By the Court,
Cole, J.
We suppose the law to be perfectly well settled that where a person takes a negotiable promissory note before maturity in the usual course of business, even as collateral security, and makes advances at the time upon the credit of such note, he is considered by all the authorities as a bona fide holder for value, within the rule for the protection of commercial paper. The indorsement and delivery of the note, under such circumstances, transfer to the holder the title to the instrument, and give him an original and paramount right of *619action upon it against the previous parties, so that he is not affected by the equities existing between them. There has been something of a conflict among the authorities whether a party taking the negotiable promissory note of a third person as collateral security for a pre-existing debt, without any new consideration intervening, was in the situation of a holder for value, so as to come within the rule ; but there is none whatever upon the question whether the holder is a purchaser for value, where a new and distinct consideration intervenes at the time of the transfer of such note. In the latter case, the language of all the authorities is, that the party is an innocent holder for value. It would be an idle display of research to cite the numerous cases where this point is directly ruled. Several will be found reported, decided by this court, where we have followed the uniform current of the authorities upon this branch of law. It is sufficient to refer to the cases of Bond v. Wiltse, 12 Wis., 611" court="Wis." date_filed="1860-06-15" href="https://app.midpage.ai/document/bond-v-wiltse-6598265?utm_source=webapp" opinion_id="6598265">12 Wis., 611; Cook v. Helms et al., 5 id., 107; Jenkins v. Schaub, 14 id., 1. It is of course an obvious and necessary consequence of these decisions, that, by the negotiation and transfer of the note under such circumstances, the holder acquires a perfect title to the instrument, and has his right of action upon it against the previous parties. Otherwise he would not be protected, and the instrument in his hands would not be discharged of all equitable and legal defenses to which it may have been subject before it came to him.
In this case it appears the court nonsuited the plaintiff on the ground that he had alleged in his complaint that he was the owner and holder of the note described in the complaint, while the evidence showed that he held said note only as collateral security for the amount due on the notes of the railroad company. It is not denied that money was paid and advanced on the strength and credit of this note, and to the amount for which the paper had been pledged the plaintiff’s right of recovery was clear. To that extent, at least, he was the owner of the instrument. It is claimed that the plaintiff could not *620recover on the note a sufficient amount to satisfy the debt for which it was pledged, without making the pledgor a party. We have been referred to no case which decides that the holder of a promissory note as collateral security for money advanced upon the credit of such note, could not prosecute an action upon it to. the point of satisfaction of his own debt. Indeed, such a decision would be at variance with all the rules and principles of law applicable to commercial paper. How could effect be given to the well established rule that such a holder is entitled to the protection of a Iona fide holder for value, unless he may recover upon the instrument in his own name ? To give him the benefit of that rule, the transfer is held to give him the title to the instrument. The complaint, therefore, in this case properly alleged that the plaintiff was the owner of the note, and it was unnecessary to aver that he received it as collateral security for the payment of the notes of the railroad company. Hilton v. Waring, 7 Wis., 493.
In the absence of any evidence to the contrary, the indorsement of the note is presumed to have been made at or about the date of the note. The plaintiff saw fit to state in the complaint the circumstances under which the various indorsements were made. We see nothing in this to prejudice his right to recover.
The judgment of the circuit court is reversed, and a new trial ordered.