Arrangoiz v. Frazer

The defendant appeals from an order at special term, striking out his answer as irrelevant, except the allegation to the effect that one Rafael is the real party in interest in this action, and that De Arrangoiz is only a nominal plaintiff. The cause of action alleged in the complaint is, that one Everitt made a promissory note for $1,000 to the order of, and delivered the same to, the defendant; that subsequently, *246and before its maturity, the defendant indorsed it for a valuable consideration, and delivered it to the plaintiff, who is now the lawful owner and holder of it. That when it became due, the maker being dead, payment was demanded of his executor, and refused, and due notice thereof given to the defendant. The defence set up by the answer is, that the note was given to the defendant as part consideration for the transfer by the defendant of an interest which he owned in certain machinery, &o. That this interest was subsequently sold by the executor of the maker to Eafael, who afterwards sold it to the defendant, receiving this note in part payment of the purchase money. That at the time of this last sale, Eafael was, as defendant is informed and believes, indebted to the executor in upwards of $1,000 mpon-a contract made by Eafael with the executor, in connection with the sale by the executor to Eafael. That when the note became due, the executor gave notice of these facts to the defendant, and forbid his paying; adding, that if he did pay the note, the “ executor would not refund the money to the defendant,” and finally it is alleged, “ on information and belief, ” that the plaintiff took the note with full knowledge of these facts; that he is only the nominal plaintiff, and Eafael is the real party in interest.

Taken as a whole, this is certainly a remarkable defence. Substantially, it may be stated thus:—The maker gave the note for a valuable consideration to the defendant; the defendant indorsed it for a valuable consideration to Eafael; Eafael transferred it before maturity, and for a valuable consideration, to the plaintiff; but, because at the time it was indorsed to Eafeal, he was indebted to the executor of the maker, the plaintiff ought not to recover. The defendant does not pretend to have any set-off, demand, or counter claim, against the plaintiff; does not even intimate that the note was transferred for the purpose of defrauding the executor of any set-off he may have against Eafael ; and yet seems to think, when called upon to respond to the obligation he incurred by his indorsement, by a plaintiff admitted to be a bona fide holder of the note, who became such be*247fore maturity for a valuable consideration; that it is a sufficient defence to say, that, while the note was, before its maturity, in the hands of an intermediate party, the maker had a counter claim, which, if that party had held the note when it became due, and had sued the maker upon it, might have been set off against it.

It would be extraordinary, indeed, if such matter should not be deemed irrelevant; and the judge at special term was right in so considering it.

Order appealed from affirmed.