Mineral Point weekly tribune. (Mineral Point, Wis.) 1859-1868, 1863-06-10
Decision OF the supreme Court. aflrm-
ing the Validity of Farm Mortgages.
OPINION BY JUSTICE PAINE

Daniel P. crosby, Respondent against samuel L.
Roua and others, Appellants
This action was rougst til, fnrs co-e VIVA
is comuonl, called farm mortgage. II
was given To the Milwaukee l. Mississippi
Railroad Company, and the note given IN
connection with it, was made payable 10
that company or order. IL is conceded
that it was transferred to the plaintiff be
fore due, for value, and that the plaintiff
had no notice of any equitable detense.-
But On the trial, the defendant offered eyi
dence of defense set up in the answer
founded upon alleged false and fraudulent
representations by the agents of the COM
pany in procuGDg the mortgage. This
was excluded on the ground THAT. such
facts would constitute no defense against
the plaintiff he being q bona tide holder
for value. 50
This ruling is alleged to be erroneous.
And it is claimed chat this note never was
transferred To the plaintiff within the rule
| OF mercantile law, so as to transfer the lie
| gal title, and that therefore the equities
| between the original parties may still Be
shown in defense. This position Is based
| entirely or The mode OF transfer, which
! was ss follows: The company executed to
| the plaintiff its own negotiable bond, pay
| able to him or bearer, attached the note 10
it, reciting in the bond that they thereby
I transferred the note and mortgage to the
| plaintiff as security, and that beth should
! be transferable in connection with the
bond and not otherwise.
The cole question is whether this was a
| sufficient endorsement of the note within
the law merchant, to pass the legal tltles
1t must be admitted that the company
did not assume the liability of indorsers.
| But this is clearly not necessary TO trans
fer of the note. Thus a payee may in
| dorSe without recourse, which transfers
the note, though he assume no liability
whatever. So be may transfer the title by
| signing on the back or attached to the
note guaranty OF the psy ment or colIec-
| ton, which is entirely a different c. ntract
| from that OF al lndorser. And even
though he should tail to bind him
{ self as guarantor, by not complying
with the statute OF frauds, there is no
room for donbs that the title to the note
would pass. 10 every case uf sale OF
| negotiable paper, there are two objects to
be accomplished. First, to pass the title
| to the purchaser, and second, TO fix the
relation OF the vendor to the paper after
the sale. The latter may release him from
any liability, or charge him with the or
| uiLdTJ ldDililJ VI iuUDlSSIs VI Will lUS
absolute liability of a guarantor of pay
| ment, or with tie conditional liability OF
| guarantor of collection. but it is imlna-
terlsl which, SO far As the accomplishment
OF the first object is concerned. La either
case the name of the payee on the paper,
| with the intent to pass the title, has that
effect, whatever may be the nature or fate
of the balance of the contract. Judge
Bronson, in Miller VS.. CASTOR, I'd Hill,
1872, states the fact incidentally, that IA
guaranty as well rs an Endorsement, may
have the effect of transferring the legal
| title to the note There are but few au-
thorities directly in point, and those are
somewhat III conflict. They are all cited
in Parsons on Notes and Bills, Vol. 2,
page 1876, Note A. The author gives it as
| bis opinion that on principle, note trans
ferred by guaranty, remains negotiable,
and those cases which sustain that con
clueion, ssem founded upon the better
reasoning. If al Endorsement without re-
course transfers the title because the par
ties so intend, an Endorsement with guar
anty should have the same effect, ana that
whether the guaranty as such, stand or
fall. 1t being established then that it is
not necessary TO transfer OF title that tie
vendor should assume the technical liabil-
ity OF endorser, but that the parties may
contract on that subject as they please,
can there be any room for doubt, that i;
the bond Of the railroad company had
been actually written on the back of the
note, it wo1ld have been a sufficient in
dOrSenent to transfer the title within the
law merchant? | can see none whatever.
Stronger language could not be used show
ing al Intent 10 pass the title 10 the note
to be held as collateral security for the
debt evidenced by the bond, and that it
was designed to circulate as negotiable
paper, transferable by delivery with the
bond, which the company must be acsum-
ed 10 have known could not have been
done without being first Endorsed by il
The intent then to pass the title and make
the note transferable by delivery after
wards, as note originally payable to or
der and duly Endorsed by the payee, is be-
You'd question. And this contract, Ike all
others. must take effect according to the
iutent OF the parties, If it is sufficient i'll
law 10 express that intent. And the fact
that the parties contracted for an absolute
liability by the.yendor, evidenced hy dis
tinct negotiable instrument on the back of
the one transferred, cannot upon any ra-
tional principle be held to distinguish tie
case, 50 far as the mere question OF a trans
fer is concerned, from case where they
contract for no liability, or for the condi-
tional liability OF an indorsee, or the abso>
lutte liability OF gnarantor. | conclude,
then, that il tbs bond had been written Oh
the back OF the note, 1t would have been
fully sufficient to pass the legal title within
the law merchant.
The only question remaining is whether
the tact that ii was on another paper at
cached to the note, prevents this effect
This must depend on the question whether
there is any iutiexible rule OF the mercan-
tile law requiring the Endorsement to be
on the Identical paper on which the note
was originally written. That there is any
such, Certainly cannot be maintained. AL
the cases where the question Is raised and
all elementary writers concur is saying
that an Endorsement may be on another
paper attached to, and made q part of the
note. Such paper Is called an alloDge,
and IL Is true that the usual reason stated
for using such paper is that there is no
longer room on the note TO make the in
dorsenent. But this does not mean that
there must be an actual physical Impossi
bihty to write the indorser's name on The
original paper. On the contrary the usage
OF the mercantile law. is as Chief Justice