Dearman v. Trimmier

Citations

• 26 S.C. 506
• 2 S.E. 501
• 1887 S.C. LEXIS 75

Syllabus

<p>1. The findings of fact by the Circuit Judge from testimony heard by him, and in part conflicting, sustained.</p> <p>2. The distinction pointed out between the commercial rule that protects an innocent indorsee for value of a negotiable instrument before maturity, and the equity rule that protects a bona fide purchaser for valuable consideration without notice.</p> <p>3. Where a party takes by indorsement from the payee a promissory note not due as collateral security for a past duo debt, he is not affected by equities then existing between the maker and the payee.</p> <p>4. And where such a note is secured by a mortgage, which also passed to the indorsee along with the note, the same doctrine would doubtless apply to the mortgage, so long as the note continued to' be a subsisting and active security.</p> <p>5. But after the note is barred by the statute of limitations and the mortgage remains as the only security capable of being enforced in law, the holder can no longer invoke the commercial rule that protected him as indorsee of the note, but must stand upon the equity rule governing purchasers for valuable consideration without notice. Under this rule the holder is not protected from existing equities, where the consideration of his purchase was a past due debt.</p> <p>6. Where a creditor holds a note and a mortgage as securities for the same debt, and has lost his right of action on the note, he may still pursue his remedy on the mortgage, while it subsists; but in such case he must rely wholly upon the mortgage unaffected by any of the incidents which attached to the note.</p> <p>7. A party who sells the land of another without authority is liable for the proceeds of such sale.</p> <p>Only the result concurred in.</p>