Arnot v. Woodburn

Bates, Judge, delivered the opinion of the court. This suit was upon a negotiable promissory note made by the defendant to Osborne, Camp & Co., and which the plaintiffs allege, and the defendant denies, was endorsed by Osborne, Camp & Co. to the plaintiffs. It appeared in evidence that the plaintiffs had for the accommodation of Osborne, Camp & Co. endorsed a note for them for five hundred dollars, and that the note so endorsed, had been delivered by them to one Bacon; and that the note of the defendant for fj277.50, which is the foundation of this suit, had been also? without the knowledge of plain [102] tiffs, delivered by Osborne, Camp & Co. to Bacon, as collateral security, with the note endorsed by plaintiffs; that the note so endorsed by plaintiffs was protested for non-payment, and the plaintiffs paid it to Bacon and received it from Bacon, and with it the note of defendant, which Bacon held as a collateral, and which was then part due. Osborne, Camp & Co. were and are indebted to the defendant in a sum exceeding the amount of the note of defendant which is the foundation of this suit. Judgment was given for the plaintiffs, after the court had refused the following instructions asked by the defendant: 1. If the jury believe from the evidence, that the note sued on was deposited by Osborne, Camp & Co. with James H. Bacon as collateral security for the payment of the five hundred dollar note spoken of, and that there was no agreement made by plaintiffs that they should be protected in their endorsement of said five hundred dollar note by collaterals, and that the endorsement of plaintiffs on said note was given without any knowledge of having any collaterals, and that the note sued on passed into the possession of plaintiffs without any agreement to that effect between plaintiffs and said Osborne, Camp & Co., then plaintiffs are not the legal holders of the note sued on, and the jury must find for the defendant. 2. If the jury believe from the evidence, that the note sued on came into possession of plaintiffs after its maturity, and that at the time of such maturity the payees thereof, Osborne, Camp & Co., were, and still are indebted unto Jacob Woodburn, defendant herein, in an amount greater than said note, then such indebtedness will be a bar to the recovery of plaintiffs in this suit, and the jury must find for defendant. As to the first of these instructions. When the plaintiffs paid and took up the note of Osborne, Camp & Co., on which they were endorsers, they acquired a title to that note (and not a mere claim against Osborne, Camp & Co. for money paid to their use) ; and the note of defendant being collateral to the note so taken up by them, passed with it to the [103] plaintiffs, who thus became the legal holders of it, as Bacon had been before. As to the second instruction. Although the plaintiffs acquired the note after maturity, yet the maker of it could only set up such defences as were connected with the note itself, and not such as grew out of distinct and independent transactions. (Mattoon v. McDaniel, 84 Mo. 138; Gullett v. Hoy, 15 Mo. 399.) Both instructions were properly refused. Judgment affirmed. Judges Bay and Dryden concur.