Thompson v. Brennan

• Decision Date: 24 November 1899
• Citation: 104 Wis. 564,80 N.W. 947
• Parties: THOMPSON v. BRENNAN.
• Court: Wisconsin Supreme Court

104 Wis. 564

80 N.W. 947

THOMPSON

v.BRENNAN.

Supreme Court of Wisconsin.

Nov. 24, 1899.

Appeal from circuit court, Douglas county; A. J. Vinje, Judge.

Action by J. Leslie Thompson, as receiver of the Citizens' National Bank of Madison, S. D., against John Brennan, on a note. The court directed a verdict in plaintiff's favor, and defendant appeals. Reversed.

Suit upon a negotiable promissory note for $772, and 7 per cent. interest, from the defendant to M. W. Daly, dated December 6, 1887, and due July 1, 1891, which, when offered in evidence, bore--First, the indorsement, “M. W. Daly,” in the handwriting of Trow, the cashier of the bank, which had been canceled or scratched out; second, the indorsement, “Without recourse to M. W. Daly,” in Daly's own handwriting. It was testified that the note came to the bank January 14, 1888, having been received by Trow, the cashier, while in California, in the course of an adjustment or division of proceeds of certain speculative investments in which Daly, who was a stockholder, Trow, who was cashier, Smith, who was president of the plaintiff bank, and others, were interested; it apparently having been accepted by Trow, in the course of that adjustment, for the bank. When first entered on the books of the bank, credit therefor was given to Trow's general account. At maturity the note was protested, and thereafter suit was commenced thereon, by direction from the bank, against the defendant, in the name of Daly as plaintiff. In that suit Brennan interposed a defense on the ground of fraud and failure of consideration, and a counterclaim seeking to cancel the note, and recover back other consideration paid by him, for fraud as to the title of real estate, conveyance of which was the consideration for this note. After the interposition of this answer, when the case was reached for trial in November, 1892, Daly refused to proceed upon his cause of action on the ground that he did not own the note, and the suit was not properly in his name; but under the order of the court the trial did proceed upon the counterclaim, resulting, after an appeal to this court, in a judgment dismissing the same. The suit upon the note in the name of Daly as plaintiff appears never to have been disposed of. In the case at bar the defense interposed was failure of consideration, and that plaintiff was not an innocent holder for value before maturity of the note sued on. A plea in abatement for that another suit was pending under the direction of the present plaintiff was interposed, and after trial thereon a verdict denying the same was directed by the court, the assignment of error upon which, in appellant's original brief, seems to be abandoned. Further facts material to the consideration of the case are stated in the opinion. At the close of the evidence the court directed a verdict for the plaintiff, from the judgment on which this appeal is taken.

E. F. McCausland and Sanborn, Luse & Ellis, for appellant.

George C. Cooper, for respondent.

DODGE, J. (after stating the facts).

1. It appearing that the consideration of the note sued on had failed, it was necessary to a recovery that plaintiff should prove that the bank received it in due course of business, before maturity, for value, and without notice of the defenses. Rand. Com. Paper. Prima facie proof of such holding might be made by the indorsement written on the note, but the time of that act is in much dispute. The original indorsement of the payee's (Daly's) name was in the handwriting of Trow, the cashier, and before trial had been canceled. The following indorsement in the hand of Daly himself was, “Without recourse.” Trow's testimony threw much doubt on whether Daly was in California or in South Dakota in January, 1888, when it is claimed the note was first received into the bank; and at and until some time after the maturity of the note the plaintiff's conduct was consistent only with the understanding that Daly was liable to the bank, as he would be under the first indorsement, but would not be under the one without recourse. The note was protested when due,--a ceremony needless, if indorsed without recourse. It was thereafter directed to be sued in Daly's name, and expenses thereof were charged to him. Notwithstanding the testimony of Trow that he thought the indorsement was written by Daly in the bank in January, 1888, rendered doubtful by uncertainty of recollection and some contradiction, such conduct on plaintiff's part was sufficient to raise a question for the jury as to whether the indorsement relied on (that in Daly's handwriting) was made before maturity, or at some time thereafter, when the difficulties in the way of recovery in Daly's name became apparent. If, however, it were the fact that the note was duly purchased by the bank in January, 1888, as claimed, there was evidence tending to show that such ownership had afterwards terminated, and that only a new and later possession and ownership existed at the time of trial, which did not commence until after maturity. The entries on its books of account prima...