State Nat. Bank v. Haylen

• Decision Date: 09 October 1883
• Citation: 16 N.W. 754,14 Neb. 480
• Parties: THE STATE NATIONAL BANK, APPELLANT, v. JOHN HAYLEN ET AL., APPELLEES
• Court: Nebraska Supreme Court

16 N.W. 754

14 Neb. 480

THE STATE NATIONAL BANK, APPELLANT, v. JOHN HAYLEN ET AL., APPELLEES

Supreme Court of Nebraska

October 9, 1883

APPEAL from the district court of Lancaster county in an action for the foreclosure of a mortgage given to secure a negotiable promissory note signed by defendants, payable to the order of Thomas P. Kennard, and by him indorsed in the manner stated in the opinion. The petition of plaintiff alleged inter alia that, "on the 26th day of April, 1880, said Thomas P Kennard, for a valuable consideration, assigned said note and mortgage and the money due thereon to plaintiff." Defendants, in and by their separate answers, set up usury fraud, etc., and denied the assignment to plaintiff, etc. Plaintiff replied, alleging purchase in good faith before maturity, for value, without notice of any equity. Judgment below before POUND, J., for defendants, and plaintiff appeals.

Reversed and remanded with direction.

A. G Scott, for appellant, cited: Heard v. Dubuque County Bank, 8 Neb. 10. Robinson v. Lain, 31 Iowa 9. 2 Daniels Neg. Instr., § 1781. Upham v. Prince, 12 Mass. 15.

J. H. Foxworthy and J. C. Crooker, for appellees, cited: 1 Daniels, §§ 666, 667. 2 Daniels, §§ 1752-1754. McCunn v. Corby, 11 Kan. 465. Story on Notes, § 120. Tappan v. Ely, 15 Wend. 364. Dyer v. Gibson, 16 Wis. 580. Lancaster Bank v. Taylor, 100 Mass. 18, 22. Van Eman v. Stanchfield, 10 Minn. 255. Allum v. Perry, 68 Me. 232. Matteson v. Morris, 40 Mich. 52.

OPINION

COBB, J.

There is no question made in the evidence of the plaintiff bank being the bona fide owner and holder of the note and mortgage, nor that it received the same before maturity in the ordinary course of business and without notice of any infirmity. Such ownership and purchase of the note and mortgage by the bank is placed beyond doubt by the testimony of its president. But the district court let in the defense of usury for the reason, as is stated in the judgment, "it (the plaintiff) holds the same" (the note) "as assignee, and not as endorsee." The writing on the back of the note given in evidence is as follows: "Collection guaranteed and notice of protest waived this 26th of April, 1880, Thomas P. Kennard." This is exactly the form of endorsement which in Heard v. Dubuque County Bank, 8 Neb. 10, we held, following Robinson v. Lair, 31 Iowa 9, to constitute an endorsement with an enlarged liability. There is no doubt a line of cases, many of them cited by counsel for appellees in this case, which hold to the contrary, but I cannot agree with their reasoning, however high their authority. It will be admitted that the possession of the note, with the payee's name written across the back, is evidence of ownership in the plaintiff. Yet it is claimed that while this would be the case if the payee's name stood alone on the back of the note, that here there are other words over the payee's signature to which it applies and upon which it has spent its force. Let us admit this, and then see whether the words taken together, including the signature, do not furnish still stronger evidence of a transfer of title in the note from the payee to the holder. By virtue of these words the payee agrees that he will pay the note in case of the holders using due diligence and being unable to collect it from the makers. He furthermore agrees that his ultimate liability to pay the note shall not be affected by reason of the neglect or failure of the...