any value or consideration for the acceptance or payment of said bill by the defendant. Accommodation indorser § 3482. Accommodation indorser. may set up any defense available to the maker. But diversion of accommodation note from its original purpose is no defense in the mouth of the maker, unless injury to him is shown.8 The want of consideration for the undertaking of a maker, acceptor, or indorser of a negotiable instrument does not exonerate him from liability thereon to an indorsee in good faith for a consideration.9 § 3483. Authority, denial of. Where a bill in equity alleges that the defendant gave authority to A. to draw a bill of exchange, the answer, to completely negative such allegation, must deny the authority, and also any subsequent ratification.10 § 3484. Check-set-off. The drawee of a check certified as "good" can not set off a claim on the holder against the amount so transferred.1 11 3485. Want of consideration. An answer in an action, by an indorser of a note, alleging that the plaintiff gave no value for the note, but took the same as security for an old debt, and showing that the plaintiff's indorser is indebted to the defendant, sets up no defense, and no evidence can be admitted under it. It is necessary to show that the indorser was so indebted at the time of the transfer to the plaintiff, as the latter takes the note free from subsequent equities.12 But partial failure of consideration can not be alleged in bar." The defense of want of consideration is personal between the parties to the original transaction. It can not be set up against an independent liability of maker or indorser of negotiable paper given 13 7 Sawyer v. Chambers, 44 Barb. 42; Cal. Civil Code, § 3120. 8 Corbitt v. Miller, 43 Barb. 305. 9 Cal. Civil Code, § 3122; see, also, Id., §§ 3123, 3124. 10 Clarke's Ex'rs v. Van Reimsdyke, 9 Cranch, 153. 11 Brown v. Leckie, 43 Ill. 497; Bickford v. First Nat. Bank of Chicago, 42 id. 238; 89 Am. Dec. 436; Rounds v. Smith, 42 Ill. 245. 12 Elwell v. Dodge, 33 Barb. 336. For form of answer in such a case, see Rodman v. Munson, 13 id. 64; Dubois v. Baker, 40 id. 556; Nichols v. Smith, 42 id. 381. 18 Lewis v. McMillan, 41 Barb. 420. in payment.1 If a person delivers to his agent a promissory note, with the place for the name of the payee left blank, with directions to insert therein the name of a bank, and have the note discounted at the bank, and with the proceeds pay another note on which the principal is indebted, and the agent fills the blank with the name of the holder of such other note, and delivers it to him in payment of the other note, the agent violates his authority, and the note is without consideration and void in the hands of the payee.1 15 § 3486. The same protest. [TITLE.] denial of acceptance, presentment, and Form No. 809. The defendant answers to the complaint, and alleges: That the bill of exchange mentioned in the complaint was not presented for acceptance nor accepted, as alleged, or at all, and that it was not presented for payment, nor was it protested for nonpayment. § 3487. The same — controverting excuse for nonpresentment. Form No. 810. [TITLE.] The defendant answers to the complaint, and denies: That any search was made when the said bill of exchange became due, to discover the residence and person of the said or elsewhere, or at all, in at .... order that the said bill might be presented to the said for payment. When an unreasonable delay § 3488. Unreasonable delay. in the presentment of a check is meant to be relied on as a defense in an action against the drawer, such delay should be 30 averred as to raise a distinct issue in the answer.16 By the California Civil Code checks are declared to be bills of exchange, and subject to all its provisions concerning them, except that the drawer and indorser are exonerated by delay in presentment only to the extent of the injury which they suffer 14 Gillespie v. Torrance, 25 N. Y. 306; 82 Am. Dec. 355; Delano v. Rawson, 10 Bosw. 286; see, also, Agawam Bank v. Egerton, id. 669; see Cal. Civil Code, § 3122. 15 Beeman v. Lovett, 46 Cal. 387. 16 Harbeck v. Craft, 4 Duer, 122. thereby; and an indorsee after its apparent maturity, but without actual notice of its dishonor, acquires a title equal to that of an indorsee before such period." § 3489. The same - payment before indorsement. [TITLE.] Form No. 811. The defendant answers to the complaint: .... 18.. I. That after the bill mentioned in the complaint was due, to-wit, on or after the ........ day of .... [date of maturity], and while said [drawer] was the holder thereof, and before this action, the defendant satisfied and discharged the principal and interest [and damages] due on said bill, by payment to the said [drawer]. II. That said [drawer] indorsed said bill to the plaintiff after said payment and after the maturity thereof.18 § 3490. Promissory note-denial of note.19 [TITLE.] Form No. 812. The defendant answers to the complaint, and denies that he made, executed, or delivered the note mentioned [or set forth] therein. § 3491. Bona fide holder. The purchaser of a promissory note from the payee before it is due but after the payee has executed to the maker a release of the same, without knowledge of such release, is a bona fide holder, although he purchases for less than the face of the note and as a speculation, and although by the exercise of a little diligence he might have ascertained that the release had been given.20 Where a promissory note is made for the accommodation of the payee, but without restriction as to its use, an indorser taking it in good faith as collateral security for an antecedent debt for the payee and indorser, with 17 Cal. Civil Code, §§ 3254, 3255. 