Crane v. Morton Realty Co.
| Decision Date | 05 April 1916 |
| Court | Idaho Supreme Court |
| Parties | FOSTER CRANE, Appellant, v. MORTON REALTY CO., a Corporation, THE BUCKEYE RANCH CO., LTD., a Corporation, Respondents, and MORRIS & JULIEN, Intervenors and Appellants |
MORTGAGE-FORECLOSURE OF-PROMISSORY NOTES-PAYMENT OF-FINDINGS OF FACTS-SUFFICIENCY OF EVIDENCE.
1. Held, that the findings of fact are supported by the evidence and the judgment must be affirmed.
[As to intervention in foreclosure proceedings, see note in Ann.Cas 1913D, 1040]
APPEAL from the District Court of the Fourth Judicial District for Gooding County. Hon. James R. Bothwell, Judge.
Action to foreclose a mortgage on real estate. Judgment for defendants. Affirmed.
Judgment affirmed, with costs in favor of respondents. Petition for rehearing denied.
John F MacLane and Richards & Haga, for Appellants.
The assignments, whether accompanied by delivery of the notes or not, were sufficient to pass all title to the notes to Crane as against the assignors, and any person having actual knowledge of the assignment. The assignment is not an indorsement or technical negotiation of the note, but is good between the parties, and is effective to put the assignee in the shoes of the assignor. (Planters & Merchants' Ins. Co. v. Tunstall, 72 Ala. 142, 148; Baldwin v. Reynolds, 189 F. 852, 111 C. C. A. 114; Hull v. Planters & Merchants' Bank, 6 Ala. 761; Ogden on Negotiable Instruments, sec. 114; Gross v. Bennington, 52 Wash. 417, 100 P. 846; Osgood's Admrs. v. Artt, 17 F. 575; Central Trust Co. v. First Nat. Bank, 101 U.S. 68, 25 L.Ed. 876.)
The Morton Realty Co. was put upon notice and charged with knowledge of the assignment of the notes in question to Crane, and could not discharge its obligation upon the notes by payment to, or an agreement to pay, anyone else but him. (3 Page on Contracts, sec. 1275, p. 1961; Works v. Merritt, 105 Cal. 467, 38 P. 1109; McCarthy v. Mt. Tecarte Land & Water Co., 110 Cal. 687, 43 P. 391.)
Morton was the president of the company, in full charge of its affairs, and notice of the assignment to him was notice to the company. (10 Cyc. 1054, 1059.)
Where paper negotiable in form is given, the maker is re quired, in the exercise of due diligence and ordinary business caution, to require the production of the paper or its formal cancelation at the time of payment, and failing in so doing, he makes payment to the wrong person at his peril. ( Assets Realization Co. v. Clark, 205 N.Y. 105, 98 N.E. 457, 41 L. R. A., N. S., 462; Murphy v. Barnard, 162 Mass. 72, 44 Am. St. 340, 38 N.E. 29; Woodward v. Brown, 119 Cal. 283, 63 Am. St. 108, 51 P. 2, 542; Dodge v. Birkenfeld, 20 Mont. 115, 49 P. 590.)
W. G. Bissell and J. G. Watts, for Respondents.
"A verdict upon substantially conflicting evidence will not be disturbed." (Ainslie v. Idaho World Printing Co., 1 Idaho 641; O'Connor v. Langdon, 3 Idaho 61, 26 P. 659; Watson v. Molden, 10 Idaho 570, 79 P. 503; Coe v. McGran, 23 Idaho 582, 131 P. 1110; Davidson Grocery Co. v. Johnston, 24 Idaho 336, Ann. Cas. 1915C, 1129, 133 P. 929.)
"Findings of fact by the court, and judgment thereon, based upon evidence substantially conflicting, will not be disturbed on appeal." (Sabin v. Burke, 4 Idaho 28, 37 P. 352; Spaulding v. Coeur d' Alene Ry. etc. Co., 5 Idaho 528, 51 P. 408; Heckman v. Espey, 12 Idaho 755, 88 P. 80; Salisbury v. Spofford, 22 Idaho 393, 126 P. 400; Miller v. Blunck, 24 Idaho 234, 133 P. 383.)
"The rule that the supreme court will not reverse a judgment where there is a substantial conflict in the evidence applies to equity cases heard on oral testimony." (Stuart v. Hauser, 9 Idaho 53, 72 P. 719; Later v. Haywood, 15 Idaho 716, 99 P. 828; Weeter Lumber Co. v. Fales, 20 Idaho 255, Ann. Cas. 1913A, 403, 118 P. 289.)
