author: Owen, J.

text:
    Railroad Company v. Schultz.

      Request to charge ffiry — When may be refused — Revised Statutes, section 3324 — Liability of railroad for defect in fence to track — Sufficient evidence of negligence — Evidence—Opinions of witnesses as to sufficiency of fence to turn stock.

    1. Where a party presents to the court a written request for instructions to the jury, unless he is entitled to have it given in the terms in which it is expressed, there is no error in refusing it.
    2. Section 3324 Revised Statutes, requiring railroad companies to fence their tracks, and providing that they shall he liable fin- damages sustained by reason of the want or insufficiency of such fences, is to be reasonably construed; and where such damage results from defects (occurring without the fault or neglect of such companies) in an otherwise sufficient fence, there is no liability.
    3. The fact that an insufficient fence has for several weeks been maintained by a railroad company along its right of way, is sufficient lo justify a jury in finding it guilty of negligence; and the fact that the plaintiff's stock had, during all such time, been kept in a field adjoining the right of way, without escaping through such fence and passing upon the railroad track, is not sufficient to excuse the company from such neglect.
    4. Where the immediate means or cause of such stock passing over such fence and upon the railroad track is that, recently prior thereto, a board or rail liad become detached and fallen from the fence, without the knowledge of the company, such company is not excused from liability, where there is evidence to justify the jury in finding that such special defect was attributable to the generally defective condition of the fence.
    5. Where one of the issues in an action is whether a fence is sufficient to turn stock, it is error to permit witnesses, who show no other qualificaeation than that they had seen the fence, to give to the jury their opinions as to the sufficiency of the fence to turn stock.
    Error to the District Court of Seneca county.
    The action below was brought by Peter Schultz against the Baltimore and Ohio Railroad Company, to recover the value of his horse killed by the cars of the company, upon whose track it had passed from the plaintiff’s field adjoining the company’s right of way, through and over the line fence built by the company. The petition alleges that this fence was constructed in a careless and negligent manner, and was defective and insufficient to turn stock, or to prevent domestic animals from going upon the railroad track; that prior to and at the time of the accident, this fence was, through the negligence of the defendant, in bad repair, and insufficient to turn stock and to prevent domestic animals from going upon the railroad, all of which the defendant knew; that by reason of such negligence and the defective condition of such fence, and without the fault of the plaintiff, his horse, on the 10th of October, 1881, got across, through, and over the fence to and upon the track, where it was killed by defendant’s cars.
    A demurrer to the petition was overruled. It was agreed that the horse was of the value of $140. The petition prays judgment for this sum, and interest from October 10,1881. * The petition did not aver when either the railroad or fence was constructed, except that it was .prior to the accident. From the bill of exceptions it appears that, by the concession of the defendant at the trial, “ the sole question for the jury to find upon the evidence adduced upon the trial was, whether the company was liable to the plaintiff in damages for said value of his horse through any negligence on account of defective fence between the fields of the plaintiff and its right of way for its railroad.”
    The evidence for plaintiff tended to prove the fence was. a board fence less than four feet high; that it was always poor, not sufficient to turn stock — not high enough, and weak; nails out in many places ; boards loose at one end ; would stand but little pressure; posts not large enough, cheeky, and could not hold nails ; boards sag down ; lapped but one inch at the end ; and had been in such a condition more than a year. The evidence of the defendant tended . to show that the fence was “ all right;” that the plaintiff’s horse was killed on the morning of the 10th of October; that it had been put in the field of the plaintiff adjoining the railroad the evening before.
    The evidence strongly tended to show that during the 9th, or the night of the 9th and 10th of October, the top board of one of the panels of the fence, without the knowledge of defendant, became detached from the post, leaving the fence at a height to allow the plaintiff’s horse to step over it, and that at this point the horse passed through and upon the track. It further appeared that the plaintiff’s stock had been running in the same inclosure for along time prior to the accident, and that none of them had before escaped upon the track. Upon the trial, witnesses who had seen the fence testified, against the objection of defendant, to their opinions concerning the fence, and that it was “ not a good fence;” “ not a substantial fence;” “ not fit to keep stock off';” “not sufficient to turn stock.” Some of these witnesses testified to facts descriptive of the fence, in connection with their opinions; others testified to> their opinions simply, without any facts upon which they were founded. Many of the writnesses failed to qualify themselves to give their opinions concerning the fence, beyond the fact that they had seen it. To the admission of this evidence exceptions were taken. After the evidence was closed, the defendant requested the court to charge the jury as follows :
    “ If the defendant’s fence had up to the night of the accident to the horse been in the same condition it had been for some days or weeks previously, while the plain tiff’s horse was.running in his field contiguous thereto, and by some accident, without the defendant’s knowledge, the fence became othei’wise defective, by which means the plaintiff’s horse got on the railroad track and was killed, then in this action the plaintiff can not recover.”
    This instruction was refused. The court charged the jury, among other things, that if they found for the plaintiff' they should return their verdict for him for the value of the horse, with interest from the date of the accident, to which the defendant excepted. Verdict was returned according to this instruction. Defendant’s motion for new trial was overruled, and judgment rendered on the verdict, which judgment was affirmed in the district court. To reverse these judgments the present proceeding is prosecuted.

      Newbegin ■Kingsbury, for plaintiff in error.

      George A. Seney, for defendant in error.
   Owen, J.

I. The instruction, requested was properly refused. The evidence tended to show that for a long time prior to the accident, and while the horse was running in the adjoining field, the fence was in a defective, unsubstantial condition, and insufficient to turn stock. The jury was at liberty so to find.. This request called upon the jury to say that, notwithstanding this condition of the fence, if “ by some accident, without the defendant’s knowledge, the fence became otherwise defective, by which means the horse got upon the railroad track and was killed, then in this action the plaintiff can not recover.” The hypothesis of a sufficient fence 'was not submitted by this request. It assumed that the fence was defective.

The expression, “ otherwise defective,” unmistakably referred to the opening left by the top board of the fence becoming detached recently prior to the accident, through which the horse passed. The j ury was asked to say that as the plaintiff’s stock had not passed over this fence before this accident, though for a long time in the adjoining field, it was shown to be sufficient to turn stock, so far as the defendant’s duty to the plaintiff was concerned, and that the special defect occurring without defendant’s knowledge, it was not liable. If the defendant was not entitled to this instruction in the very form in which it was requested, there was no error in refusing it.

The j ury was at liberty to find from the evidence that the very defect by reason of which the horse passed over the fence and upon the track was attributable to the generally defective condition of the fence. Yet under the instruction requested, if they had so found, they must have found for the defendant, in spite of its neglect to maintain a sufficient fence.

There is nothing in this view, nor in the case of Railway v Smith, 38 Ohio St. 410 (which holds that a railroad company can not escape responsibility for a defective fence, by showing that it had no notice of its actual condition), which would charge a railroad company, in the entire absence of negligence, with the consequences of defects in its fence. T. & W. R. R. Co. v. Daniel, 21 Ind. 258; Chi. & Al. R. Co. v. Saunders, 85 Ill. 288; Davis v. C. R. I. & P. R. Co., 40 Ia. 292.

II. The reasoning in support of the claim that the petition failed to state facts sufficient to constitute a cause of action, is that section 3324 Revised Statutes, which required railroad companies to fence their right of way, and gave six months after the construction of their railroads to build the fences, was repealed by an act which took effect April 20, 1881. That, as the plaintiff’s horse was killed October 10, 1881, the grant of six months’ time to railroads completed within the ten days, from April 10th to 20th, was a vested right, a part of the contract with the 'state, and could not be divested by the repeal. That for aught that appears, the defendant’s road may have been completed before April 20th, and within six months from, the killing of the plaintiff’s stock (October 10, 1881). This view is untenable. It was within the power of the general .assembly to change or remove altogether the limitation as to time for the construction of fences by railroad corporations. Article 13, section 2, of the constitution, ordains that “corporations may be formed under general laws; but all such laws may, from time to time, be altered or repealed.” Railway v. Railway, 30 Ohio St. 604; Railway v. Sharpe, 38 Ohio St. 150. The effect of the repeal of the six months limitation was to subject railroad corporations to the obligation of fencing their tracks without other qualification than that of such construction of the enactment as would allow them a reasonable time after the change of the law to build their fences, and thus save them from the hardship which this argument assumes. If such a state of facts existed, it was incumbent on the company to set them up in defense. They will not be presumed.

The record discloses, however, that the company had, before the accident, assumed to construct this fence. The duty so assumed should have beeu performed with a reasonable regard for the rights of others interested in its construction and maintenance.

III. There was no error in instructing the jury to return a verdict for the value of the plaintiff’s horse, with interest from the date of the accident. Hogg v. Zanesville Canal Co., 5 Ohio, 410. The agreed value of the horse was $140. The plaintiff was deprived of this from the time of the accident; and for the time it was withheld from him he was entitled to be compensated. This upon the assumption, of course, that he was entitled to recover in the action.

