74 F. 769 | 8th Cir. | 1896
after stating the case as above, delivered the opinion of the court.
The decision of the present case Mnges mainly, if not entirely, on fhe construction which shall he placed upon the acts of the parties when the note for $2,000 was surrendered by the intervener to the Lombard Investment Company, on February 4, 1892; and the question with respect to that transaction is briefly tins; Did the inter-vener intend to sell and assign the note to the investment company, and to vest it with the right to participate in the proceeds of the sale of the mortgaged property according to Missouri laws, or did lie intend that, as between himself and the investment company, the transaction should operate as a payment? We put the first clause of the interrogatory in this form because it is the established doctrine in Missouri that, wiiere a mortgage or deed of trust is given to secure the payment of two or more notes of the same date, those which first mature are entitled to priority of payment out of the fund realized by a sale of the mortgaged property. Mitchell v. La Dew, 36 Mo. 526; Hurck v. Erskine, 45 Mo. 484; Thompson v. Field, 38 Mo. 320; Freeman v. Elliott, 48 Mo. App. 74. Therefore, if the first branch of fhe foregoing inquiry is answered in fhe affirmative, the note for $2,000 was entitled to be first paid, and the decree of the circuit court was unquestionably right.
We should have no difficulty in assenting to the decree rendered by the circuit court, if it apjieared that tvlien the note for 82,000 was indorsed, ‘Without recourse*,” and delivered to the investment company, the intervener wras aware that fhe money to fake up the note, as well as to take up the previously maturing interest coupons, had not been provided by the maker of the notes, and if it further appeared that no contract relations existed between the parties. In (hat event, inasmuch as the transaction between the intervener and ’the investment company could only be regarded as a sale or a payment of the note, it would perhaps be more reasonable to conclude, in view of the indorsement, and in view of the fact that nothing was said about payment, that a sale, rather than a payment, of the note was intended. But the supposed case is not before us for
It is further contended by the appellees that the note for 82,000, by them held in trust, is entitled to priority of payment, on the ground that the intervener, by indorsing the note when he delivered ’{ to the investment company, thereby enabled the latter company to transfer it to the trustees of the debenture holders as an unpaid note. The equitable rubí is accordingly invoked, that, where one of two innocent persons must suffer for the fraud of a third party, the loss should fall on that one by whose neglect or default, if any, the fraud was rendered possible. We perceive no just ground for the application of that principle to the case at bar. Under its agreement with the debenture holders, the investment company had authority to withdraw any of the securities that might be in the hands of the trustees, at any time, and to deposit other securities in their place which it deemed of equal value. The trustees appear to have had no right to select the securities, or to determine their