
    *Mary Cain, Executrix, vs. R. R. Spann,
    He who takes a note, after it is due, takes it subject to any defence which the maker can set up against the payee; and when the action is in the name of an endorser or bearer, to entitle the defendant to set up, by way of discount, any matter between him and the payee, he must prove that the note was transferred after due, and that the matter of defence existed between them at the time of the transfer.
    Before Earle, J., at Sumpter, Spring Term, 1841.
    Assumpsit on a note of hand of defendant, dated 17th January, 1837, payable to John Ramsay, or bearer, for $325 63, due at one day, and transferred, after due, to the plaintiff’s testator. The defendant offered by way of discount under notice, a note drawn by Ramsay, 19th December, 1838, payable to L. M. Spann, or bearer, due at one day, and transferred to defendant, 7th January, 1839. The time when the note sued on was transferred by Ramsay to the plaintiff’s testator, was not proved. It was still in Ramsay’s hands as late as the 25th December, 1838, and after the date of his note to L. M. Spann. There was no proof that he retained it, when the latter note was transferred to the defendant; much less was there any proof of an agreement, or understanding, between Ramsay and the defendant, that the notes should be discounted, the one against the other. Without such proof, and without knowledge on the part of the plaintiff’s testator, when he obtained the note from Ramsay, that there existed any counter claim by way of discount, I held that the fact of the note sued on being transferred after due, had no other effect than to enable the defendant to avail himself of the want or failure of consideration, or of some equitable defence arising out of the transaction on account of which the note was given, and did not enable the defendant to set up by way of discount, any other separate and independent demand, which he might have or acquire against the payee.
    The plaintiff offered in evidence a letter of 31st January, 1840, from the defendant to the plaintiff herself, or her testator, asking forbearance, and promising to pay.
    The jury, under the instructions of the Court, found for the plaintiff, disallowing the discount.
    
      The defendant appeals on the following grounds :
    because his Honor erred in charging the jury that the note of John Ramsay, the payee of the note sued upon, could not be set up as a matter of discount in the said action,
    2. Because his Honor charged the jury that, even admitting the plaintiff's testator received the note from John Ramsay, after the note of Ramsay had been transferred to defendant, the defendant could not set it up as a discount.
    3. Because the note sued upon, having been transferred after due, the defendant had a right to the discount offered, and his Honor should have so charged the jury.
    
      Moses and Miller, for the motion,
    contended that the question in this case was, whether the discount offered by defendant, is a discount under the discount law.
    The defendant stands in the same position that he would, if he had been sued by the original payee. Cited in support, 3 Term Rep. 82; 7 id., 429, Brown vs. Davis; also 3 Kent, 91; Chitty on Bills, 143; McCaskill vs. Ballard, decided at May Term, 1832, at Columbia; 7 Term Rep., 430; 5 John., 118, O’ Callaghan vs. Sawyer; 9 John., 244. The endorser takes the note subject to all the equity and all the discounts that the party might offer against the original payee; 8 John., 454; Nixon vs. English, 3 McCord, 549; Perry vs. Mays, 2 Bail., 354.
    
      De Saussure and Garden, contra.
    The question arises strictly under our discount law, and we contend that there are no reported cases settling the question.
    It does not appear that the discount note was traded prior to the transfer of the note sued upon. Cited Williams & Co. vs. Hare, 2 Hill, 483; Lowry v. Williamson, 3 McCord, 247 and 249. Cited also, the Discount Act. Kenedy and. wife vs. Cunningham, Cheves’ Rep., 50.
    The note being payable to bearer, the plaintiff has a legal estate in the note so soon as it passes into his possession.
    The question involved in the cases of Nixon vs. English, 3 McC., 549, and Perry vs. Mays, 2 Bail., 354, do not apply to this case. If Ramsay was the plaintiff, he might offer the discount, and the Court would sustain it; but the note having been transferred by Ramsay, it was incompetent for the holder to offer it as a discount to the note in question.
   * Curia, per

Evans, J.

