65 Minn. 110 | Minn. | 1896
The proofs presented by the plaintiffs, on the trial of this action, that they purchased the note in question from the
The bank mark or stamp referred to seems to have been the words “Wadena State Bank,” inclosed in a border, or in brackets. The erased indorsement was the name of the payee, apparently a partnership, preceding which were the words “Without recourse,” also erased. Immediately below was the unqualified indorsement of the payee partnership. Then came a memorandum or indorsement of five payments by five different individuals, none of whom signed the note, each for the sum of $33.33, — a total of $166.65.
It is quite probable that the bank mark or stamp on the face of the note would indicate to a purchaser that the note had been in the bank, and of this fact the plaintiffs had actual notice before they purchased. They also had actual notice that, for the purpose of pledging the paper as collateral, the payee firm had indorsed it without recourse; but, as it was refused in that condition, it erased the restrictive indorsement, and made an unconditional one. The mark or stamp, the indorsement and erasure, might be suggestive, and have weight, if the dispute here was over the title to the paper, or the payee’s indorsement; but how could it be inferred from any or all of these things that the makers of the note had a defense thereto? And what was there about the memoranda or indorsements of partial payments from which the existence of a defense which might have been available in an action between the original parties should have been inferred, or from which bad faith, or notice or knowledge of such a defense or any equities held by the makers of the note,
Even if it were the rule that a purchaser of negotiable paper for a valuable consideration, in the due course of business, and before maturity, is required to exercise ordinary prudence in respect to knowledge derived from an inspection of the paper itself, there was nothing in respect to the note in suit which would have supported a verdict for defendants. But the rule is that such a purchaser is entitled to protection as an innocent purchaser, unless he has knowledge or notice of such facts that his failure to make inquiry amounts to bad faith. Merchants’ Nat. Bank v. McNeir, 51 Minn. 123, 53 N. W. 178; Merchants’ Nat. Bank v. Sullivan, 63 Minn. 468, 65 N. W. 924; Gale v. Birmingham, 64 Minn. 555, 67 N. W. 659.
Judgment affirmed.