Eagle Lumber & Supply Co. v. De Weese

• Decision Date: 15 June 1931
• Docket Number: 28755
• Citation: 163 Miss. 602,135 So. 490
• Parties: EAGLE LUMBER & SUPPLY Co. et al. v. DE WEESE et al
• Court: Mississippi Supreme Court

135 So. 490

163 Miss. 602

EAGLE LUMBER & SUPPLY Co. et al. v. DE WEESE et al

No. 28755

Supreme Court of Mississippi

June 15, 1931

Division A

Suggestion Of Error Overruled, July 24, 1931.

APPEAL from chancery court of first district of Hinds county, HON V. J. STRICKER, Chancellor.

Suit by A. De Weese against the Eagle Lumber & Supply Company, the Jackson-State National Bank, and others. From the decree defendants named appeal. Affirmed.

Affirmed.

Green & Green, of Jackson, for appellant.

Fraud is never to be presumed, and must be clearly proved.

Willoughby v. Pope, 101 Miss. 808, 58 So. 705.

The bank had no notice whatsoever of the form of the lien existent under the first trust deed.

Spellman v. McKeen, 96 Miss. 693, 51 So. 914; Acer v. Westcott, 46 N.Y. 384.

The general principle is that, where the agent is interested hostilely to the principal, communication or notice to the agent of facts are not notice to his principal.

Scott Milling Co. v. Powers, 112 Miss. 798, 73 So. 792; Sims v. Kline, 139 Miss. 246, 104 So. 85; Cooper v. Robertson Investment Co., 117 Miss. 108, 77 So. 953; Bank v. Leeton, 95 So. 447, 131. Miss. 324; Hirsch v. Kennington, 124 So. 344, 155 Miss. 242.

This trust deed was validly cancelled by a partner in the business.

Bradbury v. McLendon, 80 So. 633, 119 Miss. 210; Parberry v. Johnson, 51 Miss. 291, at 296; 47 C. J. 860.

Said trust deed, having been to Golden, trustee, for A. De Weese, beneficiary, the trustee may enter satisfaction.

The general rule is that the proper party to enter satisfaction of a mortgage upon the record is the mortgagee, the person shown by the record to be entitled to receive payment; that an assignment of the mortgage will not be presumed; and that a subsequent bona fide purchaser from the mortgagor, who, without notice of assignment, has parted with his money, relying upon a cancellation made by the party shown by the record to be the proper party, will be protected against the equity of the assignee.

Federal Land Bank v. Branscomb, 105 So. 585; sec. 2442, Hem. Code of 1927.

The recordation of the trust deed in favor of De Weese did not give notice to the world that he owned the Huggins indebtedness.

Loeb v. Chicago St. L. & N. O. Ry. Co., 60 Miss. 939; DeLashment v. McClelland, 118 So. 904, 152 Miss. 133; Wolfe v. Central Lumber Co., 124 So. 765, 155 Miss. 750.

That whereof constructive notice is here sought to be imputed is not as to any right in the land as against a purchaser and/or a creditor, but as to a personal chose in action, namely, the debt whereof there never was an application of constructive notice under the registration statutes.

The notes of Golden were pledged to the bank and pledged to the Eagle, and being negotiable notes, not yet due, the pledgee thereof, for a prior indebtedness is a purchaser for value since the negotiable instrument act was passed.

Formerly the right of following trust property depended upon the ability of identifying it, the equity attaching only to the property misapplied. This right was first extended to the proceeds of the property--namely, to that which was procured in place of it by exchange, purchase or sale. But if it became confused with other property of the same kind, so as not to be distinguishable, without fault on the part of the possessor, the equity was lost. Finally, however, it has been held as the better doctrine that confusion does not destroy the equity entirely, but converts it into a charge on the entire mass, giving to the party injured by the unlawful diversion a priority of right over the other creditors of the possessor. This is as far as the rule has been carried.

Shields v. Thomas, 71 Miss. 260, 14 So. 84.

When the cancellation was had by Mr. Golden, it became operative in favor of those holding in good faith and without notice, and the authority of Golden to receive payment and to cancel originated from the fact that he made the trade, made the deed, was allowed so to do and had in his possession and under his control securities therefrom arising and was utilizing them from time to time.

2 C. J., sec. 260, p. 623.

Wells, Jones, Wells & Lipscomb, of Jackson, for appellant.

The doctrine of equitable election is founded on the principle that he who seeks equity must do equity.

Barrier v. Kelly, 33 So. 974, 82 Miss. 233, 62 L.R.A. 421.

The right to sue at law or in equity may be cut off as of right and equity, where the facts clearly show that the conduct of the person suing has been plainly such as to operate against him an estoppel, within the law of estoppel.