It is conceded that between the Morton Realty Co. and the Buckeye Ranch Co. the notes herein sued upon are paid. It necessarily follows that if the plaintiff has any right to enforce and collect the same, the right must be predicated upon the theory that he was and is an innocent purchaser of the same for value before maturity, and is protected in his rights by the law-merchant.
In order to be a holder in due course, he must take it in the usual course of business. (Wilson v. Metropolitan Electric R. Co., 120 N.Y. 145, 17 Am. St. 625, 24 N.E. 384; Rochester & Turn Pike Road Co. v. Paviour, 164 N.Y. 281, 58 N.E. 114, 52 L. R. A. 790; Kipp v. Smith, 137 Wis. 234, 118 N.W. 848.)
"One who takes negotiable paper of a corporation in payment of or as security for the individual debts of its officers is not a bona fide holder thereof." (West St. Louis Sav. Bank v. Shawnee etc. Bank, 95 U.S. 557, 24 L.Ed. 490; McLellan v. Detroit File Works, 56 Mich. 579, 583, 23 N.W. 321; Wilson v. Metropolitan Electric R. Co., supra; Jenkins v. Planters & Mechanics' Bank, 34 Okla. 607, 126 P. 757.) There being no debt due from Morton to the intervenors, no action could be by them maintained on the collateral. (Herrmann v. Central Car Trust Co., 101 F. 41, 41 C. C. A. 176; Latta v. Tutton, 122 Cal. 279, 68 Am. St. 30, 54 P. 844; G. Ober & Sons Co. v. Drane, 106 Ga. 406, 32 S.E. 371; Bowditch v. Green, 44 Mass. (3 Met.) 360.)
This action was brought by the plaintiff, who is one of the appellants here, to foreclose a mortgage securing a series of twenty promissory notes, executed by the Morton Realty Company, a corporation, to the Buckeye Ranch Company, a corporation, six of which promissory notes in the amount of $ 2,500 each the plaintiff alleged had been assigned to him. The remaining fourteen promissory notes he alleges have been paid.
The defendant Morton Realty Company answered, admitting the making of the notes, but averred that prior to the time of the delivery of the notes sued on the same had been by the Morton Realty Company paid and discharged, and further alleged facts showing that the plaintiff was not an innocent purchaser for value of the six promissory notes; that the notes in question were the property of the Buckeye Ranch Company and were on their face payable to said company; that one W. L. Coltharp was president and one P. E. Dusault was the secretary of said Buckeye Ranch Company; that as such president and secretary they assigned three of said promissory notes to said Coltharp as an individual, and three to said Dusault as an individual, who in turn assigned them as collateral security to the plaintiff to secure the individual debts of said Coltharp and Dusault, said debts being evidenced by the individual notes of Coltharp and Dusault in the sum of $ 6,650 each.
M. J. Morris and J. G. Julien, a copartnership doing business under the firm name and style of Morris & Julien, were permitted to intervene, and filed their complaint in intervention and claimed by assignment three other notes of said series of twenty, which they alleged had likewise never been paid, and prayed for judgment for the sum of $ 7,500 principal, together with interest, and also attorneys' fees, against said Morton Realty Company and the Buckeye Ranch Company, and also prayed for a foreclosure of said mortgage as to said three notes.
The plaintiff, Crane, answered said complaint in intervention, denying the material allegations thereof, and prayed that the complaint in intervention be dismissed and that the intervenors take nothing by their action.
Upon the issues thus made the cause was tried by the court with a jury, and the jury returned an advisory verdict by answering certain special interrogatories submitted to it. The court adopted the findings of the jury, made additional findings, drew conclusions of law therefrom and entered a decree in favor of the respondents, the Morton Realty Company and the Buckeye Ranch Company, and against the plaintiff and the intervenors, who are appellants here.
The appeal is from the judgment.
The following facts, among others, appear from the record: The Buckeye Ranch Company was incorporated August 13, 1908, with a capital of $ 21,000, the stockholders being P. E. Dusault W. L. Coltharp and Charles Dilatush. However, one J. E. Clinton had a secret undivided one-half interest in Dusault's stock. The defendant Morton Realty Company was incorporated March 17, 1909, with a capital of $ 200,000 by John W. Morton, Frank R. Gooding and P. E. Dusault. On March 11, 1909, the Buckeye Ranch Company contracted to sell the premises in...
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State v. Ramirez
...was rendered and the remittitur sent down on June 19, 1906, and withdrawn from the lower court on June 22, 1906. In Crane v. Morton Realty Co., 29 Idaho 63, 157 P. 249, the clerk's records show that this court rendered judgment April 5, 1916, sent down its remittitur April 27, 1916, and rec......