Court Opinion

ID: 7002070
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:43:52.74309+00
Date Added: 2024-06-11T16:09:57.214105
License: Public Domain

Mr. Justice Sears delivered the opinion of the court. There is but one question presented which it is necessary to consider in the determination of this appeal, viz.: Did appellant, when it took the note and trust deed in question as collateral security, have notice of the fact that appellee, Brugger, had an interest in the note and trust deed as owner? There is considerable argument in the briefs of counsel as to the force of the extension agreement and as to the rights of one who buys commercial paper after its maturity from one who is unlawfully in possession of it. But this argument becomes of no importance if it be determined that when appellant took the note in question it was chargeable with notice of Brugger’s ownership of the same. For whatever may be said of the rights of a purchaser of overdue commercial paper, who buys from one who has stolen the paper, when such purchaser has no notice of the vendor's lack of title, there can be no doubt at all as to the proposition that one who buys commercial paper from one who has stolen it with notice of the true ownership, is not protected in his purchase as against the owner. There was indorsed upon the note and trust deed here in question the plain and unmistakable statement that appellee, Brugger, was the “ holder of this note ” secured by the trust deed. It is difficult to see how that indorsement could fail to inform the officers and agents of appellant, who were transacting the business for appellant, that Brugger was the one who owned the paper. As a matter of fact, disclosed by the record, it did convey precisely that information to Mr. Hiblack, who, upon seeing it, said, “ It seems to belong to somebody else.” And, as a further fact, also disclosed by the record, Mr. Hiblack, acting for the appellant, disregarded this notice of Brugger’s ownership because he had confidence in the assurance of Schintz that he had repurchased the paper. Mr. Hiblack testified: “ He (Schintz) explained that he had released two lots; that the house and security was on the remaining lot; that he had sold the loan, repurchased it, and had renewed, it and was to sell again. I did not ask particularly about Brugger’s ownership of it. I took his (Schintz’) word for it. It was a perfect explanation. I made no inquiry from any one else except Schintz. He ver asked Brugger nor made any attempt to find him. .Did not ask Gmeiner or attempt to find him.” When appellant, thus charged with notice of Brugger’s ownership, chose to disregard the notice and to rely upon the representation of Schintz, it did so at its own peril, and it can not now throw upon Brugger the consequences of having thus confided in Schintz’s assurances. Hor can it be said that the words spoken bj7 Schintz were as much entitled to the reliance of appellant as the written notice upon the paper. Brugger may have relied upon this very indorsement upon the paper for the protection of his rights while the paper was left in Schintz’s possession. Inquiry of Brugger, or even of Gmeiner, the maker of the note, would have disclosed its true ownership. When appellant did finally inquire of Gmeiner, after it had taken the paper, it at once learned that Brugger and not Schintz was the owner. We are* of opinion that appellant took the note and trust deed with notice of appellee, Brugger’s, ownership, and hence that the decree entered by the learned chancellor is right. The decree is affirmed.