R., 4 Ch. App. 688. Cases arise, however, where the suit being against the perpetrators of fraud, or against holders of the stock, with notice that it was fraudulently issued, or with knowledge of such facts and circumstances as legally put them upon inquiry, where the rule is different. Equity in such a case regards the property of the corporation as held in trust for the payment of the debts of the corporation, and recognizes the right of creditors to pursue it in whosesoever possession it may be transferred, unless it has passed into the hands of a bona fide purchaser; and the rule is well settled that stockholders are not entitled to any share of the capital stock, or to any dividend of the profits until all the debts of the corporation are paid. Railroad v. Howard, 7 Wall. 409. Assignees in bankruptcy in such a case represent creditors as well as the bankrupt, and may disaffirm the contract or retain what passed to the bankrupt, and proceed for damages against the perpetrators of the fraud or against subsequent transferees of the stock, with notice that it was fraudulently issued, or with knowledge of such facts and circumstances as legally put them upon inquiry. Decided cases which assert that rule are quite numerous and decisive. Two or three cases of the kind deserve consideration, of which the following is perhaps the most important. Money was owed to the corporation for a subscription to the capital stock, and the debtor and the officers of the company entered into an agreement to extinguish the stock debt, and to convert it into a debt for the loan of money. Bankruptcy of the corporation ensued, and the assignee claimed that the stock debt was due. Mr. Justice Miller gave the opinion, and in replying to the argument that the assignee can assert no greater right than the bankrupt, said: "The assignee is the representative of the creditors as well as the bankrupt. He is appointed by the creditors. The statute is full of authority to him to sue for and recover property, rights and credits, where the bankrupt could not have sustained the action, and to set aside as void transactions by which the bankrupt would be bound. Though it be a doctrine of modern date, we think it now well established that the capital stock of a corporation is a trust fund for the benefit of the general creditors of the corporation." Sawyer v. Hoag, 17 Wall. 619. To the same effect also is the case of Upton v. Tribilcock, where the opinion was given by Mr. Justice Hunt. He decided that the original holder of stock in a corporation is liable for unpaid instalments of stock without an express promise to pay the amount, and that a contract between such a subscriber and the corporation, or its agents, limiting the liability therefor, is void, both as to the creditors of the company and its assignee in bankruptcy; that representations by the agent of a corporation as to the non-assessability of its stock beyond a certain percentage of its value, constitute no defense to the action against the holder of the stock to enforce payment of the entire amount subscribed, where the holder has failed to use due diligence to ascertain the truth or falsity of such representations. 1 Otto, 45; 2 Cent. L. J. 784. Due care and diligence was not exercised by

* *

the purchaser in that case, though the proof was full to the point that he was legally put upon inquiry. Thomas v. Barton, 48 N. Y. 193.

Half a century before these cases were decided, Judge Story held that the capital stock of a corporation was a trust fund for the payment of the debts of the corporation, and that it might be followed into the hands of the stockholders, or of any persons having notice of the trust attached to it. Wood v. Dummer, 3 Mason, 312. Trusts are enforced not only against those persons who are rightfully possessed of the trust property, as trustees, but also against all persons who come into possession of the property bound by the trust, and with notice of the same; and whoever comes so into possession is considered as bound, with respect to that special property, to the execution of the trust. Taylor v. Plumer, 3 Maule & Selw. 574; Adair v. Shaw, 1 Sch. & Lef. 262. Reported cases almost without number lay down the same rule, but those referred to will be sufficient to illustrate the principle. Notice is essential to liability in such a case, and he who alleges notice must prove the allegation. If the shares come in the regular course of business into the hands of a purchaser for a valuable consideration, those who challenge the transaction, says Lord Cairns, must prove that such purchaser had notice of the facts. Hence, the only doubt is whether the certificates came into the hands of the holder without notice. Three other judges, to-wit.: Lord Hatherly, Lord Selborne, and Lord Blackburn, gave opinions, each to the same effect, and the House of Lords, all the judges concurring, held that the party sued as contributor was not liable, inasmuch as he took the shares as paid-up shares without notice that the representation was not true. Burkinshaw v. Nicholls, 26 W. R. 819.

Nothing is alleged in the bill of complaint tending to show that the respondents were participants in the fraud, or that they had notice of the transaction, or knowledge of any facts or circumstances tending to put them upon inquiry; and if there were any such matters alleged in the bill of complaint it could not benefit the complainant, as it is settled law that in such a case the cause of action arose in favor of the complainant when the estate of the bankrupt corporation vested in him as the assignee in bankruptcy.

