Riggs v. Trees

• Decision Date: 18 October 1889
• Citation: 22 N.E. 254,120 Ind. 402
• Parties: Riggs et al. v. Trees.
• Court: Indiana Supreme Court

120 Ind. 402

22 N.E. 254

Riggs et al.

v.Trees.

Supreme Court of Indiana.

Oct. 18, 1889.

Appeal from circuit court, Sullivan county; G. W. Buff, Judge.

Action by Alonzo D. Trees against Riggs & Berry for damages. Judgment for plaintiff. Defendants appeal.

John S. Bays and Beasley & Williams, for appellants. John C. Briggs and Hays & Hays, for appellee.

Elliott, C. J.

The appellants were partners, doing business as real-estate brokers. Swain employed them to sell his farm, and they did sell it to the appellee for $4,000. As part of the purchase price the appellee assumed and agreed to pay the principal, but not the interest, of a mortgage executed to an insurance company to secure $1,800. A like amount was paid in cash, and a note for the remainder was executed by the appellee, and to secure its payment he executed a mortgage upon the land bought of Swain. The note was payable in bank, and was placed in the hands of the appellants. By the terms of the contract between the parties the note was to be held by the appellants until an abstract of title was furnished to the appellee, and all liens against the land paid and discharged. The note was not placed in the hands of the appellants for the purpose of passing the title to it, but for the purpose of delivering it to Swain, and closing the sale as soon as he had complied with his agreement and paid the liens on the land. The appellants, notwithstanding their agreement to retain possession of the note and mortgage, delivered them, without the consent of the appellee, to Swain. The note was transferred by indorsement to a person for a valuable consideration, before maturity, and the indorsee received it without notice of any defense. At the time the contract of sale was made there were liens on the lands to the amount of $108 above the amount of the incumbrance assumed by the appellee. Swain is insolvent, and is not a resident of the state.

The appellee could not have successfully defended against the note in the hands of the indorsee, for it was by his act that the appellants were enabled to put the note in circulation, and he must suffer rather than the innocent third person. The principle which rules here is the same as that which prevailed in Quick v. Milligan, 108 Ind. 419, 9 N. E. Rep. 392. One who places in another's hands his promissory note, perfect in all its parts, cannot defeat the note in the hands of a bona fide holder. The rule, indeed, in cases of promissory notes...