Paton v. Coit

• Citation: 5 Mich. 505
• Court: Supreme Court of Michigan
• Decision Date: 09 October 1858
• Parties: Alexander Paton v. Augustus B. Coit and another

5 Mich. 505

Alexander Paton v. Augustus B. Coit and another

Supreme Court of Michigan

October 9, 1858

Heard July 12, 1858

Error to Wayne Circuit.

The action was assumpsit by defendants in error against plaintiff in error, upon the acceptance by the latter of a draft drawn upon him by Hildebrand & Co., of Cleveland, Ohio, dated March 30th, 1857, payable to the order of C. & A. Ives and by them indorsed.

The defendant pleaded the general issue.

On the trial the acceptance having been given in evidence, the plaintiff rested.

The defendant then introduced a witness, and being required to state what he expected to prove by such witness, stated that he expected to prove that such acceptance was given in payment and as security for ten barrels of intoxicating liquor, called whisky, purchased by defendant on the 30th day of March, 1857, in Detroit, of the drawers of said draft.

The plaintiffs objected to such evidence, upon the ground that under the exception in section two of the prohibitory liquor law of 1855, the presumption was that said draft was in the hands of bona fide holders, to wit, the plaintiffs; and that the onus was on the defendant to show, or propose to show notice before said testimony could be received. The court sustained the objection, and refused to allow the testimony to be given; and defendant excepted.

Judgment having been rendered for plaintiffs below, for the amount of the acceptance, the defendant brought the case to this court by writ of error.

Judgment reversed, and a new trial granted.

Howard, Bishop & Holbrook, for plaintiff in error:

The evidence offered was relevant, and sufficient to have defeated the plaintiff if no further testimony had been adduced on the part of the plaintiff; the presumption raised by it was a question, under the charge of the court, for the jury to determine as to its weight and effect: 5 Duer 574; 10 Ala. 355; 8 Conn. 523; 3 Me. 367; 2 McLean 600.

When defendant shows the consideration of the draft to be illegal, the plaintiff is then bound to show himself to be a bona fide holder without notice: Vallett v. Parker, 6 Wend. 615; Bailey v. Bidwell, 13 M. & W., 73; Holme v. Karsper, 5 Binn. 469; Snyder v. Riley, 6 Pa. S. R., 164; Aldrich v. Warren, 16 Me. 465.

Walkers & Russell, for defendants in error:

The presumption of law was that the plaintiffs received the acceptance before maturity; and the burden was upon the defendant to prove the reverse, or to show actual notice: 4 Cush. 559; 14 Ill. 51; Ewing v. Sills, 1 Ind. 125; 19 Barb. 147; 6 Md. 319; 5 Ind. 22; 4 A. & E., 838; 8 Wend. 600; 8 N. H., 334; 19 Me. 232; 1 Metc. 369; 17 Vt. 299; 32 Me. 587; 26 Ala. 730; 1 Bing. N. C., 229.

The effect of the act to prevent the sale of liquors, in respect to negotiable paper, is merely to render such paper without consideration as between the immediate parties.

The effect of the exception in section two is simply to put this statutory equity on a footing with all other equities; i.e., to make it incapable to be shown as against bona fide holders.

OPINION

Christiancy J.:

Whether the evidence in this case was properly rejected, does not depend upon the question, Whether, standing alone, it would have constituted a complete defense against the draft in the hands of a bona fide holder for value; but, Whether it would have been sufficient to throw upon the plaintiff the burden of proving himself to be such bona fide holder; or, Whether, in fact, the evidence tended, prima facie, to establish a defense.

It is assumed by the counsel for the defendants in error (plaintiffs below), that the only effect of the statute in reference to negotiable paper given for liquors sold, "is to render such paper without consideration as between the immediate parties," and that "the effect of the exception in section two is simply to put this statute equity on a footing with all other equities" between the original parties to negotiable paper.

If this be the only effect of the statute, then, according to the prevailing current of recent decisions, the evidence was properly rejected, though the cases upon this point are by no means uniform; and we do not wish to be understood as giving any opinion upon the question presented by this hypothesis, as we do not think it involved in the present case.

The defense here proposed was not merely the want, but the illegality of consideration; and this, being allowed as a defense between the original parties, irrespective of, and even contrary to the equities of the parties, can not, without perversion of language, be called an equity. It is not on the defendants' account that such a defense is allowed, as will more fully appear in the sequel.

The effect of the statute in question is not merely to render such paper without consideration, but absolutely void and illegal, between the immediate parties, and all others who have not obtained it for value, and without notice--not only void in the negative sense of having no legal basis, but affirmatively illegal as violating the positive provisions of the statute. It was not even contended that the facts offered to be shown by the defendant would not have made a prima facie case of an illegal sale, without showing that the sale did not come within any of the exceptions of the statute; and if the plaintiffs claimed to maintain the validity of the sale under any such exception, the burden of proof (this being a civil case) rested upon them to bring it within the exception.

Now, upon principle, as a question of statute construction, and without reference to any authority, when the statute expressly declares all such paper void and illegal, and forbids any action to be brought or maintained upon it "except when brought by a bona fide holder who has received the same upon a valuable and fair consideration without notice or knowledge," etc., it would seem to follow as a logical necessity, that when the paper is shown to have been given for such illegal consideration, the plaintiff's right of recovery is cut off by the general prohibition of the statute, unless, in avoidance of this, he gives evidence of those facts which alone can bring him within the exception.

We do not propose to give a definite opinion upon the point whether, the illegality being first shown, the burden of proof in this case would have rested upon the plaintiffs to show actual want of notice; this might be requiring actual proof of a negative. But we are inclined to the opinion that they should have shown the nature of the transaction accompanying the transfer; and if that disclosed no suspicion of such notice, it might make a prima facie case of want of notice, and throw upon the defendant the burden of proving notice. But the amount of the consideration given by the...