BILLS AND NOTES - ACCOMMODATION PAPER - DEFENSES WHICH CAN BE ASSERTED DY MAKER AGAINST ONE NOT A HOLDER IN DUE COURSE

The defendant, at the request of her husband, signed a blank promissory note. After making the note payable to himself, the husband discounted the note before maturity at the plaintiff bank. In an action by the bank against the wife, the accommodation maker claimed that the bank took in bad faith and that the negotiation to the bank was a diversion from the intended purpose of the accommodation. The plaintiff bank sought to recover upon the ground that the defendant was liable to it as a holder for value irrespective of whether it was a holder in due course.

Held, affirming the decision of the lower court, that the defense was not open to the defendant because the plaintiff was a holder in due course. Madigan v. Lumbert, (Me. 1939) 5 A. (2d) 278.