Court Opinion

ID: 6970228
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:01:04.703814+00
Date Added: 2024-06-11T16:08:46.441987
License: Public Domain

Mr. Justice Ricks delivered the opinion of the court: It is conceded in this case that Schintz had no title to the note and trust deed and that he fraudulently transferred the same to the trust company. Such being the case, it rested upon the trust company to show that it took the paper in good faith, without notice, for value, before maturity and in the usual course of business. (Hide and Leather Bank v. Alexander, 184 Ill. 416.) There was an endorsement on the note and trust deed iu unmistakable terms, and by Schintz as a trustee, that Brugger was the legal holder of the note. The purport of this endorsement was so plain that it immediately put the trust company upon inquiry. Having reposed confidence in the veracity of Schintz the trust company failed to make any other inquiry, and therefore empowered Schintz to wrong either itself or others. Mr. Lemon, vice-president and general manager of the trust company, testified that had he seen this endorsement it would of itself have led to inquiry. Mr. Hiblack, representing the trust company in this transaction, did see this endorsement and immediately asked Schintz what it meant. Schintz’s reply being satisfactory to the trust company, it took no further steps. Here the paper having on its face such endorsements as would lead any intending purchaser to inquiry, and the legal owner of the note having the right to rely upon this endorsement, and the trust company blindly placing its confidence in Schintz, it should sustain whatever loss the agreement or fraudulent acts of Schintz caused. 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 cannot now throw upon Brugger the consequence of its having thus confided in Schintz’s assurances. A person charged with notice who taires nnmatured paper takes it subject to all the equities which reasonable inquiry by the taker, arising from such notice, would develop. Had the trust company made any inquiry of any of the parties to the note it would at once have discovered that Brugger was the true holder of the note. Being thus charged with notice it is immaterial whether or not the purported extension was binding upon Brugger. The judgment of the Appellate Court is correct and is affirmed. Judgment affirmed,.