Hollinshead v. John Stuart & Co.
| Decision Date | 27 May 1898 |
| Docket Number | 6731 |
| Citation | 77 N.W. 89,8 N.D. 35 |
| Court | North Dakota Supreme Court |
Former order of affirmation set aside, and judgment entered and decree of foreclosure form in favor of intervener, John Stuart & Co., Limited, and against the plaintiff, Charles Hollinshead, with costs to intervener. Reversed.
On petition of appellant a rehearing was ordered in this case and, there having been a change in the members of the Court in the meantime, the case has been again fully argued upon all points. But, as to all the points except the one hereinafter mentioned, we are satisfied with the opinion as it stands, and shall not notice them further. It is urged upon us, however, that in our former opinion we carried the doctrine of equitable estoppel in pais to an unwarranted length, and that the facts recited in the opinion do not constitute such estoppel, under the circumstances of this case; and, after a very careful consideration of the point we have reached the conclusion that this contention must be sustained. What we regard as the general rule of law was correctly stated by Chief Justice Corliss in the original opinion, in these words: "Although the purchaser of such [negotiable] paper does not notify the debtor of the fact of such purchase, and although the latter is ignorant thereof, still he is, in law, chargeable with notice of the rights of the purchaser, and therefore he pays the original creditor at his own risk." The authorities cited abundantly sustain the proposition. The principle has been further illustrated by many cases. Williams v Walker, 2 Sand. Ch. 325, involved kindred questions to those that arise in this case. There the money had been paid by the maker of the bond and mortgage to the solicitor who made the loan, and who for a time held the securities as agent for the payee, and received the interest thereon, but the payee had withdrawn such securities before the payment of principal was made. The payment was made in ignorance of such fact. The decision, as condensed in the syllabus, reads In that case the chancellor reviewed the English and American authorities at length, commencing with Henn v. Conisby, 1 Ch. Cas. 93, decided in 1668, and following down to the date of the decision (1845); and all the authorities thus reviewed support the conclusion reached, except the single case of Spencer v. Wilson, 18 Va. 130, 4 Munf. 130, which case, the chancellor says, "is either carelessly reported, or was a loose decision." The matter of hardship in requiring the debtor to pay the same debt twice was as apparent in the case reported in Sanford as in this case. The chancellor said: "This is a case of great and peculiar hardship,--one which I would gladly have relieved against, were it possible, consistent with the maintenance of sound and important rules of equity, and with dispensing exact justice to the equally innocent creditor." No question of negotiability was discussed in that case, and the rule requiring the production of the securities in order to protect a debtor who pays to an agent or a supposed agent applies equally whether the securities be negotiable or non-negotiable Mechem, Ag. § 373, and cases cited; Jones, Mortg. § 964, and cases cited. In Doubleday v. Kress, 50 N.Y. 410, it was held that possession by a presumed agent of an unindorsed negotiable note was not sufficient to protect the debtor. The case of Wilson v. Campbell (Mich.) 110 Mich. 580, 68 N.W. 278, is strongly in point. The action was brought by a grantee of the original mortgage to enforce satisfaction of the mortgage of record. The defendant, Campbell, was an indorsee before maturity of the note secured by the mortgage, and held the note and mortgage in his possession. No assignment of the mortgage to him was of record. He forwarded the interest coupons to the Michigan Mortgage Company, Limited, for collection; and the interest was paid to said company by Wilson, and the coupons delivered to him. Wilson also paid the principal to said company at about the date of the maturity of the note, by executing to said company a new mortgage and note. He testified that he supposed that the Michigan Mortgage Company, Limited, was the owner of the first note. The trial Court held Campbell estopped from denying the authority of the mortgage company to receive the money. The Supreme Court, in reversing the case, said: To exactly the same effect see ...
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