Ridgeway v. Raymond

| Iowa | May 23, 1891

Changer, J.

The prayer of the.petition indicates . a purpose to recover on the original consideration for all the notes and on the note dated October 20, 1882, which was surrendered when the note assigned t0 the plaintiff’s intestate was made. It is obvious that such was not the real intent, but, on the contrary, a recovery on one of the two causes of action was intended. The appellant, in argument, says: “The plaintiff seeks to recover upon a note in the possession ot the defendant.” Also: “This action is based upon a written promissory note, signed by the appellee and E. A. Raymond, given to the Bremer County Bank, October 25, 1882.”

With the purpose of the action settled, we next consider the demurrer, a ground of which is : “ Third. It is shown that the Bremer County Bank accepted said last note signed by ‘Raymond Bros.,’ and thereafter sold and transferred the same to the plaintiff, who prosecuted same to judgment against the makers thereof; and it is admitted that the defendant was not a member of said firm at said time, or liable thereon.” It should be understood that the Bremer County Bank made no attempt to assign any note to the plaintiff’s intestate except the one dated October 19, 1883, on which, in this suit, there is no attempt at recovery. If, in this suit, there is a recovery on a note, it must be on the one dated October 25, 1882, of which the note dated October 19, 1883, was designed as a renewal. If it be conceded that the Bremer County Bank, on the receipt of the note signed “Raymond Bros.,” could have treated it as a nullity, and have maintained an action against the defendant on the note surrendered in lieff of it, because of the fraudulent acts of E. A. Raymond, does it follow as a legal sequence that the bank may assign it, and the assignee have the same right? We think not. We are not to assume that because the bank received the note in ignorance of the fact as to the existence of the partnership, when it was signed, that it continued in ignorance of such fact until after its transfer of the note to the plaintiff’s intestate. By the transfer of the note the bank was recognizing' it as a valid instrument. Its transfer by the bank to plaintiff’s intestate was as collateral security, and if the note had been redeemed by the bank, and it afterwards sought to treat it as void, and recover on the note surrendered in lieu of it,-it would at least have been required-to show that its use had been without knowledge of the facts at its inception. It would not be enough to show, ' in such a case, that it received the note without such knowledge. No less is required to entitle the plaintiff fco recover on the former note, admitting, for the purposes of the case, that under similar facts he could recover thereon. There is no averment in the petition from which we may infer that the bank ever regarded the note as invalid, and if it regarded it as valid, knowing the facts, its treatment of the note is conclusive upon its assignee, the plaintiff. There certainly should be something to overcome the presumptions arising from the facts indicated by the demurrer, as shown by the petition, that it is shown that the bank “accepted the note signed by Raymond Bros., and thereafter sold and transferred the same to the plaintiff.” So far as the statements in the petition are concerned, the bank assigned, and the assignee received, exactly what was intended, and without mistake as to its character or value. If so, the assignee has surely no right of recourse to the former note.

We think the point in the demurrer is well taken, and the judgment is aeeikmed.