Bender v. Matney

• Decision Date: 24 May 1894
• Citation: 26 S.W. 950,122 Mo. 244
• Parties: Bender, Appellant, v. Matney et al
• Court: Missouri Supreme Court

26 S.W. 950

122 Mo. 244

Bender, Appellant, v. Matney et al

Supreme Court of Missouri, Second Division

May 24, 1894

Appeal from Buchanan Circuit Court. -- Hon. A. M. Woodson, Judge.

Affirmed.

H. S Kelley for appellant.

(1) The referee erred in refusing to take and state an account between the parties. The referee's findings of fact in an equity proceeding are not conclusive upon the trial or appellate court. Heman v. Britton, 88 Mo. 549 Hardware Co. v. Wolter, 91 Mo. 484; Co. v Bissell, 41 Mo.App. 426; Holt v. Simmons, 16 Mo.App. 97; Pendergast v. Eyerman, 16 Mo.App. 387; Bender v. Markle, 37 Mo.App. 234. (2) Where the evidence is reported on which the conclusions are based, the court will determine the points in controversy upon the evidence reported. Ely v. Ownby, 59 Mo. 437; Goetz v. Piel, 26 Mo.App. 634; Bender v. Markle, 37 Mo.App. 234. (3) The evidence is reported and returned to the court with the report and findings of the referee, and we ask the court to determine the questions in the controversy. The court may accept the report of a referee as to the facts found, without accepting his inferences or conclusions of law. Bank v. Miller, 73 Mo. 187. (4) The record should show that the cause was considered by the court, and that the judgment was founded on the testimony reported by the referee. Pomeroy v. Benton, 77 Mo. 64; S. C., 6 Mo.App. 596. And when it is apparent on the face of the report that the decision is erroneous, the judgment of the court confirming the report is erroneous. Shore v. Coons, 24 Mo. 556. (5) The referee erred in his conclusions of law and fact and in recommending that plaintiff could not recover.

S. S. Brown and Vinton Pike for respondents.

(1) The plaintiff can not recover for the reason that his title originated in fraud. (2) The plaintiff has no equitable interest and his legal title is vitiated by his fraud. Loos v. Wilkinson, 113 N.Y. 485; 21 N.E. 395. (3) King can sue upon the judgment, and, if the assignment to Bender is pleaded, reply the fraud. Cravens v. Gillilan, 73 Mo. 524-528. Or he can sue in equity to set aside the assignment. Doss v. Dores, 60 Mo. 300. Or sue Bender, Albin and Matney for damages. Work v. McCoy, 54 N.W. 140. (4) The foregoing is on the assumption that King was deceived and defrauded. If he was not, then the transaction was, in form, a purchase by Bender, acting as the agent of Albin; but in legal effect, a release to Albin, by King. Bender took the assignment for Albin, and paid for it with Albin's funds. He could acquire no interest in the judgment, adverse to his principal. Bent v. Priest, 86 Mo. 482; Bartholomy v. Leach, 7 Watts, 137; Grace v. Andrews, 59 Cal. 119; Yerkes v. Crum, 2 N. Dak. 72; 49 N.W. 422; Hindman v. O'Connor, 54 Ark. 627; Cunningham v. Jones, 37 Kan. 477; Mason v. Bowman, 62 Ill. 76; Briggs v. Hodgdon, 78 Me. 514; Geisinger v. Beyl, 50 N.W. 501. (5) An agent receiving profits can not set up against his principal the illegal character of the transaction, in which they were realized. In pari delicto potior est conditio defendentis, does not apply. Pointer v. Smith, 7 Heisk. (Tenn.) 137; Brooks v. Martin, 2 Wall. 70; Railroad v. Durant, 5 Otto, 576; Whart. on Agency and Agents, secs. 26, 250. Bender's alleged agency for King was not known to Albin and Matney; nor was the character of his agency for them known to King. Atlee v. Fink, 75 Mo. 100; Schaffer v. Blair, 149 U.S. 258. (6) If the assignment was a fraud upon King, and was procured by Bender for Albin, and paid for with his money, or money Bender acknowledged to be his, whatever was acquired by the assignment, belonged to Albin. He can not set up the fraud and keep the thing purchased for himself. Larimore v. Tyler, 88 Mo. 661-668; McBlair v. Gibbs, 17 How. 232, and cases cited; Brooks v. Martin and Pointer v. Smith, supra. (7) If the funds came to Bender's hands in such way that Albin could not make him account, yet Bender could account for them. If he held them in trust for Albin, under such circumstances, it rested upon his honor, whether he should account for them. McBlair v. Gibbs, supra. This obligation Bender performed by crediting them to Albin and paying them out on his account.