IV. A more serious and difficult, question arises upon the exception of the defendant below to the admission of the testimony of non-experts who were permitted to give their opinions concerning the sufficiency of the fence in question. It is maintained by the defendant that the witnesses should have been restricted in their testimony to statements of facts concerning the condition of the fence; and that to the jury should have been left the determination of the sufficiency of the fence, upon the facts so testified to, unaided by the mere opinions of the witnesses upon that subject.

The question presented for our determination is whether the present case comes within any of the exceptions to the general rule that witnesses must testify to facts and not opinions. An examination of some leading cases upon this question will show that there is no iron rule by which it maybe determined when mere opinions of witnesses will be received, as evidence, but that it depends chiefly upon the peculiar subject of investigation and the circumstances of each case. In Crane v. Northfield, 33 Verm. 126, a witness was asked his opinion whether a certain bridge or culvert was safe and sufficient. The question was excluded. Poland, J., says : “ This was the very question that the jury were to try and decide, and it does not appear to us that there could be any difficulty in having the condition of the culvert so described to the jury by the witness that they would be just as capable of exercising their judgments and forming a correct opinion as the witness himself.”

Commonwealth v. Sturtivant, 117 Mass. 122, is a leading case in this country, upon the authority of which' it is maintained that the opinions of witnesses may be received as evidence. In this case a witness familiar with blood, who had examined, with a lens, a blood stain on a coat, when it was fresh, and who testified to its appearance at the time ho examined it, and that it was not in the same condition at the trial, was permitted to testify- that its appearance when he examined it indicated the direction from which it came, and that it came from below upward, although he had never experimented with blood or other fluids in this respect. It was held that the testimony was properly admitted. Endicott, J., says : The exception to the general rule that witnesses can not give opinions, is not confined to the evidence of experts testifying on subjects requiring special knowledge, skill, or learning; but includes the evidence of common observers, testifying to the results of their observation made at the time in regard to common appearances or facts, and a condition of things which can not be reproduced and made palpable to a jury. Such evidence has been said to be competent from necessity, on the same ground as the testimony of experts, as the only method of proving certain facts essential to the proper administration of justice.” It was assumed in this case that the subject-matter of the testimony could not be reproduced or described to the jury as it appeared to the witness at the time.

In Bliss v. Wilbraham, 8 Allen, 564, it was held that the opinion of a witness concerning the safety and general condition of a bridge was properly excluded.

In Montgomery v. Scott, 34 Wis. 345, one of the issues was whether the road in question was defective at the time of the injury. The opinion of a witness was asked whether the road was in a good, passable condition. Cole, J., says: “ It is very obvious that the question was properly excluded, since it was calling for the opinion of the witness upon the very issue which the jury were to determine, and where such opinion was not admissible. If the witness knew any facts relating to the condition of the road, he should have stated them and left the jury to draw their own conclusions from these facts. . . . .From the nature of the case the jury were quite as competent to form a judgment as to the sufficiency or insufficiency of the highway from facts submitted on that subject, as the witness could be; and it is very apparent that this was the issue they were to try and determine.”

In Kelley v. Fond Du Lac, 31 Wis. 179, the safety of a highway was in issue. A witness was permitted to testify to his opinion concerning its safety. This was held to be error ; and that he could testify only to facts, from which the jury were to determine whether the road was safe.

This case was followed and approved in Griffin v. Willow, 43 Wis. 509.

In Veerhusen v. Railway Co., 53 Wis. 689, it was held that the mere opinion of a witness upon the question whether a certain bank of earth between defendant’s track, and land occupied by the plaintiff was “ as good a protection against cattle as a fence four and a half feet high,” was inadmissible. Orton, J., says : “ An objection to this question was properly sustained. It asks for the mere opinion of the witness upon a matter concerning which, with the same knowledge of the facts, the opinion of any one else would have as much weight; and the jury should not be influenced by the opinion of anyone who is not more competent to form one than themselves; and they should be left free to form their own opinion after hearing all of the evidence. To extend expert testimony so far would include almost any thing which is the subject of common observation.”

In Enright v. S. & S. R. R. Co., 33 Cal. 230, the principal issue was the sufficiency of a fence to turn stock. It was held: “ The opinion of experts is not admissible on the question of the sufficiency of a fence to turn cattle.” Schaffer, J., says: The facts were to be testified to by the witness; but the question of sufficiency was with tho jury, and not the witness. . . . The habits and instincts of domestic animals, and the kind of fence necessary to restrain them, are so far matters of general observation and experience ^that a jury, coming from the body of a county, may be relied on to deal with questions like the one in hand with all desirable accuracy, though unaided by the opinion of persons claimed to be experts.”

In Sowers v. Dukes, 8 Minn. 28, it was held that: “ The opinions of a witness can not be received as evidence, except where the question is one of science or skill, or has reference to some subject upon which the jury are supposed not to have the same degree of knowledge with the witness.”

The issues in that ease involved the sufficiency of a fence to turn stock. A witness was asked the question: “ Was-the fence a proper fence to turn stock, and could they easily •put their heads through between fence and rider? ”

Atwater, J., delivering the opinion, says: “We think the objection was well taken, and the question should have been excluded. ... In this case the question was not one involving or requiring science or skill to arrive at a just conclusion, nor can there be any presumption that the jury were not as competent judges as to what fence was. sufficient to turn stock as the witness. It does not appear that he had any peculiar sources or means of knowledge on the subject, which are not to be presumed equally within the reach of the jury. The jury are to form opinions ; the witness to state facts. The height of the fence, the materials of which it was composed, its condition as to stability, soundess, etc., might all be very pertinent facts to be stated to the jury, upon which to base their judgment as to the sufficiency of the fence to turn stock, or whether it was in compliance with the contract. But the defendant was entitled to the judgment of the jury on the sufficiency of the -fence, and that judgment could not rightfully be aided by the mere opinions of a witness, who, as far as appears, had no means of information beyond their own.”

Coming to the adjudications of this court, a thoughtful examination will show them to be in entire harmony with the rule of the cases cited.

Clark v. The State, 12 Ohio, 483, was one of the pioneer cases holding that on questions of insanity, witnesses, other than professional men, may state their opinions, in connection with the facts on which they are founded.

In that ease, Birchard, J., says: “A careful daily observer of a person feigning madness would witness innumerable acts, motions, and expressions of countenance, which, with the attending incidents and circumstances, conclusively satisfying him of the fictitious character of the malady, but which he could never communicate to a jury or a scientific man, so as to give them a fair conception of their real importance.”

In The Steamboat Clipper v. Logan, 18 Ohio, 375, it was held that one conversant with steamboats, as master, engineer, and builder, having examined a boat injured on the Ohio river, may state in connection with the facts, his opinion as to the direction from which the boat was struck, at the moment of contact. Also that any such person, having examined the injured boat, may describe her condition, and say whether, in his opinion, she is worth repairing.

Spalding, J., says: “ With the fullest description of the nature and extent of the injury, the triers of the case, farmers and mechanics, perhaps, ignorant of such matters, would be liable to err in their estimate of the damages, from a supposition that the wreck was susceptible of being repaired and put to use for purposes of commerce. The opinion of one conversant with steam navigation, and who had examined the shattered vessel, was necessary to instruct the minds of the jury and enable them to arrive at a correct conclusion upon that subject.”

A case relied upon to sustain the admissibility of the opinions of witnesses in such cases, is Stewart v. The State, 19 Ohio, 302. In that case it was held to be competent for the .defendant to ask a witness who had seen the transaction (a homicide) whether, when the deceased rushed on him, there was time enough for him to escape, and get out of the way before the deceased rushed on him.

Caldwell, J., says: “It is true, as a general rule, that the opinion of a witness can not be given — the witness relating the facts from which the jury form their opinion. The rule, however, is not universal. The fact here sought to be proved, to wit, that the defendant could not avoid the conflict, could not be well proved to a jury by a statement of facts. . . A variety of circumstances that could only be perceived, but not detailed, would constitute the aggregate from which the opinion would be formed.” See State v. Rhoads, 29 Ohio St. 171, where this case is distinguished.

In Protection Ins. Co. v. Harmer, 2 Ohio St. 456, Ranney, J., commenting upon apparently conflicting holdings of other courts on this question, says: “In this conflict of opinion, there is no resource left but to return to the principle upon which such evidence is ever received. .The general rule certainly is, that facts only can be given in evidence, and the necessary and natural deduction from them must be made by the jury. In every thing pertaining to the ordinary and common knowledge of mankind, jurors are supposed to be competent, and, indeed, peculiarly qualified to determine the experienced connection between cause and effect, and to draw the proper conclusion from the facts before them. ... If the answer can be given from ordinary experience and knowledge, the jury must respond to it unaided; if the effects of such a cause are only known to persons of skill, and are to be determined only by the application of some principle of science or art, such persons may give the results of their own investigation and experience to the jury in the way of opinions, the better to enable them to come to a Correct conclusion.”

