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CHICAGO RAILWAY EQPT. CO. V. MERCHANTS' BANK, 136 U. S. 268 (1890)

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U.S. Supreme Court

Chicago Railway Eqpt. Co. v. Merchants' Bank, 136 U.S. 268 (1890)

Chicago Railway Equipment Company v. Merchants' Bank

No. 64

Argued November 4-5, 1889

Decided May 19, 1890

136 U.S. 268

Syllabus

The maker executed in the Illinois and delivered to the promisee a series of notes, one of which was acquired by a bona fide endorsee, and was as follows:

"$5000. Chicago, Ill., January 20, A.D. 1884. For value received, four months after date, the Chicago Railway Equipment Company promise to pay to the order of the Northwestern Manufacturing and Car Company of Stillwater, Minnesota, five thousand dollars at First Nat. Bank of Chicago, Illinois, with interest thereon at the rate of ___ percent per annum, from date until paid. This note is one of a series of twenty-five notes of even date herewith of the sum of five thousand dollars each, and shall become due and payable to the holder on the failure of the maker to pay the principal and interest of any one of the notes of said series, and all of said notes are given for the purchase price of two hundred and fifty railway freight cars manufactured by the payee hereof and sold by said payee to the maker hereof, which cars are numbered from 13,000 to 13,249, inclusive, and marked on the side thereof with the words and letters Blue Line C. & E. I. R. Co., and it is agreed by the maker hereof that the title to said cars shall remain in the said payee until all the notes of said series, both principal and interest, are fully paid, all of said notes being equally and ratably secured on said cars. No. 1. Geo. B. Burrows, Vice-President. Countersigned by E.D. Buffington, Treas."

Held:

(1) That this was a negotiable promissory note according to the statute of Illinois, where it was made, as well as by the general mercantile law.

(2) That its negotiability was not affected by the fact that the title to the cars for which it was given remained in the vendor until all the notes of the same series were fully paid, the title being so chanroblesvirtualawlibrary

Page 136 U. S. 269

retained only by way of security for the payment of the notes, and the agreement for the retention for that purpose being a short form of chattel mortgage.

(3) That its negotiability was not affected by the fact that it might at the option of the holder, and by reason of the default of the maker, become due at a date earlier than that filed.

MR. JUSTICE HARLAN, in the opinion of the Court, stated the case as follows:

This action was brought by the Merchants' National Bank of Chicago against the Chicago Railway Equipment Company, a corporation of Wisconsin, upon two written instruments, one of which is in the words and figures following:

"$5,000 Chicago, Ill., January 20, A.D. 1884"

"For value received, four months after date, the Chicago Railway Equipment Company promise to pay to the order of the Northwestern Manufacturing and Car Company of Stillwater, Minnesota, five thousand dollars each, and shall become due and payable to the holder on the failure of the maker to pay the principal and interest of any one of the notes of said series, and all of said notes are given for the purchase price of two hundred and fifty railway freight cars manufactured by the payee hereof and sold by said payee to the maker hereof, which cars are numbered from 13,000 to 13,249 inclusive, and marked on the side thereof with the words and letters Blue Line C. & E. I. R.R. Co., and it is agreed by the maker hereof that the title to said cars shall remain in the said payee until all the notes of said series, both principal and interest, are fully paid, all of said notes being equally and ratably secured on said cars."

"No. 1 Geo. R. Burrows, Vice President"

"Countersigned by E. D. Buffington, Treasurer."

This writing is endorsed: "Northwestern Manufacturing and Car Co., per J. C. Gorman, Treas." chanroblesvirtualawlibrary

Page 136 U. S. 270

The other instrument bears the same date, and is in all respects similar to the first one. No question is made as to the genuineness of the signatures to these instruments of the vice-president and treasurer of the defendant, nor as to the plaintiff's having paid value for them on maturity. They were declared upon as negotiable promissory notes. In support of the defense, certain evidence was offered that was excluded, and the jury, pursuant to the direction of the court, returned a verdict in favor of the plaintiff for the full amount of the two instruments. 25 F.8d 9. chanroblesvirtualawlibrary

Page 136 U. S. 275





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