Merchants' Exch. Bank v. Fuldner

• Decision Date: 18 February 1896
• Citation: 92 Wis. 415,66 N.W. 691
• Parties: MERCHANTS' EXCH. BANK v. FULDNER ET AL.
• Court: Wisconsin Supreme Court

92 Wis. 415

66 N.W. 691

MERCHANTS' EXCH. BANK

v.FULDNER ET AL.

Supreme Court of Wisconsin.

Feb. 18, 1896.

Appeal from superior court, Milwaukee county; R. N. Austin, Judge.

Action by the Merchants' Exchange Bank against Herman Fuldner and another on a promissory note. From a judgment for plaintiff, defendants appeal. Reversed.

A statement of the main facts out of which this case arises will be found in Burnam v. Bank (herewith decided) 66 N. W. 510. It is not necessary to repeat the statement here. The action is upon a promissory note for $10,000, executed by the defendants to the South Side Savings Bank, and by it indorsed and transferred, before maturity, with other notes, as collateral security for a loan of $90,000. The plaintiff claims to have obtained title to it by means of the writing of July 14, 1893. All the notes which so came to its hands were, in the aggregate, of less face value than the amount of its claim against the savings bank. The defendants paid to Bigelow $7,500 upon this note, and claim an offset large enough to extinguish the balance. The offset grows out of these facts: The savings bank was insolvent when it pledged the note to Bigelow. When the plaintiff received it, it was past due. When the savings bank went into the hands of the receiver, the defendants had deposits in that bank, subject to their check, amounting to the sum of $2,608.34, no part of which has been paid to them. This they ask to have set off against the note in this action. A verdict was directed for the plaintiff for the full amount remaining unpaid upon the note. From judgment on that verdict this appeal is taken.Turner, Bloodgood & Kemper, for appellants.

Quarles, Spence & Quarles, for respondent.

NEWMAN, J. (after stating the facts).

The sole question is whether the appellants are entitled to set off, in this action, the amount of their deposits against this note. It is not claimed that the plaintiff is a bona fide purchaser of the note, or has a better title than the savings bank had. It obtained the note on account of the antecedent indebtedness of the savings bank. But no part of that indebtedness was paid by it, nor was any new consideration whatever given; so it had no immunity against defenses not possessed by its assignor. This set-off would have been good against the savings bank at the time when it put the note into the hands of Bigelow. It was insolvent then. It would have been good against the note in the hands of the...