In. The Stillwater Turnpike Co. v. Coover, 26 Ohio St. 520, it was held that in an action againát a turnpike company for injuries occasioned, to the plaintiff,-by falling into a hole or excavation in its road, it Í3 not competent for witnesses to give their opinions as to whether the place in question was dangerous.

Welch, C. J., says : “ Whetherjhat place in the road was dangerous was a question for the jury, and not for the witnesses. It was not a question of science or art, nor was it one where the jury could not be put in possession of all the facts necessary to its decision. The witnesses should have been confined to a statement of these facts, and their opinions should have been rejected.”

The witnesses in this case were said to be in no sense adepts, and importance seems to be given to this consideration by the Chief Justice in his opinion.

These eases are in entire harmony with the numerous cases relied upon to support the testimony given below, which hold that the opinions of non-experts, who state, so far as is practicable, the facts on which their opinions are grounded, will be received on questions of identity as applied to persons, things, animals, or handwriting; and of the size, color, and weight of objects; of time and distances ; of the mental state or condition of another; of insanity and intoxication; of the affection of one for another; of the physical condition of another as to health or sickness (in which latter case, however, the opinion of a non-expert will not be heard upon the particular disease or cause thereof) ; of values; of' the soundness of animals; and of all subjects whére it is not practicable nor possible to put the jury in possession of all the primary facts upon which the opinions of the witnesses are grounded. Commonwealth v. Sturtevant, supra; 1 Wharton’s Evidence, §§ 436, 513; 1 Greenlf. Ev., § 440, and cases there cited.

Eor a witness to undertake to place before a jury all the facts and symptoms from which he had formed the opinion that a person was angry, drunk, sick, in love, or insane, would be to abandon himself to a hopeless attempt at mimicry and undignified descriptions and imitations, as ludicrous as they would be vain and unprofitable. This serves to illustraie tlie neeesssity of the exception to the rule.

It has too frequently been assumed, both by judges and text-writers, that there is a sharp conflict of opinions and adjudications upon this subject. On the contrary, a thorough and careful review of the authorities has satisfied the writer of • the present opinion that there is marked uniformity in the views expressed by authors and judges concerning the general principles which underlie this whole subject; the apparent conflict of opinion arises rather in the application of these principles to the particular cases under consideration.

A few general propositions are submitted, which, it is believed, fairly reflect the current of authority on the subject of the admissibility of the opinions of witnesses as evidence.

1. That witnesses shall testify to facts and not opinions is the general rule.

2. Exceptions to this rule have been found to be, in some cases, necessary to the due administration of justice.

3. "Witnesses shown to be learned, skilled, or experienced in a particular art, science* trade, or business, may, in a proper case, give their opinions upon a given state of facts. This exception is limited to experts.

4. In matters more within the common observation and experience of men, non-experts may,.in cases where it is not practicable to place before the jury all the primary facts upon which they are founded, state their opinions from such facts, where such opinions involve conclusions material to the subject of inquiry.

5. In such eases the witnesses are required, so far as may be, to state the primary facts which support their .opinions.

6. Where it is practicable to place palpably before the jury the facts supporting their opinions, the witnesses should be restricted in their testimony to such facts, and the jurors left to form their opinions from these facts, unaided by the mere opinions of the witnesses. .

7. As the warrant for the admission of the opinions of witnesses as evidence is found in some exception to the general and very salutary rule which requires that only facts be stated to the jury, it is the duty of a reviewing court to see that the admission of mere opinions as evidence was -within some one of the established exceptions to such general rule; and where it does not appear upon the whole record but that the jury was equally capable with the witnesses of forming an opinion from the facts stated, it is error to admit in evidence the opinions of witnesses.

In the present case many of the witnesses did not show 'themselves possessed of any peculiar knowledge of, nor means of forming a judgment concerning, the fence in question, or the habits of domestic animals. Testimony was admitted of mere opinions, unaccompanied by a statement of any of the facts upon which they were founded. The subject of the testimony was a board fence. So far a3 the record discloses, it was capable of such description as to height, kind of materials, manner of construction, stability, or otherwise, as would enable a jury to form an intelligent j udgment as to its sufficiency to turn stock. For any thing that appears in the record, the jurors were as familiar with the habits of domestic animals, and as capable of forming opinions as to the sufficiency of the fence to turn stock, as the witnesses themselves.

The witnesses should have been restricted in their testimony to the facts, and the jury left free to form an opinion upon them, uninfluenced by the mere opinions of witnesses.

It must not be supposed that there is any rule of evidence concerning the opinions of witnesses which is peculiar to fences, highways, bridges, or steamboats, or to any other special subjects of investigation. Where the facts concerning their condition can not be made palpable to the jurors so that their means of forming opinions are practically equal to those of the witnesses, opinions of such witnesses may be received, accompanied by such facts supporting them as they may be able to place intelligently before the jury.

For the error above indicated, the judgments below a.re re~ versed and a new trial ordered.


source: Caselaw Access Project

author: Johnson, J. McIlvaine, C. J.,

license: Public Domain

text:
    Osborn v. McClelland.

      Revised Statutes, sections 3171, 3172, 4993, 4994, 4995, and 5006 — Parties— Proper party plaintiff in action on negotiable instrument — Right of real owner of note to intervene — Right to foreclose mortgage securing note transferred after maturity by person not having title, as against real owner — Estoppel of real owner to assert ownership.

    1. Sections 3171 and 3172 of the Revised Statutes, -which define what instruments are negotiable, and provide that the indorsee or holder thereof may maintain an action thereon in his own name, must, in determining who is the proper party plaintiff, be construed in connection with section 4993 of the Revised Statutes (formerly section 26 of the Code of Civil Procedure), which requires actions to be prosecuted in the name of the real party in interest, except as provided in sections 4994 and 4995.
    2. Section 4993 requires that all actions must he Ijrought in the name of the real party in interest, unless in the excepted oases named in sections 4994 and 4995; and this applies as well to negotiable paper as to choses in action, unless the indorsee or holder is protected under the rules of commercial law, by which, if he he such indorsee or holder before due, in good faith, and for valuable consideration, h.e takes the same free from all equities.
    3. Therefore, if such indorsee or holder, who is not thus protected, sues to recover thereon, it is a good defense for the maker to show that he is not the real party in interest, unless he is authorized to sue under sections 4994 or 4995.
    4. So the real owner may intervene, and, by cross-petition, obtain the relief to which he is entitled, as against the indorsee or holder, who is the apparent owner.
    5. In ease of the blank indorsement of negotiable paper, the indorsee, who is in possession thereof, is prima facie the owner, and entitled to sue thereon, but this presumption may he rebutted and the rights of the real owner established.
    6. In this respect the civil code adopts the former rule in equity, which allows all parties interested in the controversy adversely to the prima facie owner, or who are necessary to a complete determination or settle* inent of tbe question involved to be made defendants. (Revised Statutes, section 5006.)
    7. O., for value received, made and delivered to F. her negotiable note, payable to the order of F. in five years, secured by mortgage. Two years before the same became due, F., without consideration, and solely for the accommodation of B. & S., bankers, loaned the same temporarily to them, to enable them to use the same as collaterals for a loan to meet a present emergency, B. & S. promising to safely keep and return them. B. & S. did not use them, but they were suffered to remain in their custody until after the note became due, when S., survivor of B. & S., without the knowledge of F., or without authority from her, hypothecated them to M.by delivery, merely saying the note would be paid. M. took the same in good faith and for full value, but without inquiry, guaranty, • or indorsement by S., relying solely on his possession and the blank indorsement of F. that S. was the owner. Held, that M. having acquired the note after due and without inquiry acquired no better title than S. had, and as S. had neither title nor interest which was good against F., he transferred none to M. that in equity gave him the right to foreclose the mortgage as against the real owner.
    8. Neither is F. estopped by her acts from asserting her ownership. Combes v. Chandler, 33 Ohio St., 178, distinguished.
    Error to the District Court of Eranklin county.
    The action in the common pleas was brought by McClelland against Mrs. Osborn and others to foreclose a mortgage, made by her to her daughter, Jennie L. Eaxon, to secure the following note:
    “ 5,000. Columbus, O., March 30,1874.
    “ Three years after date, I promise to pay to the order of Jennie L. Eaxon, the sum of five thousand dollars, with interest from date, payable annually, for value received.
    “ Secured by mortgage. Emelins L. Osborn.”

      Indorsements.

