Weber v. Orten

Sherwood, J. This proceeding in the court below was one of equitable garnishment, whereby the original plaintiff, John A. Weber, now deceased, sought to subject a certain promissory note and deed of trust to the payment of certain indebtedness due by one of the defendants, Felix Gr. Harrison, to the original plaintiff, on the ground that Harrison owned one moiety of the promissory note, although the same was made payable [680] to W. H. McDaniel or order. Harrison Pad become non-resident prior to the institution of this suit. The answer of Orten, the maker of the note and deed of trust, pleaded failure of consideration, fraud in obtaining the note and deed of trust, and an agreement in writing in the nature of a defeasance, though not recorded, for their surrender upon the happening of certain contingencies. The deed of trust was given to secure the payment of a debt contracted for a -certain interest in a beehive patent, and the defeasance was to accomplish the cancellation’or release of the debt and the deed of trust in the event that expectations in regard to the patent aforesaid should not be realized. The testimony of Orten went to sustain the averments of his answer, and there was testimony of a contrary effect. Orten denies having executed the note to W. H. McDaniels and handing the same to John A. Weber, deceased, with the intention that it should operate as collateral security for Harrison’s debt, and there was rebutting testimony. The above gives a sufficient outline of the salient points of this case and affords sufficient basis for the rulings necessary to be made herein. It does not appear that Jno. A. Weber, deceased, had actual notice of the terms and conditions upon which Orten bought the beehive patent and incurred the indebtedness secured by the deed of trust; nor is it material that notice of such a character should have been brought home to him, and this is the reason of it: The note as already seen, was, it is true, a negotiable note, being made payable to W. H. McDaniels or order; but, inasmuch as he had not indorsed it, the lack of .such indorsement rendered the note, to all intents and purposes, the same in the hands of Jno. A. Weber, as if it were a non-negotiable instrument, and it was, therefore, subject to all the equities to which it would have been subject had it been nonnegotiable in form, or had remained in the hands of the original payee. This rule of commercial law is firmly [681] established. Patterson v. Cave, 61 Mo. 439, and cas. cit.; 1 Dan. Neg. Inst., secs. 321, 573, 644a, 741; Quigley v. Bank, 80 Mo. 289. In consequence of the foregoing, plaintiff’s intestate took not a legal, but only an equitable, title to the note. This being the case, the law of constructive notice carried home to John A. Weber knowledge of the defeasance aforesaid, in so far as to preclude Mm from pleading ignorance of the defeasance. These considerations settle the main point in this case. In relation to the other points of this case, as, for instance, the failure of consideration, fraud, etc., seeing no reason in this instance for departing from our custom^of deferring somewhat to the trial court in its determination of questions of fact, we shall observe the rule now and affirm the judgment which the defendants recovered in the lower court. All concur,