Schultheis v. Sellers

Citations

• 223 Pa. 513
• 72 A. 887
• 1909 Pa. LEXIS 564

Syllabus

<p>Promissory notes — Action by indorsee against maker — Fraud—Burden of proof — Affidavit of defense.</p> <p>1. In an action on a promissory note the holder is required to show the consideration he paid for it and how it came into his hands where the defendant proves that it was put into circulation fraudulently.</p> <p>2. To support an action by the indorsee of negotiable paper against the maker, in the first instance it is only necessary for the plaintiff to put the paper in evidence, then, if the defendant proves that the paper was put in circulation by fraud, or undue means, his defense will prevail, unless the plaintiff establishes that he acted fairly and paid value.</p> <p>3. In an action by an indorsee against the maker of a promissory note, the plaintiff averred in his statement that he was a bona fide holder for value before maturity of the note, and that he took it without any notice of any defects or infirmities therein. The defendant filed an affidavit of defense in which he denied the averments of the statement, and charged that the payee named in the note acting as agent of a publisher, induced the defendant to sign the note as part consideration for a set of books, which the payee acting as said agent “falsely and fraudulently represented to be a special, limited and extra-illustrated edition,” worth a very large sum stated; that defendant was not an expert of the value of the books, and relied entirely on the representations made to him, that he gave two notes, one of which he paid, and that the other was the note in suit; that prior to maturity of the last note he discovered that the representations in reference to the books were false, and that immediately upon such discovery he notified the payee that the books were not as represented, requested him to return the money already paid and the unpaid note, and tendered a return of the books. He also averred that the plaintiff had full knowledge of the transaction, and took the note to aid the payee