    “ May 12. Interest paid on within note for one year, three'hundred dollars ($300).
    “Interest for one year paid on within note. Three hundred dollars. Jennie D. Eaxon.”
    The petition alleges that long before the maturity of the note, the payee, Mrs. Faxon, indorsed and delivered said note, and with it delivered the mortgage made to secure the same to Bartlit & Smith, bankers, then doing business in Columbus.
    ■Bartlit died subsequently, and David S. Gray, his executor, and with the surviving partner, Smith, are made defendants.
    It is averred that Smith, as such survivor, retained possession of this note and mortgage as assets of Bartlit & Smith, and on April 5, 1877 (which was after the maturity of the note), hypothecated the same and the mortgage to plaintiff, to secure the return of $4,000 railroad bonds then loaned to Smith on the faith of the delivery of this note and mortgage.
    It is alleged that the plaintiff acted in good faith, and in the full belief that Smith was the owner thereof, and had full power to thus dispose of the same. Smith failed to return the railroad bonds which were of the value of over $5,000, which the plaintiff claims he is entitled to have paid to him from the amount due on the note and mortgage.
    For that purpose he asks a foreclosure of the mortgage, a sale of the land, and from the proceeds, the value of the bonds loaned and not returned by Smith be paid to him, and also for general relief. No specific relief is-sought against Jennie L. Faxon, as indorser, nor against Bartlit & Smith, nor Smith, as survivor.
    Jennie L. Faxon answers, denying that plaintiff was the .owner of said note and mortgage, or that they ever -were assets of Bartlit & Smith, or that plaintiff received the same in good faith, or in the belief that Smith was the owner or authorized to hypothecate them, or that plaintiff acquired any right to or ownership of said note and mortgage.
    As a second defense and counterclaim, she says: “ 2. For her second defense to said amended petition, said Jennie L. Faxon, defendant, says that being the owner and holder of said promissory note and mortgage, as her separate property (she being a married woman), on or about April 20, 1875, for the accommodation solely of the firm of Bart-lit & Smith, bankers, of the city of Columbus? Ohio, and for no other consideration whatever, she loaned said firm, and indorsed and transferred to it, said note and mortgage, such accommodation and loan, by the terms thereof, to continue for a period not exceeding thirty days from said date; that when said period elapsed, all right, title, and authority on the part of said firm to hold or use said instruments for any of the purposes connected with said accommodation or loan, ceased and determined, and have ever since so remained; that on or about April 5, 1877, after said promissory note, had become clue and paj-able, Benjamin E. Smith having obtained possession of said note and mortgage and then holding the same, without value or consideration moving from him or from any other person, corporation, or firm, to said Jennie L. Eaxon, or any other therefor, without having received the same directly or otherwise, from any bona fide holder, for value, before due, without the knowledge or consent of the defendant, the payee thereof, and without authority, power, or right from her in any form, transferred the same to said plaintiff, and that she was at the date of said transfer, and has ever since, remained the sole and exclusive owner of said note and mortgage.
    “Whereupon this defendant prays that upon the final hearing of this cause, said plaintiff may, by the decree and order of this court, be required to deliver and surrender to her the note and mortgage aforesaid, and that she may have all other relief necessary and proper in the premises.”
    Mrs. Osborn, the maker of said note and mortgage, makes separate defense, the same in effect as Mrs. Eaxon, and claiming she is not answerable to plaintiff) but to Mrs, Eaxon, who is the real owner.
    Gray, as executor of Bartlit, answers that the firm of Bartlit & Smith was dissolved by the death of Bartlit, March 15, 1876; denies that Bartlit & Smith acquired said note and mortgage, or that the same were assets of said firm, or that Smith, as survivor, had any authority to carry on the business after Bartlit’s death, or was authorized to bind the firm, except as survivor to wind the same up.
    Plaintiff replied to the answers of Mrs. Faxon and Mrs. Osborn, denying the new matter.
    The issue presented was: Is the plaintiff the owner of said note and mortgage, and entitled to the proceeds thereof, under his contract of hypothecation by Smith to secure the return of railroad bonds loaned by him to Smith ?
    The case was héard upon said issue, which was found for the defendants. On appeal to the district court, judgment was rendered for the plaintiff', finding the value of the railroad bonds loaned to Smith which he failed to return, the amount due on the note from Mrs. Osborn, and ordering the sale of the mortgaged property, the proceeds thereof, as far as necessary, to be applied to reimburse the plaintiff for the value of the bonds converted by Smith to his own use, and the residue, if .any, to be paid to Mrs. Faxon.
    A motion for a new trial was made by defendants, on the ground that the judgment was contrary to the law and the evidence, and a bill of exceptions taken, which contains all the evidence in the case.
    The petition in error herein was filed prior to the act of April 18,1883 (80 Ohio L. 169), which relieves this court from the duty of reviewing the evidence. Hence this case is before the court as well upon the evidence as upon the law. As there is no substantial conflict in the evidence, the facts proved will be. stated in the opinion of the court.

      J. T. Holmes, for plaintiffs in error.
    McClelland acquired the paper after it was due, and took and holds it subject to all the equities and defenses available against Smith. As to past-due paper, the indorsee takes only the title of his assignor. 1 Par. N. & B. 274, 275; 2 Par. N. & B. 29; Chit. Bills, 245 ; 3 Kent’s Com. *92; Story’s Prom. Notes, § 178; 1 Dan. Neg. Inst. (1st ed.), § 782; Britton v. Bishop, 11 Vt. 70 ; Griswold v. Davis, 81 Vt. 390; Farrington v. The Park Bank, 39 Barb. 645; Newell v. Gregg, 51 Barb. 263; Howell v. Crane, 12 La. An. 126; Cook v. Larkin, 19 La. An. 507; Henderson v. Case, 81 La. An. 215; Chalmers v. Lanion, 1 Campb. 383; Tinson v. Francis, 1 Campb. 19; Brown v. Davies, 3 T. R. 80; Charles v. Marsden, 1 Taunt. 224; Crossley v. Ham, 13 East, 498; Verley v. Saunders, 2 Chitty, 127; Down v. Halling, 6 D. & R. 455; Odiorne v. Howard, 10 N. H. 343; Chester v. Dorr, 41 N. Y. 279; Cummings v. Little, 45 Me. 183; Vinton v. King, 4 Allen, 562; Whitwell v. Crehore, 8 La. 540; Fossitt v. Bell, 4 McLean, 427; Coghlin v. May, 17 Cal. 515; Battle v. Weems, 44 Ala. 105; Paine v. Cen. Vt R. Co., 14 Fed. Rep. 269; Bower v. Hastings, 36 Pa. St. 285; Hoffman v. Foster, 43 Pa. St. 137; Marsh v. Marshall, 53 Pa. St. 396; Kellogg v. Scknaake, 56 Mo. 136; Riegel v. Cunningham, 9 Phil. (Pa.) 177; Kittle v. De Lamater, 3 Neb. 325 ; Goodson v. Johnson, 35 Texas, 622; Fisher v. Leland, 4 Cush. 456; Hart v. Stickney, 41 Wis. 630; McKim v. King, 58 Md. 502; Roxborough v. Messick, 6 Ohio St. 448; McKesson v. Stanberry, 3 Ohio St. 156; Seymour v. Leyman, 10 Ohio St. 283; Bassett v. Avery, 15 Ohio St. 299; Pitts v. Fogelsong, 37 Ohio St. 676 ; Baker v. Kinsey, 41 Ohio St. 403.
    McClelland claims .to be the owner of negotiable paper, indorsed in blank by the payee before due, and transferred to him by delivery, merely, after due. He does not ask judgment on this paper against anybody in his amended petition. He alleges that he is the owner of the mortgage, which is not negotiable paper, and seeks its foreclosure. His ownership of both note and mortgage is put in issue by denial. He shows no assignment of the mortgage to himself.
    By becoming the owner of the note for value, bona fide, before due, he would, without an assignment of the mortgage, have acquired the equitable title thereto, and have been entitled to enforce the same. Paine v. French, 4 Ohio, 318 ; Allen v. The Bank, 23 Ohio St. 97; Woodruff v. King, 47 Wis.- 261.
    He stands now on the mortgage — a non-negotiable security — confessedly acquired after due from one who did not own it, who paid no consideration for it, and who fraudulently transferred it to him.
    “The transfer of a negotiable promissory note, secured by mortgage on real estate, to a bona fide indorsee, does not entitle the holder to foreclose the mortgage when it appears that both note and mortgage were obtained by fraud.” Baily v. Smith, 14 Ohio St. 396.
    Bartlit & Smith, after the expiration of thirty days from the time they borrowed the paper, by the terms of the contract, ceased to have any power to sell or pledge, and became simple bailees. Smith, as surviving partner, was simply a bailee. The note had never been indorsed or transferred to Smith, as an individual, for any purpose whatever. His negotiation or transfer of it was fraudulent for want of title.
    The mortgage was non-negotiable, and its transfer, in any way, was subject to equities and defenses.
    The transferee was bound to take Dotice of the dishonor ■of the note and the non-negotiability of the mortgage, and the title he acquired to each was such as his transferrer held — no better. ■
    The doctrine that,where one of two innocent persons must suffer by the fraud of a third person, he who trusted the third person and placed the means in his hands to commit the wrong must bear the loss, has no application. Foley v. Smith, 6 Wall. 492.

