Swift v. Tyson

Facts of the Case

Provided by Oyez

Swift took a bill of exchange as payment of a promissory note that was due to him by Norton & Keith. The bill was issued in Maine, but Tyson had accepted the bill in New York and was responsible in that capacity for paying the amount of $1,540.30 to Swift. When the bill was dishonored after it came due, Swift sought to compel payment from Tyson. Recognizing that Swift was a bone fide holder of the bill who was unaware of any problems with it, Tyson responded that he had originally accepted the bill from Norton & Keith as partial consideration for buying property in Maine to which Norton & Keith had fraudulently and falsely claimed title.

Tyson claimed that there was no consideration for the obligation to Swift, that New York state law governed the case because the bill had been accepted in New York, and that these laws, as interpreted by state courts, provide that a pre-existing debt generally does not constitute consideration of value that is applicable to negotiable instruments. The lower federal courts were uncertain about how to rule on these issues, so they certified the question to the Supreme Court.