OPINION

Burgess, J.

This is an action by plaintiff as assignee of a judgment rendered in the circuit court of Buchanan county, in favor of William H. King against James A. Matney, guardian and curator of said King, and the defendants Albin and Gaston as sureties on his, Matney's, bond, as such guardian and curator. The penalty of the bond was $ 4,000; the damages being assessed at $ 3,387.39, for which judgment was rendered at the May term, 1874, of said court, bearing ten per cent. interest per annum from that date.

On the fifteenth day of September, 1875, there was paid on said judgment the sum of $ 800. On the twenty-fourth day of October, 1877, the lien of the judgment was revived and continued in full force and an execution ordered to be issued for the amount of the judgment and costs. On the tenth day of December, 1877, the judgment was duly assigned upon the margin of the record of judgments by said King to the plaintiff Bender and one Albert Shaw. On the sixteenth day of February following, Albert Shaw assigned, in the same way, all of his interest in said judgment to the plaintiff Bender. On the twenty-seventh day of February, 1879, the judgment was revived by agreement between plaintiff Bender, Matney and Albin, and continued in full force. The order of revival recited that "the judgment had been revived on the twenty-fourth day of October, 1877, and continued in full force against said defendants, and said judgment being on the sixteenth day of February, 1878, for a valuable consideration, assigned to John C. Bender, is to be revived and continued in full force and effect," subject to the credit of $ 800, and that said plaintiff recover his costs.

The defendants answered separately but there is no material difference between the averments contained in the answers of Matney and Gaston. They allege that about the second day of February, 1878, Bender had in his possession and under his control certain funds and property of the defendant Albin, and it was agreed by and between said Albin and the other defendants on the one side, and the plaintiff on the other side, that the plaintiff should purchase the said judgment from said King at such sum as said King, knowing all the facts and circumstances, should consider should be the fair market value thereof, paying therefor out of the funds in his hands belonging to said Albin, to the full extent of such funds, and paying any balance, if there should be any, out of his own funds, and should cause execution to issue on said judgment, and the property claimed by Matney to be sold, and that Bender would become the purchaser and would hold the property for the sole purpose of paying said Albin and Bender such sums as should be advanced out of their funds to pay said King the purchase price of said judgment, and that Bender would sell the property so purchased by him, and after paying the amount so paid for said judgment and a reasonable charge for his services, would pay to Matney any sum that might remain, and reconvey all said property remaining unsold, and would thereupon satisfy said judgment. That pursuant to said agreement, Bender purchased the judgment from King, as trustee, for $ 350, and caused execution to issue, and the property of Matney to be sold, and bought it in, giving a description of the property; and that he has sold a certain amount of said property, and received therefor $ 2,450, and paid the defendant Matney $ 500, and that he has conveyed other property, and he asks for an accounting.

The defendant Albin, in his separate answer, admits that the judgment sued on "was duly given and made," and that it was assigned to the plaintiff, and charged that long before the commencement of this suit said judgment was fully paid up and satisfied. He then stated that he was largely indebted and financially embarrassed, and that he was only surety in the bonds upon which the judgment was rendered, and that Bender proffered to assist him out of his difficulties, and undertook to manage and administer his estate, and that when Bender purchased and took an assignment of the judgment in suit, he purchased the same out of funds in his hands belonging to this defendant and did not pay therefor anything from his own funds; that he purchased said judgment as the agent and trustee of this defendant, instead of taking a satisfaction and cancellation thereof; that said purchase and transfer, while to said Bender in form, was in equity and good conscience a discharge and release of said judgment; that Bender had the management and control of Albin's affairs, and the disposition of his property; that Bender has never rendered to defendant any account of his said trust or offered to settle or adjust the same; that Bender has adjusted all defendant's debts.

The plaintiff filed reply denying each and every allegation of Albin's and Gaston's answers, and denied all of Matney's answer, except as otherwise stated, viz: that he had purchased certain real estate and sold part of the same and used the money in paying taxes and other expenses, paid part of it to Matney, and expended the whole amount thereof for the benefit of Matney; and charged that plaintiff owed him $ 1,000 for one-half of a lot, and that he owed plaintiff $ 6,000 for time expended in and about Matney's business and for money paid and expended for his use and benefit which sums plaintiff offered as a counterclaim against any sum that might be found against him on account of the matters set up in the answer, and asked judgment for any balance that might be found in his favor on...