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15 Misc. 623

Stifter v. Boggs

City of New York Municipal Court

Decided February 15, 1896

City of New York Municipal Court · decided 1896-02-15

<p>Negotiable paper—Evidence — Fraud.</p> <p>In an action upon a promissory note by a transferee thereof against the maker, where the defense is fraud in its inception or diversion, the- defendant may prove such fraud or diversion without showing that plaintiff had knowledge thereof, and upon such proof being given the burden rests upon the plaintiff of showing the bonafides of his holding.1</p>

Decided 1896-02-15

Van Wyck, Ch. J.

¶1The action is upon two promissory "notes made by defendant to order of one Tuple, who indorsed same to plaintiff. Defendant’s ■ alleged defense was that these notes were obtained from.him by fraud. The record shows that plaintiff’s attorney tried the cause upon the theory that, after he had marked the notes in evidence, the defendant could not make any proof of the alleged fraudulent obtaining of the notes by the payee until he first proved that plaintiff had knowledge of the fraud, or showed that the. notes came, into plaintiff’s possession after maturity. However, he now concedes that defendant could first show the fraud, and that then the burden would be shifted to the plaintiff to show.-that he obtained the notes before maturity for value; and he now concedes that if the defendant made proper effort to prove his affirmative defense of fraud, was prevented from doing so and excepted, then that defendant is entitled to a ' reversal and new trial.

¶2The court ruled, in addressing defendant’s counsel: “ You must first show that the plaintiff had knowledge of the defense or show that they (the notes) came into possession of plaintiff after maturity,” to which defendant excepted, and again, when » defendant was endeavoring to prove the circumstances under which the notes were obtained from him, the plaintiff’s counsel said to the court: “ He cannot show any knowledge on the part of Mr. Stifter” (plaintiff), and defendant’s counsel frankly said “ I cannot show any absolute knowledge on the part of the plaintiff.” The court: “Then I sustain the objection.” “ Exception taken.”

¶3If a promissory note is obtained from the maker, by fraud or. diverted from the purpose for which, it was given, and is sued upon by a holder from the payee, and the maker defendant makes proof of the fraud or diversion, the. .plaiptiff then *625must make proof of the bona fides of his holding, and the burden to-do so is upon him.

¶4Judgment reversed and new trial ordered, with costs to appellant to abide the event.

¶5McCarthy and Suhuohman, JJ., concur.

¶6Judgment reversed and new, trial ordered, with costs to appellant to abide event.

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