18 See, as to consequences of omitting to set up an available de fense of part payment, Binck v. Wood, 43 Barb. 315. As to defense of incautious payment of stolen overdue note being available, see Cothran v. Collins, 29 How. Pr. 113. So also as to the defense that holder of note has received moneys applicable to its payment. Burrall v. Jones, 7 Bosw. 404. 19 See, as to insufficient denial of making of note, Wyckoff v. Johnson, 2 S. Dak. 91. 20 Schoen v. Houghton, 50 Cal. 528. out other consideration, is a holder for value, and may recover thereon against the maker.21 § 3492. Bankruptcy. If the defendant plead the bankruptcy of the indorser in bar, a replication stating that the note was given to the indorser in trust for the plaintiff is good, and is not a departure from a declaration which alleges the note to be for value received.22 The answer to a suit on a note set up defendant's discharge in insolvency.23 It was held that under section 59 of the Practice Act, it was sufficient to allege in the answer that a judgment had been duly rendered, discharging defendant from the demand sued on; and that whether the demand was sufficiently described in defendant's schedule was matter of evidence to be determined at the trial by inspection of the record.24 3493. Collateral contract. A contract made at the time of the execution and delivery of a promissory note, and which clearly refers to it, may be read in connection with the note as though it were incorporated into it; and in an action on the note by the payee the maker may prove that plaintiff has violated the contract; but the contract must be pleaded.25 § 3494. Composition. Where, to an action upon a promissory note, an agreement of composition between the debtor and his creditors, including the plaintiff, is relied upon as a defense, such agreement must be specially pleaded, and can not be considered under a plea of accord and satisfaction by the giving of new notes.26 In an action against the maker of a promissory note, he answered that the plaintiff, with other creditors, signed a composition deed, agreeing to exchange the notes they had against the defendant for other extended notes to be drawn by him; and it appeared on the trial that the defendant called on the plaintiff and offered him the new notes which the agreement provided for, but the plaintiff refused to receive them; but that he had not the new notes drawn at the time of the offer; to complete such defense, the party must plead and 21 Grocers' Bank v. Penfield, 69 N. Y. 502; 25 Am. Rep. 231. 22 Wilson v. Codman's Ex'rs, 3 Cranch, 193. 23 Cal. Code Civ. Pro., § 456. 24 Hanscom v. Tower, 17 Cal. 518. 25 Goodwin v. Nickerson, 51 Cal. 166. 26 Smith v. Owens, 21 Cal. 11; see § 3244, ante. prove, not only tender of the new notes, but also aver a readiness at all times to perform his part of the agreement, and must bring the new notes thus tendered into court on the trial. 66 27 § 3495. Conclusion of law. In an action on a promissory note, where the complaint contains a copy of the same, a denial of indebtedness is no denial at all.28 A denial that the plaintiff is owner and holder" of a note is a denial of a conclusion of law; and an answer admitting the other facts, but denying this, raises no material issue.29 So of an averment that the note in suit " was obtained from the said defendant by fraud, and is without consideration and void." 30 § 3496. Counterclaim set-off. It is enough if the answer states a cause of action against the plaintiff and in favor of the defendant, arising out of contract or transaction set forth in the complaint, as the foundation of the plaintiff's claim, or connected with the subject of the action.31 In an action on a promissory note, by the payee, against one of two joint and several obligors, the defendant pleaded a demand, as a counterclaim, for damages for the unskillful construction of a mill by the plaintiff for the defendant, his co-obligor, and T., for the construction of which the note in suit was given in part payment; it was held that said counterclaim being for unliquidated damages, and in part a demand in favor of a stranger to the note and suit, it was unavailable as a defense to the action.32 But where the claim of the defendant arose out of the same contract or transaction which is the subject of plaintiff's claim, 27 Warburg v. Wilcox, 7 Abb. Pr. 336. 28 Kinney v. Osborne, 14 Cal. 112; Sneed.v. Wister, 8 Wheat. 690. 29 Poorman v. Mills, 35 Cal. 118; 95 Am. Dec. 90; Wedderspoon v. Rogers, 32 Cal. 569; but see Oliver v. Depew, 14 Iowa, 490; McKnight v. Hunt, 3 Duer, 615. 30 McMurray v. Gifford, 5 How. Pr. 14. So of an averment that "the plaintiff is not an innocent holder for value of said note," and such averment is insufficient to justify the admission of evidence as to want of good faith in the acquisition of the note. Voorhees v. Fisher, 9 Utah, 303. 31 Allen v. Haskins, 5 Duer, 332; see § 3364, ante; also, Wood v. Brush, 72 Cal. 224. 32 Hock v. White, 30 Cal. 299; 89 Am. Dec. 116; King v. Wise, 43 Cal. 635. |
