Sturges v. Miller

Mr. Chief Justice Scott delivered the opinion of the Court: The original bill in this case was filed by Miller and others, against the “ Lake Superior Forwarding Company,” to cancel certain notes and the mortgages by which they were secured, which had been given in payment of a propeller bought by complainants of the forwarding company, on the ground there had been a breach of the warranty clause in the bill of sale, by which complainants had lost the vessel, and hence there had been a total failure of the consideration of the notes. An amendment to the bill made Sturges, Hubbard and Platt defendants, who, on being brought into court, answered, denying the principal allegations of the original bill. Sturges, however, filed a cross-bill, in which he alleged he was the owner of five of the unpaid notes, and asked to have the mortgages foreclosed for the sum due him. On the hearing, the court found there had been a breach in the warranty clause of the bill of sale as alleged, by the failure of the company to protect complainants against proceedings in the marine court, for debts, against the propeller; that there had been a failure of the consideration of the notes; that the same had not been assigned by the company, before maturity, to a bona fide purchaser for value, and therefore decreed that the notes be annulled and declared void; that a release of the mortgages upon the real estate of complainants be executed, and further decreed that the cross-bill of Sturges be dismissed. This appeal is prosecuted alone by Sturges from the decree of the court dismissing his cross-bill. The “Lake Superior Forwarding Company” seems to have been a mere fiction, only existing in name. The answer filed by Platt, on behalf of the company, states the capital stock was paid in to the officers of the company, but when and where, he is now unable to state. The transactions were but individual acts of the parties interested. But whether the company was fictitious or not, we think the decree is sustained by the evidence. Although Sturges claims that he was the owner of five notes, each for the sum of $500—that they were assigned to him, before maturity, in part payment of another vessel sold to the company—he admits he left them in the hands of Platt, who, it is said, was the secretary and treasurer of the company; but the evidence shows most conclusively that he is mistaken as to the fact of the notes having been assigned to him at all. As late as 1870, long after the notes had become due, the witness Kramer saw them in the hands of Stark, since deceased, and he states positively there were no indorsements upon them. The account given by this witness is so circumstantial, and, withal, so intelligent, that it is hardly possible he can be mistaken. Coming, as it does, from •a disinterested witness, it may, with great propriety, be regarded as the better evidence in the case. Having taken the notes without indorsement, it follows they were subject to the same defense in the hands of Sturges that they would have been had they remained in the li^nds of the forwarding company. That there has been a failure of the entire consideration of these notes, does not admit of a doubt. ICramer is positive in his recollection that the bill of sale contained a clause of warranty as to the title to the vessel. The proof is clear the propeller was seized for old debts that were a lien upon it, was sold by order of the court, and the proceeds realized from the sale divided among the libellants. Evidence offered shows the officers of the company were notified the vessel had been seized for old debts that w-ere a lien upon it, but they neglected to defend it, and it was wholly lost to complainants. Strongly corroborative of this view of the case, is the fact that, after the vessel was libeled, no effort was ever made by the company, or any one else, to collect any of the remaining notes given for the purchase money, although many years elapsed before this suit was brought to cancel the securities. It may be added, with great justness, it does not appear that Sturges was, in any sense, a purchaser of the notes for value, as claimed by him, and hence he took them subject to all the defenses that existed against them in the hands of the original holders. No satisfactory evidence is to be found in this record that he received them in part payment of a vessel sold to the company. There is evidence tending, at least, to show that vessel was paid for in another way. Adopting this latter theory, there is no evidence that shows he paid anything whatever for the notes. On the whole record, we are entirely satisfied justice has been done, and the decree will be affirmed. Decree affirmed.