Grant v. Holden

By the Court. Ingraham, First J.

Without examining the various questions presented in this case, as to the sufficiency -and binding effect of the alleged compromise with Dunning, I think a new trial must be ordered, because no evidence of such a compromise with him, without the assent of the plaintiffs, could affect their rights.

The rule, that the plaintiffs must be bona fide holders for value, is not applicable to this defence. The note was placed in the plaintiffs’ hands before maturity and before the compromise, to be collected and applied to the payment of indebtedness from Dunning to the plaintiffs. This is apparent from the depositions of the plaintiffs, who were examined by the defendant, and the indebtedness was a sufficient consideration for the transfer. Having obtained the note for the purpose of applying' it to a debt owing to them by Dunning, they were not bound by his acts subsequently, any further than ratified by themselves. They have simply acknowledged the receipt of the payment of $250 on account, by permitting the endorsement on the note. Whatever compromise was agreed to by Dunning, was not communicated to nor authorized by the plaintiffs, and so long as any thing remained due to them from Dunning, their claim upon the note was not impaired.

A new trial must be ordered, costs to abide the event,