Bishop v. Chase
| Decision Date | 08 May 1900 |
| Citation | 56 S.W. 1080,156 Mo. 158 |
| Parties | BISHOP et al., Appellants, v. CHASE et al |
| Court | Missouri Supreme Court |
Appeal from Jackson Circuit Court. -- Hon. John W. Henry, Judge.
Affirmed.
A. F Evans and Frank F. Brumback for appellants.
(1) One who takes a negotiable note payable to order without indorsement or merely by assignment, takes only the title of the person who transferred to him and subject to all equities against the note. This is so even though the note be taken before maturity, for value and without notice of such equities. Tiedeman on Com. Paper, sec. 247; Randolph on Com Paper, secs. 788, 789; Patterson v. Cave, 61 Mo 439; Weber v. Orton, 91 Mo. 677; Quigley v. Bank, 80 Mo. 289; Doll v. Hollenbeck, 19 Neb. 639; Gaylord v. Bank, 74 N.W. 415; Pavey v. Stauffler, 12 So. Rep. 512; Central Trust Co. v. Bank, 101 U.S. 68; Omaha Bank v. Walker, 5 F. 399. (2) Lahme took the Chambers note without indorsement. The collateral agreement pinned to the note was certainly not an indorsement and indeed it was not even an assignment. Tiedeman on Com. Paper, secs. 264, 256; Daniel on Neg. Instruments, sec. 690; Peck v. Bligh, 37 Ill. 318; Haskell v. Brown, 65 Ill. 29; Franklin v. Twogood, 18 Ia. 515; s. c., 25 Ia. 520; Osgood v. Artt, 17 F. 575; De Haas v. Roberts, 59 F. 853; Aniba v. Yeomans, 39 Mich. 171; Gaylord v. Bank, 74 N.W. 415; Thomson Co. v. Capitol Co., 56 F. 849; Belcher v. Smith, 7 Cush. 482. (3) The Chambers note was paid in Hick's hands with the money of the Jones estate and was not enforcible by Chase, the executor of the Jones will. Lahme stood in no better position than Chase because he took the note without indorsement. Bunn v. Lindsay, 95 Mo. 250; Patrick v. Boonville Co., 17 Mo.App. 462; Kellogg v. Schnaake, 56 Mo. 136; Murphy v. Simpson, 42 Mo.App. 654; Bank v. Wingfield, 68 Mo.App. 335; Appledorn v. Streeter, 20 Mich. 9. (4) There is no estoppel against the appellants by reason of anything they did in relation to the removal of Chase as executor and the proceedings taken by his successor. Comstock v. Eastwood, 108 Mo. 41; Nansen v. Jacobs, 93 Mo. 331, 346; Blodgett v. Perry, 97 Mo. 264; Clark v. Bettelheim, 144 Mo. 258; State v. Branch, 52 S.W. 390.
Powell & Powell for respondents, Kumpf and Pierce.
The judgment rendered in favor of Seehorn, as such administrator, against Chase and his sureties, Pierce and Foree, on January 20th, 1896, for $ 18,198.81, and all the findings of the court therein are binding on Seehorn as such administrator, on the estate and on the plaintiffs, heirs and devisees under the will, and is a bar to an action by these plaintiffs. (a) A judgment against administrator both as to personalty and realty is conclusive on the heirs. Moody v. Peyton, 135 Mo. 482; Ward v. Brown, 87 Mo. 468. (b) A judgment in an action by or against a trustee will be a bar to an action by the beneficiary. Barton Bros. v. Martin, 60 Mo.App. 351; Wych v. East India Co., 3 P. Wm. Ch. 309; Bryan v. Means, 29 Ala. 423; Williams v. Otey, 8 Humph. 563.
Wash Adams and R. H. Field for respondents, Lahme and Arnold.
