of an unambiguous instrument;55 purchase of the note and bringing an action thereon with a design to harass and oppress the maker;56 promise by the indorsee to the payee to demand no more of the maker than the amount paid for the instrument;57 statement of the payee that he intended to give the note to the maker;58 that all of defendant's property is exempt;59 and misapplication of the proceeds of the note.60 The mere fact that the instrument sued on was transferred after maturity and without consideration is no defense where no valid defense could have been interposed against the payee. So where a note was given in settlement of an obligation as guarantor of a debt due a partnership, it was no defense that at the time defendant executed the note he did not know that plaintiff was a corporation and had succeeded to the ownership of the debt and guaranty.62 And it is no defense that the note was given in payment of goods sold at an exorbitant price, since no defense going behind the instrument itself can be interposed.63 Where persons who are partners sign a note individually as joint makers, it is no defense that a receiver has been appointed for the firm who is in charge of its affairs.64 So the insolvency of the drawee after notice of dishonor to the drawer of a dishonored check who has been 56. Bragg v. Raymond, 11 Cush. (Mass.) 274; Ormsby v. Gilman, 24 Vt. 437.

49.

50.

51.

213].

57. Babson v. Webber, 9 Pick. (Mass.) 163.

58. Myers V. Malcom, 20 Ill. 621.

59. Warnock v. Itawis, 38 Wash. 144, 80 P 297.

[a] Thus a special defense that defendant was an Indian of the Puyallup tribe, and that all his property was exempt from lawful sale or forfeiture, under certain acts of congress, was irrelevant, and properly stricken. Warnock v. Itawis, 38 Wash. 144, 80 P 297.

60. Johnston v. Gulledge, 115 Ga. 981, 42 SE 354; Guthrie v. Farmers' Bank, 14 Ga. A. 270, 80 SE 511; Yeomans v. Lane, 101 Ill. A. 228.

[a] Thus, where defendant executed a note to a bank to obtain a fund to be used for a particular purpose, which fund was deposited in the name of a third person as trustee, defendant was liable on his note, although the money was withdrawn and misappropriated by the trustee. Guthrie v. Farmers' Bank, 14 Ga. A. 270, 80 SE 511.

[b] No misappropriation of the purchase money, to which the purchaser of a note is not a party, will affect his rights. Yeomans v. Lane, 101 Ill. A. 228.

[c] Whether a pledgee of a note given to a married woman, and pledged as a security for a debt partially due by her, has made the proper application of the proceeds does not concern the maker. Johnston v. Gulledge, 115 Ga. 981, 42 SE 354.

61. Lockner v. Holland. 81 NYS 730; Lindsay v. Dutton, 217 Pa. 148, 66 A 250.

[a] In Pennsylvania an allegation in an affidavit of defense, in an action on a note, that the indorsement was after maturity, with full notice of the maker's defense, will avail defendant only so far as he has a defense against the payee. Lindsay

v. Dutton, 217 Pa. 148. 66 A 250. 62. Davis v. McEwen, 193 Fed. 305, 113 CCA 229.

63. Renaud v. Bougie, 16 Que. Super. 405.

182 Pa. 274, 37 A 814.

notified of its dishonor is no defense to the drawer.65 Likewise it is no equitable defense to a note given by trustees to one of their number for money borrowed for the purpose of a trust that the makers were agents to collect rents for the purpose of paying such note and that they failed to account for the rent. However, a sound reason why the holder ought not in equity and good conscience to recover the face value of the instrument is a good equitable defense, although neither a set-off, a counterclaim, nor an affirmative cause of action.67

Actions against indorser. In addition to the defenses heretofore noticed,es and the release of the indorser by agreements between the maker and the

70

holder," or the failure to create a liability because of want of presentment for payment or notice of dishonor, it has been held that an indorser may set up as a defense that his blank indorsement was made solely to transfer title to the note to the holder." But an indorser cannot set up as against a remote bona fide indorsee for value before maturity that the latter did not rely on said indorsement.72 So it is no defense that the maker had, after the maturity of the note, a sufficient deposit in the payee bank to pay it, which the payee failed to appropriate for that purpose.73 So it is no defense that a receiver has been appointed for the corporation of which defendant was a director.74

[§ 1067] A. Scope of Treatment. It is not intended to include herein matters in no way peculiar to the law of bills and notes, nor particular questions relating to courts or to incidental actions relating to bills and notes. Thus matters relating to the abatement and revival of an action, to actions on lost instruments, to an action in equity to cancel the instrument, to actions to reform the instrument, to an injunction against a transfer or action on, to the jurisdiction of particular courts over actions on, to the consolidation of actions, to the severance of actions, to a joinder of causes of action,10 to the statute of limitations," to tender,12 to fraud in the sale of as authorizing an action for deceit,13 to lis pendens as applicable to,11 to the conversion of the instrument,15 to actions on premium notes,16 to parties to the instrument as competent witnesses, where the other party is dead,17 etc., are treated of in other articles.

