66 Mo. 498 | Mo. | 1877
— Two questions of prominence present themselves: Eirst, whether the evidence adduced suffices to support the allegations of the petition and warrant the decree rendered. Second, whether on the case made by the pleadings, the plaintiff has any standing in a court of equity. Defendant, seeking a reversal, holds in each instance the negative. As .the pleadings are lengthy and the evidence voluminous, and as the substance of each is hereto prefixed, we will not discuss the evidence in de
I. Relative to the-first point: A careful perusal of the evidence has fully satisfied us that a-conspiracy wras formed by the parties named in the petition to secure the issuance of the bonds of Cass county and their transfer to and distribution among the conspirators ; that this conspiracy was successful and the conspirators smitten with sudden fear at their own iniquitous success seized their ill-gotten gains and, justly apprehensive of popular indignation commensurate with the fraud perpetrated, sought safety in flight and opportunities in the distance for the secret and secure division of their plunder. This division occurred March 2nd, 1872, in St. Louis, and was marked as was the entire affair from inception to termination with the secrecy, hurry and trepidation usually incident to larcenous operations. A lai’ge portion of the bonds taken across the river to East St. Louis, and there placed in the custody- of an express company for safe keeping, were afterwards recovered by the county in an action of replevin. Cline, the county attorney of Cass county, received, as his share of the spoil, $55,000 in bonds, and left on the same day. So conspicuously conclusive is the evidence regarding the fraudulent issuance of the bonds, that defendant does not seriously controvert it, but relies on the defense of being an innocent purchaser. (It is worthy of parenthetic remark in this connection, as one of the anomalies incident to the transfer of railroad bonds, that a purchaser of a different description- is seldom, or never seen.) Let us examine the facts and weigh the evidence, in thg endeavor to ascertain whether the claim which defendant
Now, it would seem very far from probable, and probability is the chief guide in placing a proper estimate upon evidence, that Thos. H. Mastin would see his brother and partner asked to purchase a large amount of bonds, which-he, himself, had just refused to purchase, and yet pass him by without so much as a single word or gesture of warming or disapproval. And then take the conduct of Thos. H. Mastin in Chrisman’s office. Did he rejoice at the subterfuge by which an honest clerk was spirited away and a dishonest deputy substituted in his stead, and the people of Cass county saddled with a large fraudulent debt, because he loved fraud for fraud’s sake? or was it because he expected the fraud to be personally beneficial, to swell his revenues and enrich his coffers ? The latter supposition is more creditable to him and more credible to us. But how, when and where, did Thos. IT. Mastin derive the information that the clerk was opposed to issuing the bonds ? And how, when and where that the county court of Cass county “got the advantage of the clerk?” Nothing that Mastin reveals as having transpired in the conversation with Cline afforded that information. Either, then, Cline in the conversation with Thos. H. Mastin, must have revealed more than the latter testified to, or else prior to the 4th of March Thos. IT. Mastin must have been apprised of the conspiracy to get the clerk out of the way; a matter virtually predicted by Cline nearly a month before, when procuring and purchasing the services of the deputy Yelton; and Cline, about a week before his last visit to Kansas City, had been there and conversed with Thos. H. Mastin.
When we take all these matters into considei’ation, the conclusion is very strong that Mastin, who it does not appear had any business at Independence, went there in
He then took the bond and order to Black’s office. "What occurred there is not known, but it is certain, according to the testimony of Thos. II. Mastín, that Black, on coming down to the bank, did give an opinion in opposition to that given by Cline as to the validity of the bonds; and John J. Mastín says himself that Cline did not succeed in impressing Black favorably with the order.
Yet, notwithstanding this adverse opinion, leaving behind him the objectionable order which authorized the issuance of the bonds, he took the bond alone and consulted defendant about the validity of the issue. Green was not counsel for Mastín, and it is noteworthy, in this connection, that Mastín did not go to Green’s law office, but to the Times office, where he “ expected to see him.” Green, the testimony shows, was the frequent purchaser of and dealer in railroad bonds, but he never inquired for the funding order, nor did Mastín offer it to Green, although the evidence shows that' it is customary, when offering bonds for sale, to accompany them by the order which authorizes their issue.
