144 Iowa 42 | Iowa | 1909
In the fall of 1903 the Schroeder Hardware Company sold its stock of goods to C. M. Powers, taking in partial payment therefor three notes signed by himself, W. E. and Sarah Powers. At the time of this sale the hardware company was indebted to- the State Bank of Blairsburg, and the bank took one of the Powers notes as partial payment, and the other two were placed with it as collateral security for the debt of the hardware company. The two notes which were thus given to the bank as collateral security were assigned to the plaintiff herein in July, 1904, while they were still in the hands of the bank. The notes had previously been assigned by the hardware company to II. E. Schroeder, and
The defendant herein pleaded the judgment in its case on the Powers notes as an adjudication against the plaintiff’s claim for an accounting, and such plea presents the only real issue in this case. It is easily disposed of. The bank was not an innocent holder before maturity for the reason that the notes were not indorsed to it until after suit was commenced, and the notes were subject to existing defenses in favor of the makers. When the counterclaim was made, the bank did all that it could do to induce the payees and indorsees of the note, so far as it had knowledge thereof, to come in and make defense to said counterclaim. It did not know the plaintiff in the transaction and had no privity of contract with her; but the record does show that the plaintiff’s husband, E. E. Schroeder, had
The judgment is right, and it is affirmed.