Thompson v. Shepherd

Hubbard, J.

The note declared on, having been negotiated by the indorser after it was dishonored by the maker, is subject to any defence, in the hands of the present holders, which might be made to it if Bugbee, the indorser, was the plaintiff.

A ground of objection made at the trial was, that the note was given by the defendant to Beaumont, and by him indorsed to Bugbee, without consideration and for the accommodation of Bugbee ; and as to this objection, the judge instructed the jury that, if the note was thus made for the accommodation of Bugbee, the plaintiffs could not recover.

The defendant further requested the judge to instruct the jury, that if Shepherd, when he gave the note, was ignorant of the promise of Beaumont to Bugbee, the plaintiffs could not recover. But the judge instructed the jury, that if the note was made by Shepherd for the accommodation of Bug-bee, without knowledge of and assent to the agreement in respect to the payment out of the proceeds of the sale of the house, the plaintiffs could not recover. And we are of opinion that the instruction given, and not that which was asked for, was correct.

The case may be tested by supposing Bugbee to be the plaintiff, instead of the present plaintiffs ; as they stand in no better situation than Bugbee. Upon the facts, as proved, the note was given to Beaumont by the defendant, for Beaumont’s accommodation, and in lieu of a promise to lend him money But whether the defendant knew of the agreement between Beaumont and Bugbee, does not appear. Treating the note, then, as an accommodation note between the defendant and Beaumont, it lies with the defendant to bring home to Bugbee knowledge of the fact, (if it will avail him,) before Bugbee can be affected by it; and there is nothing to show but that Bugbee believed that Beaumont had given value for the note.

• The agreement between Beaumont and Bugbee was not that of a lending of Shepherd’s note, with Beaumont’s indorsement, for the accommodation of Bugbee; but it was a loan and transfer of the note, for a valuable consideration, in lieu of so much money which Beaumont had promised to lend to Bugbee, if he would purchase a lot of land of Beaumont, and would expend the amount towards building a house upon it, which Beaumont believed would be for the benefit of his adjoining land, and the amount of which note, with other money to be lent, was not to be repaid on the maturity of the note, but from the proceeds of the house when sold. And in pursuance of this contract, Bugbee went on and built the house, and procured the note to be discounted. Shepherd refused to pay it at maturity, and Bugbee, taking it up as indorser, again negotiated it to the defendants, to pay them foi work done on the house.

At the time when the note fell due, the house was not sold, and no fault is imputed to Bugbee in that respect. His debt is not payable to Beaumont; he received the note for a valuable consideration, and could enforce the payment of it against the defendant, if he were himself the plaintiff. Nor would his right to recover have been affected, if he had known that, as between Shepherd and Beaumont, it was merely an accommodation note. As he received it for value, his rights are the same as though Beaumont had given value for the note. And it was of no consequence, so far as Bugbee was concerned, whether Shepherd, when he gave the note, was ignorant of the engagement of Beaumont to Bugbee, or not. His ignorance of the fact does not alter his liability.

Exceptions overruled.