Dobbins v. Oberman

• Decision Date: 03 February 1885
• Citation: 17 Neb. 163,22 N.W. 356
• Parties: DOBBINS v. OBERMAN.
• Court: Nebraska Supreme Court

17 Neb. 163

22 N.W. 356

DOBBINS

v.OBERMAN.

Supreme Court of Nebraska.

Filed February 3, 1885.

Appeal from Gage county.Lamb, Ricketts & Wilson and N. Z. Snell, for plaintiff.

James E. Philpott, for defendant.

COBB, C. J.

This action was brought in the court below by Thomas Dobbins, plaintiff, against Frank H. Oberman and wife, defendants, for the purpose of foreclosing a mortgage on real estate. Hoagland Bros. and the Chicago Lumber Company were also made defendants, as the holders of liens on the said real estate. The defendant Frank H. Oberman purchased the tract of land in question from one Anna M. Wilson, receiving from her and W. F. Wilson, her husband, a warranty deed therefor, and paying her part cash, and giving her the note and mortgage involved in this suit for $400, the balance of such purchase price. This transaction took place on the fourth day of October, 1882. The following is a copy of the note:

“LINCOLN, NEBRASKA, October 4, 1882.

On March 1, 1883, for value received I promise to pay to Anna M. Wilson or order four hundred dollars with seven per cent. interest from this date. This note shall become due immediately upon Anna M. Wilson delivering possession to me of the north-west quarter of section 12, town 6, range 6 E., in Gage county, Nebraska.

F. H. OBERMAN.”

This note was, on the ninth day of October, 1882, as appears by indorsement thereon, indorsed by Anna M. Wilson to the plaintiff. The cause was tried to the court, who found for the defendant, and dismissed the action at the cost of the plaintiff, who brings the cause to this court on appeal.

The contention in this court is between the plaintiff and the defendant Oberman; the latter contending that the former cannot maintain his action against him, for the reason that at the time of the sale and conveyance to him of the premises, his co-defendants, Hoagland Bros. and the Chicago Lumber Company, each held judgments against W. F. Wilson, amounting in the aggregate to more than the amount of his note and mortgage, and that suits in the nature of creditors' bills were then pending against said Anna M. Wilson and W. F. Wilson in the proper court for the purpose of having said judgments declared to be liens upon said lands, which said suits have since ripened into a judgment or judgments, and been declared a lien or liens on the said land. Had the action been brought by Anna M. Wilson as the payee of the said note, it cannot be doubted that the above defense would be good. So, also, if the note is held to be in form non-negotiable, or was not indorsed to the plaintiff before maturity for a valuable consideration, in the usual course of trade, and without knowledge of the foregoing facts, which, it is assumed, would impeach its validity as between the maker and payee.

It is not urged by the appellee in this court that the note is not negotiable in form. But it having been urged in the court below, and a considerable part of the appellant's brief being devoted to that point, it is but fair to say that the note, as to form, no doubt complies with all the essential requisites of a negotiable promissory note,--“an open promise in writing by one person to pay another person therein named, or to his order or to bearer, a specified sum of money, absolutely and at all events.” 1 Daniel, Neg. Inst. § 28. It matters not, then, that it also contains a promise to pay sooner than the general date of payment, upon the happening of an uncertain event. It is evident that the note was indorsed before the first day of March, 1883, the general day of payment; and, there being no evidence of the delivery of the possession of the land in question to the defendant, so as to render the note due by the terms of the special provision, it cannot be contended that the note was past due or dishonored when indorsed to the plaintiff. It is evident, therefore, that the learned court, which rendered the finding and judgment against the plaintiff, must have believed from the evidence that the note was not received by him in the usual course of trade for a valuable consideration paid bona fide, and without notice of the antecedent facts which would amount to a defense as between the original parties.

The rule of law applicable to this case is assumed to be correctly laid down in the cases cited by counsel for appellant: “To defeat his recovery thereon it is not sufficient to show that he took it under circumstances which ought to excite suspicion in the mind of a prudent man. To have that effect it must be shown that he took the paper under circumstances showing bad faith or want of honesty on his part.” Johnson v. Way, 27 Ohio St. 374. It should be borne in mind that the appellee does not place his defense on the ground of gross negligence, but upon the ground of mala fides. In his answer he alleges that the plaintiff, “with the said Anna M. Wilson and her son, Frank Wilson, have conspired together fraudulently and deceitfully to cheat and defraud the said Oberman,” etc., so that the defendant must fail in his defense, unless there was evidence to sustain a finding by the trial court that the plaintiff knew the facts upon which the defense is founded at or before the time of the indorsement to him of the note. The evidence on his part is chiefly circumstantial; but this is no objection if it is sufficiently convincing. In the case of Johnson v. Way, supra, the court, in the opinion, say: “Circumstances tending to show bad faith or fraud in taking such paper, though not conclusive in themselves, are admissible in evidence, and the establishment of such bad faith or fraud, whether by direct or circumstantial evidence, subjects the holder of paper so taken to defenses existing between antecedent parties.”

Anna M. Wilson was, throughout the transaction of selling the land in question and taking the note and mortgage to secure the sum of $400, part of the purchase money therefor, represented by her son, Frank Wilson, who was her agent for that purpose. It appears from the evidence offered by both parties that this man Frank Wilson and the plaintiff were, at the date of this transaction, partners, carrying on a second-hand store in the ...