Wylde v. Schoening

Citation96 Wash. 86,164 P. 752
Decision Date01 May 1917
Docket Number13620.
PartiesWYLDE et ux. v. SCHOENING et ux.
CourtUnited States State Supreme Court of Washington

Department 1. Appeal from Superior Court, King County; John S. Jurey Judge.

Action by Samuel Wylde and wife against Charles Schoening and wife. From a judgment for plaintiffs, they appeal. Reversed, and cause remanded for further proceedings in accordance with the opinion.

Andrew J. Balliet, of Seattle, for appellants.

E. H Guie, of Seattle, for respondents.

ELLIS C.J.

This is an action for conversion of a nonnegotiable promissory note. On May 14, 1910, defendants were the owners of a certain 80 acres of land in King county, and on or about that date sold the same to plaintiffs and a number of other persons. The purchase price was $26,000, of which the sum of $2,000 was paid in cash. The balance, evidenced by six nonnegotiable promissory notes for $4,000 each, was secured by a purchase-money mortgage on the property. The mortgage contained provisions as follows:

'The mortgagors (mortgagees) herein are limited solely to the above-described property for the payment and satisfaction of the above-named notes, hereby secured, and in case of foreclosure, no deficiency judgment shall be entered against the mortgagors herein, jointly or severally. The mortgagors intend platting the land herein described in quarter acre tracts approximately, which will consist of about three hundred and twenty-two (322) quarter acre tracts. The mortgagees agree to release any of such quarter acre tracts upon being paid one hundred dollars ($100) per tract. Such release or releases, however, shall not impair the validity of this mortgage as to the balance of the land described in said mortgage.'

Plaintiff Samuel Wylde, having been instrumental in negotiating the sale of the property, defendants, as a commission for his services, indorsed to plaintiffs the sixth or last of the promissory notes, defendants retaining possession of that note under the following written agreement:

'Know all men by these presents, that whereas, Charles Schoening and Minnie Schoening, his wife, have indorsed over to Samuel Wylde and Ellen J. Wylde, his wife, promissory note No. 6, for the principal sum of four thousand dollars ($4,000), dated at Seattle, Washington, May ___, 1910, due on or before three years from date, payable to the order of said Charles Schoening and Minnie Schoening, his wife, with interest at seven per cent. (7%) per annum, payable semiannually; said note is indorsed without recourse. Said note is also secured by mortgage on the following described real estate, to wit: The north half of the northwest quarter of section thirty (30), township twenty-three north, range four (4) east, W. M., containing eighty (80) acres, situated in the county of King and state of Washington. It is agreed between said Charles Schoening and Minnie Schoening, his wife, and said Samuel Wylde and Ellen J. Wylde, his wife that said note shall be held by said Charles Schoening in trust for the benefit of said Samuel Wylde and Ellen J. Wylde, his wife, with the express understanding and agreement that the payments of said note and interest thereon are subject to the prior payment of the principal and interest of five (5) other notes of like tenor and effect, for four thousand dollars ($4,000). And the said note so indorsed over to the said Samuel Wylde and wife is not to be collected or suit brought for the foreclosure of the same until the said five notes of four thousand dollars ($4,000) each, with interest, as aforesaid, shall first be paid to said Charles Schoening and Minnie Schoening, his wife, or their order. The said Charles Schoening and Minnie Schoening, his wife, agree that if the interest is paid on all of said notes, including the said $4,000 note, so held in trust by said Charles Schoening, that he will immediately remit to the said Samuel Wylde and Ellen J. Wylde, his wife, or their order, any interest that may be collected by him, without cost or charge. That when said five notes of Charles Schoening shall have been fully paid and satisfied, he, the said Charles Schoening, will turn over to the said Samuel Wylde the said notes or the proceeds of the same if they shall have been paid to the said Schoening. In the event said mortgage is foreclosed and said note of $4,000 shall be included in such foreclosure suit, the said Samuel Wylde and Ellen Wylde, his wife, shall bear their proportionate share of the cost of such foreclosure suit, but it is optional with the said Charles Schoening as to whether or not he will include the said note in any foreclosure proceedings should such suit be brought to foreclose.
'Executed in duplicate this ___ day of May, 1910.
Samuel Wylde.
'Ellen Wylde.
'C. Schoening.
'Minnie Schoening.'

