Parr v. Ft. Pierce Bank & Trust Co.

• Decision Date: 21 October 1930
• Citation: Parr v. Ft. Pierce Bank & Trust Co., 100 Fla. 941, 130 So. 445 (Fla. 1930)
• Parties: PARR v. FT. PIERCE BANK & TRUST CO.
• Court: Florida Supreme Court

130 So. 445

100 Fla. 941

PARR v. FT. PIERCE BANK & TRUST CO.

Florida Supreme Court, Division B.

October 21, 1930

Suit by Geneieve B. Parr, also known as Genevieve B. Parr, a widow against Ft. Pierce Bank & Trust Company. From an order sustaining a demurrer to the bill, complainant appeals.

Reversed. Appeal from Circuit Court, St. Lucie County Elwyn Thomas, judge.

COUNSEL

Vocelle & Mitchell, of Vero Beach, for appellant.

F. L Hemmings, of Ft. Pierce, for appellee.

OPINION

BUFORD J.

During the year 1927 the appellant had money on deposit in the Ft. Pierce Bank & Trust Company, a banking corporation located at Ft. Pierce, Fla. She, having great confidence in the officers of that institution, authorized such officers to invest money for her in dependable securities.

On January 1, 1926, Ft. Pierce Bank & Trust Company received from one Koblegard and one McMurtray a note in the sum of $8,000, together with a mortgage on certain real estate to secure said note. The note was payable on or before three years after date. The interest was at the rate of 8 per cent., and payable semiannually. On August 3, 1927, the Ft. Pierce Bank & Trust Company, it is alleged, assigned by a separate instrument the mortgage to the appellant. The assignment contains the following clause: 'Together with the note or obligation described in said mortgage and the money due and to become due thereon with interest from the 1st day of July, 1926.' This shows upon its face that at the time of the assignment the makers of the note and mortgage were in default on account of the nonpayment of interest due January 1, 1927, and July 1, 1927.

On the 19th day of April, 1930, appellant filed her bill of complaint in the circuit court of St. Lucie county alleging that she had filed suit to foreclose the mortgage and pursuant thereto a final decree had been entered against the makers of the note and mortgage, and that, after costs had been paid and all credits duly made, there was due her a balance of $7,709.55 on the said indebtedness, together with interest from April 7, 1930, at the rate of 8 per cent. per annum. She alleges that the notes were not indorsed by the Ft. Pierce Bank & Trust Company, but that she is entitled to such indorsement under the laws of the state of Florida. She alleges that she has demanded the indorsement by the Ft. Pierce Bank & Trust Company and demanded payment of the balance due her by Ft. Pierce Bank & Trust Company, but that the said Ft. Pierce Bank & Trust Company has failed and refused to indorse the note, and has failed and refused to pay the balance due her or any part thereof.

Section 6808, Comp. Gen. Laws of Fla. 1927, reads as follows:

'Where the holder of an instrument payable to his order transfers it for value without indorsing it, the transfer vests in the transferee such title as the transferer had therein, and the transferee acquires, in addition, the right to have the indorsement of the transferer. But for the purpose of determining whether the transferee is a holder in due course the negotiation takes effect as of the time when the indorsement is actually made.'

There was a demurrer filed and sustained to the bill of complaint. It is a well-settled principle that equity looks upon that as done which should have been done. The bill alleges in effect that the officials of the bank, having authority from the appellant to invest her money, which was on deposit in the bank, in dependable securities, assigned a mortgage and note to the appellant for the face value of the mortgage and note and charged her account with the full sum of $8,000, and this at a time when the makers of the note had defaulted in two interest payments and declare the full sum of the debt due and to foreclose the mortgage for enforcement of the payment of the debt because of the default.

It appears from the allegations of the bill and from the contents of the exhibits attached thereto, which are by apt language made a part thereof, that the bank represented both itself and the appellant in the transaction and assigned to the appellant a mortgage and note which were of doubtful value, and in lieu thereof transferred to itself $8,000 of the appellant's money.

We think that under the provisions of section 6808, supra, the complainant in the court below was entitled to an unqualified indorsement unless there was an agreement to the contrary.

The fact that she accepted an assignment by a separate written instrument does not evidence an agreement upon her part to accept a qualified indorsement.

