The opinion of the court was delivered by
Taft, J.I. It is claimed by the defendant that Borden paid no consideration for the note in suit, for that the former note, No. 328, upon and for the surrender of which the note in suit was taken, was of no value in his hands. Whatever rights he may have had against the bank, or any of the parties to the note, save Mr. Page, it is certain that the note was a valid claim against the latter, in the hands of Borden. He had taken it from Page under Page’s endorsement, and advanced him the amount of it in money, and however great the fraud, if any there was, on the part of Page in taking the note from the bank and transferring it to Borden, it would not affect the validity of the claim of the latter against Page as endorser. Page could make no defence to such claim. The note No. 328 was therefore of value in Borden’s hands, and its surrender would constitute a valuable consideration for taking the note in suit. Churchill v. Bradley, 58 Vt. 403.
II. The defendant further claims that the note in suit was taken under such circumstances as to deprive Borden of the character of a bona fide holder, without notice of any equities existing in favor of the defendant. The rule in this respect is well stated in Rob. Dig. p. 100, s. 12 7. “ The purchaser of negotiable paper must exercise reasonable prudence and caution in taking it. If the circumstances are such as ought to excite the suspicion of a prudent and careful man as to the validity of the paper as between the-parties to it, or the propriety of the transfer, and *51the purchaser takes it without inquiry, he does not stand in the position of a bona fide holder, but in the position of the party-from whom he takes it, though he may have paid value for it.” The question then arises whether there were any circumstances attending the taking of the paper by Borden, which ought to have excited the suspicions of a prudent and careful man, as to the paper, or the propriety of its transfer. If there were, Borden is chargeable with such facts as he would have learned had he actually made inquiry. If he had inquired he would have learned that Page had no right to transfer the note, except for certain specified purposes ; and admitting that it was not taken by Borden for such purposes, it is incumbent upon us to say whether any of the facts reported by the court ought to have put him upon inquiry. In this respect but two suggestions aré made by the counsel for the defendant. First, the fact that the note for which the one in question was taken, was overdue, and that the one offered for it was good, and would be paid at maturity. The overdue note was given by the Dorset Marble Company, a corporation owning quarries and mills in Vermont, and producing annually a large quantity of marble, and raising funds by issuing commercial paper like the note in suit. Page was a man of high standing financially, engaged in great enterprises, with large financial dealings, and was known as a man of integrity and high character. Borden had theretofore had pecuniary transactions with him and had loaned him money. Now although the fact that the note, No. 328, was not paid at maturity might import insolvency in the sense in which the word is sometimes used, it was far from importing that the paper was worthless, and the fact that to take up the note in question, another was offered, with a name on it, that was represented as perfectly responsible with the further representation that the note would be paid at maturity, would tend to allay any suspicions that might otherwise arise. The defendant was president of the company making the paper ; and Borden might well think he was interested in sustaining its credit. Second, *52the defendant contends that the amount of the note, four thousand dollars, would suggest more careful scrutiny than if the amount had been small. In this case, we do not think it would; whether it would or not in any given case would to a great extent depend upon' circumstances. While it might excite suspicion if a man of no means and of no business should offer a piece of commercial paper for thousands of dollars for sale, none would naturally arise, caused by the amount of the paper, when offered by a man of large enterprises, and who would naturally need large sums in carrying on an extensive and varied business. More careful scrutiny would be suggested if the paper was small; for if Mr. Page, standing as he did financially, engaged in banking and other enterprises, had been endeavoring to raise money on a note for one hundred dollar's, instead of one for four thousand, and that in a place so far away from his home and business as Philadelphia, it would naturally suggest, at least in regard to him,-and we think the paper,' that something was wrong. We fail to see that there was any fact that attended the taking of the note by Borden that should have put him upon inquiry. The defendant’s counsel contends with great vigor that this case is within the rule enunciated by Dwek. J., in Pringle v. Phillips, 5 Sandf. 137, in stating what the principle of the doctrine of constructive notice is, viz. : “ When a person is about to perform an act by which he has reason to believe that the rights of a third party may be affected, an inquiry into the facts is a moral duty, and diligence an act of justice. Hence he proceeds at his peril when he omits to inquire, and is then chargeable with a knowledge of all the facts that by proper inquiry he might have ascertainedand that it was incumbent upon Borden to make inquiry at all events, the defendant being a third party. We do not think this rule applies to a surety or endorser upon a note offered for discount or sale, irrespective of any circumstances which should have put the party to whom it is offered upon inquiry. The rule, with the application to the extent claimed in this case, does not prevail in this State, if anywhere. *53If it did, then whoever takes from the holder a note with a surety or endorser takes it subject to all equities existing between the principal and surety or endorser; i. e., if he must inquire in all cases where the rights of an accommodation party are involved. That such is not the law, see Harrington v. Wright, 48 Vt. 427. The surety upon a note is not a third party as to whose rights thé taker must inquire unless the circumstances and facts are such as require it under the rule as above stated. We think it is affirmatively shown by the case that Borden took the note in good faith and stands as a bona fide holder without notice. Upon the facts reported by the County Court we think there was nothing to put Borden upon inquiry and no error in the judgment; and it is affirmed.
Royce, Ch. J., and Powers, J., did not sit in this case, being absent.