Soon after May 14, 1910, the land was platted into 320 quarter acre tracts in accordance with the terms of the mortgage for the purpose of resale. Whenever one of the tracts was sold it was released from the mortgage lien upon the payment to defendants of $100, which amount was credited upon the notes. In December, 1912, defendants, for their personal use and benefit, borrowed, through one Fred E. Sander, as agent, $7,000 from the People's Savings Bank, of Seattle. As collateral security for this loan, on December 28, 1912, they executed and delivered to the bank in writing an absolute assignment of the $24,000 mortgage and the six notes. The assignment included the note for $4,000, which defendants held in trust for plaintiffs. It is this act which is relied upon as a conversion. In January, 1915, 160 of the quarter acre tracts were sold to certain persons, as the court found, 'for the purpose of facilitating the sale of the land.' It appears that prior to that time plaintiffs had parted with their interest in the land. No money was paid on this sale, but a note for $16,000, secured by a mortgage covering these tracts, was given by the purchasers to defendants. This mortgage was pledged to the bank as collateral security for defendants' loan in the same manner as the $24,000 mortgage, and on May 5, 1915, the bank released from the lien of the original $24,000 mortgage the 160 quarter acre tracts covered by the $16,000 mortgage. On learning these facts plaintiffs demanded that the $16,000 be credited on the $24,000 mortgage. This was refused. Thereafter the indebtedness of defendants to the bank which had been reduced to about $4,000 was taken over by the Seattle Land & Improvement Company, a corporation, of which Sander is president, and the $24,000 mortgage and notes, including that of plaintiffs, and also the $16,000 mortgage were assigned to it by the bank. After this latter assignment, Sander indorsed on the $16,000 note a memorandum to the effect that the amount named in that note would not be credited on the original $24,000 notes and mortgage until actually paid in money. The trial court found most of the facts substantially as above stated, and specifically:

'That some time after the said agreement had been entered into said Charles Schoening, by and through an agent, obtained a loan of $7,000 from the People's Savings Bank, of Seattle, and said agent against the instructions of said Charles Schoening, included the note of plaintiffs so held in trust by defendant Charles Schoening with the other of said five notes as collateral security for the said $7,000 loan. That prior to the commencement of this action the said note of plaintiffs was released from the assignment to said bank as collateral security, as aforesaid, and returned to the control of the defendant as such trustee under the terms of said trust agreement, and the said note of plaintiffs is now held by the said Charles Schoening as trustee for plaintiffs and under the terms and conditions of said trust agreement. That after the said 14th day of May, 1910, the said land hereinbefore described was platted into 320 quarter acre tracts, streets, and alleys for the purpose of selling the land so platted. That in order to facilitate the sale of said land the said People's Savings Bank did release 160 of the said quarter acre tracts, and the said 160 quarter acre tracts were immediately remortgaged for $16,000, payable
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4 cases
  • First Nat. Bank v. Dunbar
    • United States
    • Court of Appeal of Missouri (US)
    • June 22, 1934
    ...they declared that the jury might consider the face value of the voucher to be prima facie its value at the time of the sale. Wylde v. Schoening, 96 Wash. 86. (5) The of res judicata should have prevented the submission of the defendants' counterclaim to the jury at the second trial, since ......
  • Grays Harbor County v. Bay City Lumber Co., 32925
    • United States
    • United States State Supreme Court of Washington
    • November 22, 1955
    ...The converted property in Hofreiter v. Schwabland, 72 Wash. 314, 130 P. 364, was a house. The measure of damages in Wylde v. Schoening, 96 Wash. 86, 164 P. 752, was the value of the note in question as measured by the value of the land by which was secured, less the amount of certain other ......
  • First Nat. Bank v. Dunbar et al., 22547.
    • United States
    • Court of Appeal of Missouri (US)
    • June 22, 1934
    ...that the jury might consider the face value of the voucher to be prima facie its value at the time of the sale. Wylde v. Schoening, 96 Wash. 86. (5) The principle of res judicata should have prevented the submission of the defendants' counterclaim to the jury at the second trial, since ther......
  • Knudsen v. Hill
    • United States
    • California Court of Appeals
    • June 5, 1964
    ...date of the conversion.' (Emphasis supplied.) (Op. cit. 85 A.L.R.2d p. 1352.) One case is cited as authority for the rule, Wylde v. Schoening, 96 Wash. 86, 164 P. 752. The rule is apposite here because the Cracraft note is a 'purchase price obligation,' and in the event of foreclosure no de......

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