Kucher v. Scott
| Decision Date | 18 May 1917 |
| Docket Number | 13584. |
| Citation | 96 Wash. 317,165 P. 82 |
| Parties | KUCHER v. SCOTT et al. |
| Court | Washington Supreme Court |
Department 1. Appeal from Superior Court, King County; Boyd J. Tallman Judge.
Action by C. W. Kucher and another, against Richard M. Scott and Duncan W. Campbell. From a judgment for defendants, the named plaintiff appeals. Affirmed.
Roney & Loveless and Brightman & Tennant, all of Seattle, for appellant.
Ralph E. Moody, of Portland, Or., and Wilson R. Gay and Douglas Lane & Douglas, all of Seattle, for respondents.
The plaintiffs, being the owners of certain real property in the city of Seattle which was covered by two mortgages, claiming that one of the mortgages was invalid, but not knowing which one, brought this action for the purpose of securing the cancellation of the void mortgage, whichever one it might be. The defendants are respectively the owners of the two mortgages. The trial resulted in a judgment adverse to the plaintiffs' contention. From this judgment, the appeal is prosecuted.
The facts which gave rise to the litigation are substantially these: For many years, A. Robinson & Co., had been engaged in the real estate, loan, and insurance business in the city of Seattle. All the transactions here involved were handled by this company, through its secretary, Wilbur S. Lewis, who, on March 9, 1915, committed suicide. On January 30, 1912, the appellant purchased from F. C. Riley and wife a dwelling house, and the lot, or lots, which it occupied. At this time, the property was subject to a mortgage held by one John Benson, in the sum of $4,000. This mortgage, and the note which it was given to secure, were made payable to A. Robinson & Co., and by it transferred to Benson. It was the custom of that company, when making loans, to have the note and mortgage made payable to it, and then indorse the note and assign the mortgage to the person advancing the money. The Benson mortgage was due three years after date, or on October 13, 1914. On September 9, 1912, this mortgage was purchased by Richard M. Scott, one of the respondents, and thereupon the note was indorsed to him, and the proper assignment of mortgage placed of record. The interest upon the mortgage was paid every six months, as it became due, to A. Robinson & Co., after the appellant had received a statement for the interest from that company. When the interest was paid, it was either sent by the company to Scott, or deposited to his credit in the State Bank of Seattle. Some months prior to the 13th day of October, 1914, the appellant was approached by Lewis with reference to a renewal, and, after some negotiation, on September 1, 1914, the appellant and wife executed a note and mortgage, payable to A. Robinson & Co., and delivered the same to Lewis. At this time, Lewis had informed the appellant that he was getting the money from a man who resided in Portland, Or., but the name was not disclosed. After the note and mortgage were received by Lewis, the note was indorsed and forwarded to Portland, Or., to the respondent, Campbell. Thereafter, and on the 5th day of September, Campbell drew a check payable to the order of A. Robinson & Co., and forwarded the same to it. Lewis apparently appropriated the money which had been received from Campbell, and, in the course of a few months, committed suicide. Subsequent investigation disclosed the relation of the company as affects the three parties involved in this litigation.
This is one of those unfortunate cases in which one of three persons, all of whom acted in the utmost good faith, must sustain a loss in the sum of $4,000. It is an old and settled maxim of the law that, where one of two or more innocent persons must suffer by the acts of another, he who has placed it in the power of that other person to occasion the loss must sustain it. Merchants' Bank v. State Bank, 10 Wall. (U. S.) 604, 19 L.Ed. 1008; Parker v. Hill, 68 Wash. 134, 122 P. 618; Wiswell v. Beck, 92 Wash. 208, 158 P. 976.
With this principle of law in mind, the case, so far as it involves the appellant and Campbell, will be first considered. The appellant executed the note and mortgage made payable to A. Robinson & Co., and delivered the same into the possession of Lewis, as secretary of that company. Campbell was requested by Lewis to forward his check before he received the note of the appellant, but this was not done. The check was not forwarded until the note, properly indorsed, had been received. Campbell had done no act by which he placed it within the power of Lewis to occasion the loss. On the other hand, the appellant had delivered to him the note and mortgage drawn in such form he could use them in any manner he saw fit. The appellant having placed it in the power of Lewis to commit the wrong is the one that should bear the loss, rather than Campbell.
There is much discussion in the briefs relative to the previous transactions of Campbell with A. Robinson & Co. It is true that, for a number of years, that company had either sold him securities, or, from time to time, had made loans for him. There is no evidence, however, that would justify the inference that A. Robinson & Co. was the general agent of Campbell for the purpose of making investments. Each transaction was considered separately, and was approved by Campbell.
There is also a somewhat extended discussion in the briefs over the question whether the note which Campbell received was a negotiable or a nonnegotiable instrument, but this question does not seem to us to be material. The case is ruled by the principle of law above stated.
We will now consider the case of the appellant and respondent Scott. The latter was an army officer, and, at different times, stationed in the Philippines, and in various parts of the United States. Dating from about the year 1909 A. Robinson & Co. had handled a number of transactions for him, but in each case the particular transaction was submitted to Scott, and he either approved or disapproved of...
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