Notes and bills are usually transferred by indorsement before they are due. But they may be so transferred after they are due, and before they are paid. There is, however, a very important difference between the effect of the transfer of a bill or note before its maturity, and that of such transfer when the bill or note is overdue. The bond fide holder of a note by indorsement before maturity takes it subject to no equities existing between his assignor and the promisor which are not indicated on the face of the note, (i) and to none which do not exist at the time of the transfer. (j) It was once much questioned whether he who received a note under circumstances of suspicion was not bound to ascertain for himself, and at his own peril, that the note came rightfully into his hands; and therefore a promisor might defend against the note, by showing that he had lost it, or that it was stolen from him, or by any other similar defence, showing also that this might have been ascertained by the holder before receiving the note. (k) But the weight of recent authority is in favor of the rule that such holder is entitled to the benefit of the note, unless *he is a wilful party to the wrong by which it comes into his hands, or, perhaps, has been guilty of such negligence as amounts to [clear evidence of actual] fraud; (I)* for even gross negligence alone would not deprive him of his right. (m)2 But the authorities on this subject are not, as our note will show, in entire agreement. The law is certainly otherwise, however, if the bill or note were transferred to him when overdue.(n) It comes to him then discredited; he is put upon his guard; and, although he pays a full consideration for it, he receives nothing but the title and rights of his assignor. Such a bill or note can no longer represent a distinct and definite credit, or money to be paid at a certain period; and as it no longer answers the purpose or performs the functions of negotiable paper, it no longer shares the privileges of such instruments. And it is therefore said that any defence which might be made against the assignor may be made available against the assignee; (o) and

(g) Nicholls v. Diamond, 24 E. L. & E. 403; Mare v. Charles, 34 E. L. & E. 138; 8. c. 5 E. & B. 978.

(h) Hicks v. Hinde, 9 Barb. 528; Bab-cock v. Beman, 1 Kern, 200; De Witt v. Walton, 5 Seld. 571. See ante, p. * 52.

(i) Brown v. Davies, 3 T. R. 82, per Buller, J.; Hall v. Wilson, 16 Barb. 548; Fletcher v. Gushee, 32 Me. 587; Walker v. Davis, 33 id. 516; Gwynn v. Lee, 9 Gill, 138; Kohlman v. Ludwig, 5 La. An. 33. And the doctrine of lis pendens is that whoever purchases property which is at that time in litigation, takes it subject to any decree or judgment made in respect to it in the pending suit, is held not to apply to negotiable notes. Winston v. Westfeldt, 22 Ala. 760.

(j) Fnrniss v. Gilchrist, 1 Sandf. 53.

(k) In Gill v. Cubitt, 3 B. & C. 466, where a bill of exchange was stolen during the night, and taken to the office of a discount broker early in the following morning by a person whose features were known, but whose name was unknown to the broker, and the latter, being satisfied with the name of the acceptor, discounted the bill, according to his usual practice, without making any inquiry of the person who brought it; it was held that, in an action on the bill by the broker against the acceptor, the jury were properly directed to find a verdict for the defendant, if they thought that the plaintiff had taken the bill under circumstances which ought to have excited the suspicion of a prudent and careful man; and they having found for the defendant, the court refused to disturb the verdict. Down v. Hailing, 4 B. & C. 330; Smith v. Mec. & Tran. Bk. 6 La. An. 610.

(l) Miller v. Race, 1 Burr. 452; Law-son v. Weston, 4 Esp. 56; Goodman v. Harvey, 6 Nev. & M. 372; Cone v. Baldwin, 12 Pick. 545; Matthews v. Poythress, 4 Ga. 287; Raphael v. Bank of England, 33 E. L. & E. 276, 17 C. B. 161; Magee v. Badger, 30 Barb. 246. See contra, Nutter v. Stover, 48 Me. 163.

(m) "Gross negligence may be evidence of mala fides, but is not the same thing. We have shaken off the last remnant of the contrary doctrine." Per Lord Denman, Goodman v. Harvey, 4 A. & E. 870, 6 Nev. & M. 372. It is a question for the jury whether the party taking the bill was guilty of bad faith. See Cunliffe v. Booth, 3 Bing. N. C. 821. In Crook v. Jadis, 5 B. & Ad. 909, Patteson, J., says: " I never could understand what is meant by a party's taking a bill under circumstances which ought to have excited the suspicion of a prudent man." But the authority of these cases is denied in Pringle v. Phillips, 5 Sandf. 157, and an opposite doctrine strongly maintained and decided. So also in Roth & Co. v. Colvin, Allen & Co. 32 Vt. 125, where the law is fully examined by Poland, J., and the doctrine of Gill v. Cubitt reaffirmed, and the case of Pringle v. Phillips fully approved. And see Mer-riam v. Granite Bank, 8 Gray, 254; and where a note was sold and delivered before maturity but not indorsed until after maturity, it was * held open to the same defences as if it had been transferred after dishonor.(p) This rule has, however, this important qualification. It is said by high authorities, and on good reason, that the defence must arise from the note itself, or the transaction in which the note originated, and not from any collateral matter. (q) 1

Crosby v. Grant, 36 N. H. 273; Hall v. Hale, 8 Conn. 336; Sandford v. Norton, 14 Vt. 228; Tutor v. Patton, 13 La. 213; Greneaux v. Wheeler, 6 Tex. 515.

(n) Chalmers v. Lanion, 1 Camp. 383; Thomas v. Newton, 2 C. & P. 606; Smith v. Hiscock, 14 Me. 449; Hascall v. Whit-more, 19 id. 102.

(o) Brown v. Davies, 3 T. R. 80, per Buller, J.; Beek v. Robley, 1 H. Bl. 89, n. (d); Howard v. Ames, 3 Met. 308; Mac-kay v. Holland, 4 id. 69; Potter v. Tyler, 2 id. 58; McNeil v. McDonald, 1 Hill (S. C), 1; Mosteller v. Bosh, 7 Ired. Eq. 39; Connery v. Kendall, 5 La. An. 515; Sawyer v. Hoovey, id. 153; Lancaster Bank v. Woodward, 18 Penn. St. 357; Clay v. Cottrell, id. 408. - The burden of proving, however, that the note was indorsed after it was overdue, in order to let in his equities, is on the defendant; for the presumption is that the indorsement was made at or soon after the date of the note, or at least before its maturity. Lewis v. Parker, 4 A. & E. 838; New Orleans v. Montgomery, 95 U. S. 18; Cook v. Norwood, 106 Ill. 558; Burnham v. Wood, 8 N. H. 334; Burnham v. Webster, 19 Me. 232; Ranger v. Carey, 1 Met. 369; Cain v. Spann, 1 McMull. 258; Washburn v. Ramsdell, 17 Vt. 299. Contra is Clendenin v. Southerland, 31