67 P. 650 | Idaho | 1902
— This is an action upon a promissory note, and to foreclose a real estate mortgage given to secure the same. The note is negotiable in form. The execution of the note and mortgage is admitted; the same having been executed by the defendant, Archibald C. Stoddart, and made payable to the Boise City and Nampa Irrigation, Land and Lumber Company, bearing date September 16, 1892, and falling due September 16, 1897. The answer puts in issue the ownership of the note by the plaintiff, and sets up certain affirmative defenses, in the way of failure of consideration, which it will not be necessary to discuss, in the view that we take of the case. The controlling question presented by the appeal is whether or not Joseph D. Warren, now deceased, became the purchaser, in good faith and for value, before maturity, of the note in question. It seems to be conceded that, should the findings of the court below be sustained upon this question, the matters presented in the affirmative defenses would become immaterial.
Counsel for appellants urge, however, that, notwithstanding the indorsement, Warren, in fact, purchased the note and took title by assignment, and not by virtue of this blank indorsement. It is claimed that in the first complaint plaintiff alleged transfer by assignment. While this may he true, yet upon the reversal of this case upon a former appeal the plaintiff amended his complaint, and set up transfer and title by virtue of the indorsement. No objection was made to the amendment, and, even if there had been objection, it was within the authority and power of the court to permit the amendment. (1 Ency. of Pl. & Pr. 489; Currie v. Southern Pac. Co., 23 Or. 400, 31 Pac. 963; Interstate etc. Assn. v. Knapp, 20 Wash. 225, 55 Pac. 48, 931; Perry v. Burton, 126 Ill. 599, 18 N. E. 653.) The evidence upon the part of the plaintiff discloses that the company to whom this' note was made payable transferred the note to H. E. Simmons in consideration of his taking up a note of one Dr. Clapp, which note the company owed Clapp; that thereafter, and in June, 1894, Simmons placed the note with Warren, now deceased, as collateral security for a loan of $5,000; that in February, 1895, upon Warren giving Simmons $2,000 in addition to the loan, the note in question was sold to Warren. About this time, it appears, Simmons executed an assignment of the mortgage. As we understand the rule, the production in evidence of the note in question, bearing the indorsement, regular in form, is sufficient prima facie evidence to entitle the respondent to recover. The legal conveyance by a transfer and delivery of a negotiable note' is one that the law presumes to have been before the note fell due, in good faith, and without notice of any infirmities attaching. Possession, even without explanation, is prima facie evidence that the holder is the proper owner or lawful possessor of the instru
It is also argued, as the note was payable to the company and indorsed by the president, and he was thereby dealing with the company’s notes, indorsed by himself, when he transferred the same to Warren, that this would be some notice of any infirmities that might exist. The evidence shows that Simmons had ceased to be president of the company long prior to the time that the note went into the hands of Warren, and that at the time of the transfer to Warren he was in no way connected with the company — at least, he was not its president. It also appears, as we have before stated, that the company actually transferred the note to Mr. Simmons, and there is no question of bad faith as between Mr. Simmons and the company. We do not think that this would be notice sufficient to put a purchaser of a negotiable instrument upon inquiry. The indorsement was regular in form, and, looking at the note as it appeared when presented to Warren, there was nothing to suggest any infirmities. “The inspection of the paper itself furnishes the only criterion by which a stranger to whom it is offered can judge of its character.” Had Simmons yet been president of the company, there might be something in the contention of counsel; but he was not president, and this paper is a negotiable instrument, and entitled to be followed by the legal presumptions which accompany such an instrument. (First Nat. Bank of Freeport v. Compo-Board Mfg. Co., 61 Minn. 274, 63 N. W. 731.)
Counsel also urge error of the court in refusing permission of the defendant to introduce certain evidence with reference to assignment, to wit, the assignment of the mortgage, both in the transfer of the mortgage from the company to Simmons and from Simmons to Warren. This evidence was not admissible under the pleadings, as the answer stood; and, as counsel did not avail themselves of permission to amend upon the terms allowed, we do not think the refusal of the court was error. Aside from this, in the view which we have taken of the case, the evidence offered would not have proven an assignment of the note. The assignment of mortgage was in the record, and we have examined the same.
Another error assigned is that of the court in fixing the attorney’s fees at $1,000. The amount of the note sued upon, principal and interest, is about $11,000. The record shows that the case has been earnestly and ably contested. The testimony also discloses that the plaintiff has actually contracted to pay as attorney’s fees $2,000, $1,000 of which has been paid. Evidence was also introduced of attorneys as to the reasonableness of the fee, both of whom fixed the fee higher than the court allowed. The court having found that $1,000 was a reasonable fee, we are unable to say that the finding is not supported by the evidence. ,
We have examined the record and the numerous assignments of error, and find no reversible error. The judgment is affirmed, with costs to respondent.
— I am unable to concur in the conclusion reached by my associates in this case. This action was commenced in the district court by Joseph D. Warren now deceased, •during his lifetime, to obtain judgment foreclosing a certain real estate mortgage given to secure the- payment of a note executed by the appellant, dated September 16, 1892, due September 16, 1897, for the sum of $6,400. The original plaintiff having died during the pendency of this action, the respondent, 'T. J. Jones; has been duly appointed and qualified as administrator with the will annexed of said decedent, and the action revived in his name as such personal representative. The cause was tried, findings of facts in favor of the respondent made, and a decree foreclosing said mortgage rendered and entered, from which this appeal is taken.
