The Kenosha telegraph. [volume] (Kenosha, Wis.) 1860-1888, 1863-06-18
DecIsiOn of Ghe Supreme Court, an rIni Al 6
the Validity Of Farm Mortgage.
OPINION BIZ JUSTICE PAINE.

OPINION By JUSTICE PAINE.
DAME! ? 5?rcsby Resp ondent az inst samuel L, Rou
and others, Appellants.
This action was brought TO foreclose villa
is commonly called a farm mortgage. II wa
given to the Milwaukee & Mississippi Rail
road Company, and the note given in connec
ton with it, was made payable to that com
pany or order. 1t is conceded that it VA
transferred to the plaintiff before due, for val
ue, and that the plaintiff had no notice of any
equitable defense. But on the trial, the de
PENDANT offered evidence of a defense set up il
the answer founded upon alleged false and
fraudulent representations byithdagentso Of th'
company in procuring the mortgage. This
was excluded en the ground that such facts
would constitute no defense against the plain
tiff he being bonn ffle holder for value.
This ruling is alleged to be erroneous. AnC
it is claimed that this note never was trans
ferred to the plaintiff within the rule Of ner
camille law, so as TO transfer the legal title
and that therefore the equities between The
original parties may still be shown in defense
This position is based entirely on the mode O.
transfer which was as follows; The compa
ny executed to the plaintiff its own negotiable
bond payable TO him or bearer, attached the
note to it, reciting in the bond that they there
by transferred the note and mortgage to the
plaintiff as security, and that both should be
transferable in connection with the bond anC
not otherwise.
The sole question is whether this was a suf
fcient endorsement of the note within the Law
merchant to pass the legal title?
1t must be admitted that the company die
not assume the liability of indorsers. But this
is clearly not necessary to transfer Of the
note. Thus the payee may indorse without
recourse, which transfers the note, though he
assume no liability whatever. SO he may
transfer the title by signing on the back or at
tached to the note q guaranty of the payment
or collection, which is entirely different con
tract from that of an indorscr. And even
though he should fail to bind himself as guar
antor by not complying with the statute Of
frauds, there is no room for doubt that the ii
tie to the note would pass. In every case d
q sale of negotiable paper, there are two oh
iects to be accomplished. First, to pas the ii
tie to the purchaser, and second, TO fix the re
lation Of the vendor to the paper after the sale
The letter may release him from any liability
to charge him with the ordinary liability Of
endorser, or with the absolute liability Of q
guarantor Of payment, or with the condition
al liability Of a guarantor of collection. But
it is immaterial which, SO far as the accom-
plishment of the first object is concerned. II
either case the name of the payee on the pa
per, with the intent to pass the title, has tha
effect, whatever may be the nature OF fate o
the balance of the contract Judge Bronson
in Miller vs. CASTOR, I'd Hill, 1872, states thu
fact incidentally that "a guaranty as well al
an Endorsement. may have the effect of trans
ferring the legal title to the note" There are
but few authorities directly i'll point, and thost
are somewhat in conflict. They are all citec
in Parsons on Notes and Bills, Vol 2, page
1875, Note A. The author gives it as his opin
ion that on principle, note transferred 10y
guaranty, remains negotiable, and those cases
which sustain thai conclusion, seem founded
upon the better reasoning. If an Endorsement
without recourse transfers the title because
the parties SO intend an Endorsement will
guaranty should have the same effect, anC
that whether the guaranty, as such, stand OF
fail. 1t being established then that it is moi
necessary to a transfer Of title that the vendor
should assume the technical liability of indoors
er, but that the parties may contract on thai
subject as they please, can there be any room
for doubt that if the bond Of the railroad corn
pany had been actually written on the back
of the note, it would have been a sufficient in
dorsement to transfer the title within the law
merchant? | can see none whatever Strong
er language could not be used showing ali in
tent to pass the title to the note to be held al
collateral security for the debt evinced by the
bond and that it was designed to circulate as
negotiable paper, transferable by delivery with
the bond, which the company must be assum-
ed to have known could not have been done
without being first indOrsed by it, The intent
thento pass the title andimake the note trans
ferable by delivery afterwards, as a note orig
inally payable to order and duly Endorsed by
the payee is beyond question. And this con
tract, like all others, must take effect accord
ing to the intent Of the parties tit is sufficient
in law to express that intent And the fact
that the parties contracted for an absolute IL
ability by the vendor evidenced bY a distinct
negotiable instrument on the back of the one
transferred, cannot upon any reasonable prin-
ciplc be held to distinguish the case. as far as
the mere question of transfer is concerned,
from a case where they contract for no liahiI-
ity, or for the conditional liability of an in
dorsee, or the absolute liability ola guarantor
| conclude, then that if the bond had been
written on the back of the note it would have
been fully sufficient to pass the legal title
within the law merchant.
The only question remaining is whether
the fact that it was OH another paper attach
ed to the note prevents this effect, This must
depend ON the question whether there is any
intiexible rule of the mercantile law requiring
the endorsement to be on the indentical paper
ON which the note was originally written
That there is any such, certainly cannot bl
maintained, All the cases where the ques-
ton Is raised and all elementary writers con-
cur III saying that an endorsement NAV be
on another paper attached to, and made part
of the note Such paper is called an aIlonre,
and it is true that the usual reason stated
for using such a paperis that there is no lon
ger room on the note to make the endorse
ment. But this does not mean that there
must be an actual physical impossibilitv 10
write the endOrsers name on the ORIGINAL pa-
per. On the contrary, the usage Of the mer-
camille law, is as Chief Justice Marshall saws
founded in convenience And all that either
its spirit or its letter requires is that when it
is inconvenieut to write on theback of the
real contract between the vendor and the ven
dee, and which if SO written would pass the
title, it may be written on another paper and
attached to it with like effect. Thus suppose
the consideration of an ordinary Endorsement
was a sale of real estate and the parties de
sired to express the consideration. Ii might
be wholly unnecessary, yet no one could ques-
ton their right to do so. Suppose the des-
c1ptlon Of the real estate was too long to be
written Oh the back of the note, and they
should write the endorsement on another pa
per containing the full description and attach
it to the note Could it be for a moment con
tended that it would not pass the title? I
think not.
Yet if not, it must be because the spirit OF
the nlercantile rule is as above stated a nd
if such is itsspirits the particular reason sicll
makes the contract too long 70 be written on
thenute is wholly iiilndateriI All that can
be material is that it be contract which if
on the note would pass the title, and that for
some reason it is announcement TO write it-on
the note. When this is true the transfer may
be effected by writing it on another paper at
tached to the note
All that is shown by the authorities relied