Page:Federal Reporter, 1st Series, Volume 4.djvu/874

 860 PEDEEAL REPOSTBB. �suit to foreclose were proseouted by Irby, be set up against his heirs and distributees ? The transfer of the note by Henry Irby in his life-time to Sarah Jane Hicks, his daughter, was not for value ; it was a mere gif t. The rule is that a nego- tiable instrument, in order to be operative in the hands of an indorsee as against equities and defences existing between the maker and payee^ must have been taken by the indorsee for value; that is, he must have parted with something valu- able therefor at the time of the transfer. Park Bank v. Wat- son, 42 N. Y. 490. �Neither Sarah Jane Hicks nor her husband, Royal B. Hicks, paid anything for the note at the time of its transfer by Henry Irby. They parted with nothing of value as a con- sideration for the transfer. The same defences against the note were therefore open to the maker as if it had remained in the hands of the original payee. The agreement made between Hicks and wife, and the other heirs and distributees of Irby's estate, after Irby's death, did not change the terms on whioh Hicks and wife had received the transfer of the note and mortgage. They agreed to consider them as an advance- ment, and they had received them from Henry Irby as an advancement. The oontract between them and the other heirs and distributees provided that in case of any recovery against the estate of Henry Irby, reducing the distributive shares of the heirs, they, the said heirs, would "refund their pro rata shares of such recovery to an extent sufEcient to save indemnified and harmless the legatees of said estate, and make ail parties interested therein equal." A fair con- struction of this oontract would require, in case of a faiiure to collect the note in suit by reason of the defences set up, the answer that the residue of the estate should be equally divided between ail the distributees, so as to give each an equal share. In any view that may be taken, the complainants neither paid nor surrendered anything of value for the trans- fer of the note and mortgage. The same defences are there- fore open to the maker of the note as if the suit were prose- cuted by Henry Irby in person. �The defendant Jennings, after setting forth in his answer ����