Court Opinion

ID: 6599012
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:06:04.082634+00
Date Added: 2024-06-11T15:57:57.093227
License: Public Domain

By the Court,

DixoN, C. J.
The power of the Racine, Janes-ville & Mississippi Rail Road Company to take the note and mortgage upon a subscription for capital stock cannot be questioned. Charter, chap. 392, secs. 2 and 6, Laws of 1852; Clark vs. Farrington, 11 Wis., 306; Blunt vs. Walker, id., 334; *306Cornell vs. Hichens, id., 353. Therefore, notice to the plaintiffs, at the time they received the note and mortgage, that they were given by the defendants in consideration of a subscription to the capital slpck of the company, does not impair the legal rights of the plaintiffs, or change their attitude as bona fide holders. It was notice of a lawful consideration, and not of one which tended at all to defeat the obligation as between the original parties.
All other questions as to the relations of the plaintiffs and their rights as bona fide holders, are cut short by the stipulation. It is there agreed that the plaintiffs became the purchasers, before maturity, at par, without any knowledge or information that the company had agreed with the defendant Samuel Hart to pay the interest, or any'information in fact of the circumstances and transaction under which the note and mortgage were obtained, save that they were given in payment for the capital stock of the company. This is an end of all controversy in that respect, and the court should have excluded the evidence offered for the purpose of showing that the note and mortgage were executed and delivered in consequence of the false and fraudulent representations of the company and its agents, unless there is something in the mode of transfer to the plaintiffs-which should deprive them of the protection ordinarily afforded by law in this state to the holders of such paper under like circumstances. We feel quite confident that there is nothing which should take this case out of the general rule. Fisher v. Otis, 3 Chand., 83; Martineau v. McCollum, 4 id., 153; Croft v. Bunster, 9 Wis., 503; Cornell v. Hichens, supra. The note is payable to the company or bearer, and was, therefore, transferable by delivery. The only circumstance from which an .inference can be drawn unfavorable to the claim of the plaintiffs, is, that the transfer wasaccompaniedby a written guaranty of the company, annexed to the note and mortgage, by which the company engaged to the holder thereof that the principal, and the interest semi-annually, should be *307paid at their office in New York. It was likewise provided in /the^guaranty that the note and mortgage might be transferred in connection therewith, but not otherwise, to any party or purchaser whomsoever. ■
After the case of Crosby v. Roub, 16 Wis., 616, it cannot be contended that this guaranty destroyed, or in the slightest degree affected, the negotiable character of the note and mortgage. There the note was payable to order, and was transferred by the company as collateral security for the payment of its negotiable bond to which it was annexed. There was no formal indorsement of the note. The transfer was effected by words of assignment contained in the bond. Here no indorsement was necessary; and the guaranty, made negotiable by express words, is no more than a further security which every purchaser of negotiable paper may well take without jeopardizing his claim against the maker or other party to the paper.
The only other question made by the pleadings, though apparently not urged in the court below, is that the note is void for usury. It was executed on the 12th of April, 1855, but draws interest from the 10th of February preceding, five years from which time the principal sum became due. No proof was offered to show that this was an artifice resorted to for the purpose of exacting illegal interest, but it is said that the note is -usurious on its face. The contrary doctrine is well settled. The presumption is that it was given upon a state of facts which authorized the taking of such an instrument, and that the transaction is lawful. Marvin v. Feeter, 8 Wend., 533; Holden v. Pollard, 4 Pick., 173; Leavitt v. Pell, 27 Barb 332.
Judgment reversed, and cause remanded with direction that judgment be entered for the plaintiffs according to the demand of the complaint.