Haugan v. Sunwal
| Decision Date | 27 February 1895 |
| Citation | 60 Minn. 367,62 N.W. 398 |
| Parties | HAUGAN v. SUNWAL. |
| Court | Minnesota Supreme Court |
OPINION TEXT STARTS HERE
(Syllabus by the Court.)
1. The rule laid down in Rosemond v. Graham, 56 N. W. 38, 54 Minn. 323, that the indorsee of negotiable paper taken before maturity as collateral security for an antecedent indebtedness, in good faith, and without notice of defenses which might have been available between the original parties, holds the same free from such defenses, followed and applied.
2. By the words “good faith” is meant the good faith of the indorsee simply.
3. Upon the testimony offered and received, as well as that offered and excluded, it is held, that there was nothing tending to indicate fraud or bad faith on plaintiff's part when taking the note in question.
4. Whether the general rule in respect to the powers of bank cashiers to negotiate, manage, and dispose of notes and securities held by the bank is applicable to the facts in this case is immaterial, for at most the act of the cashier, when transferring and indorsing the note to plaintiff, was merely voidable. His act can only be questioned by the representative of the bank, its assigneee in insolvency.
5. In an action brought upon a negotiable promissory note by an indorsee before maturity, the maker cannot avail himself of a defense based upon the claim that the provisions of the insolvency laws of the state relating to fraudulent preferences were violated, when the note was transferred to such indorsee.
Appeal from district court, Hennepin county; Seagrave Smith, Judge.
Action by Andrew Haugan against G. F. Sunwal. Verdict for plaintiff, and from an order granting a new trial he appeals.
A. Ueland & Benton and Roberts & Brown, for appellant.
Spooner & Taylor, for respondent.
This appeal is from an order granting defendant's motion for a new trial after a verdict had been rendered against him, by direction of the court, for the full amount claimed to be due on his negotiable promissory note. This note had been made payable to the order of the American Exchange bank, and before maturity had been transferred, indorsed, and delivered by the cashier of the bank to the plaintiff as collateral security for money belonging to the city of Minneapolis, which the latter had previously deposited in the bank in his own name as treasurer. The indorsement and delivery were made June 24, 1893. Three days afterwards the bank closed its doors, and on July 1st it made an assignment for the benefit of its creditors under the insolvency laws of the state. The principal question in the case is whether the court below erred when it excluded from the jury all consideration of certain evidence introduced by defendant which tended to show that at the time of the transfer of the note to plaintiff, and up to the time the bank suspended payment, the former had a sum of money exceeding $800 on deposit therein. The object of the evidence was to render available to defendant as a set-off pro tanto the amount of the deposit. It was undisputed that plaintiff had no knowledge of the fact when he took the note. As it stands conceded that the indorsement and delivery were before the maturity of the note, and the consideration therefor was a pre-existing debt, the rule laid down recently in the case of Rosemond v. Graham, 54 Minn. 323, 56 N. W. 38, is exactly in point. It was there held, after a thorough examination of the authorities, that the indorsee of negotiable paper taken before maturity as collateral security for an antecedent...
To continue reading
Request your trial