86 Iowa 656 | Iowa | 1892
I. An important feature of this case is whether or not the plaintiff bank is such a good-faith purchaser of these notes as not to be subject to equities arising at their inception. It is beyond dispute that the first, note was transferred, if at all, before its maturity, and was not paid at maturity. It is also beyond dispute that the other three notes were assigned after maturity and default in the payment of the first note, and before the commencement of this suit. Before the commencement of the suit there was no election by the holder to have the last three notes due, because of a failure to pay the first note. The district court instructed the jury that the default in the payment of the first note rendered the other notes due at the time of the default,
We do not understand the appellees to contend that the mere fact of default in payment, without election by the- holder, would render them due, but that the “option must be declared at the time of the default or as of the time of the default;” that is, the act by which the notes are rendered mature relates back to the time of the default, and hence that the maturity of the latter notes and ■ the default are the same in point of time. No question is made as to the right of the holder to make the election at any time after default, and we do not determine it, but consider the case with that as an uncontroverted question; and, thus considered, we think the election does not relate back .to the maturity of the first note, but that the notes mature at the time of the election. The reasons for such a holding are quite manifest. The very fact that the maturity of such a note depends on an election, if before maturity, by its other terms, militates strongly against the thought that when the election is made the note matured months or years before, as the fact might be. The day before the election the note is not due; th'e day of the election it has been due for months or years. Again, the consequences to result to commercial paper from such a holding are such as to forbid it, in the absence of reasons quite imperative for its support. The giving of the instruction was error.
In the answer it was pleaded that the notes in suit were never delivered; that they were placed in escrow, to be delivered only when the threshing machine for which they were given should prove satisfactory,