Thompson v. Longan

Gill, J. This is a suit in replevin, involving the title and right of possession to certain machinery, typé, — 150 — etc., formerly belonging to the Sedalia Democrat Company. The real contestants are Lon V. Stephens, the holder of a junior, and John O’Day the claimant of a senior, mortgage on the property in dispute. Plaintiff Thompson is the trustee in the Stephens incumbrance,’ while defendant Longan is the trustee in the O’Day deed of trust. No question is made as to the original lona jldes of both deeds of trust. At the time the suit was brought both debts were past due, and defendant Longan, trustee in the senior mortgage, had possession, by direction of his beneficiary, for the purpose of foreclosure. Thompson, trustee in the junior mortgage, took the goods on writ of replevin from Longan claiming that the said • senior incumbrance had been theretofore paid and satisfied. „ This- indeed presents the substantial issue of this case. If the mortgage, or deed of trust, under which defendant Longan claims had been paid off (as plaintiff insists) then there is no doubt as to the right of plaintiff to recover. But if O’Day was the holder of the same by purchase from the original owner then defendant’s right to these goods is unquestionable. This issue was submitted to a jury in the circuit court, under instructions from the court, and a verdict and judgment had for the defendant, from which plaintiff has appealed. Plaintiff, in seeking a reversal of the judgment below, insists that on the admitted facts and evidence adduced at the trial the judgment was clearly for the wrong party; that there is no testimony to sustain the jury’s finding. After a careful review of this record we must differ with the plaintiff’s counsel. We hold that there is here shown ample evidence to sustain the verdict. It seems that the note secured by this senior mortgage is for fifteen hundred dollars, dated April, 1883, and it is admitted that the legal title by due indorsement was in J. H. Bothwell on the twenty-seventh day of June, 1888, but that he had no beneficial interest therein. It — 151 — is admitted that the title was put into him for the purpose of a contemplated purchase which was never consummated. On that day John D. Russell was the agent of one Mrs. Schmidt, the owner of the equitable title to the note with full power to deal with the same, and was as such agent pressing for the money thereon; while on the other hand Michael K. McGrath (representing the owner of the mortgaged property who had assumed the payment of the note) was trying to arrange' a plan for Russell as such agent to get the money on the note. Some time prior to that Russell had demanded the money, and 'McGrath having no funds had gone to St. Louis and arranged with O’Day to advance it (about'two thousand dollars), and take and hold the note and mortgage as a friend until he (McGrath) could adjust his business troubles and pay the debts of the concern he represented, of which said note was one ; the payment of it having been assumed as aforesaid. In pursuance of an arrangement made between McGrath and O’Day, 0 ’Day sent a blank form of indorsement and assignment to McGrath by mail to Sedalia. McGrath then took the note to Bothwell, and Russell went along (although some of the witnesses are not clear as to Russell’s presence) and the blank indorsement, as dictated by O’Day and forwarded to McGrath, was placed on the note by Bothwell in the following form, and on the following date: “Sedalia, Mo., June 27, 1888. “For value received, pay to the order of-without recourse on me, and I hereby assign same to him.' “ (Signed.) ’ J. H. Bothwell.” ' If Russell did not go to Bothwell’s office to have this indorsement made, he sent the note with McGrath to have it done. Russell was indifferent as to whether the note was sold, or “paid,” or discharged. Part of the arrangement of McGrath with O’Day was that the indorsement should be in blank, so a name could be — 152 — inserted, and that the note should be sent to the Continental Bank of St. Louis to receive the money, and deliver the note and mortgage to him as live paper secured by a first lien. In accordance with this understanding, steps were taken to send the nóte through the First National Bank of Sedalia to the Continental Bank. The mortgage itself was mislaid or not at hand, and was not sent. Russell thinks he took the note to the bank. Thompson, the cashier of the First National Bank, thinks Mi’s. Russell (wife of John D.) brought it to the bank and left it there, with word that “McGrath would give instructions about it;” at all events, the First National Bank sent the note to St. Louis, to the Continental Bank, on the same day of the Bothwell indorsement, and this was done in pursuance of prior arrangements. The exact terms of the instructions to the bank do not appear. The note was not indorsed to the Sedalia bank for collection, or otherwise. The Sedalia bank placed no indorsement upon it. The banks were both a mere convenience to effect an exchange, the terms of which they were not interested in, and the Sedalia bank, as its way of getting at results, inclosed the note to the Continental Bank in “collection” letter. The Continental Bank informed Ó’Day in pursuance of instructions, and O’Day sent his clerk with the money to get the note as he agreed, and it was delivered to him. This was the twenty-eighth of June, 1888. Someone, by whom it was done does not appear, put the Continental Bank stamp of “paid” on this note. Some one, by whom, and when, it was done does not appear, erased it. 0 ’Day filled in the blank designedly left in the blank indorsement of Bothwell, with the name of “H. L. Morrill,” and subsequently wrote'an assignment from Morrill to Randolph on a piece of paper attached to the note, and sent; it to Morrill to sign, which he did. On the question as to whether Russell knew the note was to be assigned, and consented to the arrangement, the evidence is somewhat obscure — 153 — and conflicting. It consists, first,' oí the acts of the parties as aforesaid, and, secondly, what was said during the negotiations. Russell claims he did not know it, but admits he was indifferent, and that what he wanted was to get the rnoney. We have here borrowed largely, in the foregoing statement of the evidence, from that set out in defendant’s brief, since we find it a fair relation of the testimony in his behalf, as appeárs from the record before us. From this it is difficult to find any fault with the jury’s finding. In the matter of the purchase and the transfer of this note and attendant mortgage, plaintiff’s counsel contends rightly that; like other contracts, there must be a concensus of minds of indorser and indorsee. There could be no legal transfer of the note without the assent of the holder. Wolff v. Walter, 56 Mo. 292. There appears here one “physical fact” at least, which argues very strongly in favor of this assent by the holder to O’ Day’s purchase of the note. I refer tQ the written indorsement of Both well transferring the note in express terms. Mrs. Schmidt, it is true, did not, in person, pen this transfer, yet Russell, her agent, did, and the same was by him sent to St. Louis preparatory to securing the money thereon. The note thus indorsed by the apparent holder and owner was notice of itself to O’Day that the holder had agreed to sell and transfer the same to whomsoever should pay the amount called for. It is said in Neuhoff v. O' Reilly, 93 Mo. 164, that “ where the true owner of a negotiable note, overdue, clothes, another with the usual evidence of ownership or with full power of disposition, and third persons are thereby led into dealing with Such apparent owner and receive a transfer of the same, they will be protected.” As to 0’Day’s intention of becoming a purchaser of the note, the evidence is all one way. He never intended a payment of the note and mortgage, but simply to take up and carry the incumbrance for the — 154 — temporary relief of an embarrassed friend. This being his intention the duty of the court is to give effect to such intention. Campbell v. Allen, 38 Mo. App. 27. At the trial plaintiff offered to read in evidence a chattel mortgage by the Sedalia Democrat Newspaper Company, executed by M. K. McGrath, president, dated some months after O’Day’s purchase of the note, which on objection by defendant was excluded ; and of this ruling plaintiff makes now some complaint. In our opinion-the trial court was correct in such ruling. There is no possible theory upon which this mortgage could be used to impair O’Day’s title to the fifteen-hundred-dollar note. At most it could only be used to show that McGrath did not then consider the Schmidt mortgage a subsisting claim against the newspaper property. But McGrath cannot be permitted thus to admit away the rights of O’ Day. We discover no reversible error in the record, and the judgment, therefore, of the circuit court is affirmed. All concur.