
    Cedar Rapids National Bank v. Simon S. Rhodes.
    [51 South. 717.]
    
    Promissory Notes. Bona fide holder. Defenses.
    
    Tlie maker of a promissory note who can read and did read the contract evidencing the payee’s obligations to him for which the note was given, cannot defend a suit brought on the note by a bona fide holder, upon the ground that the note did not evidence the obligation he intended to assume, where the note was drawn payable in another state to the payee or bearer.
    From the circuit court of Nankin county.
    Hon. James E. Byrd, Judge.
    The National Bank, appellant, was plaintiff in the court below; Ehodes, appellee, was defendant there. From a judgment in defendant’s favor the plaintiff appealed to the supreme court.
    The note sued upon was given to a jewelry company ‘in consideration of its written contract to deliver Ehodes, the maker of the note, designated goods upon terms therein specified. The note was made payable in Iowa to the jewelry company “or bearer.” It was transferred by the payee named before maturity for value to the plaintiff who was without notice of the facts of which the defense was sought to be predicated. The defendant testified that the note was materially variant from what he believed it to be when he executed it.
    
      William. Buchanaaij for appellant.
    It is no defense to say that the agent who sold the goods, represented the note to be an order for goods. Defendant •could read and write and he cannot, by his negligence, cause an innocent third party to1 suffer loss. 2 Thompson on Trials, | 1108; 4 Am. & Eng. Ency. of Law (2d ed.) 201 and notes.
    
      Tbe plaintiff is presumed to be a bona fide bolder and cannot be affected by any equities between tbe immediate parties, tbe note being-payable in Iowa and to bearer. Craig v. Vicksburg, 31 Miss. 216; Harrison ,v. Pike, 48 Miss. 46; Winstead v.. Paris, 40 Miss. 785; Mercien v. Cotton, 34 Miss. 64; 4 Am. & Eng. Ency. of Law (2d ed.) 193, 199; Richardson v. Monroe (Iowa), 52 N. W. 339.
    Defendant should not bave been permitted to introduce evidence to vary or contradict tbe written contract, wbicb be admitted be signed.
    
      A. J. McLaUrin, Jr., for appellee.
    It is a perfect defense to a suit brought on an alleged promissory note in tbe bands of a bona fide purchaser for value before maturity without notice, to show that tbe affixing of tbe signature of tbe maker was procured by false and fraudulent representations that tbe instrument now alleged to be a note was. an order for goods when tbe person sought to be charged, believing such representations and being guilty of no negligence affixed bis signature to' tbe instrument. Douglass v. Matting,. 4 Am. Rep. 240 and note.
    There lies a distinction between cases where tbe false and fraudulent representation on tbe strength of wbicb tbe alleged maker affixes bis signature bave regard to the character of tbe instrument so signed; and those where tbe maker is apprised of' tbe character and knows the nature of tbe instrument to* wbicb be fixes bis signature but does not know for what amount it calls nor to whoni nor where payable, etc.
    In tbe latter case one so affixing bis signature is charged with greater care and caution. Cline v. Cuthrie, 13 Am.'Rep. 359.
    In such a case as tbe former when tbe person charged bad no intention of signing a paper of the character be did sign and “who is ignorant of such character, and is not guilty of negligence in so affixing bis signature nor in ascertaining tbe ■character of the instrument, be is no more bound by it than if it were a total forgery, the signature included.” Walker v. Egbert, 9 Am. Rep: 548; Gibbs v. Linaberry, 7 Am.'Rep: 675.
   Whitfield, O. J.,

delivered the opinion of the court.

The authorities upon which appellee chiefly relies are Foster v. McKinnon, 38 L. J. Reports (N. S.) 310, and Whitney v. Snyder, 2 Lans. (N. Y.) 477, which are set out in the note to the case of Douglass v. Mailing, 29 Iowa, 498, 4 Am. Rep. 238. The principal case is squarely against the appellee. In that case the court said: “As between the bona -fide holder, receiving the paper before due for value, and the maker, the equities are all on the side of the first. The maker put his ■genuine signature to a note appearing upon its face fair and regular. In the regular course of business it comes into the hands of an innocent party, who has paid a valuable consideration for it, and has no notice of any infirmities or defenses attaching to the paper. Now it would be manifestly unjust to permit the maker, while admitting the genuineness of his signature, to defeat the note on the ground that, through his own culpable carelessness while dealing with a stranger, he signed the instrument without reading it or attempting to ascertain Its true contents. The law will favor, as between the holder and maker in such a case, the more innocent and diligent. The maker had it jn his power to protect himself from the fraud, but failed to do so. When the consequences of this act are about to be visited upon him, he seeks to make another bear it, on the ground that he was defrauded through his own gross negligence. He can certainly claim protection neither on the ground of his innocence nor diligence. The rule contended for by appellee would tend to destroy all confidence in commercial paper. It is better that defendant and others, who so carelessly affix their names to paper, the contents of which are ■unknown to them, should suffer from the fraud which their recklessness invites, than that the character of commercial •paper should be impaired, and the business of the country thus interfered with and unsettled.”

In the two other cases cited in the note, the reason of the holding that the maker of the note might successfully defend was that the maker’s mind never had assented to the contract in the note -embodied, he (the maker) having been induced to sign the note, believing it to be a wholly different contract; and this defense was held to be good only in a case where the evidence clearly showed, as repeatedly stated in said note, that the maker was not guilty of negligence in signing the note and in not ascertaining what he was signing. For example, in Whitney v. Snyder, supra, the maker offered to prove 'in defense that he was unable to read. Now, this principle, resting upon the ••absence of any negligence on the part of the maker of the negotiable note payable to bearer, finds no application in the facts -of this record. The testimony makes it perfectly clear that the appellee could read, and that he did read practically the whole •of the order; for he states the contents of the order perfectly, with the exception that he said he knew nothing about any free watch to be given. It would be utterly subversive of the security of commercial paper to hold that, where the testimony shows that the maker of the note, who could read, was so grossly negligent as not to inform himself of the contents of- the note he was signing, when, too-, he did read and knew the contents ■of the order, he might defeat such note in the hands of an innocent purchaser for value without notice.

There ought to have been a peremptory instruction for the plaintiff in the case on the testimony in this record,, since there was no evidence tending to show any knowledge of fraud in the inception of the note on the part of appellant.

Reversed and remanded.  