A number of errors are assigned, but, in order to properly understand the same, it is first necessary to review the history <of this action. This is the second appeal in this action. From the first judgment, rendered in favor of the respondent, appeal was brought to this court, and upon hearing said appeal this court reversed the said judgment. (See Warren v. Stoddart, 6 Idaho, 692, 59 Pac. 540.) The grounds upon which the first judgment was reversed are fully stated in the said opinion; the principal error for which said decree was reversed being the ■error which the lower court made in striking out certain paragraphs of the answer which averred facts showing a failure of consideration, and a breach of the warranty against encumbrances contained in the deed, which was the alleged consideration for the note and mortgage. The original complaint in this action alleged the execution of the said note and mortgage to the original ■mortgagee, the Boise City and Nampa Irrigation, Land and Lumber Company, and an assignment thereof by said original mortgagee to H. E. Simmons, and a subsequent assignment thereof by said Simmons to the plaintiff, Warren. In the decision of this case upon the former appeal, this court, in delivering the opinion, uses the following language: "The plaintiff alleges title to the promissory note and mortgage sued on by as
At the former trial the plaintiff had alleged title to said mortgage note by assignment. He had introduced witnesses (one of them being H. E. Simmons) who testified that said note and mortgage were assigned to said Simmons, and afterward assigned by said Simmons to the plaintiff, Warren. At the last trial, on behalf of the plaintiff, E. W. Purdum was introduced as a witness, and testified, in substance and effect, as follows: “I was a director and manager of the Boise City and Nampa Irrigation, Land and Lumber Company from 1890 to 1893, and assistant manager from 1893 to 1899. Defendant Stoddart signed the note and mortgage herein. The indorsement on the back of the note in the following words, ‘Boise City and Nampa Irrigation, Land and Lumber Company, by H. E. Simmons, President/ is all in the handwriting of H. E. Simmons. Simmons was at the time of that indorsement president of the Boise City and Nampa Irrigation, Land and Lumber Company, and also a member of the board of directors. This indorsement was made in the winter of 1892, while Mr. Simmons was president of the corporation.” On cross-examination said witness testified: “I think I was president at the time this
The evidence introduced at the last trial, as well as that at the first trial, shown by the entire record in this case as brought into this court, shows that the indorsement which is upon the back of the note was made by the original payee in order that said note might be used as collateral security at the First National Bank of Boise City to secure a loan, and was so used, and afterward returned by the bank to the company; that afterward H. E. Simmons, who had ceased to be president of the corporation, purchased said note, and took the same by assignment, not relying upon the indorsement, nor having any thought of taking it by indorsement, as an indorsee; that afterward he sold and assigned the same to the plaintiff, Warren, in settlement of his own debt; and that the said Warren took the same by assignment, and not upon the original indorsement. Hence, as was heretofore adjudged and decided in this case, Warren took as an assignee, and not as an indorsee. It is a well-settled principle of law that, where one takes the securities of a corporation in payment of an obligation of one of its officers, he does so at his peril. The principle is correctly stated in the syllabi to the decision in Wilson v. Railway Co., 120 N. Y. 145, 17 Am. St. Rep. 625, 24 N. E. 384, as follows: “It seems the general rule is that one who receives from an officer of a corporation its notes' or securities in payment of, or as security for, a personal debt of the officer, does so at his peril. Prima facie, the act is unlawful; and, unless actually authorized, the purchaser will be deemed to have taken them with knowledge of the rights of the corporation.” In the ease
The evidence produced at the trial by defendant, as I view it, established his defenses. The deed from the original payee to the defendant Stoddart, and which was the only consideration for said note and mortgage conveyed simply a grant of a right to rent water from said payee-at the rate of $100 per cubic
The defendant offered in evidence, which was received, a mortgage executed by the Boise City and Nampa Irrigation, Land and Lumber Company, as mortgagor, to the Farmers’ Loan and Trust Company, mortgagee, mortgaging the entire canal, water, and water rights of said mortgagor, including the water rights purported to be conveyed to said defendant by said mortgagee to secure an indebtedness of $200,000, with interest at the rate of seven per cent per annum until paid, which indebtedness was to fall due June 1, 1900. Said mortgage was duly recorded in the office of the county recorder in and for Ada county, and afterward transcribed and recorded in the office of the county recorder in and for Canyon county, and was recorded and in existence at the time said deed was given by said irrigation company to defendant. The defendant introduced evidence proving that said mortgage was unpaid and unsatisfied. The defendant thus established his‘claim of breach of the warranty against encumbrances, and clearly made and sustained this defense.
Recurring to the question as to whether Simmons took the note in question by assignment or by indorsement, in my view of the law, an indorsement, to pass title to a negotiable instrument, must be delivered to the indorsee for that purpose and with that intent. There is nothing in the record before this court which shows that the original pajme in said note intended to pass the title thereto to the said Simmons by indorsement. On the other hand, the record shows affirmatively and conclusively that it did not so intend, and that said Simmons did mot so intend. The majority opinion makes an indorsement between these parties contrary to the intention of the parties, simply because the note had the name of the payee on the back thereof, in the face of the sworn testimony of the said Sim