How have the courts interpreted the rule that negotiable paper is good in the hands of a bona fide holder?

[119 N.Y. 367]In Cowing v. Altman the action was upon a check, payment of which was resisted by the maker upon the ground that it was given under an agreement to pay an assignee in bankruptcy a compensation greater than that provided by the act, and which was forbidden. It was held that the check was good in the hands of a bona fide holder. The check, however, was not transferred until 14 months after its date; and the controversy in that case turned upon the point whether, when received by the plaintiff, it was not past due, and dishonored. But it was shown that the bank from which the plaintiff took the check paid full value for it; and there was no attempt to impeach its right, except upon the ground that the check was past due. The question of actual notice to the bank of the consideration of the check was not raised, and was not involved. These cases, when understood, do not decide any principle, with respect to the burden of proof in cases where it is shown that negotiable paper has been procured from the maker by fraud, inconsistent with the rule above stated.