Wood v. Seitzinger

Is the holder of a negotiable note, who has taken it as a security for a pre-existing debt, a holder for value, and so protected against any equities subsisting between the original parties to it? This is the only question presented by this case.

If the rule established in Pennsylvania by the decisions of her highest court is to be followed, it must be answered in the *285negative. But these decisions are only persuasive, as may he said also of a recent decision in this court by a late eminent judge, eomformably to the state rule. The question involved is not one of local law, but of general commercial jurisprudence ; hence the duty of the court is imperative to follow the guidance of general judicial opinion concerning it. As to the preponderating weight of this opinion there is scarcely ground for doubt.

In perhaps the majority of the United States, the law. is settled that the taking of a note as collateral security for a pre-existing debt is a holding for value. So it is held in England. See 2 C. M. & R. 180; Percival v. Frampten, and Poirier v. Morris, 2 E. & B. 89. It is stated to be the better doctrine in 3 Kent’s Com. *81; in Story on Prom. Notes, § 195; in 1 Parsons’ Prom. Notes, 218; and in Byles on Bills, by Sharswood, *28. It has the judicial sanction of Judge Story, in Swift v. Tyson, 16 Peters’ R., whose adoption of it is distinctly approved by the supreme court in McCarty v. Root, 21 How. 439.

Such weight of authority must be regarded in this court as decisive, and judgment is, therefore, entered for the plaintiffs on the case stated.