      Lorenzo English, for defendant in error.
    By force of the statutes of Ohio, negotiable paper, negotiated after maturity, is subject to the same defenses which can be made in an action by the assignee of non-negotiable paper. In this respect negotiable paper, negotiated after maturity, and non-negotiable paper, are governed, and the rights of parties measured, by the same rules. Such I assume to be the law independent of statute.
    The note is a negotiable instrument, and bears upon it the blank indorsement of the payee. The mortgage is an incident of the note, and its title passes with it. Woodruff v. King, 47 Wis. 261.
    The title to negotiable paper, indorsed in blank, passes by delivery; and this is so before and after due. Miller v. F. & M. Bank, 30 Md. 393; Springer v. Dwyer, 58 Barb. 189 ; Lamb v. Matthews, 41 Vt. 42; 2 Par. N. & B. 19; Palmer v. Nassau Bank, 78 Ill. 380; Miller v. Henry, 54 Ala. 120.
    The indorsement being admitted to be genuine, it is not competent for the plaintiffs in error to deny that McClelland is the owner and holder of the note. Way v. Richardson, 3 Gray, 412; Red. & Big. Cas. B. & N. 220-272.
    The indorsement being made before maturity, a purchaser of negotiable paper in the ordinary course of business, and for a valuable consideration, without notice of facts which would impeach its validity between the antetecedent parties, holds the title unaffected by these facts. Swift v. Tyson, 16 Pet. 1. And see McKesson v. Stanberry, 3 Ohio St. 156; Bassett v. Avery, 15 Ohio St. 299; 2 Par. N. & B. 27, 29; Morris v. Preston, 93 Ill. 215; Eversole v. Maull, 50 Md. 95.
    If the first indorsee takes negotiable paper while current, the title of his indorsee will not be affected by the fact that he acquired title after the same became due. Lickbarrow v. Mason, 2 T. R. 63, 71; Robinson v. Reynolds, 2 Q. B. 196, 211; Bassett v. Avery, 15 Ohio St., supra; Peabody v. Rees, 18 Iowa, 571; Woodman v. Churchill, 52 Me. 58.
    And the bona fide holder of negotiable paper is not affected by any knowledge obtained after his title becomes perfected. Hoge v. Lansing, 35 N. Y. 136.
    If one by his acts, silence, or negligence misleads another, he must bear the loss if the immediate party suffer. Mahan v. Dubuclet, 27 La. An. 45.
    Mrs. Faxon is estopped, as against McClelland, to set up her pretended claim of title. In Combes v. Chandler, 33 Ohio St. 178, the doctrine and law of estoppel is applied to non-negotiable paper. For a much stronger reason, it must apply to negotiable paper and to over-due negotiable paper which has been indorsed and delivered by the payee before due. Pom. Rem., §§ 160, 161; McNeil v. The Tenth Nat. Bank, 46 N. Y. 325; Blair v. Waite, 69 N. Y. 113; Cherry v. Frost, 21 Am. Law Reg. 57.
    By the application of the doctrine of bailments to the facts of the case, the legal result is the same. International Bank v. German Bank, 71 Mo. 183; Edw. Bail., §§ 139, 306.

      Baily v. Smith, 14 Ohio St. 396, has no application, because the note and mortgage were not obtained by fraud either by the original payee and mortgagee, Bartlit & Smith, or by McClelland.
   Johnson, J.

The evidence establishes the following facts :

1. The note and mortgage in controversy were the separate property of Jennie L. Faxon, given to her by her mother, Mrs. Osborn, in payment of a legacy from her father, and was, up to the 20th day of April, 1875, in her sole possession and under her exclusive control.

2. Bartlit & Smith had for many years been engaged in the banking business in the city of Columbus, where the plaintiff, McClelland, as well as Mrs. Osborn and Mrs. Faxon resided; that McClelland since 1861 was a customer and depositor in said bank, and in the habit of transacting banking business with said firm.; that Vm. C. Faxon, the husband of said Jennie L., was the cashier of said bank, intrusted by the firm with the transaction of business of the bank under the general direction of the firm, especially in the absence of Smith.

3. That on the 19th of April, 1875, said Wm. C. Faxon, at the instance of Smith, who expressed a strong desire to raise money to meet some pressing necessity of the bank, informed Smith that his wife owned this note and mortgage, and that he believed he could get her to loan the same to the bank to enable it to get out of its present difficulty; that at the request of Smith he' asked his wife to loan said note to enable it to raise money temporarily, stating to her that they needed funds to help them for a short time, and he assured her the note would be safely returned within thirty days at the farthest. She consented to do so, and the next morning delivered the note, without her indorsement, and the mortgage, to her husband, who on the same day handed the same to Benjamin E. Smith, of the firm of Bartlit & Smith. Soon thereafter, at Smith’s request, Mrs. Eaxon, who was called into the bank for that purpose, indorsed the note iu blank; that in this transaction Eaxon acted entirely for the bank, and not in any sense for his wife.

4. That thereafter, until the 5th of April, 1877, two days after the note became due, it, with the mortgage, remained in the possession of said bank, never having been used for the purpose for which they were borrowed.

5. On the 15th of March, 1876, the firm of Bartlit & Smith was dissolved by the death of Bartlit, leaving Smith as survivor in possession of the property of the firm, with authority as such to settle and wind up its business, but without any authority to continue the business in the firm name. Notwithstanding this he did continue business in such firm name until after the transaction with plaintiff hereinafter stated.

6. That Mrs. Eaxon suffered or permitted said note and mortgage to remain in the possession of said firm and of said Smith, survivor, until after the same became due, but neither said firm nor said Smith, as survivor, had any ownership or interest therein, nor authority to hypothecate them to McClelland, but simply kept the same as the property of Mrs. Eaxon, aud as her bailees.

7. On the 5th of April, 1877, plaintiff, McClelland, being in the bank, was applied to by Eaxon, as cashier, to loan to the bank $4,000 of first Toledo railroad bonds, offering as collateral security this note and mortgage, stating that the note would be paid. McClelland made no inquiry either of Smith or of the cashier, Faxon, or of Mrs. Osborn, the maker, as to title or ownership thereof, but took the same upon observing the blank indorsement of Mrs. Faxon on the note, and delivered the railroad bonds as a loan, supposing the note and mortgage were the property of Bartlit & Smith, and upon the faith and belief that Smith was the owner of the note. It did not appear, nor was there any injuiry as to when, Mrs. Faxon indorsed the note, but the fact was that she had done so April 21, 1875.

8. It appears that on the 21st of July, 1875, Bartlit & Smith executed a receipt for this note, showing that it was to be returned or accounted for to Mrs. Faxon, but as it was never delivered to her, and she had no knowledge of it or its provisions until the first trial of this case, it can not affect her rights, especially as it was not known to McClelland until after he acquired the note. It formed no basis of his action. He took the note upon the evidence alone of Mrs. Faxon’s indorsement and the presumption arising from possession.

As between Bartlit & Smith, or Smith, as survivor, and Mrs. Faxon, they were mere bailees or custodians, with no interest in the note. They borrowed the note temporarily, to be used to tide them over a present emergency. "While it retained the character of commercial paper, they never exercised the right to so use it. After it fell due they did, or rather Smith did so use it. In doing so Smith was guilty of a wrongful conversion. McClelland made no inquiry as to the ownership, but took the same, relying solely on the indorsement of Mrs. Faxon, but in good faith and for value, supposing Smith to be the owner. Smith did not indorse or guarantee the paper, nor was he asked to. No assurance was given, orally or otherwise, that the bank was the owner. Mrs. Faxon had never authorized this transaction, nor did she know of it, or in any way ratify or approve it.

McClelland does not ask for legal relief, but for a foreclosure of the mortgage, basing his right on the ownership of the note, and of the incident equity to the mortgage.

The defense of the maker, Mrs. Osborn, and t'he indorser, Mrs. Eaxon, is that plaintiff is not the owner; that the note is in fact the property of Mrs. Eaxon, and the latter, by cross-petition, asks that it be surrendered with the mortgage to her. It is urged that McClelland, having acquired the note after due, got no better title or right than Bartlit & Smith had. On the other haud, he claims that he acted in good faith upon the strength of the indorsement by the payee, and for value, without notice or knowledge of any equities, and that Mrs. Eaxon is estopped from claiming any thing as against him.

Let it be assumed that this note was negotiable after due, so as to confer upon the indorsee the legal title, and that prima fade he is entitled to recover.

At common law this authorized the indorsee to sue in his own name, and it was no defense to show he was not the owner.

By the code the action must be brought in the name of the real parly in interest, except in cases of express trust, etc. If, therefore, the indorsee is not the real party in interest, nor the trustee of the real owner of a negotiable note, his action may be defeated by showing that some other person is the owner.

As to choses in action assigned, suits at law could only be brought in the name of the assignor for the use of the assignee before the code, but since then the assignee is to be regarded as the holder of the legal title and entitled to sue in his own name, as was always the rule in equity. Allen v. Miller, 11 Ohio St. 374.