Where the charter of a bank contained a provision binding the individual property of its stockholders for the ultimate redemption of its bills, in proportion to the number of shares held by the stockholders respectively, the Supreme Court held, that the liability of the stockholder arose when the bank refused or ceased to redeem and became notoriously insolvent. Terry v. Tubman, 2 Otto, 156. Just the same question, with others, was presented to the Supreme Court in a subsequent case, in which the court held, the chief justice giving the opinion, that the liability of the stockholders upon their unpaid subscriptions is that of debtors to the bank, and that all such balances passed to the assignee under the assignment, which, by the bankrupt act, is "of all the property, estate, credits and assets of the bankrupt, whether a corporation or an indi

vidual," and, for all that is shown in the record, the stockholders were liable to suit at any time for the recovery of the balance due from them, as such stockholders. Terry v. Anderson, 5 Otto, 632; Kennedy v. Gibson, 8 Wall. 505; Com. v. Bank, 3 Allen, 42; Baker v. Bank, 9 Met. 182. Apply that rule to the case before the court, and it follows that even if the bill of complaint had charged that the respondents had notice of the fraud, or were put upon inquiry in that regard, it would not have benefitted the complainant, as in that event his claim would have been barred by the two years' limitation of the bankrupt act. Bailey v. Glover, 21 Wall. 342. Purchasers of stock, where it appears upon its face that it was only partially paid up, may be held liable to pay all the unpaid instalments, but the authorities to that effect have no application in this case. Webster v. Upton, 1 Otto, 65; 3 Cent L. J. 402; Upton v. Hansbrough, 3 Biss. 427.

Adjudged cases in which it has been held that creditors or assignees in bankruptcy may enforce such payments, when the corporation would be estopped to do so, are suits against original subscribers or transferees, implicated in some way in the fraudulent transaction. Upton v. Tribilcock, 1 Otto, 45; 2 Cent. L. J. 784. Failure to use due diligence when put upon enquiry was the ground of the decision in that case. Oakes v. Tunquand, L. R. 2 H. L. 325. Whatever remedy for the fraud the assignee had, it is evident he might have pursued at any time after he acquired title to the bankrupt's estate. Ex parte Currie, 7 L. T. (N. s.) 486; Carling's case, L. R., 1 Ch. Div. 124; Alison's case, L. R., 9 Ch. App. 6; De Ruvigne's case, L. R. 5 Ch. Div. 323.

Demurrer sustained; bill of complaint dismissed.

NOTE.-See Phelan v. Hazard, 6 Cent. L. J. 109.

REFORMATION OF THE DEED OF A MARRIED WOMAN.

The article on this subject in the JOURNAL of September 6, 1878, fails to draw a distinction between the power of a court of equity to aid the defective execution of a conveyance by a married woman, or to enforce specific performance of her contract to convey, and the power to reform, or correct a mistake in a conveyance duly executed by her.

The right in any case to invoke the aid of a court of equity in the case of defective execution of instruments, or to enforce specific performance, depends on the existence of a valid contract between the parties. For instance, a court of equity will not decree the specific performance of a contract void under the statute of frauds.

But the right to have an instrument reformed, or to have a mistake corrected, so as to make it speak the truth, has no relation whatever to the validity of the prior contract which led to its execution. It would be no answer to a bill filed against a person sui juris to correct a mistake in a conveyance of land to say that the contract which

the deed was intended to evidence, was by parol, and therefore void under the statute of frauds. If the purpose to be accomplished by the contract and the conveyance in pursuance of it was to violate the law, a different rule would apply.

But there is no essential difference between the qualified or limited disability enforced by the statute of frauds, on persons otherwise sui juris, in making the contracts covered by the statute, and that enlarged disability which inhibits married women from making any valid contracts except in certain specified cases and under prescribed forms.

The deed of a married woman, made and executed in accordance with the laws applicable to her, is a valid contract, through which title passes from her to the vendee, precisely as it does through a conveyance executed by any other person. It may be that no valid contract existed, no title passed, and no equity to have the title conveyed arose in the vendee until the instrument was executed and delivered, pursuant to the requirements of the law; but when all these were done, the deed became a vehicle or channel of title, and as such, that is, in so far as it operates as a conveyance of title, it should have the same operation and effect, and none other, which the law gives to similar instruments executed by other persons.

