45 Iowa 106 | Iowa | 1876
“ 3. If the jury find from the evidence that, before the note sued on was due, plaintiff, in good faith and for a valuable consideration, bought said note of the payee, and that at the time'of the purchase thereof said note, indorsed in blank, was in the possession of the First National Bank of Iowa City, as collateral security fo,r the payment of a note by Eberle given said bank, and if you.find that after the said purchase; if any there was, as a part of the transaction, plaintiff and John Eberle (the payee) went together to the bank and notified its cashier of the sale of said note and said bank recognized said sale, and if you find that plaintiff paid the note due the bank although such payment was made after the maturity of the
This instruction was refused and the following was given:
“ 6. If the jury believe from the testimony that the note in suit was held by the First National Bank of Iowa City as collateral, indorsed in blank by Eberle (the payee), until Jan. 22, 1875, and was then paid off and delivered to Grimm for the first time, then Grimm’s right as owner or holder dates only from that time and being subsequent to the maturity of the note, the note is liable in his hands to the same defenses which it would be liable to in the hands of Eberle.”
The instruction given, in our opinion, is erroneous, and the one refused presents a correct rule of law and should have been given. The principles upon which this conclusion is based will be briefly stated.
A holder of negotiable paper, to be protected against equities existing between the original parties, must have acquired it by indorsement before maturity. A transfer, except by indorsement, even before maturity carries no such consequences. Franklin v. Twogood, 18 Iowa, 515. The holder under a blank indorsement may transfer the paper without any further indorsement, or without filling up the blank; in that case the transferee will take it as an indorsee with all the rights of such a party. The indorsement of a promissory note to be taken as collateral security confers the legal title and property of the payee upon the holder. Sheldon, Hoyt & Co. v. Middleton, 10 Iowa, 17; McCarty v. Clark, Id., 588.
Applying these familiar principles to the case which the evidence tended to establish, we discover that, if the bank transferred the note to plaintiff upon the blank indorsement, under a bona fide arrangement among all the parties concerned, he acquired the legal title to-the paper. If under a like bona fide arrangement, made before the maturity of the note, the payee had transferred all his equities and contingent interest therein to plaintiff, it is plain that he acquired there under the legal property in the instrument. The bank held
The instructions presenting this rule are erroneous. If cannot be claimed that the sale of the good will of a business will bind the seller farther than that he will do' no act which will interfere with the purchaser retaining the customers that, at the time of the contract, patronized the seller. ITe is bound to do no act which will divert the business which he transfers to the' purchaser. The establishing of a new business of the same kind might have such an effect. Authorities, however,
III. The covenant of the contract which is the foundation of defendants’ claim for damages, to the effect that the payee of the note should not engage in the ice business in Iowa City, was not violated by personal services rendered by him to others, if he acted in good faith and was not interested in the business further than as an employe. He does not engage in the ice business by working for those who were so engaged. The covenant is intended to bind him not to carry on the business. The distinctions between the act of engaging in a business and of serving one who is engaged in business, are obvious and need not be pointed out.
The instructions upon this branch of the case, so far as they are in conflict with the views we have expressed, are erroneous.
Other questions presented in the argument of counsel we forbear to discuss or pass upon, as the judgment of the Circuit Court for the errors pointed out must be
Reversed.