Truman v. McCollum

Cole, J. The defense relied on to defeat a recovery on the note and mortgage upon which the action is brought, is, that these securities were placed in the hands of Mr. Burchard on a special trust and confidence, to be delivered to the railroad company if certain parol conditions were fulfilled; otherwise to be returned to the makers; and that the railroad company got possession of these securities without performing the conditions, and without the assent of the makers or of the party who held them. It appears, however, that Mr. Burchard was — 370 — acting solely as tlie agent of tlie railroad company in procuring subscriptions to its capital stock, and was fully authorized to receive a delivery of the note and mortgage for the company ; and it is insisted, with much force of reason, that such being his relation to the parties, these securities could not be delivered to him as an escrow, but that the delivery to him was in law a delivery to the grantee, and that the grantee, or railroad company, took the securities discharged of all conditions. There are certainly authorities which seem to support this position (Worrall v. Munn, 5 N. Y., 229; Braman v. Bingham, 26 id., 483); but from the view we have taken of the case it becomes unnecessary to inquire whether they lay down the correct rule of law upon this subject, or whether the facts attending the delivery of the note and mortgage to Mr. Burchard render these decisions applicable to the case at bar. For the circuit court found as matters of fact (and we think this finding is fully sustained by the evidence), that the defendant James F. McCollum, in the fall of 1854 or spring of 1856, was informed and knew that the plaintiff was possessed of and claimed to own said note and mortgage; and that the defendant never, until after the spring of 1858, made any objections to the plaintiff’s said possession thereof; nor did he ever before that time demand the same of the plaintiff, nor take any steps to regain the possession thereof; and never until about the time of the commencement of the action, informed the plaintiff that the note and mortgage were delivered to Mr. Burchard upon certain conditions, and that they were fraudulently taken from Mr. Bm'chaxd’s possession without these conditions being complied with; and that the defendant, in the spring of 1858, received from the railroad company a certificate for sixty shares of stock of the company, without making objection to the delivery of his note and mortgage to the company, or to its sale thereof. Now it seems to us very obvious upon these facts, that the appellant, with full knowledge of the circumstances, by receiving the stock of the company, fully ratified the delivery made — 371 — by Mr. Burchard, discharged of tbe conditions upon which the delivery was to be made. The appellant himself was sworn as a witness, and states what these conditions were. He says, after he signed the note and mortgage, he handed them to Mr. Burchard; that the note and mortgage were not to be used and were not to become the property of the company but upon certain conditions; the company wanted to raise one hundred thousand dollars west of Rock River, so that they could complete the road through to Beaver Dam by the 1st of January, and if they did not raise the one hundred thousand dollars, his mortgage was not to be used by the company. Another condition was, that before the company should have possession of the mortgage or should use it, it should deliver him sixty shares of as good stock as it gave to cash subscribers; such stock, he then understood, was then selling at 80 or 90 cents on the dollar in New York; and the mortgage was not to be used until the road was finished to Beaver Dam ; the mortgage was put into the hands of Burchard in June, 1855 ; and the road was not completed to Beaver Dam until the spring of 1856. The witness subsequently testified that in the first conversation he had with Bogert about his mortgage, Bogert said he owned one half of it; afterward Bogert said he had sold to the plaintiff; that this was sometime after the mortgage was given, and the witness thought it was the same year. In the ■ spring of 1858, he confessedly received a certificate for sixty shares of stock of the company, which was the sole consideration for the note and mortgage. It is objected that by his contract with the company he was entitled to the same kind of stock issued to cash subscribers, and that he did not get it. He however did not insist upon having this kind of stock, but received a different kind, which he held and owned at the time of the trial. Under these circumstances it seems to us it would be a violation of well settled principles of law to permit the appellant to say that there never had been any good delivery of the note and mortgage — that they were not binding ¿upon him — 372 — because tbe conditions were not performed upon wbicb they were to be delivered. Suppose tbe appellant, after tbe company bad obtained possession of tbe note and mortgage, bad gone to tbe officers of tbe company and said that be waived all conditions and assented to tbe delivery made, and then accepted tbe stock wbicb was tbe consideration, of these securities; could it be seriously contended that tbe instruments never took effect ? It seems to ns not; and yet in contemplation of law this is precisely wbat tbe appellant bas done. So that we bave no hesitation in saying that, upon tbe facts disclosed in tbe record, tbe railroad company itself would be entitled to recover in tbe action, if it were plaintiff and bad not transferred tbe note and mortgage. And it is evident that this view of tbe case relieves us from tbe necessity of considering tbe question so elaborately discussed on tbe argument, whether, by tbe transfer of tbe note and mortgage in the manner it was made, the plaintiff became a bolder for value, and can insist upon all tbe rules of law established for tbe protection of commercial paper transferred to an innocent bolder before maturity. For if tbe note and mortgage would not be subject to any equities in tbe bands of tbe railroad company, it is not claimed that any exist between tbe parties to tbe suit. And there certainly can be no valid ground for saying that tbe plaintiff did not furnish ample proof of bis own title. It is further claimed and insisted, that tbe case shows that tbe note and mortgage were transferred merely to secure tbe payment of principal and interest upon tbe railroad bond thereto annexed; that therefon. 'the plaintiff only bad a right to bring suit upon them when tbe company should make default; and that such default should be alleged in tbe complaint. It is true, tbe complaint alleges an unconditional assignment of tbe note and mortgage to tbe plaintiff; that be is now the true and lawful owner and bolder of the same ; and that there is now due him upon tbe note and mortgage tbe sum of $1440. This, by tbe strongest implica — 373 — tion, is alleging tbat the company was in default in the payment of the interest due upon its bond; and the bond itself showed that the interest coupons had not been paid since January 1st, 1858. But perhaps a more satisfactory answer is, that the objection is a technical one, even if valid, and was not taken in the court below, where it could have been obviated by an amendment of the complaint. "We think it too late now to object that the complaint should specifically aver that the company had made default in the payment of its bond. And although the principal and interest on the railroad bond were made payable at the Broadway Bank in the city of New York, yet the weight of authority in this country is, that it was not incumbent upon the plaintiff to aver and prove a demand of payment at that place. Wallace v. McConnell, 13 Peters, 136. It appears that certain issues in this case were submitted to a jury, and it is insisted that under chap. 169, Laws of 1864, every fact put in issue should have been passed upon by the jury. In our view the issues submitted to the jury were not material. They were however the only issues of fact that the defendant requested should be tried by the jury. If the issues were not as broad as they should have been, it was the defendant’s fault. He certainly cannot now object that other facts should have been submitted. The law of 1864 does not even profess to make it imperative upon the comt to submit every issue of fact joined in an action to foreclose a mortgage to a j my. But every such issue “ upon demand of either 'plaintiff or defendant, -shall be tried by a jury, and the finding of the jury as to such issue of fact shall be final and conclusive, as m other cases of trial by jury.” Whether, under the constitution of this state, it is competent for the legislature to make the finding of a jury upon questions of fact in an equity cause conclusive and final, and not merely advisory, is a point not necessary to be considered now. The jury did not pass upon the question whether the defendant had not by Ms acts ratified the delivery of the note and mortgage dis — 374 — charged from all conditions, because no such issue was submitted to them. To avoid all misapprehension, my brethren think I had better add, that we do not suppose it incumbent upon the circuit court to submit in an equity cause the trial of issues of facts to a jury, unless it thinks proper to do so. We think these remarks dispose of the material questions in this case. By the Court. — The judgment of the circuit court is affirmed.