Boyle v. Lybrand

113 Wis. 79 | Wis. | 1902

Wiwslow, J.

Tbe simple question in tbe present case is, Which party has tbe better title to tbe $1,000 note? Whoever owns tbe note owns the mortgage, because the note is tbe principal thing, and tbe mortgage being an accessory. Hitchcock v. Merrick, 18 Wis. 357. Tbe note in this case was on its face a negotiable promissory note; and it is settled in this state that a negotiable promissory note secured by mortgage may be transferred before maturity, like other negotiable' paper, and tbe bolder takes it with its accompanying security, discharged of existing equities. Kelley v. Whitney, 45 Wis. 110; W. W. Kimball Co. v. Mellon, 80 Wis. 133. Tbe question is therefore purely one of the ownership of negotiable paper. The plaintiff claims under assignments indorsed on the mortgage, he never having seen qr had possession of the note. The appellant claims under a subse‘quent transfer by indorsement and delivery of the note to his testator, nothing appearing thereon to indicate any previous transfer. It is very plain that the appellant’s title must be the better, because the negotiable paper itself was actually transferred and delivered to his testator, unless such •testator is charged with knowledge of the previous dealings with the plaintiff. He had no actual knowledge of such •dealings, but it is said that the fact that Wallace did not have the mortgage was sufficient to charge him with such knowledge. It was long ago held by this court, quoting from the supreme court of the United States,' that in such cases, '“as with negotiable paper, mere suspicion that there may be ■defect of title in its holder, or knowledge of circumstances which would excite suspicion as to his title in the mind of a prudent man, is not sufficient to impair the title of the purchaser. That result will only follow where there has been bad faith on his part.” Kelley v. Whitney, supra. There is .absolutely nothing in the case to show bad faith on the part ■of Lybrant. He purchased the note before due, for a substantially adequate compensation, and after searching the records to ascertain whether any assignment of the mortgage had been recorded. The position of the plaintiff is unfortunate, but the result has come from his neglect in allowing the note to remain in Wallace’s hands. By so doing he left the apparent title with Wallace, and enabled him to do just what has been done here. If he were allowed now to defeat the subsequent innocent purchaser of the security, he would take advantage of his own inexcusable neglect.

By the Court. — Judgment reversed, and action remanded with directions to dismiss the complaint.