In short, Mastín, who would not purchase till his attorney said so, concluded to buy, whether he said so or not; was more willing, in other words, to trust Green’s judgment, without a funding order, than Black’s with one. And Green was so highly pleased with the looks of the bond that after a brief examination of the law of 1868, without more ado, gave an enthusiastic opinion in favor of their validity. But Green did have a copy of the funding
Besides all that, even if we concede that the $10,000 was really paid by Green, and paid in good faith, what excuse has he to offer for paying his note for $29,600, long after discovery of the fraud? Ilis defense in any action by Mastin & Co. on the note would, it seems, have been ample. He certainly, therefore, can lay no claim to having paid that sum, at least, in good faith. And Thos. II. Mastin’s testimony shows that Green was fully aware that if the bonds were “ fraudulent or forged, he would-have recourse” against them. John J. Mastin says the note of Green was paid “in money or its equivalent.” What equivalent ? Their cash-book shows no such payment. John J. Mastin states that Cline’s administrator threatened, unless they paid the acceptances given to Cline, to throw the firm into bankrupty, and thereupon they paid them. And on the same day Green is called upon and pays his note, as it is said, thus keeping up the coincidence of payments which began when Green drew his check, the only difference being that payment of the cheek took place just before Cline was paid, and the payment of the note just after his administrator was paid. But what caused Mastin & Co. to so readily yield to the demand of Cline’s administrator? Their defense, too, would appear to have been good. These are mysteries which deserved and should have received the fullest explanation. The above, however, are not the only mysteries, incongruities and contradictions presented by this record.
When the endeavor was made by the Cass county officials in the latter part of March, 1872, to discover the locus in quo of the bonds in order to replevy them, Thomas H. Mastin stated that they were not interested, that they had only purchased as the “ agents or brokers ” of Green; and yet, when on the .same day, and a brief space thereafter, Green, in the presence of Thomas H. Mastin, states em
But the evidence having established the fraudulent issuance of the bonds, that burden is cast in all its weight on the shoulders of the defendant. This ruling is in full accord with our most recent adjudication. Hamilton v. Marks, (63 Mo. 167.) In that case our approval was bestowed upon the views of the latest elementary writer on this subject: “That if the maker * * * * proves that there was fraud or illegality in the inception of the instrument; or if the circumstances raise a strong suspicion of fraud or illegality, the owner must respond by showing that he acquired it bona fide, for value in the usual course of business while current, and under circumstances which create no suspicion, that he knew the facts which impeach its validity.” (Daniel Neg. Instr. Sec. 8.1-r.) Drimarially, as a matter of course, the presumption favors the holder of negotiable paper acquired before maturity. (Horton v. Bayne, 52 Mo. 531.) But this presumption must be for naught held and esteemed, when a record, such as
Our object in considering the claim of Mastín & Co., to be considered innocent purchasers, in connection with a like claim made by Green, is because of the assertion made by the latter, that if the former purchased without notice, defendant, even if a purchaser with notice, would take a title purged from all fraud. There is no doubt of the general correctness of this assertion, (2 Gif. Ev. § 171,) but inasmuch as we regard both Mastín & Co. and defendant as purchasers with notice, this doctrine has here no application.
But we must not conclude our remarks touching the sufficiency of the evidence before adverting to some other matters. The defendant was present at and conducted the trial. The opportunity for giving explanation of, or contradiction to, the damaging statements made by Allen and others, which tended to show defendant’s want of good faith, was thus opén to him, -and yet he failed to embrace it. The presumption, under such circumstances, is always adverse to the party thus making default. (Adams v. Adams, 21 Wal. 185; Henderson v. Henderson, 55 Mo. 559.) And this failure is rendered more strikingly apparent when it is remembered that the good faith of defendant, is, by the very form of this procedure, directly called in question ; questioned in a court of equity, which cannot look upon unfair dealing with the least degree of-allowance; questioned in a court accustomed from its very nature and organization to track fraud through all its crooked pathways, and to drag it forth discomfited from its most hidden recesses.
Again, it is insisted that the judgment must be reversed because the evidence shows that the bonds were transferred before suit brought. That transfer, it is said, oe
II. In regard to our second point: The case of Grand Chute v. Winegar, (15 Wallace 355, 373,) is cited as showing that plaintiff is entitled to no relief in equity. But that case is totally unlike this. There an injunction was prayed of a suit at law on some bonds, on the ground that the bonds were void. It does not appear whether the bonds were not mature at the time of their reception, nor that the holder threatened to negotiate them, and the bill was very properly dismissed because the remedy at law was amply adequate. Here, on the contrary, though the reply shows that the bonds are void, yet the petition charges, in addition to the matters already noticed, that repeated demands and actions at law had proved unavailing to recover possession of the bonds from defendant; that defendant refused to obey the order of the court and deliver possession of the bonds, but kept them concealed so that they could not be reached by process at law; that the bonds were negotiable in form and transferable by delivery ; that defendant pretended he had already transferred them, and unless restrained defendant would transfer them, so that any decree rendered would be ineffectual. It is quite clear that any remedy at law would, in this case, bo wholly inadequate and, therefore, equity has jurisdiction. This proceeding is somewhat analogous to that where a party is seeking to remove a cloud upon his title; the title held by his adversary, though void, is on its face valid, and be made the basis for repeated actions at law.
Aeeirmed.