Hibernian Bank v. Everman

Citations

• 52 Miss. 500

Syllabus

<p>1. Negotiable Paper : Secret equity in. Purchaser for value without notice.</p> <p>A purchaser of negotiable paper for value, without notice, will not be bound by any secret equity therein in favor of a third person not connected With the legal title to the paper. Where a trustee assigns negotiable paper in violation of the trust, the bona fide assignee will take it free from the trust, whether he bought it before or after maturity, and whether payable in this state or elsewhere. The anti-commercial statutes of this state apply only to defenses between those connected with the legal title, and not to those asserting equities in such paper. The same is true as to that principle of the law-merchant which requires the purchase to be made before maturity.</p> <p>2. Same : Case in judgment.</p> <p>A partner who held notes which, both by law and by contract with his copartner,, ho was bound to apply to the payment of the liabilities of the firm, fraudulently transferred and converted them to his own use. By subsequent transfer they came into possession of the Hibernian Bank. The injured copartner, for himself and the firm creditors, sought to have them applied to the firm liabilities. Held, that, there being nothing on the face of the notes to indicate their fiduciary character, the bank acquired a good title.</p> <p>3. Negotiable Paper : Lis pendens.</p> <p>The doctrine of lis pendens cannot apply to a party purchasing negotiable paper beyond the jurisdiction, even if it applies to a purchase within the state. It is a mere representative of value and has no situs, and unless impounded in the hands of a receiver, or otherwise placed under the control of the court,, an innocent purchaser cannot be affected by notice of the litigation.</p>