Pie who takes a note after it is due, takes it subject to any defence which the maker can set up against the payee ; and according to my understanding of the law, where the action is in the name of an endorser, or bearer, to entitle the defendant to set up by way of discount, any matter between him and the payee, he must prove that the note was transferred after due, and that the matter of defence existed between them at the time of the transfer. The defendant has not brought himself within these principles. According to the report, there was evidence that the note was transferred to Cain after it was due, but there was none that Spann was the owner of the note offered in discount, at the time his note was transferred to the plaintiff’s testator. Without such proof, we think the presiding judge was right in charging “that the fact of the note sued on being transferred after due, had no other effect than to enable the defendant to avail himself of the want of failure of consideration, or of some equitable defence arising out of the transaction on account of which the note was given.” The grounds of appeal imply that the presiding judge charged the jury, that the discount could not be allowed, even if Spann was the owner of it at the time his note was transferred to Cain. It is likely, from the report, that he does entertain that opinion, but it was not involved in the facts of the case, and even if wrong, furnishes no ground for a new trial. It could have been no more than an incidental expression of an opinion on a question not involved in the case. ■

I have assumed, in stating the law as applicable to this case, that it devolved upon the defendant to prove the facts which entitle him to his defence — the transfer of the note sued on, after it was due, and that at the time of the transfer, he was the owner of Ramsay’s note to L. M. Spann. I ha.ve always so held on the circuit, and supposed it well settled and understood by the profession, but as doubt has been expressed on the subject, I will endeavor to illustrate it. In the ordinary mode of declaring on a note, nothing appears on the record that the note was not transferred otherwise than in the regular course of trade, before it was due. The plaintiff is bound to prove no more than the making and transfer of the note. It was never heard of, that he was bound to prove when he became the owner of the note. Upon the proof of the making *and transfer of the note, the plaintiff is prima facie entitled to recover. His action can only be defeated, by showing some de-fencc on the part of the defendant. By the rules of evidence, he who affirms a proposition, is bound to prove it. Spann, by his discount, affirms that Ramsay owes him, and that he is entitled to set off Ramsay’s debt against the plaintiff’s demand. To do this, he must make out by proof everything necessary to his defence. A discount is a cross action, in which the defendant is the actor, and by him everything must be proved necessary to maintain his cross action. It was not enough to show that Ramsay was indebted to him at the time of the trial, by the production of the note, but he must prove there w'ere mutual debts subsisting between them at the same time; that is, that Ramsay was indebted to him the note offered in discount, at the same time that he owed Ramsay the note which was transferred to Cain. If Spann got the note of Ramsay, after his own note had been transferred, then the debts were not mutual, and cannot be set off’, one against the other.

The defendant having failed to make this proof, his discount cannot be allowed, and the motion is dismissed.

O’Neall, and Butler, JJ., concurred.

Richardson, J ,

dissenting.

What is the principle of law upon which the Judge charged the jury? Upon that principle, whatever it was, the verdict is placed, and can stand only if the principle be correct. The Judge states the case as follows: “Assumpsit on a note of hand, of defendant, dated 17 th January, 1837, payable to John Ramsay, or hearer, for $325 63, due at one day, and transferred, after due, to plaintiff’s testator. The defendant offered, by way of discount, under notice, a note drawn by Ramsay, 19th December, 1838, payable to L. M. Spann, or bearer, duo at one day, and transferred to the defendant, 7th January, 1839. The time when the note sued on was transferred by Ramsay to the plaintiff’s testator, was not proved. It was still in Ramsay’s hands as late as the 25th December, 1838, and six days after the date of his note to L. M. Spann. There was no proof that he retained it, when the latter note was transferred to the defendant; much less was there any proof of an agreement or understanding between Ramsay and the defendant, that the notes should be discounted,* the one against the other. Without such proof, and without knowledge on the part of plaintiff’s testator, when he obtained the note from Ramsay, that there existed any counter claim by way of discount, I held, that the fact of the note sued on, being transferred after due, had no other effect than to enable the defendant to avail himself of the want or failure of consideration, or of some equitable defence arising out of the transaction on account of which the note was given, and did not enable the defendant to set up, by way of discount, any other separate and independent demand which he might have or acquire against the payee.

“ The plaintiff offered in evidence, a letter of 31st January, 1840, from the defendant to the plaintiff herself, or her testator, asking forbearance, and promising to pay.”

