Martin v. Iverson

STATEMENT OF THE CASE REYNOLDS, J. On December 14, 1917, J. O. Lofton, by act before B. F. Allums, a notary public of Bienville parish, sold to Quincy Iverson sixty acres of land situated in Red River parish for $950.00, the price being represented by four promissory notes signed by the purchaser, bearing even date with the act, each for the sum of $237.50, all bearing 8% interest from their date until paid, all drawn payable to the order of the vendor on October 1, 1918, October 1, 1919, October 1, 1920, and October 1, 1921, respectively, all stipulating payments of 10% attorney’s fes in case of being placed in the hands of an attorney for collection, and all paraphed “Ne Varietur” to identify them with the act of, sale which retained a vendor’s privilege on the land to secure their payment. All four notes were endorsed in blank by J. O. Lofton and transferred to plaintiff, Thomas J. Martin, before maturity and in due course of trade. The first two maturing. of the notes were not paid at maturity by Qunicy Iverson and were acquired by intervenor and third opponent, W. W. Gahagan, through the firm of J. B. Martin & Company in exchange for his check for $494.00. The two last maturing of the notes were not paid at their maturity either, and plaintiff brought suit against Iverson in the District Court of Red River parish on these two notes and also on another note signed by him for $53.00, dated February 3, 1920, drawn payable to the order of plaintiff on October 15, 1920, bearing' 8% interest from December 5, 1919, and stipulating payment of 10% attorney’s fees in case of suit for collection, which note, he alleged, was given to him by Quincy Iverson in part payment of the second maturing of the four purchase money notes. He asked for recognition of his vendor’s privilege on the property sold by Lofton to Iverson to secure the payment of the principal, interest and attorney’s fees owing on the two notes for $237.50 each. Iverson, though duly cited, interposed no defense, and judgment was rendered against him and in favor of plaintiff on January 25, 1922, for $528.00, the principal of the three notes, with' 8% interest on $475.00 thereof from December 24, 1917, and 10% attorney’s fees on the whole, and 8% interest on $53.00 thereof from Decern [527] her 5, 1919, and- 10% attorney’s fees on the whole. The judgment recognized plaintiff’s vendor’s privilege on the property -jOld by Lofton to Iverson, to-wit: SE1^ of SW% and W% of SW% of SE% of Section 25, Township 14 north, Range 5 west, in Red River parish, to secure the payment of the $475.00 and interest and attorney’s fees thereon and the cost of suit. Execution was issued on this judgment and under it the property was seized and advertised for sale by the sheriff. Thereupon intervenor and third opponent, W. W. G-ahagan, filed his petition of intervention and third opposition, in which he alleges that he was the owner and holder in due course of the two first maturing of the four purchase money notes, that they were unpaid, and that to secure the payment thereof he has a vendor’s privilege on the property, which, -he alleges, has been advertised for sale under plaintiff’s judgment against Iverson. He further- alleges that he has brought suit against Iverson on the two notes owned and held by him and that for the payment thereof he enjoys an equal privilege with plaintiff and that out of the proceeds of the sale of the property he is entitled to have the two notes held by him paid concurrently with the two held by plaintiff. He also alleges that as to that part of plaintiff’s judgment against Iverson for $53.00, interest and attorney’s fees, plaintiff has no privilege on the property and is not entitled to have that part of his judgment paid out of the proceeds of the sale until and unless the notes held by intervenor and third opponent have been first paid in full. Intervenor and third opponent subsequently filed a supplemental petition in which he alleges' that he acquired the two notes held by-- him from the plaintiff, Thomas J. Martin; that by reason thereof the plaintiff “has no right to compete with your petitioner, as transferee, in the proceeds of the mortgaged property, in the event there should not be enough to satisfy the claims above”, and that he, intervenor and third opponent, is entitled to have the two notes held by him paid out of the proceeds of the sale of the property in preference to plaintiff’s judgment. Plaintiff moved to strike out the supplemental petition because it changed the issues presented by the original petition. This motion was overruled. Plaintiff filed an answer in which he denied that intervenor and third opponent acquired the two notes held by him in due course, and alleged that at the maturity of the two notes he, plaintiff, was the owner and holder thereof, and that thereafter the defendant, Quincy Iverson, paid the amount thereof, with the exception of $53.00, which he lacked to pay them, and for which amount he took the personal note of Iverson, payable October 1, 1919, and turned over to Iverson the two notes for $437.50' each as paid, and that these two notes, having been paid by Iverson, the debt represented thereby was satisfied and the vendor’s privilege and mortgage securing their payment extinguished to that extent. He denies that intervenor and third opponent acquired the notes from him and avers that they were paid by Quincy Iverson and turned over to him by plaintiff as paid. He alleges that the note for $53.00 was given by Quincy Iverson in part payment of the two notes turned over to him by plaintiff and that it represented part of the purchase price of the property, and [528] that he is entitled to have his judgment therefor paid out of the proceeds of the sale of the property. He denied that intervenor and third opponent has a privilege or mortgage on the property to secure the payment of the notes held by him and denies that he is entitled to have the same paid out of the proceeds of sale in preference to or concurrently with plaintiff’s judgment. Plaintiff filed supplemental answer, alleging that after the maturity of the two notes held by intervenor and third opponent, Quincy Iverson paid him the amount that was owing thereon, with the exception of $53.00, for which he took the personal note of Iverson, and that he delivered the notes to Iverson as paid, and that thereby the debt they represented was paid and the vendor’s privilege and mortgage securing their payment extinguished to that extent. Plaintiff also filed a plea of estoppel, in which he alleged that intervenor and third opponent, having alleged in his original petition that the notes held by him were of equal rank with those on which plaintiff’s judgment was based