Trust Co. of St Louis County v. Markee

• Decision Date: 21 June 1910
• Docket Number: 92.,91
• Citation: 179 F. 764
• Parties: TRUST CO. OF ST. LOUIS COUNTY v. MARKEE. SAME v. REYBURN
• Court: U.S. District Court — Eastern District of Pennsylvania

179 F. 764

TRUST CO. OF ST. LOUIS COUNTY v. MARKEE.

SAME v. REYBURN

Nos. 91, 92.

United States Circuit Court, E.D. Pennsylvania.

June 21, 1910

Townsend Elliott & Townsend and W. W. Porter, for plaintiff.

J Howard Gendell, for defendants.

J. B McPHERSON, District Judge.

These two cases are brought upon the same promissory note and were tried together. The defendants are successive indorsers and the plaintiff is a holder for value before maturity. The note is for $25,000, is dated September 27, 1906, is payable one year thereafter in the city of St. Louis, and was made in Missouri by the St. Louis, Webster & Valley Park Railway Company to its own order. It was indorsed by the company itself, and by Paul D. Cable, John E. Reyburn, William Markee, and H. C. Begole, in the order named, and has been duly protested for nonpayment. The further facts are as follows: St. Louis, Webster & Valley Park Railway Company. The note

On July 26, 1906, the plaintiff discounted a note of $25,000 for the was signed by the railway company and by three other persons and was accompanied by $50,000 of the company's bonds as collateral. It was due on January 26, 1907, and contained the provisions that are usual in such obligations-- among them, the provision that the makers should give further security under certain conditions. In addition to the railway bonds, the plaintiff held what purported to be a written obligation of the Allis-Chalmers Company guaranteeing the payment of the note. When the note fell due the Allis-Chalmers Company denied its liability on the guaranty, asserting that the writing was without authority. Thereupon a conference was held between the plaintiff and the officers of the railway company; and, in consequence of the plaintiff's demand, the note in suit, accompanied by other bonds of the railway company, was pledged as further collateral for the original note. The defendants are accommodation indorsers, and, so far as Reyburn is concerned, his indorsement was given 'under an agreement that (the note) was to be used or given to the Allis-Chalmers Company'-- to use his own language on the witness stand. But the note was delivered by him to the proper officers of the railway company, and was pledged by them without communicating this agreement to the plaintiff, and with no knowledge on its part thereof.

The pledge was made in January, 1907, several months before the due date of the note.

Upon these facts there seems to be little room for dispute. If the case is to be governed by the federal decisions, it is enough to refer to Railroad Company v. Bank, 102 U.S. 14, 26 L.Ed. 61, in which the Supreme Court decided that:

'The transfer by indorsement to a creditor of negotiable paper before maturity, merely for an antecedent debt, although it is without his express agreement for indulgence, is not an improper use of such paper, and is as much in the usual course of

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