The Supreme Court of Oregon in the case of Simpson v. First National Bank, 94 Or. 147, 185 P. 913, in a very able opinion prepared by Mr. Justice Harris, say:

'Action against bank to recover balance on bankrupt's note, in which note, prior to maker's bankruptcy, the bank, as agent for plaintiff, had invested her money, and which note had been delivered by bank to plaintiff without indorsement and with payee's name left blank, the complaint, averring that 'plaintiff is entitled to the indorsement of defendant * * * upon said note,' and that the bank, on account of its negotiation and sale of the note to plaintiff, was liable as indorser, held to state a claim based on the note and not upon any independent oral promise of guaranty or express warranty. * * *

'In this jurisdiction the distinction between suits in equity and actions at law is preserved. The proceeding brought by the plaintiff is an action at law and not a suit in equity; and, since the court cannot compel an indorsement of the note in an action at law, but can do so only in a suit in equity, it necessarily follows that, since the amended complaint is in its present condition insufficient as a complaint in equity, the trial court correctly sustained the demurrer to the complaint, even though it be assumed that the plaintiff is entitled in a proper proceeding to compel the bank to indorse the note. But it is said in section 390, L. O. L., as amended by chapter 95, Laws 1917, that----

"No cause shall be dismissed for having been brought on the wrong side of the court. The plaintiff shall have a right to amend his pleading, to obviate any objection on that account.'

'It is possible that the plaintiff can so amend her complaint as to entitle her to the indorsement of the bank and to a judgment against it as an indorser, and hence the cause will be remanded, with permission granted to the plaintiff to amend her complaint within the authority of chapter 95, Laws 1917. Farmers' Loan & Trust Co. v. Brown, 182 Iowa, 1044, 165 N.W. 70; Brown v. Wilson, 45 S.C. 519, 23 S.E. 630, 55 Am. St. Rep. 779, 780.

'The plaintiff relies upon section 5882, L. O. L., which corresponds with section 49 of the Uniform Negotiable Instruments Law, is substantially like section 31(4) of the English Bills of Exchange Act 1882, and reads as follows:

"Where the holder of an instrument payable to his order transfers it for value without indorsing it, the transfer vests in the transferee such title as the transferrer had therein, and the transferee acquires, in addition, the right to have the indorsement of the transferrer; but for the purpose of determining whether the transferee is a holder in due course, the negotiation takes effect as of the time when the indorsement is actually made.'

'It must be remembered that, at the time when the bank transferred the note to Grace Simpson, the instrument did not contain the name of a payee, although the note was payable to 'order' and contained a space which was plainly intended as the place for the insertion of the name of some payee. If, when the note was transferred by delivery to the plaintiff, the name of the bank appeared in the note as payee, then by force of the express terms of the statute the plaintiff would be entitled to the indorsement of the bank. Lawless v. State, 114 Wis. 189, 192, 89 N.W. 891. And so, too, in the absence of a statute she could compel the bank to indorse the note. Unterharnscheidt v. Missouri State L. Ins. Co., 160 Iowa, 223, 138 N.W. 459, 45 L. R. A. (N. S.) 743; Swenson v. Stoltz, 36 Wash. 318, 78 P. 999, 2 Ann. Cas. 504; Schoepfer v. Tommack, 97 Ill.App. 562, 567; Walters v. Neary, 21 T. L. R. 146. It is true that many of the precedents and writers upon the subject do no more than to define the right of a transferee to the indorsement of the transferrer where the transferrer expressly agreed to indorse an instrument payable to his order but because of inadvertence, mistake, or fraud failed to do so, and yet it is doubtful whether any of those precedents or writers can be regarded as authority for saying that the transferee would not be entitled to the indorsement unless the transferrer expressly agreed to indorse. 1 Daniel On Neg. Inst. (6th Ed.) 857; Byles on Bills (7th Ed.) 157; 1 Parsons on Notes and Bills, 278; Hughes v. Nelson, 29 N. J. Eq. 547; Story on Promissory Notes, § 120; 1 Story's Eq. Jur. (13th Ed.)§ 99b; Southard v. Porter, 43 N.H. 380; Brown v. Wilson, 45 S.C. 519, 23 S.E. 630, 55 Am. St. Rep. 779. If the right to an indorsement must be predicated upon an agreement, it is more logical and certainly more consistent with the character, qualities, and purposes of the paper dealt with to deduce from the character, qualities, and purposes of such paper the conclusion that the agreement for the indorsement may, under the rules of the law merchant, be implied; and that therefore, if at the time of the transfer the parties are silent upon the subject of indorsement, then the law implies an agreement by the transferrer to indorse a negotiable instrument when it is made payable to his order. Schoepfer v. Tommack, 97 Ill.App. 562, 566; Wade v. Guppinger, 60 Ind. 376, 378; Walters v. Neary, 21 T. L. R.

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