If the court of equity has no power to correct a mistake in a conveyance against a married woman, because of the invalidity of her precedent contract to convey, it necessarily follows that the court could not correct such a mistake in her favor. Suppose a married woman owned two tracts of land, say the "southeast quarter," which was of great value, aud the "northeast quarter," of little value, and in attempting to convey the latter, "south" should be written for "north," would she have no remedy? Her deed, executed as required by law, and delivered, would certainly pass the title at law to the lands therein described. And if she cannot have mistakes corrected, a court of equity would say to her, "We can only give effect to what you have done, and not to what you and your husband and the vendee intended to do; we must let the vendee take your valuable lands and your homestead in place of the wild lands you and your husband intended to convey, and the vendee intended to purchase."

It seems to me clear that the law is correctly declared by the Supreme Court of Indiana in Hamer v. Medsker, and that the true rule is to give to the contracts of married women, in so far as they are valid under the law applicable to them, the same operation and effect, and, so far as practicable, to attach to them the same incidents in all respects as apply to valid contracts of the same character made by other persons.

ONE of the few instances which have come under our knowledge where the sense of a passage was improved by a typographical error, is found in Barclay's Digest, p. 73, §

70. The author wrote: "In an attachment suit submitted to the court sitting as a jury upon the claim of an interpleader, the court should pursue the provisions of the new code," etc. The printer printed: "In an attachment suit," etc., the court should peruse the provisions of the new code," etc. How much the administration of justice would be improved if this happy advice were followed!

NOTES OF RECENT DECISIONS.

COMPOSITION IN BANKRUPTCY-" ASSEMBLED."— In re Richmond. United States District Court, Northern District of New York, 14 N. Y. Daily Register, 869. Opinion by CHOATE, J. 1. The word "assembled,” in the seventeenth section of the bankruptcy amendment act, approved June 22, 1874, in the clause "and such resolution shall, to be operative, have been passed by a majority in number, and three-fourths in value, of the creditors of the debtor assembled at such meeting either in person or by proxy," includes every creditor who appears at any session of the meeting and proves his debt, although at the time the vote is taken such crediter is not present or represented by proxy. 2. Creditors are not obliged to employ cousel to represent them. and are to be reckoned as voting against the resolutions, unless they indicate by affirmative acts that they intend to withdraw and not to be counted.

COMMON CARRIER-NEGLECT OR REFUSAL TO EXPLAIN HOW Loss OCCURRED RAISES PRESUMPTION OF NEGLIGENCE. - Pennsylvania R. R. v. Miller. Supreme Court of Pennslyvania, 9 Pitts. L. J. 54.-Opinion PER CURIAM. - 1. Where a carriage was shipped by the defendant company from New York to Pittsburgh, and arrived at its destination damaged by fire, and the companty neglected or refused to furnish the consignee owner information as to the manner in which the damage occurred, and, on the trial of the case, he rested upon these facts clearly made out: Held, that the law raised a presumption of negligence in the defendant, which could only be repelled by satisfactory evidence. 2. The evidence given by the defendant must account to the satisfaction of the jury for the fire, and also for the conduct of the defendants towards the plaintiff.

ABSTRACT OF DECISIONS OF SUPREME COURT OF OHIO.

December Term, 1877.

thereon should be forfeited to the company. Held, That the right of the assured to exchange the policy for a paid-up non-forfeiture policy was limited to the time during which the policy was in force. Opinion by WHITE, C. J.—Busing v. Mutual Life Ins. Co. JURORS PPACTICE-DECLARATION-EVIDENCEINSTRUCTION-VERDICT.-1. The right of a defendant, under section 3, chapter 6, of the penal code, (74 Ohio Law, 344) to have ballots drawn from the box to make the number of competent jurors thirty-six, exists only when the deficiency arises from the absence of jurors, or by reason of the grounds of incompetency named in section 2. To supply the place of jurors challenged for other causes, talismen should be called from the by-standers, as provided in section 9, and where the record does not show the ground of challenge, it will not be presumed that the challenge was made for any cause stated in section 2. 2. In a criminal prosecution, where the state offers in evidence against the accused a part of a declaration or conversation, the defendant is entitled to have the whole of such declaration or conversation given to the jury. But there is no rule of law which requires the jury to reconcile the whole, if possible, with the fact of innocence. The whole declaration or conversation, and each part thereof, as well that which tends in his favor as against him, is entitled only to such weight as is fairly due to it in the judgment of the jury. An instruction by the court to the jury, that the state must prove the material elements of the crime beyond a reasonable doubt, fully secures to the defendant the benefit of the legal presumption of his innocence. 4. Upon the trial of an indictment for murder in the first degree, a verdict of guilty of murder in the second degree, without expressly acquitting the defendant of murder in the first degree, is good. Such verdict is equivalent to "not guilty" of the higher degree of the crime charged. Motion overruled. Opinion by MCILVAINE.-Morehead v. State.

