Mitchell v. St. Mary

• Decision Date: 25 May 1897
• Docket Number: 18,242
• Citation: 47 N.E. 224,148 Ind. 111
• Parties: Mitchell v. St. Mary et al
• Court: Indiana Supreme Court

47 N.E. 224

148 Ind. 111

Mitchell v. St. Mary et al

No. 18,242

Supreme Court of Indiana

May 25, 1897

From the Noble Circuit Court.

Affirmed.

H. G Zimmerman and P. D. Keager, for appellant.

R. P Barr, for appellees.

OPINION

Hackney, J.

This was a suit by the appellant, John Mitchell, upon four promissory notes, and to foreclose a mortgage of certain real estate securing said notes. The notes were executed by Peter St. Mary to Curran F. Cain, were payable in a bank, and contained a stipulation that "the drawers and endorsers severally waive presentment for payment, protest," etc., and "all defenses on the ground of any extension of time of payment that may be given by the holder or holders to them or either of them." The complaint alleged the endorsement in blank by Cain of the notes, the assignment of the mortgage, and the transfer thereby to the appellant. Judgment was sought against Cain, as endorser, it is claimed. The trial court sustained Cain's demurrer to the complaint, and the appellee, St. Mary, in several paragraphs of answer, in various forms, pleaded that the appellant was not the real party in interest; that he purchased the notes and mortgage with the money of, and acting for and on behalf of the Lake View Cemetery Association, and that he held the same as the officer of said association, and was attempting to enforce the same in his own name, and without authority from said association. The court overruled demurrers to said answers. The appellant thereupon replied to said answers in affirmative paragraphs. One, alleging that he was the agent of said association in purchasing the notes and mortgage, and employed therein the funds of said association; that he took the assignments to himself as such agent, and holds the same as such and for the benefit of the association as the trustee of an express trust. Another paragraph alleged that he was treasurer for the association, and as such it was his duty to collect and account for the said fund to said association; and another paragraph alleged that he was one of the directors of the association; that he was chosen as such to act as agent for the association to purchase the notes and mortgage, and to take the assignment of the notes and mortgage, and to take the assignment thereof in his own name for the purpose of facilitating the collection thereof, and that he seeks to collect the same as trustee of an express trust in favor of the association. To these replies demurrers were sustained.

A trial resulted in special findings and conclusions of law in favor of the appellees to which appellant excepted. These several rulings are here urged for the reversal of the judgment of the lower court. Every phase of the questions arising upon the rulings upon demurrers to the answers and to the replies is presented upon the special finding and conclusions of law, and said rulings may, therefore, be properly disregarded. Smith, Trustee, v. Wells Mfg. Co., post, 333, and cases there cited.

That the notes in suit were negotiable under section 7515, Burns' R. S. 1894, so as to vest title therein, is not questionable, but that they were commercial paper, "as inland bills of exchange," under section 7520, Burns' R. S. 1894, is not only doubtful, but the reverse has been decided, owing to the stipulation permitting an extension of the time of payment. Glidden v. Henry, 104 Ind. 278, 1 N.E. 369; Brown v. First Nat'l Bank, 115 Ind. 572, 18 N.E. 56; Oyler v. McMurray, 7 Ind.App. 645, 34 N.E. 1004; Merchants', etc., Bank v. Fraze, 9 Ind.App. 161, 36 N.E. 378.

The complaint, as to Cain, not having alleged the use of due diligence as required by section 7518 Burns' R. S. 1894, was not, in view of the character of the paper, sufficient. Smythe v. Scott, 106 Ind. 245, 6 N.E. 145; Somerby v. Brown, 73 Ind. 353; Hayne v. Fisher, 68 Ind. 158; Couch v. First Nat'l Bank, 64 Ind. 92.

The facts specially found were, that Lake View Cemetery Association was, at the time of the transactions under investigation, a corporation of which appellant was treasurer and had custody of its moneys with the duty of lending the same; that in June, 1894, Cain endorsed the notes described, in blank, and gave one Campbell authority to dispose of them; that Campbell sold them to said association said Mitchell paying its money therefor, and said notes with said endorsement were delivered to Mitchell as such treasurer, and as the property of said association and not otherwise; that on said date Cain assigned said mortgage to Mitchell, but that Mitchell received the same and the notes as the property of the association; that Mitchell never claimed any title to or interest in said notes and mortgage or the proceeds thereof, but the same were by him entered upon the books of the association to its exclusive credit, and it was, and still is the owner thereof. It is...