Hughes v. Large

• Decision Date: 02 January 1845
• Citation: 2 Pa. 103
• Parties: HUGHES <I>v.</I> LARGE.
• Court: Pennsylvania Supreme Court

2 Pa. 103

HUGHES v. LARGE.

Supreme Court of Pennsylvania.

December 26, 1845.

January 2, 1845.

Dec. 26.

ERROR to the Common Pleas of Bucks county.

Roberts, for plaintiff in error, made two points. 1. Defendant was bound to show he was the holder of the note, meant to be set off, before transfer of the note to plaintiff. Hinkley v. Walton, 8 Watts, 260; Morris v. Morelan, 15 Serg. & Rawle, 63; 2 Johns. 274. 2. The equities, subject to which plaintiff took, were such as then existed on the note. Chit. Bil. 8 ed. 822; Burrough v. Moss, 10 B. & Cress. 558, Chit. Bil. 15; Byles, 95; 10 Mees. & Wels. 696; Story, Prom. Note, § 178, 195; Ib. on Bills, § 220, 107; 5 Pick. 1; 10 Connect. 55, 10; 6 Cow. 693; 3 Har. N. J. R. 222.

Dubois, contrà.—1. The inference of law was, our note was endorsed at date, being in blank. 8 Wend. 600. 2. Our act of defalcation is much more extensive than the British statute.

Jan. 2. GIBSON, C. J.

It is certain the profession formerly thought that the endorsee of a promissory note took it, subject not only to equities arising out of the original transaction, but to demands collateral to it. For proof of this, we need go no further back than to Cromwell v. Arrott, 1 Serg. & Rawle, 180, in which it was said by Chief Justice Tilghman, and Mr. Justice Yeates, that before the act of 1797, it was considered that the endorsee held it subject, as well to set-off as to every other legal or equitable defence that could be made against the payee. Indeed, the framers of the statute took it for granted that such was the law; for they enacted, that notes, drawn in a particular form, and dated in the city or county of Philadelphia, "shall be held by the endorsee discharged from any claim of defalcation or set-off." It was further said by the Chief Justice, that this notion sprung from the act of 1715, which put the assignment of bonds, and the endorsement of notes, on the same level, by enacting, that a person to whom "bonds, specialties, or notes, are assigned, endorsed, or made over," may prosecute actions at law in their own names, "for recovery of the money mentioned in such bonds, specialties, or notes, or so much thereof as shall appear to be due at the time of such assignment, in like manner as the person to whom the same was made payable could have done." From this it was inferred that there was no design to put an assignee or endorsee on better ground than the assignor or endorser; and, acting on this interpretation, in Metzgar v. Metzgar, 1 Rawle, 227, we allowed an obligor to set off the debt, even of an intermediate assignee, in which we certainly went beyond what had been done before. But the Chief Justice added, that the legislature, finding the law of the state to be behind the law of our neighbours, yielded so far to the...