BILLS AND NOTES-RIGHT OF MAKER OF PROMISSORY NOTE TO SET-OFF IN AN ACTION BY A POST-MATURITY TRANSFEREE

In an action upon a promissory note by a holder who was a transferee after maturity, the maker sought to set-off collateral claims which he held against the holder's transferor. Section 58 of the Negotiable Instruments Law provides: ''In the hands of any holder other than a holder in due course a negotiable instrument is subject to the same defenses as if it were non-negotiable." Another statute of the jurisdiction allowed set-off of collateral claims against third persons in actions on negotiable instruments. The lower court refused to allow the set-off. On appeal, held, reversed.

Section 58 of the Negotiable Instruments Law includes only defenses inherent in the note itself. However, it is not exclusive and does not prevent the pleading of set-off if authorized by other statutes. Turkenkoph v. Te Beest, 55 N.M. 279, 232 P. (2d) 684 (1951).