The same rule as to proper party plaintiff applies to commercial paper, unless the indorsee is protected as a holder for value acquired in the usual course of business before due.

In Edwards v. Campbell, 23 Barb. 423, which was an action on a note payable to bearer, the plaintiff had possession of the note, and on that ground obtained a judgment, but this judgment was reversed on the ground that he was not the real party in interest.

So in Killmore v. Culver, 24 Barb. 656, the note was paj’able to T. or bearer; the answer denied the plaintiffs ownership, and this defeated the right of the holder to recover.

In City Bank v. Perkins, 29 N. Y. 554, this doctrine was denied, where the defense was interposed by the maker or indorser, the court saying: “As to anything beyond the bona fides of the holder, the defendant v)ho owes the debt has no interest.” It is added, however: “ It will be time enough to determine whether any other person has a better title when such person shall come before the court to claim the bills in question or their proceeds.” That is the exact thing Mrs. Faxon is doing in the case at bar.

. After much conflict upon this point the court of appeals of New York has definitely settled the question in favor of the right of the maker, or other person claiming title to intervene.

Hayes v. Hathorn, 74 N. Y. 486, was an action by the indorsee against the indorser of a negotiable note. He did not deny his liability, but defended on the sole ground that plaintiff' was not the owner, and alleging that another, to whom he had indorsed it, was. In the trial court evidence to prove this defense was excluded on the ground that, as he did not deny his liability, that was a question in which he had no interest, but the court of appeals held, that while possession of negotiable paper indorsed was prima facie evidence of title and ownership, yet a recovery could be defeated by showing that the plaintiff is not the real owner.

Our code, and that of New York, it will be seen, works a radical change in respect to the proper party plaintiff, not only as to non-negotiable, but as to negotiable, paper. In the case at bar Mrs. Osborn, the maker of this note, and Mrs. Faxon, if sued as indorser, might show that the plaintiff is not the real owner of the paper. By parity of reasoning Mrs. Faxon may intervene and assert her ownership.

The decisions which had prevailed before the code in actions at law, which shut out such defenses, are overruled by the mandatory provision that in all actions the suit must be brought in the name of the real party in interest. If the indorsee is a bona fide holder for value of a note acquired before due, he is the real party in interest, and this and all other defenses are excluded, otherwise not.

In Swift v. Ellsworth, 10 Ind. 205, Ellsworth sued on a note made by Swift to one Rowe, and indorsed to plaintiff. The maker of the note, Swift, set up that the note had been indorsed by Rowe, the payee, to secure a debt of Rowe to plaintiff, which debt Rowe had since paid, and therefore the plaintiff is not the owner nor the real party in interest.

The Indiana statute, like ours (Revised Statutes, section 3172), authorized the transferee to maintain an action “ in his own name,” and their code, like ours, requires the suit to be brought in the name of the real party in interest, except in eases of express trust. The court holds that the real party in interest, as was formerly the rule in equity, must bring the action, subject to the exception of express trusts, and persons authorized by the statute, and that if any other than those thus authorized brings the action, an answer showing affirmatively the facts, is a good answer.

Thus it was held that this provision of the code, as to real party in interest, was made to override an express provision of the act relating to negotiable paper, which authorizes the transferee to sue in his own name.

Section 8172 Revised Statutes, which is but a copy of section 2 of the act of 1820 (1 S. & C. 862), authorizes the indorsee of negotiable paper to maintain.an action thereon in his own name to recover the money due on the same in his own name against the maker, drawer, or obligor; and section 3173 allows these parties to set up any defense they may have if such paper be indorsed or delivered after the day it became due. Such right of defense is expressly limited to “the maker, drawer, or acceptor,” and under the decisions prior to the code, the maker, drawer, or acceptor could only in such cases set up equities between the parties to the paper. They could not defend on the ground that the plaintiff'was not the owner of the paper; neither could an indorser or third party, except in equity, intervene and claim the note.

The code changes this by declaring that the suit must, be in the name of the real party in interest, except in cases of express trust, created by statute or by contract. It does not, however, destroy the right of holders of commercial paper acquired in due course, before due, to cut off all defenses, including that of ownership. This exposition furnishes a key that will explain and reconcile many of the decisions seemingly in conflict.

Two questions only remain to be considered : Under the circumstances stated, is McClelland entitled to a foreclosure of the mortgage as a bona fide holder of the note under the rules applicable to commercial paper? and, if not, is Mrs. Faxon by her acts in the premises estopped from asserting her ownership of this note and mortgage?

1. As to McClelland’s rights as the holder of a negotiable note under the rules of the law merchant.

The significant facts in this case are that this note was the property of Mrs..Faxon; that Bartlit & Smith, and the survivor, Smith, were mere bailees for safe keeping; that while they might, before it was due, as apparent owners, have negotiated it to an innocent holder for value, though loaned for a special purpose only, yet they did not do so.

Under the terms of the loan by her they had express authority from her to use it temporarily, but not having' exercised that authority their continued possession was permissive merely and as between her and the bank, without authority to use it. If, in violation of their trust, they had negotiated it to an innocent holder before due, the doctrine that where one of two innocent parties must suffer, the one that so acts as to give rise to the injury, rather than the one who is not to blame, should be the loser, would apply, but this has no application to the purchaser of an after-due negotiable.instrument. In that respect the purchaser takes only the title which his transferrer or indorser had.

“ The holder, in order to acquire a better right and title to the paper than his transferrer, must become possessed of it before it is overdue. For if it were already paid, by the maker, or acceptor, and had been left outstanding, it would be already discharged, and they would not be bound to pay it again to any one who acquired it after the period when payment was due. And if it were not paid at maturity, it is then considered as dishonored; and although still transferable in like manner and form as before, yet the fact of its dishonor, which is apparent upon its face, is equivalent to notice to the holder that he takes it subject to its infirmities, and can acquire no better title than his transferrer. The doctrine applicable to this subject has been admirably stated by Chief Justice Shaw, wdio says:

‘ Where a negotiable note is found in circulation, after it is due, it carries suspicion on the face of it. The question instantly arises, why is it in circulation ? Why is it not paid? Here is something wrong. Therefore, although it does not give the indorsee notice of any specific matter of defense, such as set-off, payment, or fraudulent acquisition, yet it puts him on inquiry ; he takes only such title as the indorser himself has, and subject to any defense which might be made if the suit were brought by the indorser.’”' 1 Daniel on Neg. Inst., § 782.

In Foley v. Smith, 6 Wallace, 492, it was declared to be the rule of law that he who takes an overdue and dishonored note, takes it incumbered with all the equities between the prior parties to it, and a person who takes such a note from one intrusted by the owner with the-collection of it only, can not come upon the mortgage given to secure it, where it will interfere with the rights of the real owner. The facts of this case are so nearly like the present as to leave no legal difference, and the opinion of the court covers all the points arising in this case. We therefore quote at length from it.

Mrs. Smith sold to McHatton a plantation-and took purchase-money notes for $70,000, secured by mortgage on the property. One of these notes was indorsed in blank and left with the Bank of Kentucky for collection before due. The bank, by like indorsement, sent it to a bank in New Orleans to be collected. It was duly protested for nonpayment but .was allowed to remain in the bank at New Orleans for over seven months, when one McKnight, who was the agent of the Rank of Kentucky, took it from the New Orleans bank and sold and delivered it for full value to Eoley & Co. He transferred the note by a public notarial act in writing, by which he professed to assign the note -with all rights and remedies which the Bank of Kentucky might be entitled to as the holder of the note; that is, he did, in a formal manner, do exactly what Eaxon as cashier did in this case when he delivered this note and mortgage to McClelland. When the other purchase-money notes fell due, Mrs. Smith foreclosed the mortgage. The sale did not bring enough to satisfy the notes which she still held. Eoley & Co. intervened and asked that the note which they held and which first fell due might first be paid. The circuit court refused the relief and dismissed this claim. Mr. Justice Miller, after reciting the rule already quoted as to overdue paper, says:

“ Under this rule, the purchaser from the Bank of Kentucky could get no better title than the bank had when it sold. It is conceded that it had no title whatever. The appellants purchased of McKnight, as agent of the Bank of Kentucky, and as the note was not the property of McKnight or of the bank which he represented, appellants must show some authority for the sale from the real owner, or the sale is invalid. Such authority is claimed in argument to result from the possession of the note by McKnight. But if mere possession by the person who.proposes to transfer a note were sufficient authority, there would be no difference, as regards its negotiability, in a note before its maturity and after its protest. The appellants in this case relied upon the public act of transfer by McKnight, and if this was without authority their purchase was void.