Lake v. Perry, 49 So. 569, 95 Miss. 550.

Estoppel must arise from some word spoken, act done, or failure to speak when called on to speak.

Canal Commercial Trust & Savings Bank v. Brewer, 108 So. 424, 142 Miss. 146, 47 A.L.R. 45; 47 S.Ct. 96, 273 U.S. 638, 71 L.Ed. 816.

If an officer of a bank who has purchased a note from the bank was present when payment was made to the bank and did not disclose his ownership, he is estopped from suing on the note.

Sivley v. Williamson, 72 So. 1008, 112 Miss. 276.

Where one of two innocent purchasers must suffer, the one whose negligence or conduct occasioned the loss must bear it.

Hall v. Box, 94 So. 221, 131 Miss. 218.

Where the maker of a note promises a, prospective purchaser that he will pay it, or represents to him that the note is valid and that there is no defense thereto, he is estopped to resist payment in any action by such purchaser who relied on such representations, and he will be precluded from setting up as a defense that the note was for a gambling debt.

Dayhood v. Neely, 99 So. 440, 135 Miss. 14.

Where plaintiff, depending upon a statement of defendant that a third person is the owner of property, makes a loan to such third person upon it, in an action against him for its recovery defendant will be estopped from denying that it belonged to such third person.

Mask v. Allen, 17 So. 82.

A husband conveyed land to his wife for a voluntary consideration, recorded the deed, made improvements in fraud of and at the expense of subsequent creditors. The wife knew she had no money, that the husband had none, and that the improvements were being made at the expense of some one. Held, that she was estopped from asserting her title as against such creditors of her husband.

Wynne v. Mason, 18 So. 422, 72 Miss. 424.

As to, other instances of estoppel see:

Frederic v. Mayers, 43 So. 677, 89 Miss. 127; Hafter v. Strange, 3 So. 190, 95 Miss. 323, 7 Am. St. Rep. 659; Vicksburg & M. R. Co. v. Barrett, 7 So. 549, 617 Miss. 579; Richardson v. Toliver, 16 So. 213, 71 Miss. 966; Strauss Bros. v. Denton, 106 So. 257, 140 Miss. 745, 45 A.L.R. 341.

The general rule is that the proper party to enter satisfaction of a mortgage upon the record is the mortgagee, the person shown by the record to be entitled to receive payment; that an assignment of the mortgage will not be presumed; and that a subsequent bona fide purchaser from the mortgagor, who, without notice of the assignment, has parted with his money, relying upon a cancellation made by the party shown by the record to be the proper party, will be protected against the equity of the assignee.

Federal Land Bank v. Branscomb, 105 So. 585.

Golden & De Weese were partners in this venture and that being true the cancellation made by one of them was binding as to all.

Bradbury v. McLendon, 119 Miss. 210, 80 So. 633; Parberry v. Johnson, 51 Miss. 291, 296; 47 C. J. 860.

A bank dealing, whether to its own benefit or otherwise, with, through or under any person, who is or may be an agent, trustee, or other fiduciary, or a corporate officer, agent or employee, or a partnership member or representative, shall not be deemed to have notice of or be obliged to inquire as to any lack of or limitation upon the power of such person by reason in and of itself, either of the fact that such person has executed in his representative capacity and is himself the payee or endorsee of any check, bill, note or other promise or order, or of the, use of descriptive words in connection with his deposit account or accounts, any transfer, certificate or memorandum thereof, or in connection with any signature or endorsement of such person.

Section 3882, Hemingway's Code of 1927.

Our registry laws are intended only for the protection of purchasers and creditors.

Loeb v. R. R. Co., 60, Miss. 933.

De Weese is not entitled to have transferred to him in any event more than two thousand five hundred dollars of the note for four thousand two hundred fifty dollars executed by Huggins and wife in January, 1928, but dated June 21, 1927, because complainant himself admitted that his agreement with Golden was that he was to be interested in the second mortgage note of Huggins and wife only to the extent of two thousand five hundred dollars.

At the utmost the only relief which the complaint can have here is to have the prior note and deed of trust securing it reinstated and declared a live lien on the, property, leaving the present note and deed of trust as an outstanding obligation in the hands of the present owner, the Lumber Company.

A money judgment against, the bank was erroneous for the reason that it did not collect that money under the assignment of the note and mortgage which ran to J. E. Golden, trustee, etc., but under pledge of the present paper which simply ran to J. E. Golden, individually.

The requirement of full payment, section 2155, Code of 1930, has nothing to do with the right of the mortgagee, whatever his capacity may be, to cancel the deed of trust. The requirement of full payment operates only when the mortgagor is demanding the cancellation. That section provides a penalty on the...