Gormley v. Bunyan

• Decision Date: 02 March 1891
• Parties: GORMLEY et al. v. BUNYAN et al
• Court: U.S. Supreme Court

138 U.S. 623

11 S.Ct. 453

34 L.Ed. 1086

GORMLEY et al. v. BUNYAN et al.

March 2, 1891.

This was an action of assumpsit, brought on the 24th of December, 1886, by James Bunyan and James Meehan, executors of the last will and testament of Edward Clark, deceased, citizens of New York, against Michael Gormley and Morton Culver, citizens of Illinois, to recover a balance due on a certain promissory note dated at Chicago, May 15, 1877, and due in three years, with interest at 9 per cent. per annum, payable semi-annually until due, and 10 per cent. thereafter, at the Chemical Bank of New York, made and signed by the defendants, payable to their own order, and by them indorsed in blank, and also the recover the amount due on six coupon notes of the same date, of $450 each, representing the semi-annual interest on the principal note, all of which notes the plaintiffs claimed to own as such executors. The declaration consisted of a specialcount on the notes, describing them as having been indorsed and delivered to Edward Clark by the defendants, alleging that the same were lost, and could not, therefore, be produced in court, and stating that the coupon notes represented interest upon the principal note; and also of the usual common counts in assumpsit of indebtedness for work and labor, materials, money lent and advanced, paid, laid out, and expended, had and received, etc., to Edward Clark. Attached to the declaration were copies of the coupon notes, and what was intended to be a copy of the principal note, but which differed from it in some minor particulars hereafter referred to. The plaintiffs also made profert of the letters testamentary issued to them as executors of the last will and testament of Edward Clark, deceased. The defendants put in a plea of the general issue, and filed an affidavit of merits, March 10, 1887. On the 8th of December, 1887, the cause then being on the trial call of cases for that day, the defendants moved to be allowed to file instanter four additional pleas, viz.: (1) Plea of nonest factum; (2) plea of the statutes of limitation of New York; (3) plea of the statutes of limitation of Illinois; and (4) plea of satisfaction. This motion was denied by the court, and the defendants excepted. Afterwards, on the 10th day of December, 1887, the case being still on the trial call of cases for that day, the defendants moved the court to be allowed to file instanter additional pleas of set-off, claiming as due them from the plaintiffs the sum of $50,000, and also former recovery. The court overruled this motion also, and the defendants excepted. The case went to trial before Judge DYER and a jury on the 15th of December, 1887. At the trial the plaintiffs offered in evidence the original principal note for $10,000 and the six coupon notes, (which it was shown had been found a few days prior thereto,) all indorsed payable to the plaintiffs, and offered evidence to prove the execution of the notes by the defendants. The $10,000 note had a credit of $8,848.50, indorsed as of September 10, 1878, and the coupon notes were marked, 'Paid.' The defendants objected to the introduction of these notes, claiming (1) that they differed from the notes set out in the special count of the declaration; (2) that they were not admissible under the common counts, which charged an indebtedness to Edward Clark, and not to the plaintiffs; (3) that the coupon notes were not described in the special count of the declara- tion, and were not admissible under the common counts, because the common counts all ran to Edward Clark, and not to plaintiffs; and (4) because the coupon notes were marked, 'Paid.' The objections were overruled, and the defendants excepted. The indorsements upon the notes were explained as follows: All of the notes had been secured by a deed of trust to Adolph Loeb upon certain described property. This trust-deed was foreclosed by Loeb, and on the 10th of September, 1878, the property was sold, under the power of sale contained in the deed, for $8,848.50. Loeb thereupon made the indorsement on the note to represent the amount of money received by him as trustee. Loeb also testified that the coupon notes had been marked, 'Paid,' by his clerk, without any authority, and that such marking was incorrect. It was further shown in evidence that the amount due on the notes at the time the sale was made was $11,027.79; and that Loeb, as trustee, deducted from the proceeds of the sale the following items: $374.09 for redeeming the property from tax-sales for the taxes of 1876 and 1877; $16, costs of advertising the sale of the property; and $200 as his fees for the sale of the property,—in all, $590.09; leaving a balance of $8,257.91 to be applied on the note, September 10,1878, which left $2,769.88 due on the note on that day. Interest was then computed on that amount at 9 per cent. to the maturity of the note, and 10 per cent. thereafter, according to the terms of the note, and the total amount due at the trial was thus ascertained to be $5,290. Objection was made at the trial by the defendants to the allowance of the above items deducted by Loeb from the proceeds of the sale of the property, on the grounds that the items for advertising and for trustee's fees were grossly excessive, and that after the trustee's sale of the property September 10, 1878, the trustee had no authority to redeem the property from the tax-sales. The plaintiffs also offered in evidence the deposition of James Meehan, one of the executors, taken in New York city before a notary public, to prove, among other minor matters that the note sued on had been in the possession of Edward Clark before his death, and had never been disposed of by him in any manner. Objection was made to the introduction of this evidence on several grounds, chiefly that the notice of taking it was defective in several particulars, and was not served on the defendants; that it was not taken by the commissioner named in the commission, and did not show when or for what reason it was taken; and that other informalities and irregularities existed on the face of it. The court overruled the objections, and admitted the deposition, and the defendant excepted. The plaintiffs also offered in evidence certified copies of the will of Edward Clark, and the probate proceedings had thereon. The defendants objected to this evidence generally, 'and on the specific ground that where the seal ought to be there is nothing but the letters 'L. S.;" but the court overruled this objection, and the defendants excepted.

