In re Hill

Citations

• 187 F. 214
• 1911 U.S. Dist. LEXIS 285

Syllabus

<p>1. Bankruptcy (§ 290*) — Claims-—Defenses—Availability to Trustee.</p> <p>Where a claim against a bankrupt’s estate was based on a note given by her in a marginal gambling transaction, the defense that it was based on an illegal consideration was available to her, and was, therefore, available to her trustee in bankruptcy.</p> <p>[Ed. Note. — For other eases, see Bankruptcy, Dec. Dig. § 290.*]</p> <p>2. Bills and Notes (§ 497*) — Transfer—Holder for Value — Burden of Proof.</p> <p>Both Negotiable Instruments Law N. V. (Laws 1897, c. 612) § 98, and Negotiable Instruments” Law Pa. 190Í, § 59 (P. L. 202), provide that every holder is deemed prima facie to be a holder in due course, but when it is shown that the title of any person who has negotiated the instrument is defective the burden is on the holder to prove that he. or some person under whom he claims, acquired the title as a holder in due course. Act N. Y. § 91, and Act Pa. § 52, declare that a holder in due course is one who has taken the instrument, which is complete and regular on its face, before maturity and without notice of previous dishonor, if dishonored, in good faith and for value, and without notice of any infirmity in the instrument or defect in the title of the person negotiating it. Held, that where the payee of a note given for a gambling debt, transferred it to claimant before maturity for an inadequate consideration. on proof flint the note was founded on an illegal consideration. tile burden of showing that claimant was a holder in due course shifted to him. both under the negotiable instruments law and independent thereof by the law merchant.</p> <p>[Ed. Note.- -For other cases, see Bills and Notes, Cent. Pig. §§ 1675-1687: Dec. Dig. § 497.*]</p> <p>3. Bums and Notes (§ 35-1*) — Transfer—Consideration-—IIor.BEB in Due Course.</p> <p>Notes aggregating $31,800, with interest, having been executed by a bankrupt, to cover losses in marginal gambling transactions, were transferred by the payee