[ 1068] B. Nature and Form of Action-1. In

General. An action on a bill or a note to recover the amount due thereon is an action on a contract and governed in general by the rules relating to actions ex contractu.18

[§ 1069] 2. On Original Consideration. Where privity of contract exists, the holder of a note may waive his right to proceed thereon and declare for the original consideration.18 If a bill or a note is given to a creditor by a debtor, and is not accepted or is not paid at maturity, and there is no express agreement that it should be received as payment, the creditor's right of action on the original consideration revives;19 and this is true where the instrument is void.20 But the right to sue, where the instrument is valid, is suspended until the maturity of the instrument.21 Thus, if the drawee of a check refuses to pay it, the holder may sue the drawer either on the check or to recover the debt evidenced by the check.22 So where the drawee of an order refuses to accept it and he had no ef

66. Megibben v. Shawhan, 9 KyL 358.

67.

Williams v. Neely, 134 Fed.

1, 67 CCA 171, 69 LRA 232.

68.

69.

See infra §§ 1010-1066.
See supra §§ 660-665.

70. See supra §§ 739, 740, 895-898. 71. Lake Providence First Nat. Bank v. Reinman, 93 Ark. 376, 125 SW 443, 28 LRANS 530 and note.

72.

471].

16. Halbach v. Trester, 102 Wis. 530, 78 NW 759. 756]. 73. 17. Far Rockaway Bank v. Norton, 186 N. Y. 484, 79 NE 709. See also 2324]. First Nat. Bank v. Dick, 22 Pa. Super. 445 (holding that in an action on a note it is immaterial as a defense that when the note matured the maker had on deposit in the bank at which it was payable an amount sufficient to meet it, unless this was lost through failure to present the note for payment).

74. Commercial Nat. Bank V. Clarke, 180 Mass. 249, 62 NE 370. 1. Cross references: What law governs see supra § 160. Right of maker to sue payee for fraudulent or wrongful transfer of the instrument see supra 564. Garnisheeing holder of see Garnishment [20 Cyc 1003, 1006].

2. See Abatement and Revival 1 C. J. p 15.

the relief demanded being commensurate only with the idea of money had and received to the use of defendants. Savage V. Savage, 36 Or. 268, 59 P 461.

20. Indianapolis Ins. Co. v. Brown, 6 Blackf. (Ind.) 378; National Granite Bank v. Tyndale, 179 Mass. 390, 60 NE 927; Edgell v. Stanford, 6 Vt. 551; Antigo First Nat. Bank v. Larsen, 146 Wis. 653, 658, 132 NW 610.

"It is well settled that, if the plaintiff would be entitled to recover on the original consideration if the note had not been given, the giving of a note void for lack of authority in the signer or for any other cause does not discharge the pre-existing obligation, but the plaintiff may recover upon a cause of action separately stated in the complaint upon the original consideration." Antigo First Nat. Bank v. Larsen, supra.

[a] Where the payee elects to treat the note as void aş to the maker, he may recover on the original transaction under the money counts. National Granite Bank V. Tyndale, 176 Mass. 547, 57 NE 1022,

4. See Cancellation

ments [6 Cyc 288].

5. See Reformation

ments [34 Cyc 931, 935].

of of

Instru

See Courts.

841]. 7. Federal courts as bound by state decisions in regard to see Courts [11 Cyc 901].

Stipulation in, for attorney's fees as affecting amount in controversy

Where instrument altered see Alteration of Instruments §§ 14, 18. 21. Martens-Turner Co. v. Mackintosh, 17 App. Div. 419, 45 NYS 275, 4 NYAnnCas 279; Corbet Buggy Co. v. Dukes, 140 N. C. 393, 52 SE 931; Otto v. Griffin, 54 Wash. 506, 103 P 789; Hatfield v. Worden, 41 N. B. 552 (holding it immaterial that the note was not presented for payment at maturity and that no notice of dishonor was given to the debtor as indorser, unless there was money at the place of payment ready to pay such note at its maturity).

22. Camas Prairie State Bank v. Newman, 15 Ida. 719, 99 P 833, 128 AmSR 81 and note, 21 LRANS 703 and note; David v. Merchants' Nat.