and were entitled to be satisfied out of the proceeds of the sale of the property concurrently with plaintiff’s judgment, he was estopped to assert that the privilege securing the payment of the notes held by him was superior in rank to plaintiff’s judgment or that he was entitled to be paid out of the proceeds of sale in preference to plaintiff. There was judgment in favor of intervenor and third opponent, W. W. Gahagan, and against plaintiff, Thomas J. Martin, recognizing intervenor and third opponent’s privilege and mortgage on the property in controversy, and ordering that the notes held by him be paid out of the proceeds of sale of the property, in preference to plaintiff’s judgment. Prom this judgment the plaintiff has appealed. OPINION The defendant, Quincy Iverson, testified that he delivered the check of W. W. Gahagan to J. B. Martin & Co., and that he told Mr. Bryan Martin not to mark the notes “paid”, because he had to deliver them to Gahagan. Mr. Bryan Martin does not remember this. However, we do not regard the statement as of importance, inasmuch as Bryan Martin did deliver the notes to Quincy Iverson without having marked them paid, and did receive from’ Iverson the check of Gahagan for $494.00, and collected the check. The first question presented for decision is, did intervenor and third opponent’s judicial allegation that he was entitled to prorate with plaintiff in the distribution of the proceeds of the sale of the property estop him to afterwards claim to be paid out of the proceeds by preference over plaintiff? Intervenor and third opponent insists that this question cannot be considered for the reason that plaintiff’s exception presenting it was not verified. The view that we take of the question renders it unnecessary for us to pass on this phase of the exception. Intervenor and third opponent’s change of pleading did not cause plaintiff any damage or cause him to change his own position to his detriment. In Irion vs. Knapp, 132 La. Ann. 60, 60 South. 719, the Supreme Court said: “It is essential, to maintain the plea of estoppel; that the one pleading it should [529] have been put in a worse position by the act of the one against whom it is pleaded.”. It is clear that intervenor and third opponent’s first judicial allegation did not cause plaintiff to change his position. Hence the second judicial allegation is entitled to be considered and passed on. Intervenor and third opponent’s mortgage and privilege retained in the act of sale passed before B. P. Allums, notary public, and recorded in Book Z of mortgages of Red River parish and filed in evidence, stood in the way of the funds being paid out before intervenor and third opponent’s mortgage notes were cancelled, and there was no reason why he should not have his rights fully pasesd on as prayed for in his petition of intervention and third 'opposition. The second and most important question to be decided is whether or not the plaintiff, by turning the notes over to Quincy Iverson without having marked them “paid” and receiving therefor the check of W. W. Gahagan for $494.00, had the effect of transferring them or of paying them. Section 119 of the Negotiable Instruments Law provides: “A negotiable instrument is> discharged: “5. When the principal debtor becomes the holder of the instrument at or after maturity in his own right.” The evidence shows that the notes held by W. W. Gahagan did not go into the hands of Quincy Iverson in his own right, for plaintiff received from ,W. W. Gahagan therefor a check for $494.00. Hence, the notes passing into the hands of Quincy Iverson under the surrounding circumstances and not marked paid did not have the effect of discharging them. Section 34 of the same a^t provides:, “An endorsement in blank specifies no indorsee, and an instrument so indorsed is payable to bearer, and may be negotiated by delivery.” The two notes held by W. W. Gahagan were endorsed in blank and were delivered to him without being marked paid, and his check for $494.00 for same was turned over to nad endorsed and collected by T. J. Martin or his agent, J. B. Martin & Go. There is no allegation of error on the part of plaintiff or fraud on the part of W. W. Gahagan, and plaintiff cannot be heard to question his ownership of the notes, especially since plaintiff received ' and collected W. W. Gahagan’s check for $494.00 for the two notes. City Savings Bank & Trust Co. vs. Goodman, 156 La. Ann. 106, 100 South. 66. Quick vs. Littlejohn, 156 La. Ann. 369, 100 South. 531. There appears on the last maturing of the two notes held by W. W. Gahagan indications that some memorandum has been endorsed on the back thereof and subsequently erased, and plaintiff insists that as to this note intervenor and third opponent holds subject to the memorandum, but the evidence makes it clear that T. J. Martin ordered it delivered to Quincy Iverson ,to be delivered by him to intervenor and third opponent. T. J. Martin testified, page 4: “Why, I got my son, Bryan, that is here, to look after it. I was leaving his house and I was looking for the negro up there —I don’t know whether that week or within a few days at least, and I told him if the negro> came, why he could receive the money and it would suit me all right; and the negro went and paid one note out and [530] he failed to figure in the interest of fifty-three ($53.00) dollars and some cents on the second note, and my son didn’t let him have it; and the negro came in a few days to see me, and he plead so faithful for the notes, and I think he told me that Dr. Gahagan required him to bring that note in. I didn’t know that the doctor was in it until then — and I finally told him that if he would ¡give me a bank note and promise me faithfully that he would pay it next fall — first I told him that I could not and would not do it — and finally I told him, he kept on so persistent, that if he would give me that note and pay it the next fall, that I would give him an order for the other note, and he agreed to do it.” T. J. Martin received from W. W. Gahagan his check for $494.00, understanding that Quincy Iverson was compelled to deliver the notes to Gahagan, and cannot now be heard to claim any credits on the note, 'after having received from W. W. Gahagan the full amount thereof in principal and interest, excepting $53.00; and the judgment of' the lower court only allowed W. W. Gahagan to be paid $475.00 by preference when, as a matter of fact, he gave his check for $494.00; so that W. W. Gahagan has received judgment for a smaller amount than he was entitled to, but he has not prayed for an amendment of the judgment. Hence, the judgment of the lower court is correct and must be affirmed, and it is accordingly so ordered. ON REHEARING