Davies v. Stevenson

Allen, J. , . . . , Ssfwovtatae,rafts wñen. Do the findings of fact warrant the conclusions of law and judgment entered thereon? Suit on the note was not barred by the Statute of Limitations, because the defendant was absent from the State most of the time after the execution of the note. The case is not complicated by any question as to the rights of an innocent purchaser of commercial paper. The note was held by the payee, not only till long after maturity but until after all the transactions on which the defendant claims aright of set-off had been completed. It appears from the findings that Price, McGavock and Company made a profit of $40,000 on the tie contract they had with the Mexico, Monterey & Gulf Railroad Company ; and that Davies was entitled to one-fifth of these profits. There was a general balance due from the Railroad Company to Price, McGavock and Company of $66,-000.* It does not appear that any separation of the payments on the grading contract and on the tie contract was made by the parties. The trial court seeems to have assumed that all of the profits on the tie contract were included in this $66,000, and still remained uncollected. We shall assume this to be the fact, yet it does not warrant the conclusion of the court. Price, McGavock and Company drew on the railroad company for the whole amount due them and obtained the company’s acceptance of their drafts. They thereupon converted the drafts to their own use by transferring them to the National Bank of Commerce of Kansas City, as collateral for their indebtedness to 653 it. They afterwards obtained judgment on the drafts for the amount of them, and this judgment was assigned to the bank. It is expressly found that the bank had no notice of any rights of Davies in the fund. Whether he could successfully assert his rights as against the bank under the circumstances we need not decide, but he clearly is not bound to do so. In this state of the case it was quite unnecessary for the defendant to prove any market value of the judgment, but he had a right to treat the profits as having been realized by Price, McGavock and Company. In the absence of any proof on the subject the presumption is that the drafts were worth their face value. When they converted the acceptances to their own use they were chargeable with his share of the profits. * _ maintained. Nor is there any force in the contention that a mere verbal direction given by Davies to P. P. Price, who was also a member of the firm of Price, McGavock and Company, and who it is said was the treasurer and financial manager of the company, to apply this fund to the payment of a debt of $3000 owing by Davies to him, and this note, operated to place the fund beyond the reach of Price, Mc-Gavock and Company, and of Davies. If R. R. Price had actually done what he was directed to do the note would have been paid. There is no proof nor claim that he made any misappropriation of the money or took it out of the assets of the firm at any time, or for any purpose. The findings of the court are all on the theory that the whole of the profits on the tie contract are locked up in the judgment held by the bank against the railroad company. If so, the firm of Price, Mc-Gavock and Company has had the full benefit of them, and each member of the firm is personally liable to account to the defendant for his share. Making allowance for the discounts to which Mexican money was then 654 subject the profits due the defendant far exceed the amount of the note sued on. The defendant had the right to set off this claim for his share in the profits of the tie contract against the claim of John R. Price on the note sued on. His daughter, Cordelia Price Stevenson, having purchased the note long after maturity and long after the right to assert the set-off had accrued,^stands in the shoes of her father, and the note in her hands is subject to all defenses which might have been made against him. On the findings of fact made by the trial court the defendant was entitled to judgment. The judgment of the District Court is reversed, and the cause remanded with directions to render judgment in favor of the defendant for costs.