Gioso v. Di Bell

• Decision Date: 13 January 1931
• Docket Number: 12414.
• Citation: Gioso v. Di Bell, 88 Colo. 287, 295 P. 919 (Colo. 1931)
• Parties: GIOSO et al. v. DI BELL et al.
• Court: Colorado Supreme Court

295 P. 919

88 Colo. 287

GIOSO et al. v. DI BELL et al.

No. 12414.

Supreme Court of Colorado

January 13, 1931

Rehearing Denied Feb. 16, 1931.

In Department.

Error to District Court, City and County of Denver; George F Dunklee, Judge.

Suit by Rocco Gioso and another against Josephine Di Bell and others.To review the judgment, plaintiffs bring error.

Affirmed.

A. J. Fowler and Ernest B. Fowler, both of Denver for plaintiffs in error.

Frank McDonough, Jr., and Gilbert L. McDonough, both of Denver, for defendants in error.

BURKE J.

Payment was made on a note to one who assumed to act as agent and who appropriated the money.The question here is, Who must lose?

Plaintiffs in error are hereinafter referred to as plaintiffsdefendants in error as defendants, or as Di Bell, Mrs. Di Bell, and Hotz, and one James A. Fleming, who did some business under the fictitious name of Frances Borwig as Fleming.

May 15 1922, Di Bell gave his note for $2,000 to Frances Borwig.It drew 6 per cent. semiannual interest, was secured by a trust deed to Hotz on the home of Di Bell, and was payable in one year at the office of Fleming.When the note came due, Fleming, at the request of Di Bell, extended it to May 15, 1926.About May 15, 1923, Fleming sold the note and security to plaintiffs.December 22, 1924, Di Bell conveyed his home to Mrs. Di Bell.September 5, 1925, Mrs. Di Bell paid to Fleming, on principal, $800.Fleming did not then have possession of the note, kept the money, and never indorsed the payment.In May, 1926, Fleming, in the name of Borwig and with the consent of Gioso, extended payment to May 15, 1929.

Fleming paid interest to plaintiffs annually in May of each year up to and including 1927, although Di Bell had paid none.His first payment was $600 for five years' interest and was made September 8, 1927.On the back of this note appear the Borwig indorsement to plaintiffs, the two extensions of time of payment, and three entries reading 'Paid Int. to date.'All this is in the handwriting of Fleming.Although during all the time here covered plaintiffs and Mr. and Mrs. Di Bell were neighbors and intimate friends, the former not only made no attempt to collect principal or interest, but never disclosed the fact of their ownership until after the arrest of Fleming, who now appears to be serving a sentence in the state penitentiary under conviction on another charge.

Plaintiffs brought foreclosure, and Di Bell claimed credit for the $800 paid September 5, 1925.This credit was allowed by the court, and plaintiffs bring error.

As a simple matter of justice, the judgment would seem right, on the general principle that, when one of two innocent persons must suffer from the acts of a third, he must suffer who put it in the power of the wrongdoer to inflict the injury.Plaintiffs dealt with Fleming and made him their agent.A word from them to their friends that they owned the paper would doubtless have prevented the loss.They paid little attention to the conduct of their agent or their business.But they say agency to collect interest is not agency to collect principal, and that he who pays negotiable paper...