ABSTRACT OF DECISIONS OF SUPREME COURT COMMISSION OF OHIO.

December Term, 1877.

[Filed November 19, 1878.]

HON. W. W. JOHNSON, Chief Judge.

AN ORDER, DECISION OR DECREE of the probate court, in a proceeding under the statutes in relation to assignments for the benefit of creditors, is not appealable to the court of common pleas, unless it is of a definitive nature, affecting property rights, and the approval by the probate court of the election of an assignee by the creditors, is not an order, decision or decree of that nature. Judgment of the district court reversed, and judgment of the court of common pleas dismissing the appeal affirmed. Opinion by OKEY, J. Brigel .v Starbuck.

LIFE INSURACE-POLICY-CONDITION.-In a life insurance policy the payment of premiums was to cease after ten years. The policy contained a provision that, after two or more of the annual premiums had been fully paid, the policy might be exchanged for a paidup non-forfeiture policy, for an amount equal to the sum of one-tenth of the amount insured for each premium which has been so paid. A condition of the policy was that, if the amount of any annual premium should not be fully paid on the day and in the manner provided for, the policy should be "null and void and wholly forfeited;" and that in case the policy became null and void, all payments which had been made

PROMISSORY NOTES-DEMAND AND NOTICE.-1. That all the maker's property has been assigned to the endorser for the benefit of all creditors equally, does not dispense with the necessity of demand and notice, when that property is not sufficient to meet all the maker's inabilities. 2. A waiver of demand and notice by the endorser must be by words or acts that clearly show that such was the intention. 3. M was endorser upon a series of notes made by C, who had assigned all his property for the benefit of all his creditors equally to M. After the assignment, M told the banker, holder of the notes, to bring them to him as they matured, and he would pay them or waive protest on them. This was done upon all the notes but the last. At twelve o'clock, of the day this one became due, the bank clerk presented it to M for payment, who said he would not pay it, or waive protest on it, because the signature was not his, but a forgery. Held, the necessity of demand and notice was not dispensed with. Opinion by WRIGHT, J. Judgment of the district court affirmed. Johnson, C. J., and Scott, J., dissented

from last proposition and the judgment.-Second National Bank v. McGuire.

ACTION-FALSE REPRESENTATION-INSTRUCTIONS. 1. One seeking to be relieved from a contract on the ground of alleged false representations, must show that there were in fact false representations of a material fact, upon which he relied and upon which, from the circumstances of the case, he had a right to rely, and, in doing so, was mislead to his injury. 2. An action will lie for a false representation of a material fact, whether the party makes it knew it to be false or not, if, when made, it was done with the intention of inducing the person to whom made to act upon it, and the latter does so, sustaining a damage in consequence. 3. Where an agent of an insurance company makes representations to one having a claim for a loss against the company, the parties standing in antagonistic relations to each other, that the latter had no claim or rights that he could enforce by legal proceedings, such representations are only opinion-representations upon which he had no right to rely; and if he does so rely it must be at his own risk, because the truth or falsehood of such representations could be ascertained by ordinany diligence. 4. The charge to a jury should not only be correct, but be so distinctly adapted to the case made by the proofs, and so explicit as not to be misconstrued or misunderstood by the jury in the application of the law to the facts proven; where, however, the charge, for want of such certainty and explicitness, is calculated to confuse and misleade the jury, that is error for which a judgment may be rewersed. 5. Where, in a charge in relation to false representation upon which a complaining party has a right to rely, the court enumerates as a ground for false representation, upon which the plaintiff might rely, a matter which should not be considered by the jury in that relation; and but for such misdirection the jury might have arrived at a different conclusion, such a charge is erroneous because misleading. 6. A charge requested by defendant consisted of two legal propositions, one sound and the other unsound. A modification to the request, by the court, when applied to the sound proposition, rendered it unsound, and when applied alone to the unsound one, cured the defect in it; and when applied to the request generally, it rendered the whole uncertain and ambigious. Held, error. Charges that are uncertain and ambigious are misleading. Judgment reversed. Opinion by ASHBURN, J.Etna Life Ins. Co. v. Reed.

had completed her term, she claiming that she had been employed for a term of eight months, and was discharged without cause. She recovered in the lower court. Held, on appeal, that she was not entitled to recover. DICKEY, J., says: "This judgment must be reversed. When a teacher is selected and employed, the contract is for the personal services of that teacher. The teacher can not fulfill the contract by biring a substitute. A temporary absence of a short time, with the temporary substitution of another competent teacher, ought not. under certain circumstances, to constitute such a breach of contract. In this case, however, the teacher was requested by Mr. W to resume her personal services." Reversed.-School Directors v. Hudson.

