126 N.W. 100 | N.D. | 1910
The plaintiffs have joined in bringing this action to forclose a chattel mortgage, and to recover judgment for the two promissory notes, to secure which the mortgage was given. Each plaintiff holds one of the two notes as collateral to an indebtedness due it. from the Marion Manufacturing Company of Ohio, the payee named therein. Each note was indorsed and transferred before maturity, and to. secure an advancement or loan of money made at the time to the said Marion Manufacturing Company of Ohio, the holder thereof. The loan by the Central National Bank of Battle Creek, Mich.., was $5,000, upon which there was due and unpaid at the time of the trial of this action $3,800. On the loan by the Second National Bank of Bucyrus, Ohio, there was düe and unpaid at the time of the trial of this action the sum of $2,478. The proof shows the indorsement of the notes by the payee through its treasurer, and the delivery thereof to the respective plaintiffs on September 26, 1906, and the consideration therefor.
The testimony of the officers of the plaintiffs shows that the notes were taken in the regular course of business in good faith, before maturity, and for a valuable consideration. This testimony is undisputed. The defense interposed was a breach of warranty of a threshing machine purchased from' the Marion Manufacturing Company, for which the notes were given, and that a return of the threshing machine to the Marion Manufacturing Company at Bowdon, N. D., was made before the commencement of this action. The note held by the plaintiff bank of Battle Creek was due on or before December 1, 1907. The note held by the plaintiff bank of Bucyrus, Ohio, was due on or before the 1st day of December, -1906.. Each note contained a provision that a failure to pay any one of which, or the interest thereon, when due rendered the entire
The evidence of the defendant as to the breach of warranty of the Marion Manufacturing Company as to the threshing machine, and as to the attempts to collect these notes by other parties than the plaintiffs, and as to the commencement of the action by the trustee of the Marion Manufacturing Company was objected to by the plaintiffs. At the time of the trial, and before the commencement thereof, the defendant called for a jury bn the ground that the question at issue was whether the notes were assigned in due course of business before maturity, and that there was nothing in the pleadings that would make it an equitable action-; and, further, that this was not an action for foreclosure, and could not be sustained under the pleadings for the reason that the complaint does not state that no proceedings at law or otherwise have been had for the foreclosure of this debt as provided by statute. This request was denied. In this ruling there is no error. It is not necessary to allege in the complaint in an action to foreclose a chattel mortgage that no proceedings at law or otherwise have been had for the recovery of the
If the plaintiffs are good-faith holders of the notes in question before maturity and for value within the meaning of our negotiable instruments law, then the judgment must be reversed, and the plaintiffs awarded the relief demanded. The trial court found that the notes were given for a threshing machine under a warranty, of which there was a breach, and that the defendant, with the consent of the Marion Manufacturing Company, returned the threshing machine to Bowdon, where the defendant received the same. The trial court also made the following findings of fact: “That the plaintiff, the Second National Bank of Bucyrus, thereafter, and after the maturity of said note, and with notice and knowledge of the breach of warranty and failure of consideration, obtained possession and control of said the first-mentioned note and mortgage, but not in good faith or as an innocent purchaser. That the plaintiff, the Central National Bank of Battle Creek, Mich., thereafter, and after the maturity of the second mentioned note, obtained possession and control of said second mentioned note, but not in good faith as an innocent purchaser, but with full notiee and knowledge of the breach of warranty and failure of consideration” —and among other conclusions of law, made the following: “That the plaintiff, the Second National Bank of Bucyrus, Ohio, was not an innocent purchaser in good faith and before maturity of its said note in the premises described. That the plaintiff, the Central National Bank of Battle Creek, Mich., was not an innocent purchaser in good faith and before maturity of its said note in the premises described.”
The two last-mentioned findings of fact are wholly unsupported by any competent evidence. The evidence conclusively shows that the plaintiffs were good-faith holders of the notes before maturity and for value. The cashier of each of the plaintiffs testified that on the 86th day of September, 1906, his bank made the loan hereinbefore stated to the Marion Manufacturing Company of Ohio, the Second National Bank of Bucyrus taking the $469 note with other bills receivable of the Marion Manufacturing Company as collateral security, and the Central National Bank of Battle Creek taking the $400 note with other bills receivable of the Marion Manufacturing Company of Ohio as collateral security. This testimony is undisputed. There is nothing inconsistent with plaintiffs’ claim
It follows from what we have said that each plaintiff is the holder of the note assigned and indorsed to it in due course and for value.
The judgment of the district court is reversed, and that court directed to enter a judgment in favor of plaintiffs for the relief demanded in the complaint.