Cummings v. Oglesby

SiMrall, J., delivered the opinion of the court: Jackson sold to Cummings a quarter section, on the 17th of January, 1870, retaining the title until payment of the purchase money. The controversy grows out of the connection of Oglesby with [155] the sale, and with the assignment of the first note for $1,200 to him. It is contended by the appellants, that Oglesby advanced the first payment on the land, and took the note of Cummings, with Jackson’s indorsement without recourse, as a memorandum, or evidence of Cummings’ indebtedness to him, for the money advanced for him to Jackson, thereby disconnecting that note from the land trade, as representing a part of the purchase money. Oglesby maintains, that the note was indorsed and transferred to him, with the same benefit of security, upon the land, as it would have had in the hands of Jackson. Jackson conveyed the land to Cummings, whilst the note was outstanding in the hands of Oglesby, and with positive knowledge that it was unpaid; and on the day after, Cummings sold and conveyed to Mrs. Parish for a price paid in cash, several hundred dollars more than he agreed to pay, to Jackson. If the theory of the case put forward by Oglesby be correct, and has been established by evidence, then a gross fraud has been practiced upon Oglesby. The chancellor was of opinion and so determined, that Oglesby had sustained his case by the evidence. Was that conclusion wrong ? The depositions of the witnesses, those that seem to us to give the most probable and reliable account of the matters in controversy, considered in connection with the written documents, furnish an easy solution of the disputed points. Jackson desired to get for his land $1,200 cash, and $1,200 twelve month thereafter. Cummings could not raise the money for the cash payment. Oglesby being a man of some wealth and a lender of money, agreed for the accommodation of Cummings, to assist in the consummation of the trade with his money. The payments were secured (as appears in Jackson’s bond) by one note for $1,200 at ten per cent, interest from date, payable 1st January, 1871, and a note for the like sum due 1st January, 1872, at six per cent, interest for the first year, and ten per cent, thereafter. The title, bond and notes were dated the 17th of January, 1870. [156] The purpose of Jackson was to realize $1,200 in hand and the like sum a year thereafter. How that should be accomplished is manifested by a writing dated the 11th of January, 1870, signed by Jackson, Cummings and Oglesby. After stating that Cummings was to make his two notes, of the term and maturity above specified, it is recited that Oglesby agrees to cash the first note at five per cent, discount, the discount to be paid by Cummings, and Oglesby agrees also to indorse on the second note that he will cash the same on the 1st January, 1871, at the face of said note. The first note, in its body, contains the statement that it was for the first payment of the quarter section of land, and was indorsed thus: “For value received I transfer and assign tbe within note to A, A. Oglesby without recourse on me.” Signed J. E. Jackson. It is impossible to put any other construction on these papers, than that Oglesby was to use his money to buy or discount tbe note, so as to enable Jackson to get his cash payment; and that the second instalment might not be postponed longer than twelve months, he agreed at that time to pay the face for that note. It is in evidence that Oglesby was applied to, because he had moneyed means, and used it in loans, and that he participated in the trade after another person, who was also a capitalist, had declined. It is shown that Cummings was a comparative stranger to Ogles-by, and that the latter was under no special obligation to do him a favor. Oglesby was willing to advance bis money, because be thought the land was worth fully the price agreed to be given, and was an ample security. This exposition arising upon the face of the papers is borne out by the testimony of Oglesby and Hal pin, and partially by Crump. The latter thinks that he told Oglesby that the land was security for the note, Halpin/'who held the note for collection for Oglesby, states that about a month before the note was due, Jackson and Cummings called upon him and examined tbe note. Cummings submitted an offer to pay the face of the note, and desired Halpin to write that proposition to [157] Oglesby, who was in California; he also proposed if Oglesby would accept that offer, he would also pay off the second note at the same time. Cummings also said, that although the note was well secured, if.Oglesby declined his propositions, he must get his money at the end of the law. Cummings proffered to deposit the money with a merchant in Lardis, to await an answer from Oglesby. Shortly after this Halpin informed Cummings that he had authority to accept his offer. It would be hard to resist the conviction that both Jackson and Cummings knew that Oglesby looked to the land as security, and that they were willing for any pretext, to defeat and destroy it. Nor can it be well doubted that both Jackson and Cummings were privy to the plan by which the sale should be made and title conveyed to Mrs. Parish, who was ignorant of Oglesby’s equity. The transfer of the note by Jackson to Oglesby, transferred also pro tanto the security which Jackson held for its payment. Tanner v. Hicks, 4 S. & M., 294. That security might have been enforced by Jackson. Ib. But so soon as Jackson was paid the last instalment retained by himself, he conveyed to Cummings. Manifestly the land in Cummings’ hands would have been liable to Oglesby’s equity. But he conveyed to Mrs. Parish, an innocent and bona fide purchaser. In such circumstances, Jackson, who held the legal title as security as well for his assignee, Oglesby, as for himself, became thereby trustee for Oglesby. And if he has been faithless, and has destroyed the lien on the land, he ought to be still held trustee for the purchase money which he has realised, and be required to make the complainant sound and whole by paying him the value of the security. Cummings was an equal participant with Jackson, perhaps the guiltier of the two (since he reaped the benefit) in the acts which defeated the lien, and should share in the responsibility. The nature and efficacy of the lien upon which Oglesby advanced his money is described in Tanner v. Hicks, 4 S. & M.; Terry et al. [158] v. Woods et al., 6 S. & M., 149; Parker v. Kelly, 10 S. & M., 191, and Pitt v. Parker, 44 Miss., 252. It is in effect like conveying the title and taking security by mortgage. An assignment-of the purchase money, or any part of it, invests the assignee with all the rights of the vendor. It cannot be displaced but by some act of the assignee. The assignor cannot release it. It-may be postponed however in favor of an innocent purchaser, who has parted with value and had no notice, which was the predicament of Mrs. Parish. The decree is affirmed.