It is plain that the case presented this question of law: Was it necessary for Spann to prove that, at the date of his discount, (7th January, 1839,) Ramsay still retained his note ? or was the time when Ramsay transferred that note to Cain, a question for the jury, under attending circumstances ? I maintain that the jury alone should have decided the fact from the circumstances.

But the charge to the jury presupposes that no defence can be set up, but such as was intrinsic to the note, or would arise out of the equity of that single transaction; unless by agreement with or notice to the endorsee, or unless it be proved that Ramsay still held Spann’s note, at the time Spann took the transfer of Ramsay’s note. This would exclude, of course, all discount, and balancing of accounts, however just, between the maker, (Spann the payee, and J. Ramsay,) as extrinsic to the matter of the note, unless Spann proved expressly, that his note was in the hands of Ramsay on the 7th of January, 1839.

But, is this the proper principle ? The purport of the endorsement of a note already due, is that of an order to pay the money to the endorsee; which order, the maker has, by virtue of his note, already accepted. But only to the extent of his true indebtedness at the time of the endorsement. It amounts to the acceptance of a bill, if so much be due the drawer: and the note is to be settled by the adjustment of their mutual accounts, to be made with the endorsee, instead of the payee. Where a negotiable note's endorsed by the payee, *before due, the maker is confined to the written terms of his note. Whatever be his counter demand upon the payee, the note has become his bill of credit, for so much money, which he must pay to the endorsee, without abatement.

But, whenever the note has been endorsed after due, the endorsee receives it upon the faith and credit of the endorser alone, and the maker may set up any defence that he could have done against the payee at the time of transfer. Williams & Co. vs. Hare, (2 Hill, 483;) 3 Term, 82; 7 T. 429; Chitty, 143; 3 Kent, 91; 3 McC. 549; 2 Bail. 354. The true inquiry, then, in the case, should have been, whether the discount of the defendant would have been good and available against John Ramsay at the time of the transfer. Suppose, for example, the endorsee, upon receiving the note from John Ramsay, and ignorant of any discount, and, as the fact was, without any notice or agreement, had called on the maker (Spann) for payment; and Spann had presented Bamsay’s note, or the note and the balance in money, would not Spann’s note have been paid in full ? or pro tanto according to his tender? And, for the purposes of the charge to the jury, this was substantially the case before the Court. For the jury were to decide, whether Spann received Ramsay’s note in due lime, to render it available against the endorsee, and could have so presented it. This should have been the question. And Spann’s subsequent letter of 31st January, 1840, may, very possibly, have indicated the fact against him. But that remains to be tried by the jury.

If this be not the true question, then any bank may sue A, upon his note, endorsed by another bank, after due, and A cannot bring in discount the bills of the endorsing bank, to meet his own note; and, if so, any broken bank has only to let its discounted notes become due, endorse them over for value at a time unspecified, and the makers cannot discount the bills of such bank, collected for the purpose of paying these very notes, uidess the makers can also prove the precise time when their own notes had been endorsed. In the case before us, if Cain truly held Spann’s note before the 7th of January, he could have proved the fact, by showing that ho had the note in possession. But Spann could only disprove it by circumstances adduced, and leave the presumption to the jury. In such case, the notes should, or at least, may, discount each * other, just as if Spann’s note remained in the hands of Ramsay, nnless it appear that his note had been transferred to Cain before the 7th of January. If it be not so, then Cain took the dishonored note upon the credit, not of the endorser, but the maker, which reverses the law of the case, (see 3 Term, 82,) and would throw the burden of express proof upon the defendant, who had only undertaken to pay what he owed llamsay at the time of the transfer to Cain. It is unnecessary to go so far as to say, that after Spann proved that Ramsay held the note as late as the 25th December, 1838, at least, the burden of proving that Cain received it before the 7th January, fell upon the plaintiff. But I do conceive it was the very point of the case, and for the jury to decide, under the facts, before the Court; and that, therefore, there ought to be a new trial, for error in the charge, in supposing that the burden lay altogether upon the defendant.

Gannt, J., concurred. 
      
      
        а) See 11 Rich., 381, Jewry vs. Strauss. An.
      
     
      
       Sup. 29. An.
      
     