In re Estate of Reeve

111 Iowa 260 | Iowa | 1900

Given, J.

1 I. The facts, as we find them to be from the evidence, the competency of which is not questioned, are as follows:' For a number of years prior to his death Mr. J. B. Reeve was conducting a private bank at Garrison, Iowa. At the time of his death Mrs. Ella M. Pierce, daughter of deceased, and her husband, Mr. T. A. Pierce, came from their home, in Colorado’, to Garrison. A day or two after the funeral, Mrs. Reeve, Mr. and Mrs. Pierce, and Miss Magirr, who had been employed in the bank up to the death of Mr. Reeve, went to- the bank to look over its affairs. In th.e safe, to which Miss Magirr alone had the combination, was an envelope containing said note of J. B. Reeve to Mrs. Pierce, said alleged collateral notes, and a certificate of deposit to Mrs. Pierce, and one to her minor son. Upon the outside of the envelope was written in the handwriting of J. B. Reeve, on one side: “Ella M. Pierce. These notes are held by Ella M. Pierce as collateral. J. B. Peeve.” On the other, the words: “Ella Pierce. Ella Pierce.” The alleged collateral notes payable to order, and some of those payable to bearer were indorsed in blank by J. B. Peeve. This envelope and contents were then, and had previously been, kept in the note case used by the bank, but in a separate pocket from the notes of the bank. Mrs. Pierce took and retained possession of said envelope and contents, and produced the note of her father to her on this trial. The note bears credits at different dates from July 21 to October 12, 1897, for amounts collected by Mrs. Pierce on the collateral notes aggregating nine hundred fifteen dollars and seventy-five cents, leaving one thousand three hundred and seventy-one dollars and eighty cents, which she asks to be allowed as a claim of the third class against the 'estate.

2 II. On the claim that the principal note was voluntary and without consideration, we will say that we are in no doubt from the evidence, the competency of which is not disputed, that said note represents a bona, fide indebtedness to the full amount thereof for money loaned and interest thereon. This principal note was unquestionably executed by J. B. Peeve. Miss Clark, who was in his employ in 1895, testifies that on August or September of that year he told her to figure up the interest on his note to Mrs. Pierce “before she came home; that he wanted her to do the same, and compare our figures;” that she did so; and that the note amounted to nearly two thous- and dollars. She further says: “I heard Mr. Peeve speak about borrowing money from Mrs. Pierce. He said he thought he would have the note renewed. I heard him say that he borrowed the money during the financial crisis of 1893.” Miss. Magirr, who was employed in the bank in 1896, testifies: “I remember in the fall of 1896, when Mr. Peeve and Mrs. Ella M. Pierce were at the bank. It was in the evening, after we had closed the bank. They were at a desk, figuring up her note, and I was at another table. As near as I can remember, I was putting away the checks in the check case. I remember him going to the certificate register and writing out certificates of deposit, — one for $140, and one for Allan for a smaller sum; $20, I think it was.” Other testimony of this witness leaves no doubt but that at that time the principal note in question was executed.

3 III. To sustain her report, the appellant, Mrs. Reeve, testified in her own behalf, and she called and examined Mr. and Mrs. Pierce. The testimony of appellant and of Mr. and Mrs. Pierce is, in part, to personal .communications and transactions between them, respectively, and Mr. Reeve, deceased; and to this the appellees object as incompetent, under section 4604 of the Code. In view of our conclusion on the evidence, the competency of which is not 'questioned, it is unnecessary that we pass upon -this objection. We now inquire whether there was such a delivery of the principal note and of the collaterals to¡ Mrs. Pierce as to give her. title thereto'. That it was the intention of both parties that the principal note should stand as a valid note in her favor, and that the collateral notes should stand as security for the payment thereof, is entirely clear; but, if there was no delivery of the principal note, then it is a nullity, and in that case she'would take no title in the collaterals. In 1 Daniel, Negotiable Instrument (3d ed.) section 63, it is said: “It is to be observed, however, that delivery may be constructive as well as actual, by manual passing of the instrument. Where the plaintiff’s bankers indorsed a note to him, and put it in an envelope with his papers, at the same time making appropriate entries of the transaction on their books, it was held sufficient delivery to him, and that a subsequent assignment of the bankers could not defeat it.” It is further said: “But, if advances had been made on the faith of a delivery, then the promisee or indorsee would be entitled to a delivery.” See Williams v. Galt, 95 Ill. 172; Clark v. Boyd, 2 Ohio, 56; Clark v. Sigourney, 17 Conn. 511. In Tiedeman Commercial Paper, section 34, it is said: “And even where, in indorsing a note the indorser, who sustains the character of banker to the indorsee, instead of making an actual delivery to him, puts it into an envelope containing other papers of the indorsee, this is held to be a good constructive delivery.” Mr. Dániel, in his first volume (section 67), says: “It is essential to delivery that the minds of both parties should assent, in order to bind them; and if, through inattention, infirmity, or otherwise, one does not assent, the act of the other is nugatory.” As already stated, we are in no- doubt but that the minds of both these parties assented that these notes should stand as the property and security of Mrs. Pierce. We give no .force to the presumption that would arise from Mrs. Pierce’s possession of the notes, that possession being fully explained. We think it fairly appears that, to evidence and secure this existing indebtedness, Mr. Pierce executed the principal note in the presence of, and with the consent of, Mrs. Pierce, and that the same was kept by him thereafter for her as her banker, — for safe-keeping, and for the collection of the collaterals, and the- crediting of the proceeds thereof upon the principal note. This we. think would constitute a constructive delivery, under the authorities quoted above. See, also, Sharmer v. Johnson, 43 Neb. 509 (61 N. W. Rep. 728), — a case in many respects quite similar to this. If it should be said that there was not a constructive delivery, still we think thé evidence warrants the conclusion that there was an actual delivery of all the notes. Miss Magirr’s testimony alone is sufficient, we think to show an actual delivery. It appears that this principal note was executed in renewal of a former note, with which the callaterals had been put in the envelope.

4 IY. The claim that these ho-tes, if ever delivered to Mrs. Pierce, were returned to Mr. Reeve, and that thereby she waived any right she had in them, is not well sustained. If actually delivered, as we think they were, they were returned by her for the purpose of safe-keeping and collection, and that would not deprive Mrs. Pierce of her rights in the notes. In Colebrook Collateral, Security, (2d ed.) section 2, it is said: “The holder of negotiable instruments as collateral security, receiving the same so as to become a party thereto, does not lose his right and title thereto, nor to the proceeds thereof, by a delivery of the same to the pledgor, where such delivery is made with the intention or upon an agreement that the pledgor shall proceed, for and on behalf of the pledgees, to make collection thereof, or do some other proper and necessary act in respect thereto. Where collection of collaterals is the object, the pledgor is regarded as the representative or agent of the pledgee.” The author also states that, where there is such a delivery under an agreement that the pledgor may exchange or substitute other collaterals, the exchange does not affect the title to the securities in the pledgee by proper indorsement. It is fairly inferable from all the evidence that it was so agreed in this case, but if not, Mr. Reeve could not affect the rights of Mrs. Pierce by changing collaterals without her consent.

Our conclusions upon the whole record are that this principal note stands for a bona fide indebtedness, that the notes claimed as collaterals thereto were set apart and pledged as such by Mr. Reeve, that there was such a delivery of these notes as to vest Mrs. Pierce with title thereto, and that were was no re-delivery thereof that devested her of that title. It follows from these conclusions that the order and decree of the district court must be reversed, and that a decree must be rendered in harmony with this opinion.— Reversed.