Stafford v. Bond

Opinion by JARMAN, O. Ella Bond, plaintiff below, sold certain real estate to Dona Stafford for'tbe purpose of buying an automobile from Jonas J. Watson. $450 was paid on tbe consider» tion and tbe balance of tbe consideration was taken care of by a note and mortgage, wbicb, by agreement of all tbe parties, was executed by Dona Stafford and delivered to said Jonas J. Watson, and tbe automobile was then delivered to tbe plaintiff. It developed that Watson did not bave a clear title to tbe automobile, resulting in Sprague & Wrigbt, automobile dealers of Ada wbo beld a mortgage on tbis automobile, taking possession of the same. In order to satisfy tbe «aim of Sprague & Wrigbt on tbe automobile, Watson deposited with them tbe note in question as security, and after Sprague & Wright’s indebtedness had been fully paid and satisfied, Watson, on December 5, 1921, executed an assignment of tbe note and mortgage to tbe plaintiff, Ella Bond. Tbe note at that time being in tbe possession of Sprague & Wrigbt, Watson issued an order directing Sprague & Wrigbt to deliver tbe same to tbe plaintiff. Immediately after Sprague & Wrigbt took tbe caí from the plaintiff, Watson was arrested for disposing of mortgaged property, and it was tbe settlement of tbis charge and of tbe claim of Sprague & Wright against tbe car that caused Watson to assign tbe note and mortgage to tbe plaintiff. Tbe note was not delivered by Sprague & Wrighit to tbe plaintiff, but to Watson, wbo subsequently indorsed and delivered said note to James H. Gernert. wbo held said note and claimed to bo the owner thereof at the time this action was brought. This action was brought by tbe plaintiff to recover judgment on said note and to foreclose 'the mortgage, securing tbe same, resulting in a judgment for tbe plaintiff, and tbe defendant)» have appealed. Tbe first assignment or error urged is that the court erred in overruling tbe demurrer to .the petition of tbe plaintiff. Tbe defendants contend that tbe petition does not show that tbe note or mortgage indebtedness was ever transferred to tbe plaintiff. It is conceded that tbe assignment attempted, to transfer tbe mortgage but defendants claim that tbe mortgage could not be transferred independently of tbe note. Tbe assignment itself fully answers this question for it states, “I hereby grant, sell and assign to Ella Bond a eerrain mortgage on certain real estate and the indebtedness thereby secured.” It is quite clear from the assignment itself that not only the mortgage but tbe mortgage indebtedness, evidenced by tbe note, was assigned and transferred by Watson to the plaintiff. That tbe interest of Waitson in tbe mortgage and mortgage indebtedness, represented by tbe note, could be transferred or assigned by a separate instrument in writing without tbe actual delivery of tbe note is well settled by tbe ¡rule announced in 8 C. J.. 383, and tbe authorities therein cited. Tbe plaintiff did not become a bolder in due course of tbe note, but she acquired such interest therein as Waitson bad, and tbe court properly overruled tbe demurrer to plaintiff’s petition. Tbe two remaining assignments of error urged by tbe defendants are that tbe court erred in overruling tbe demurrer to tbe evidence of tbe plaintiff, and that tbe court erred in rendering judgment for tbe plaintiff. Tbe defendants contend that tbe evidence on tbe part of tbe plaintiff wholly failed to show that the plaintiff was tbe owner of the note in question or that there was any thing due on tbe note, and that the plaintiff wholly failed to make out a case, but it is not necessary to pass on these questions under tbe «rule announced in tbe case of Smith v. Cornwell & Chowning Lumber Co., 101 Okla. 86, 223 Pac. 154, bolding that where the trial court overruled a demurrer to tbe plaintiff’s evidence, and thereafter both parties proceed with the trial and introduce evidence wbicb is sufficient to make out a case for tbe plaintiff, a judgment rendered thereon for tbe plaintiff will not be disturbed on appeal, although the demurrer, to plaintiff’s evidence was erroneously overruled. After tbe demurrer of the defendants to tbe plaintiff’s petition in tbis case was overruled, the trial was proceeded with and additional evidence was introduced by both sides, sufficient to make out a case for tbe plaintiff, and tbe error, if any. in overruling tbe demurrer was harmless under tbe foregoing authority. The only party wbo made any defense in this action is the defendant Gernert, wbo claimed that tbe note in question was indorsed and transferred to him by Watson on November 15, 1921, and that be was tbe owner and bolder of said note and tbe owner of tbe mortgage securing tbe same at tbe time Watson attempted, by a separate instrument in writing, to assign said note and mortgage to tbe plaintiff on December 5, *175 1921,. This was the issue submitted to the court, a jm-y having been waived, for determination. Under the facts in this case the note and mortgage were, in the first instance, procured 'by "Watson through fraud, and this having been shown, the burden was upon Gernert to prove that he was an innocent bolder for value of said note. The evidence discloses that Gernert is a lawyer, and that he represented "Watson at the time he was arrested for disposing of the mortgaged automobile, and represented him in the settlement of the case against him, and there is other evidence tending to show that he had knowledge of all the transactions pertaining to the fraudulent manner in which the note and mortgage were procured by Watson, and there is evidence tending to show that Gernert did not acquire the note until after the assignment thereof was made by Watson to the plaintiff, and that Gernert had knowledge of the same. There is considerable conflict in the evidence and we cannot say, after consideration of the same, that the trial court erred in holding that the defendant failed to sustain ithe burden of proof. No prejudicial error is shown to have been committed in the trial of this case, and the judgment of the trial count is affirmed. By the Court: It is so ordered.