RUMSEY v. *(Lucas

• Decision Date: 07 February 1891
• Citation: 34 W.Va. 721
• Court: West Virginia Supreme Court
• Parties: RUMSEY v. LaIDLEY.*(Lucas, President, absent.)

34 W.Va. 721

RUMSEY

v. LaIDLEY.*(Lucas, President, absent.)

Supreme Court of Appeals of West Virginia.

Submitted January 17, 1891.

Decided February 7, 1891.

1. Collateral Security Failure to Enforce Collaterals-

Laches., Where a party who is indebted executes his notes to his creditor payable at different times, and subsequently assigns and transfers non-negotiable notes which he holds against other parties to said creditor as collateral security for the payment of his notes held by said creditor, it is the duty of such creditor to use reasonable care and diligence to make said notes, received as collateral security, available, and if by negligence or laches on his part said collaterals or any of them are lost, the loss should be borne by such creditor.

2. Collateral Security Failure to Enforce Collaterals

Laches.

A note for five hundred dollars against two parties was assigned by a debtor to his creditor as collateral security for a pre-existing debt. One of the makers of said note was dead at the time said note was assigned, and it was on file before a commissioner in a creditors' suit to settle said deceased maker's estate. Nothing was ever done by said creditor to hasten the collection of said note against either of the makers thereof, but said creditors received one hundred and ninety one dollars and seventy cents from said creditors' suit twenty years after said transfer was made. In a suit brought by said creditor upon said orginal indebtedness, held, that said creditor had not used that diligence which the law requires with reference to the collection of said collaterals, and that said debtor was entitled to charge said creditor with the amount thereof.

SimmsSf Enslow for plaintiffs in error, cited 2; Rob. (Nav.) Pr. 272; 3 Gratt. 127; 2 Wash. 229.

W. S. Laidley for defendant in error, cited Col eh. Coll. Sec. § 425; 16 W. Va 721; 13 W. Va. 718.

English, Judge:

George S. Laidley, being indebted to James M. Rumsey, Josiah Roads, and Joseph G. Reed, partners doing business as Rumsey, Roads & Reed, executed to them four notes, all dated the 4th day of November, 1867 one for six hundred forty six dollars and thirty six cents, payable ninety days after date, to their order, at their counting-room, Portsmouth, Ohio; one for one hundred eighty one dollars and fifty cents, payable thirty days after date, to their order, at the same place; one for one hundred and eighty two dollars and forty cents, payable sixty days after date, to their order, at their said counting-room; and another for one hundred thirty dollars and sixty eight cents, payable to their order sixty days after date, at their counting-room aforesaid.

On the 14th day of April, 1868, the following paper was signed by said firm of Rumsey, Roads & Reed and said George S. Laidley: "Received of Mr. George S. Laidley, as follows: His claim of a certain note of John Morris and James R, Morris, to order of C. T. Everett, dated Dec. 1, '61, payable on or before Jan. 1, '64, calling for ($500) five hundred dollars, and drawing interest from its date, accompanied with a copy of said note certified by Jos. S. Miller, master commissioner, Circuit Court, Cabell county, W. Va., said document being indorsed by George S. Laidley; also a note of A. C. Handley to order of and indorsed by John Laidley, Jr., and indorsed by George S. Laidley, also dated April 6, '68, and payable on or before July 1, '68, calling for three hundred dollars ($300.) The condition of this receipt is that the proceeds of the same, when collected, are to be applied to the said George S. Laidley's indebtedness to us; he to indemnify us for all costs and expenses in the collection of the same, and we to return to him all that may be over and above the said Laidley's in- debtedness to us, and be to make good to us any deficiency in the same."

On the 5th of January, 1876, James M. Rumsey inclosed to said George 8. Laidley a statement showing that four hundred and four dollars and seven cents had been collected as proceeds of the TIandley note assigned to said Rumsey, Roads &Reed, upon the condition mentioned in the above receipt, which had been applied in extinguishment of said Laidley's note for one hundred and eighty one dollars and fifty cents, dated November 4, 1867, and also in extinguishment of his note for one hundred and eighty two dollars and forty cents, dated November 4, 1867, and the interest on same twenty nine dollars and fifty nine cents, aggregating three hundred and ninety three dollars and forty nine cents, leaving a balance of ten dollars and fifty eight cents, which was applied as a credit on said Laidley's six hundred forty six dollars and thirty six cents note held by said Rumsey, Roads & Reed. On the 2d day of June, 1875, said firm of Rumsey, Roads & Reed brought an action of assumpsit in the County Court of Cabell county against said George S. Laidley on said note for six hundred and forty six dollars and thirty six cents, executed by said George S. Laidley, and payable to their order ninty days afterdate, which note bears date November 4, 1867; which action was subsequently transferred to the Circuit Court of said county. The defendant demurred to the plinitifi's declaration which demurrer was sustained, and on leave the plaintiff amended their declaration, and the defendant again demurred, and bis demurrer to the amended declaration was overruled; and on the 14th clay of May, 1890, the parties waived a trial by jury, and the questions of law and fact arising on the issues therein were submitted to the judgment of the Court in lieu of a jury; and the Court, having heard the evidence, found for the plaintiffs, and assessed their damages at two hundred dollars and seventy cents and rendered judgment for that amount, with interest thereon from the 15th day of May, 1890, until paid, and costs.

The following facts were agreed to by the parties, which were submitted to the court: "There was pending in the Circuit Court of Cabell county a creditors' bill against the estate of Morris, the maker of the five hundred dollar note, spoken of in the above receipt or agreement'in 1868, at the time when that agreement was entered into. The original note was on file in that suit as a charge against the estate of Morris at the time of the transfer spoken of. Out of the proceeds of the sale of the Morris estate was realized by the plaintiffs one hundred ninety one dollars and seventy cents in 1888, which was credited on the six hundred forty six dollars and thirty six cents note. Said suit is still pending in the Circuit Court of Cabell county, and this amount was all that was ever realized or could be realized from the Morris estate. The plaintiffs took no steps at any time to collect or attempt to collect said five hundred dollar note, or any part thereof, from C. T. Everett, the payee and indorser thereof in his lifetime, or against his estate after his death. C. T. Everett died in 1867, leaving an estate amply sufficient to pay off the whole of said note. In 1872 his executor disbursed and distributed his estate to his children. In 1888, when the Morris estate was finally cleared up and settled, the estate of 0. T. Everett had been so completely wound up and distributed that nothing remained of said estate that had not passed into the hands of his children."

These were all the facts before the court, and the court found that the one hundred dollars, the one hundred eighty one dollars and a half, and one hundred eighty two dollars and forty cents notes had been paid by the defendant; and that the six hundred forty six dollars and thirty six cents note, with its interest, was due to the plaintiff from the defendant, subject, however, to be credited with the full amount of the five hundred dollar note first spoken of in said agreement, with interest, which left a balance due on said note of one hundred and forty dollars; also that the plaintiff's were entitled to a reasonable fee for making collection, which the court fixed at one hundred and thirty dollars, making the whole amount of recovery in favor of the plaintiffs, two hundred and seventy dollars; to which rulings and findings of the court the plaintiffs excepted, and moved the court to set aside the said rulings and judgment, and grant them a new trial, which motion the court overruled, and entered...