The defendants sought to obtain credit on the note for a number of small items of charges made by Loeb at the time the original note and deed of trust were made and executed, which were disallowed by the court. They will be understood best, perhaps, from a recital of the following undisputed facts: The defendants, being indebted to the Travelers' Insurance Company in the sum of $10,000, with certain accrued interest, applied to Loeb, who was a loan agent in Chicago, through John Culver, a brother of one of the defendants, to secure a loan of $10,000 to pay off their debt to the insurance company. That debt was evidenced by a bond, and was secured by a deed of trust on the lands afterwards included in the Loeb trust-deed and certain other lands, to Lyman Baird. Loeb made arrangements to procure the loan from Edward Clark, through Clark's agent in Chicago, one Bolton. For procuring this loan and clearing up the title of the lands included in his trust-deed Loeb made the following charges: $40.40 to pay certain taxes due on the property, $32.50 to pay a judgment against the defendant Culver, $12.90 for a continuation of the abstract of title, $37.50 for attorney's fees, $2.25 for recording fees, and $350 for his own service in securing the loan. Accordingly, it was found that a loan of $10,000 was insufficient to satisfy the indebtedness of the defendants, and another loan of $1,300 was effected, through Bolton from Edward Clark. The money in these transactions was paid over by Bolton in the form of checks—one for $10,000, and the other for $1,300—of the Singer Sewing-Machine Company, of which Clark was president, and Bolton and agent in Chicago. The minutiae of this transaction need not be stated. It is sufficient for our purpose to state that the court held all those matters to be purely personal between Loeb and the defendants, and, therefore, having no connection with the debt due to the plaintiffs. The defendants also sought to have a credit of $142.60 allowed on the first coupon note as of date April 10, 1878; but the court held that the evidence showed that they ought to be allowed a credit of but $100 at that time, the other $42.60 having been paid to Loeb to induce him to stop proceedings which he had commenced looking to the foreclosure of the trust-deed. The defendants attempted to show by the evidence of one witness that the property sold at the foreclosure sale was worth at least $40,000, and that therefore they had been greatly wronged in the transaction; but the court refused to allow the evidence to be introduced, and the defendants excepted. The defendants also attempted to show that the notes sued on were never scheduled as a part of the estate of Edward Clark, deceased, as, they claimed, was...