Baxter v. Ellis

Danforth, J.

The provisions of ch. 33, § 27, Pub. Laws of 1858, do not “ extend to negotiable paper in the hands .of any holder for a valuable consideration, and without notice of the illegality of the contract.” From this limitation iñ the act referred to, it follows that negotiable paper given for intoxicating liquors, in the hands of an indorsee, is subject to the same principles of law as are applicable to any other negotiable paper to which there is a defense in the hands of the payee.

The indorsee is presumed to be an innocent holder for value until the contrary is proved, or fraud or illegality in the consideration is shown. In the case at bar, Barnum and Bickford being parties to the note, are not competent witnesses to prove its illegal origin, until notice of that illegality, or its equivalent is brought home to the plaintiff. Thayer v. Crossman, 1 Met. 416. Without their testimony there is no proof as to the origin of the note. The burden of proof, then, is upon the defendant to show that plaintiff is not an innocent holder for value. For this purpose, Barnum is a competent witness; but his declarations as testified to by Bickford, that he sold the note after it was payable, must be excluded, as it does not appear that at the time they were made he had the note in his possession. If he is to be believed, the plaintiff is an innocent holder. If he is not to be believed, as contended by defend*181ant’s counsel, then there is no testimony upon this point, and he is entitled to the presumption of law in his favor.

Judgment for plaintiff for the amount due upon the note.

Appleton, C. J.; Walton, Dickerson, and Barrows, JJ., concurred.