Tuttle v. Wilson

By statute the assignee of an overdue bill of exchange or negotiable promissory note is put upon the same footing as the assignee of any other chose in action. He takes it subject to any demand against his assignor, and in favor of the maker, existing at the time of the transfer, which might have been set off against the assignor while the note or bill belonged to him. Gen St. 1878, c. 66, §27. La Due v. First Nat. Bank of Kasson, 31 Minn. 33. This note and mortgage were made payable to Welles, who transferred to Richards. Richards assigned to Gibbs as collateral security. Richards, having complied with the conditions of his assignment, and being entitled to a reassignment from Gibbs, sold the note and mortgage to plaintiff, and caused Gibbs to assign directly to him. Gibbs received nothing for this; the consideration being paid by plaintiff directly to *424Richards, from whom he purchased. The note in fact belonged to Richards. Plaintiff understood this. Hence the case stands precisely as if the assignment had been, directly from Richards to plaintiff.

The demand against Richards, set up in the answer, could have been set off against the note while in his hands. Hence, the note being overdue, plaintiff took it subject to this demand against his assignor. Consequently the referee erred in refusing to allow defendant to prove this offset, and for that reason the court properly granted a new trial. The appellant seems unaccountably to have fallen into the errror of supposing that overdue paper is taken by any subsequent assignee subject only to defences existing against the payee at the time of his assignment, and that defences existing against an intermediate holder, while the note belonged to him, do not attach.

Order affirmed.