Gillespie v. Evans

Fuller, J. From the complaint, as properly amended to conform to testimony admitted without objection, and from the court’s findings fully sustained by the evidence, it appears that plaintiffs executed and. delivered to defendant a series of four promissory notes, aggregating $10,000, all bearing date June 17, 1890, payable, respectively, in two, three, four and five 237 years after date, and secured by a mortgage upon real property. Before the maturity of either note, and prior to the 14th day of May, 1892, the defendant, by delivery, transferred all of said notes to the Home Insurance Company', as collateral security for the payment of his own notes for $10,000, held by said company, which are still so held, and in possession of John P. Allison, as receiver of said insurance company. On the day last above mentioned, May 14, 1892, plaintiffs, with full knowledge that their notes were still in possession of the Home Insurance Company, were induced by the defendant to pay him the full amount thereof, including accrued interest, upon the representation then made by the defendant that he was still the owner of said notes, and -would within a few days obtain and deliver the same to plaintiffs for cancellation. Before the commencement of this action, and since the payment of their notes in full, which amounted to $11,133.33, plaintiffs have often demanded of the defendant that he return said notes to them, in accordance with his agreement so to do, or, failing in that particular, refund the money whicl^he had thus received; but he has at all times and in every material respect refused, and still refuses, to comply with said demand, and every part thereof, claiming that he. is unable to obtain the notes from the receiver of the Home Insurance Company, by whom they are still held to secure his personal obligation of $10,000 and interest. The court further found: “That the said Fred T. Evans has, in fraud and violation of plaintiffs’ rights, misappropriated and converted to his own use the said sum of $11,133.33^, so as aforesaid paid to him by plaintiffs for the purpose of paying and canceling their said notes, and has fraudulently and wrongfully failed to use and apply said moneys to the payment and discharge of said notes of plaintiffs. ” And, as conclusions of law from the foregoing facts: “That said plaintiffs are entitled to a decree of the court as prayed for in their complaint, for the immediate return and cancellation of said notes described in plaintiffs’ complaint, or for a personal judgment 238 against said deiendant for the sum of $ll,133.33-¿-, together with interest thereon at the rate of seven per cent per annum from May 14, 1892. "'That a reasonable time to be given said defendant within which to deliver said notes to plaintiffs is the period of thirty days from the 19 th day of May, A. D. 1896. That plaintiffs are entitled to a judgment for their costs and disbursements. ” From a judgment accordingly entered, and an order overruling a motion for a new trial, the defendant appeals. The death of Ella S. Gillespie having occurred since the trial of the cause, and her demise being suggested in this court, her husband and co-plaintiff, Fred D. Gillespie, as the duly appointed and acting administrator of her estate, is, upon stipulation of counsel, substituted in her stead as a party plaintiff, and, under the title thus amended, the cause will be considered and the appeal disposed of. Confessedly, appellant received and converted to his own use $11,133.33 of respondents’ money, with which in equity and good conscience, he should have satisfied their indebtedness, obtained their notes in accordance with his agreement, and surrendered the same to them for cancellation. Reposing special confidence in one with whom they had formerly transacted business, he was intrusted with the entire amount of their notes before maturity under circumstances which created a trust relation; and, having wrongfully converted the same, leaving the notes outstanding, unpaid, and in full force, he ought, in default of a compliance with his promise, to refund the money, with- interest; and this action for money had and received is a proper remedy. Jackson v. Hough, 38 W. Va. 236, 18 S. E. 575; Spencer v. Dearth, 43 Vt. 98; Neal v. Hanson, 60 Me. 84. Disturbance of mind, inability to use their money, impairment of credit, and probability of ultimate loss, are considerations repugnant to the theory that respondents have sustained no injury. As the case stands, appellant has, and wrongfully withholds, a large sum of money belonging to respondents; and the fact that it came into his hands lawfully 239 is no reason for requiring them to remain passive until their claim is barred by the statute of limitations or until they are ejected from their premises by reason of the foreclosure of a reinstated mortgage, given to secure their notes, and which was by appellant discharged of record, apparently without any authority at the time he obtained their money. -The reason for the law authorizing an action to recover compensatory damages for a refusal to deliver up a note that has been paid requires no elucidation; and where money has been misappropriated in violation of a trust, under circumstances resulting in actual fraud, the true measure of damages is the amount converted, with interest thereon. Comp. Laws, § 4603; Robbins v. Packard, 76 Am. Dec. 134. The judgment appealed from is affirmed. Corson, P. J., dissents.