Crampton v. Perkins

Irving, J., delivered the opinion of the Court. This action of assumpsit was brought by the holder, who was the endorsee of a promissory note, against the maker. The declaration contains the common counts, and a special count sitting out the promissory note, and its endorsement by the payee to Mason, and by him to the plaintiff. The pleas are general issue, and that the note was procured by fraud.

The replication traversed the fraud, and issue was joined. According to the undisputed facts, the appellee contracted' with one T. J. Mason for the purchase of a tobacco and cigar store, stock and goodwill which she designed to be conducted by her nephew, Howard E. Appier, who resided with her. A note for two hundred and forty dollars was drawn in favor of Mason at ninety days, and was signed by Howard E. Appier, and the appellee wrote her name in blank across the back of the note. At the time of executing this note, the appellee gave the payee Mason two watch chains as collateral security for the money secured . by the note.

A few days afterwards, Mason, thinking that a note of different form would he more negotiable, went with Appier to the appellee’s house to get its form changed, and the note now in suit was substituted for the first note. Mason did not see the appellee, but Appier took the note into the room where appellee was, and testifies that she willingly signed it. This note was a-note of appellee for two hundred and forty dollars in favor of Howard E. Appier, which was by him endorsed to Mason, and by Mason to the plaintiff.. When the note was endorsed by Mason to the plaintiff, the latter was not informed that Mason held the chains as security, and only shortly before the note fell due, did he learn this fact.

He then demanded them, but ²⁵ Mason declined to surrender to bim because he had receipted for them. Thereupon appellant requested Mason to notify Mrs. Perkins that the note was falling due, and ask that it be paid, which was done without telling her of the assignment of the note, for the reason that it was thought she would more readily pay it if she was not so informed. When the note fell due, Mason and appellant called together, and demanded payment, which being, refused, this suit was brought. The first exception is to the admission of certain facts connected with the execution of the new note, or the exchange of the original for the new note which were supposed to indicate fraud in the procurement thereof.

In this ruling there was no error. The issue of fraud was distinctly raised by the pleadings, and it is the established law that, if fraud in the procurement of a note be shown, the onus is then cast on the plaintiff to show that he paid value for the note before maturity, and under circumstances that “create no presumption that he knew of the existence of the facts that impeached the validity of the instrument.” Totten vs. Bucy, 57 Md.,