(1) When the transfer of negotiable notes before due for value is accompanied by a written paper (an allonge) pinned to the note setting forth a qualified indorsement of the note (as in this case), this is a sufficient indorsement of the note to invest the transferee of the notes with all the rights of a bona fide purchaser, the same as if the indorsement had been written on the note itself. Crosby v. Roub, 16 Wis. 645; Partridge v. Davis, 20 Vt. 488. (2) Lahme was not called upon to take notice of the deed from Chambers to Crawford nor of the deed from Crawford to the plaintiffs, because they were subsequent in date and record, to the deed of trust given to secure the $ 3,700 note. Coldbrook on Coll. Security, sec. 147; Crockett v. McGuire, 10 Mo. 37; Digman v. Collum, 47 Mo. 374; Lincoln v. Thompson, 75 Mo. 613; Bartlett v. Eddy, 49 Mo.App. 45. (3) Plaintiffs are strangers to the $ 3,700 note and to its alleged payment, if made; therefore they can have no advantage therefrom. Kelly v. Staed, 136 Mo. 430; Bartlett v. Eddy, 49 Mo.App. 33; Hunleth v. Leahy, 146 Mo. 408. (4) Plaintiffs learned from Chase in September, 1890 (through their attorney, A. F. Evans), that Chase claimed to have paid off the $ 3,700 note and failing to get the note from him, four or five years after so learning of Chase's claim of payment, elected to cause or suffered the transaction of Chase with Hicks to be treated by the probate court as not a payment by Chase of the $ 3,700 note for the estate, but as a transaction for his (Chase's) own use, and charged and caused or suffered him to be charged therewith and with interest thereon accordingly. The plaintiffs were thereby estopped to thereafter claim, as against Lahme or even as against Chase, that the transaction of Chase with Hicks in respect of the $ 3,700 note was a payment for, or on behalf of, the Jones estate, or its beneficiaries, and the court for this reason alone, properly dismissed the plaintiffs' petition in this action, based upon such claim. Barker v. Barker, 14 Wis. 146; Fowler v. Savings Bank, 113 N.Y. 450; Bigelow on Estoppel, p. 642; Herman on Estoppel, pp. 1172, 1173; Nanson v. Jacobs, 93 Mo. 346; Knoop v. Kelsey, 102 Mo. 298. And even if the plaintiffs had not authorized, nor participated by their attorneys in, the recast of the account between Chase and Seehorn, his successor, they were in law represented by Seehorn and bound by his action in the settlement in the probate court, in accepting from the probate court a withholding from Chase and his sureties a credit for the $ 5,000 on account of purchase of property and $ 3,700 note in question, and by his receiving and accepting judgment there charging them (Chase and his sureties) therewith and with interest thereon as for Chase having bought the Hicks note and deed of the property for himself individually. R. S. 1889, sec. 48; Ward v. Brown, 87 Mo. 468; State ex rel. v. Moore, 18 Mo.App. 406; Smarr v. McMasters, 35 Mo. 351; Young v. Byrd, 124 Mo. 591; Reed v. Perry, 1 Monroe (Ky.), 253; Alston v. Cohen, 1 Wood, 487; Lalibut v. Pruitt, 1 Wood, 144; Pomeroy on Rights and Remedies, sec. 261.
A. F. Evans and Frank F. Brumback for appellants in reply.
(1) Even if the theory advanced by respondents of following trust fund should be adopted, then even more conclusively does it appear that the action in the probate court was not an election, because the rule is well established that one may sue for trust funds and at the same time pursue the property into which they have gone. Holly v. Domestic and Soc., 85 F. 249; Wemple v. Hawenstein, 46 N.Y.S. 288; R. Pierson's Estate, 46 N.Y.S. 557; Goodyear v. Caduc, 144 Mass. 85; Walden Bank v. Birch, 130 N.Y. 221. (2) The judgment obtained by Seehorn could not operate as an election because the appellants did not know the facts as they actually stood. 7 Am. and Eng. Ency. Plead. and Practice, p. 366; Bank of Lodi v. Washburn, 74 N.W. 363. The modern doctrine of election is that satisfaction constitutes a bar, but no preliminary step can estop. Miller v. Hyde, 37 N.E. 760; In re Pierson's Estate, 46 N.Y.S. 557; Bowdish v. Page, 47 N.E. 44.
This is a suit in equity by plaintiffs to set aside a trustee's sale of a small tract of land in Kansas City, Missouri, made by defendant O'Neill, sheriff, and trustee under a deed of trust on said land, executed by J. T. Chambers and his wife Othelia on the 19th day of April, 1889, to Samuel Foster, trustee, for the use and benefit of Charles R. Hicks, to secure the payment of a promissory note for the sum of $ 3,700, dated on the 17th day of April, 1889, due three years after its date and executed by said Chambers and wife to said Hicks.
In 1878 one John Jones died testate in Ohio possessed of real and personal property in Jackson county, this State. He left surviving him as his only heirs at law two children, viz., Mary E. Bishop and Edward J. Jones. By his will which was duly admitted to probate in said county, the testator named Charles W. Chase as his executor, who thereafter qualified as such. By his will the testator directed his executor to sell all of his real estate, and after paying some bequests to invest the balance of the proceeds in unincumbered real estate, the interest and profits arising from which was to be divided equally among his two children during their natural lives. The investments were to be made in Kansas City property.
The executor sold the land as directed by the will, realizing therefrom something over twenty-two thousand dollars. He then began negotiations with Matt. H. Crawford for the purchase of the land in litigation, for which the latter asked five thousand dollars.
It had formerly been owned by said Chambers and wife, from whom Crawford derived title, and while they owned it they had placed upon it the deed of trust under which it was sold at trustee's sale, at which defendant Arnold became the purchaser. In the negotiations between Chase and Crawford for the purchase of the land it was developed that it was incumbered by said three thousand seven hundred dollar deed of trust, and they went to Hicks to whom the note was executed to see what could be done about it. Hicks had negotiated the note, and did not have it in his possession, but promised to get it back, and thereupon Chase by his individual check paid $ 3,852.11, the amount of the note and four coupon notes then due, and two per cent commission thereon to Hicks. At the same time Hicks made out in the name of Hicks and Foster (of which firm he was a member) and delivered to Crawford the following receipt.
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