DIVORCE

EVIDENCE TO PROVE ADULTERY.-Proceeding by bill for a divorce on the ground of desertion. Defendant appeared and filed a cross-bill charg ing plaintiff with adultery. Trial by court and judgment for plaintiff. The following instruction was given: "The court further instructs that the charge of adultery is, in law, a charge of a grave and serious character; that while such a charge may be proven by circumstantial evidence, yet to make out a charge of adultery alone the circumstantial evidence must be so connected when taken together as to exclude every other reasonable hypothesis than that of the guilt of the party charged; and if they believe from the testimony in the case that the circumstances relied on to make out the alleged charge of adultery do not exclude every other reasonable presumption than that of the guilt of A, then such circumstantial evidence will not justify a verdict of guilty of the charge of adultery." Held, erroneous. BREESE, J., says; “In a criminal proceeding, which this was not, every reasonable presumption in favor of the innocence of the defendant charged should be indulged. The rule is familiar. The doctriue of this court has uniformly been, in cases of this kind, that a preponderance of evidence suffices to establish the issue. The court might as well have told the jury that they should be satisfied beyond a reasonable doubt of the truth of the charge, for the instruction goes to that extent. The farthest this court has gone, as tending to give support to this instruction, is to be found in the case of Carter v. Carter, 63 Ill. 439, where it was said: 'Wheu immorality or wrong is imputed, it must be established by at least a prepond erance of proof; and when the evidence may as well establish innocence as guilt, the jury should always adopt the former rather than the latter hypothesis."" Reversed.-Chestnut v. Chestnut.

ASSESSMENT-CAPITAL STOCK OF RAILROAD COMPANY.-This was an action by a railroad company to recover an installment of ten per cent. on his subscription of five hundred dollars to the capital stock of that company. Judgment for plaintiff in the court below, and defendant appeals and insists that there was no power in the corporation to make this assessment, and no liability upon him to respond to it, on the ground that the capital stock was fixed at one million dollars, and the shares of stock to be 10,000 of $100 each, and when this call was made on appellant, the sum of one hundred and fifty thousand dollars only had been subscribed. Held, that no power existed in the corporation to make this call, the full amount of capital stock not having been subscribed. BREESE, J., after quoting at length the powers and duties of corporations, as laid down by statute, says: "This question is to be decided by authority. On reference to a leading work on railroads (1 Redfield on Law of Railroads, 176) we find it is there said that it is an essential condition of making calls in these companies when the number of shares and the amount of stock is fixed that the whole stock shall be subscribed before any call can lawfully be made." Reference is made in support of the text

to Stoneham Branch Railroad Co. v. Gould, 2 Gray, 277, in which Chief Justice Shaw uses this emphatic language: "It is a rule of law too well settled to be now questioned that when the capital stock and the number of shares are fixed by the act of incorporation, or by any vote or by-law passed conformably to the act of incorporation, no assessment can be lawfully made on the shares of any subscriber until the whole number of shares has been taken. This was held in 6 Pick. 23; 9 Pick. 187; 6 Cush. 50; 9 Cush. 110." The chief justice says this is no arbitrary rule; it is founded on a plain dictate of justice, and the strict principles regulating the obligation of contracts, When a man subscribes a share to a stock to consist of one thousand shares, in order to carry on some designated enterprise, he binds himself to pay a thousandth part of the cost of such enterprise. If only five thousand are subscribed, and he can have no assurance which he is bound to accept, that the remainder will be taken, he would be held, if liable to assessment, to pay a five hundredth part of the costs of the enterprise, besides incurring the risk of an entire failure of the enterprise itself, and the loss of the amount advanced towards it." See also 45 Me. 525. Reversed.—Allmen v. H. R. & E. R. R. Co.

WHERE A VENDOR OF LAND receives the vendee's bank check for the amount of a cash payment, a withdrawal by the vendee of his funds from the bank before presentatlon of the check, leaving nothing to pay it, is a fraud upon the vendor, and he will retain his equitable lien upon the land for the amount of such check. So held where the vendee's funds were withdrawn about two weeks, and the check presented nearly four weeks after its date. Opinion by ORTON, J.-Madden v. Barnes.

