Bills and Notes. If one receiving an accommodation note agrees not to sell it to A., and thereupon takes it to A. who lends money to B. with which B. purchases the note, and B. holds the note until he sells it to a bona fide purchaser, this does not show that the note was put into circulation fraudulently.
If one purchases an accommodation note for cash and sells it to a bona fide purchaser in exchange for the purchaser's own note, the purchaser may be found to be a holder of the note in due course within the meaning of R.L.c. 73, § 69, and entitled to recover its face value.
HAMMOND, J.
At the time the defendant delivered the note to Marcus there was an oral agreement between them by which Marcus was not permitted to negotiate it to Riley. Although apparently Marcus attempted to violate that agreement, still he did not succeed, for the judge finds that Smith purchased the note of Marcus and thereafter held it until he sold it to the plaintiff. It is not shown therefore that the note was fraudulently put into circulation. The judge further finds that before its maturity the plaintiff became a bona fide purchaser, giving as a consideration therefor his own note to Smith, who still holds it. These findings are warranted by the evidence. The plaintiff upon the facts found by the judge took the note in due course of business, R.L.c. 73, § 69, and, there being no fraud, is entitled to recover its full value.
Exceptions overruled.