Holme v. Karsper

5 Binn. 469, 1813 Pa. LEXIS 15

• Court: Supreme Court of Pennsylvania
• Decided: April 3, 1813
• Status: Published

Opinion

Tilghman C. J.

This action was brought by the indorsee against the indorser of a promissory note. The defendant gave notice to the plaintiff, that he should call on him at the trial, to prove what consideration he had given for the note, and under what circumstances he came to the possession of it. On the trial, the defendant offered to prove, that the note had been put into circulation by the drawer, fraudulently and without his knowledge, and it was his intention after laying this foundation, to call on the plaintiff to shew how he came by it, and what he gave for it. The Court rejected the evidence, and a bill of exceptions was taken to their opinion. Honesty and good faith are the basis of the mercantile law. Those, therefore, who act with honesty and good faith, and those only, are worthy of protection. Negotiable paper stands in the place of specie; it is therefore of the utmost importance, that when such paper is fairly put into circulation, the bona fide holder should be involved in no difficulty, on account of secret transactions between the original parties. On this principle our act of assembly was made, which forbids defalcation, in case of paper of a certain description. But although the person who acquires paper, in the usual course of business, should receive all possible protection, yet there is no principle of justice or sound policy, which requires the same extension of favour to one who comes to the possession of it in an unfair manner, or xvithout consideration. In the first instance it is presumed that every man acts fairly. It lies on the defendant, therefore, to shew some probable ground of suspicion, before the plaintiffis expected to do any thing more than produce the note on which he founds his action. But this being done, it is reasonable that the holder should be called on to rebut the suspicions. All that is asked of him, is to shew that he has acted fairly, and paid value. That these are the principles of the mercantile law, has been abundantly shewn by the cases cited by the plaintiff in error. Now to apply these principles to the case before us. The defendant offered to prove that the note indorsed by him, had been put in circulation by the drawer, by fraud and falsehood. If he had proved this, enough would have been done, to throw on the plaintiff the proof of the manner in which he came to the possession of the note, and what he paid for it. But from this evidence the defendant was precluded. He was not permitted to make out a case, which would have entitled him to a verdict, unless the plaintiff had come forward and cleared himself of suspicion. I am of opinion, that the District Court erred in rejecting the evidence, and therefore the judgment should be reversed, and a venire facias de novo awarded.

Yeates J. gave no opinion, not having been present at the argument. Brackenridge J. concurred with the Chief Justice.

Judgment reversed.