NEW TRIAL WHEN GRANTED WITHOUT TERMS "PERVERSE."-A verdict should be set aside as against the evidence, and a new trial granted, only upon terms that the moving party pay the costs of the former trial, unless the verdict is a perverse one; and an honest verdict, one not apparently influenced by prejudice or passion, though unsupported by a preponderance of the evidence, is not "perverse" within the rule. Opinion by LYON, J.-Pound v. Roan.

CONTRACT OF SALE-ACTION ON COVENANTS.-In case of an ordinary contract of sale of land, with covenants by the purchaser to pay, as well as a provision that, upon default in payment of any installment, the contract shall be determined at the option of the vendor, and all payments forfeited, an action on the covenants for installments overdue will lie before all are due, and the vendor is not confined to the remedy by strict foreclosure; nor need he aver that he has tendered a deed, nor that he is ready and willing to convey on payment of the purchase-money, nor that defendant is in possession. Opinion by TAYLOR, J.— First Nat. Bk. v. Agnew.

SCHOOL LAW-POWER OF TEACHER- RULINGS OF

EDUCATIONAL DEPARTMENT.-1. While the principal or teacher in charge of a public school is subordinate to the school board or board of education of his district or city, and must enforce regulations adopted by it for the government of the school, and execute its lawful orders in that behalf, yet, in matters concerning which the board has remained silent, he has authority as in loco parentis, to enforce obedience to his lawful commands, subordination, civil deportment, respect for the rights of other pupils, and all obligations inherent in every school system and constituting the common law of the school, which every pupil is presumed to know. 2. In a proper case, and where not deprived of the power by affirmative action of the board, such teacher has the inherent power to suspend a pupil from the privileges of the school; though such suspension should be promptly reported to the board, with the reasons therefor. 3. Decisions of the department of public instructions upon questions within its jurisdiction are entitled to great weight, and should not be overruled by the courts unless clearly contrary to law. Opinion by LYON, J.-State v. Burton.

RAPE-CHIld lnder TEN YEARS- INDICTMENTVERDICT.-1. The statute (sec. 40, ch. 164, R. S. 1858) provides that "if any person shall unlawfully know and abuse a female child under the age of ten years, he shall be punished by imprisonmeut in the state prison for life." An information charging that defendant, "with force and against her will did ravish and carnally know" a female child under the age of ten years, held to charge sufficiently the crime defined in the statute, the averment of force and want of consent being immaterial and mere surplusage. 2. Such an information will not sustain a conviction of rape, under sec. 39 of the same chapter; because both averment and proof of force and want of consent are essential to such a conviction. 3. The rule that the accused may be convicted of a lower crime when charged with a greater, applies only where the proof necessary to convict of the greater is sufficient to prove the less. 4. The verdict upon the information above recited was, that defendant was "guilty of the crime of rape upon one A B, being of the age of over ten years:" Held, that a motion in arrest of judgment should be granted. Opinion by TAYLOR, J.-State v. Errickson.

PROMISSORY NOTE-PURCHASER SUSPICION OF TITLE-NOTICE.-1. A promissory note matures only when, by its terms, the principal becomes due; and one who purchases it in good faith, for value, before maturity, is within the protection of the law merchant, although interest is overdue at the time of such purchase. Boss v. Hewitt, 15 Wis. 260, followed, and a dictum in Hart v. Stickney, 41 Wis. 630, overruled. 2. It is the settled law of this state, that a negotiable promissory note secured by mortgage, is transferred before maturity, passes to the holder discharged o equities, like other negotiable paper; and the mortgage passes as an incident to the note, and may be enforced by the holder of the latter without regard to equities between mortgagor and mortgagee. 3. Mere suspicion that there may be a defect of title in the holder of negotiable paper, or knowledge of circumstances which would excite suspicion in a prudent man, is not sufficient to impair the title of the purchaser; but there must be bad faith on his part. 4. The purchaser for value of a negotiable note before maturity is not chargeable with notice of a defense on the part of the maker, nor put upon inquiry, by its being indorsed by the payee "without recourse;" nor do the words upon its face, "secured by real estate mortgage," charge him with notice of the contents of such mortgage. 5. While equity will not permit a prior mortgagee, knowing that portions of the mortgaged premises have been subsequently conveyed or incumbered, to release the other portions and attempt to