“ The principle is invoked by appellants that in case of a loss of this kind, in which one of two innocent persons must suffer, that one should sustain the loss who most trusted the party through whom the loss came. It is a sound principle, and its application to this case does not favor the appellants. If Mrs. Smith trusted the Bank of Kentucky with her note, it was for a purpose which was ended when the note was protested. By indorsing the note she did trust the bank with full power to dispose of it before due, although that was not intended, and she trusted the bank for the return of the money to her, if the money had been paid. This trust the law implied. But her trust ceased, except as to the mere possession of the note as a bailment, after the note was protested. It was the appellants who, with notice of the dishonor of the note, purchased it, who trusted the bank for the title, which it professed to sell. It is to be remembered that the intervention of appellants did not claim a personal judgment against McIIatton or Mrs. Smith on the note, but an appropriation of the proceeds of the sale to the payment of the note held by them.

“As Mrs. Smith is the real owner of the debt due from McHatton, evidenced by the note in the possession of the plaintiff's, there can be no equity in making her substantially pay the note out of the proceeds of the sale, or in postponing her just claim to that of appellants, who are not innocent holders without notice.”

In that case, as in this, the holder relied upon the transfer by the agent of the bank, though in that there was a formal transfer in writing by the agent, while in this the note and mortgage were merely delivered to McClelland, without inquiry, upon the blank indorsement of the payee. There,-as here, the principle was invoked that, where one of two innocent persons must suffer, that one should sustain the loss who most trusted the party through whom the loss came, but it was held that that principle did not favor Eoley & Co.; that while Mrs. Smith did trust the bank so far as to enable it to dispose of it before due, although that was not intended by her, yet this trust ceased, except as to the mere possession of the note as a. bailment, after it was dishonored, and that the purchaser who took it with notice of the dishonor, himself trusted the bank for the title which it professed to sell, and, as Mrs. Smith was the real owner, the purchaser must show some authority for the sale from the real owner, or it is invalid.

In that case, as here, no personal judgment was sought against the maker or Mrs. Smith as indorser, but simply an appropriation of the proceeds arising from the sale of the mortgaged premises to the payment of the note. In a very recent case, Towner v. McClelland, 110 Ill. 542, Foley v. Smith was cited and approved. We quote the syllabus :

“ 1. Where the holder and owner of two notes indorsed in blank, the one overdue and the other not, placed them in the bauds of an agent to receive payment of them only, and the latter sold and delivered them to an innocent purchaser having no notice, in fact, of the agent’s want of authority to negotiate the same, it was held that tb e pureh aser, as to the note past due, was put ou inquiry to ascertain whether the agent had authority to negotiate the same, and took no title as to such note, but as to the note not due the purchaser acquired the legal title.

“ 2. While a purchaser in good faith of a note before its maturity, which is indorsed in blank, acquires the legal title, and may enforce his rights in a court of law, yet if the note is secured by mortgage on real estate, and he resorts to .a court of equity to foreclose the mortgage, that court will let in any defeuse which would have been good against the mortgage in the hands of the mortgagee.

“ 3. A mortgage, not being assignable at law, the assignee takes it subject to equities betweeu the parties; and the fact that he takes the note secured by the mortgage by assignment before maturity, free from all defenses at law, does not protect the mortgage against equitable defenses.

“4. The equitable assignee of a mortgage, to protect his rights against a payment by the mortgagor to the mortgagee, must give the former notice, actual or constructive, of its assignment. He may place the assignment on record, or give notice to tbe mortgagor, and thus protect his equitable rights. If he does neither, a payment of the debt to the mortgagee — and there are no circumstances to put the mortgagor on inquiry as to the fact of the assignment — will satisfy the mortgage and defeat a foreclosure. But such payment to the mortgagee, after the legal transfer of the note before maturity, will not discharge the note, and it may be enforced at law.”

In that case, there were two notes secured by the mortgage, one due and the other not due at the time of the transfer. Both notes had been indorsed in blank for collection only, and were, as in the case at bar, fraudulently sold to one who paid full value. ■

There, as here, the purchaser made no inquiry of the maker of the note and mortgage, or of any one, but relied 'implicitly upon the possession of the note with the blank indorsement of the payee thereon.

Mr. Justice Walker, in delivering the opinion of the court, said the question was, did the purchaser acquire title to these notes, or either of them; .that as to the overdue note he was put upon inquiry,-and having failed to learn whether the agent and custodian had the necessary authority to sell, he must suffer the loss; as to the undue note, being a purchaser in good faith and for value, he could maintain an action thereon at law and collect the same; that the purchaser having in good faith and for a full consideration acquired this undue note, all his rights incident to commercial paper may be enforced in a court of law; but where resort is had to a court of equity by such holder to foreclose the mortgage, the court will let in any defense against the mortgage which would be good against the mortgagee.

It is sufficient for our present purpose to adopt that part of the decision relating to the overdue note, and to hold, as we do, that the purchaser acquired no title thereto. So much of that decision as relates to the undue note, which denies relief upon the mortgage, is but in accord with Bailey v. Smith, 14 Ohio St. 396, which holds that a bona fide indorsee of negotiable paper secured by mortgage is not entitled to foreclose, where it appears that both note and mortgage were obtained by fraud; in other words, the mortgage being a mere chose in action, it is open in the hands of the holder to all equities subsisting against the mortgagee. That case has given rise to some discussion ; but as the case at bar relates to a past due note and the rights of its holder in the mortgage, and as it never was doubted that as to past due paper the indorsee only took the title of his assignor, the doctrine of Bailey v. Smith is not involved. And therefore we hold that as against the real owner McClelland’s equity is inferior to that of Mrs. Faxon; that mere possession after due by Smith did not enable McClelland to acquire any better title than Smith had, which was none at all, and that McClelland, having made no inquiry, was guilty of such laches as to deprive him of the'character of an innocent purchaser.

He, McClelland, took this paper on the faith of what appeared on its face, without any effort to ascertain the facts. He presumed from the mere fact of possession that Smith was the owner, or had authority to confer title.

Such a presumption attaches to paper until dishonored in favor of a bona fide holder, but after dishonor the transferee acquires only the assignor’s title. In a very recent case in Kentucky (Greenwell v. Haydon, 78 Ky. 332), the rule is thus stated: “ Whoever takes a hill or negotiable note after maturity, takes it so far as the title to, and integrity of, the paper is concerned, apon the credit of the person from whom he receives it. He gets whatever right and title that person had and no more.”

McClelland knew that the bank was a collection agency, as well as a dealer in commercial paper, and it is quite as probable, that paper found in the bank after due, was left there for collection merely, as that the bank owned it.

He did not even exact an indorsement or guaranty that it would be paid. This of itself is a suspicions circumstance, and as the bank was not the owner, he acquired no greater title or ownership than it had.

Had the bank been the bona fide holder before maturity, the transferree, who became such after due, bona fide, would have succeeded to the rights of his assignor.

The presumption arising from possession is not a strong one. It is of the slightest nature, and open to be blown away by the slightest breath of suspicion. Daniel on Neg. Inst., § 784a, 785, and cases cited; Beall v. Leverett, 32 Ga. 105; Snyder v. Riley, 6 Pa. St. 164; see also Daniel on Neg. Inst., § 724a, and the numerous cases there cited.

2. Was Mrs. Eaxon estopped?

The claim is that, having indorsed this note before due, and left it with Bartlit & Smith, she clothed them with the indicia of title, and enabled them to negotiate it after due to a holder free from the rights of the real owner.

„ This doctrine, if conceded, abolishes all distinction between the rights acquired before due and after due as to such paper. The settled rule of commercial law is, the indorser, as well as the maker of such paper, can set up his rights and equities against a holder who acquired it after due from one having no interest.

This is the exact point in Foley v. Smith, supra, and the other cases above cited. The Bank of Kentucky, in Foley v. Smith, was clothed with all the indicia of ownership, as in this case, and yet Eoley, who acquired title for value in good faith after due, did so subject to the latent equities of Mrs. Smith.

"W here, however, the owner of choses in action (and dishonored commercial paper is subject to the same rule), by his affirmative act, has conferred apparent title and absolute ownership upon another, upon the faith of which it has been purchased for value, he is estopped from asserting his real title. This distinction is elaborately and ably considered in Pom. Eq. Jur., §§ 698-711, and notes; Pom. Rem., §§ 154-163. Thus the owner of stock, who exeecutes a transfer of the same in blank, with power of attorney authorizing a transfer on the books of the corporation, and places it in the hands of a broker for sale or uses it as collateral, and the holder of this apparent title abuses his trust aud sells it to a bona fide purchaser for value, the owner is said to be estopped to claim the stock as against such holder.

This doctrine is fully and ably discussed, and the cases, especially in New York, where the principle has, in the interest of commerce, been extended beyond reason, as shown by Prof. Pomeroy, as above cited. 'He clearly demonstrates that this principle is not applicable to commercial paper, so as to change or modify the rights and liabilities arising thereon, when the only indicia of title or ownership is derived from a blank indorsement.

Mrs. Eaxon did no act purporting to clothe the bank with absolute ownership after due; nor even before due did she authorize the bank to use this paper, except for a temporary purpose merely. After the death of Bartlit, Smith was clothed with no power to use it at all. While it remained undue, he might, under the rules of commercial law, have sold to a bona fide purchaser for value, and she would have been estopped; yet, as she was the real owner, and after due did no act amounting to an estoppel, the doctrine does not apply.

Mr. Pomeroy conclusively shows that any other rule would estop every debtor, and give to choses in action all the qualities of commercial paper before due.

Combes v. Chandler, 33 Ohio St. 178, following the doctriue of McNeil v. Tenth Nat. Bank, 46 N. Y. 325, held that where the payee delivers non-negotiable notes, payable to himself, to another, in payment for a purchase made, arid the indorsee sells it before due, to a bona fide purchaser for value, the payee can not set up a fraud or failure of consideration of the assignee to defeat the right of such bona fide purchaser. This case goes to the verge; but when the syllabus is read, as it should be, in the light of the facts and the reasoning, it is not an authority against the conclusion reached in this case.

Combes, the payee aud assignor, intended to part with the title and ownership of the paper, for what he then supposed was an adequate consideration. In analogy to the common-law rule applicable to personal property, that when such is the intention, and possession is delivered, a fraudulent vendee may convey absolute ownership on a bona fide purchaser for value, the court held that Combes having intended to, and having in fact conferred the title and absolute ownership of the paper and its possession upon Chandler, he, though a fraudulent vendee, could confer such title and ownership upon Woods, who was a bona fide purchaser. It was held that Combes so acted as to estop himself. He intended that Chandler should take full title and ownership, with power to alien absolutely. Chandler did no more than he was authorized to do by Combes, and the fact that the payee and indorsee afterward discovered that he was swindled, did not give him the right to defend against a bona fide holder, who purchased before due from the fraudulent vendee.

This distinction between the acts of Combes in the above case and of Mrs. Eaxon in the present case is so clear that it requires no comment. Mrs. Eaxon did no act intending to part with her title other than as accommodation indorser. She never intended to authorize Smith to transfer title and ownership to McClelland or any one else. No act of hers is shown that amounts to an estoppel. She was careless in allowing Smith to remain a bailee of the paper, but such bailee can confer no better title than he actually had. Ballard v. Burgett, 40 N. Y. 314. The same doctrine applies to conditional sales, when possession is delivered to the vendee. The vendor is not estopped to set up his title against a bona fide purchaser from the vendee when the conditions have not been complied with, though the owner has clothed the vendee with the indicia of absolute ownership. Sanders v. Keber, 28 Ohio St. 630.

Judgment reversed.

McIlvaine, C. J.,

dissenting. I am constrained to dissent from the judgment in this case. The original action was simply to foreclose a mortgage. The exact question may be thus stated : Is Mrs. Faxon, the payee of the note, estopped from denying McClelland’s title and ownership of the note and mortgage ?

The material facts are as follows: The note is negotiable, and McClelland is a purchaser in good faith and for a valuable consideration, but after maturity. He purchased from Smith, in the usual course of business, who was in possession of the note, duly indorsed by the payee, and of the mortgage given to secure it. Smith was a banker engaged in buying and selling such paper. Mrs. Osborn, the maker of the note, has no defense to its payment to the person entitled to receive the money.

Mrs. Faxon, the payee and owner of the note before its maturity, indorsed and delivered it, with the mortgage, to Smith, of the firm of Bartlit & Smith, bankers, for the purpose of enabling that firm to raise money for their own use for a short period of time, and with the understanding and agreement that the note should be returned by them to the indorser within thirty days. The note and mortgage were not used by Bartlit & Smith. After the time limited for the return of the note to Mrs. Faxon, Bartlit died, but the note and mortgage remained in the possession of Smith, until after maturity, when it was transferred to McClelland, who had no notice of the circumstances of Smith’s possession, or of the fact that he had no title.

I assume for the present that the original action on the mortgage, brought by McClelland against Mrs. Osborn, must be maintained, if an action on the note could be maintained.

Promissory notes made payable to bearer, assigns, or order, are made negotiable by statute, and are alike negotiable after maturity as before maturity. The difference between negotiation before and after maturity is this: If before maturity the indorsee takes it free from defenses unknown to him; if, after maturity, the transferee takes it subject to any defense which the maker could have set up against the original payee. Section 3173 of Revised Statutes.

In this case it is not claimed that the maker has any defense that could be set up against the payee. The matter set up by way of defense by the maker, as well as by the payee (who has been made a party to the suit), is in denial of the plaintiff’s (McClelland’s) ownership of the note and mortgage. This defense would be alike available if the transfer to McClelland had been before maturity, as after maturity. It would be alike available, whether the note were negotiable or non-negotiable.

The law merchant, as it is commonly called, or the statute in regard to negotiable instruments, has no special application in this case. It is a mere question of ownership ; nothing more, nothing less.

The possession of the note, indorsed by the payee, and of the mortgage securing the noto, is prima facie evidence that the holder (McClelland) is the owner of the same. I admit that this prima facie evidence may be rebutted, either by Mrs. Osborn, the maker, or Mrs. Eaxon, the payee; and I further admit that as between Mrs. Eaxon, the payee, and Smith, who received the note and mortgage from Mrs. Eaxon, there was no authority in Smith to transfer the same to McClelland.

But the controversy here is between Mrs. Eaxon and the plaintiff', McClelland. One or the other must suffer from the unauthorized transfer by Smith. Upon which does the law east the loss? If either of these parties were careless, and the loss can be attributed to his or her carelessness, it certainly should be cast on the careless party. Let us see. McClelland found the note and mortgage in the possession of Smith. Their execution by Mrs. Osborn, for a valuable consideration, to Mrs. Eaxon, is admitted. The note was indorsed by Mrs. Eaxon. The genuineness of the note is admitted. Smith, proposed to transfer them to McClelland. His (Smith’s) possession was prima facie evidence of his ownership. McClelland acted on faith that the facts were as they appeared to be. Reasonable prudence did not require him to make inquiry into facts which were not in strict correspondence with appearances.

Who was responsible for the appearances in so far as they were not in conformity to the facts ? I think there can be no doubt as to the answer to this question. Mrs. Eaxon clothed Smith with the indicia of ownership. McClelland was misled by the indorsement of Mrs. Eaxon.

The general indorsement of the note and its delivery, with the mortgage, to Bartlit & Smith, and permitting the same to remain with Smith for a long time thereafter by Mrs. Eaxon, was the act of carelessness and imprudence to which the loss, now to be adjusted, must be directly attributed, and Mrs. Eaxon should be estopped from denying the title and ownership of Smith as against McClelland, who was misled by the indicia of title with which Mrs. Faxon had clothed Smith.

It is said relief by foreclosure of a mortgage may be denied, where an action on the note, to secure which the mortgage was executed, would be maintained under the doctrine of Bailey v. Smith, 14 Ohio St. 396. I have no inclination to dispute the doctrine of that ease, which is, that an infirmity in a negotiable promissory note, which can not be set up against an innocent indorsee before maturity, and for value in an action on the note, may nevertheless prevail against a mortgage given to secure the note. The ground of the decision is, that a mortgage is a mere non-negotiable chose in action, and is not exempt from defenses in the hands of an assignee which could not prevail against the negotiable promissory note, to secure which it was executed, in the hands of an innocent indorsee for value before maturity. I think it is enough to say on this point, that the doctine of Bailey v. Smith can have no application in the case before us.

I admit my inability to reconcile the decision in Foley v. Smith, 6 Wall. 492, with the views above expressed. The question decided in that case, however, is not a federal one, and can not be regarded in the light of authority, which this court is bound to follow, further than the logic of the case commands respect and submission. No one is more ready than myself to acknowledge the exalted character of the court that decided Foley v. Smith, or the distinguished ability of the judge who delivered the opinion, but I must be pardoned for saying that the reasoning of the opinion is not convincing to my mind.

On the other hand, in a recent case decided in this state by the supreme court commission, Combes v. Chandler, 33 Ohio St. 178, the doctrine contended for in this dissenting opinion is maintained by very satisfactory reasoning. The law is thus laid down in the syllabus of the case by a unanimous court: “ A bona fide purchaser for value of a non-negotiable chose in action from one upon whom the owner has, by assignment, conferred the apparent absolute ownership, when the purchase is made upon the faith of such apparent ownership, obtains a valid title as against the real owner, who is estopped from asserting title thereto.”

A distinction is sought to be drawn between Combes’ case and the one at bar, in this, that in Combes’ case it is said in the opinion that the payee, when lie indorsed the notes, intended to part with the title and ownership, while in the case at bar, Mrs. Eaxon, when she indorsed and‘delivered the note, did not intend to part permanently with the title or ownership. This distinction made no difference as to subsequent transferees, who had no knowledge of intention in either case except such as the law implies from the act of indorsement, which was alike in both instances, an indorsement in blank.