Lee v. Turner

| Mo. | Apr 15, 1886

Black, J.

The petition in this case is in the nature •of a bill of interpleader. The defendants, Thomas T. Turner, R. M. Million and Wm. Roemheld, each made claim to the fund brought into court. ' Their respective ■claims arise out of the following transactions :

On the twenty-second of February, 1876, one Rohn made to the plaintiffs, A. and J. F. Lee, a deed of trust ■on certain property in the city of St. Louis to secure a note made by Rohn for nine thousand dollars due in three years, payable to Turner as trustee for Mrs. Briggs, and to secure six interest notes. There was a default in the payment of the principal note and some of the interest notes, and on the tenth of March, 1879, the trustees sold the property, and Turner became the purchaser, at six thousand dollars. This sale paid the interest notes, and the trustees endorsed on the principal note a credit of the residue of the proceeds of the sale. Soon after this sale, and in April, 1879, Turner, as trustee, endorsed the note to Million without recourse. On the same day he took back a contract, reciting the assignment and amount due upon the note, by the terms of which Million was to endeavor to collect the balance from the estate of Rohn, who died previous to the date of the trustee’s sale. Million agreed to pay all the costs of litigation and for Ms services was to receive one-half of the amount collected, and at the end of eight years return the note, if not collected. Million had allowed in his own name the balance due on the note by the probate court against the estate of Rohn, and in like manner prosecuted suits to set aside deeds alleged to be fraudulent and to subject the property to the payment of this debt.

In 1881, Turner contracted to sell the property which he had purchased at the trustee’s sale, when an investigation of the title disclosed the fact that the trustees had only advertised the property for sale for twenty days; the trust deed required' thirty. Thereupon, Turner directed the trustees to re-advertise and sell the property again, which they proceeded to do. While the property was thus being re-advertised,. Roemheld loaned Million three thousand dollars, to become due in one year, and as security took an assignment of the Rohn note, which was then in the possession of Million. The re-sale was temporarily enjoined, and in 1882 the trustees again sold the property at public sale for twelve thousand dollars, and this is the fund in dispute. The circuit court found and decreed that Roemheld was entitled to be paid three thousand dollars and the interest thereon, and that Turner should have the residue. This judgment was reversed in the court of appeals, and Roemheld prosecutes this appeal from that judgment.

As between Turner and Million there can be no difficulty. By the endorsement and agreement, both made at the same time, and, therefore, as between them, parts of the same transaction, Million had and could have no interest in the special security. He took the note upon the supposition and understanding that the security had been exhausted. Besides this, he held the note for the sole purpose of collecting the residue out of other property of the Rohn estate. It is true the note was over due when transferred by Turner to' Million and long past due whea received by Roemheld. But we do not see that the doctrine that a transferee of negotiable paper, to whom it is transferred after maturity, acquires nothing but the actual right and title of the transferer, should control the disposition of this case. The note was assignable. If the true owner of a negotiable note over due, or of a non-negotiable note, clothes another with the usual evidences of ownership, or with full power o E disposition, and third persons ahe led into dealing with such apparent owner, they will be protected in their dealings. As was said in McNeil v. Tenth National Bank, 46 N. Y. 329, and approved by this court in The International Bank v. The German Bank, 71 Mo. 197, “ their rights in such cases do not depend upon the actual title or authority of the party with whom they deal directly, but are derived from the act of the real owner which precludes Mm from disputing, as against them, the existence of the title or power which, through negligence or mistaken confidence, he caused or allowed to be vested in the party making the conveyance.”

Now does Roemheld occupy that relation as to Turner and to the noté in question % It is urged, and if true, is a matter of considerable consequence, that he loaned the money to Million for one year and took as security this Rohn note when he knew the property securing it was at the same time advertised for sale. Uhlman, through whom the loan was made, testifies unequivocally that he did not know the property was then advertised, and it is shown beyond all doubt that Roemheld relied upon Mm and the attorney for advice, against whom there is no suspicion to be fairly drawn from anything in the record. Roemheld says he saw the property advertised in a newspaper and went ,to see Mr. Gottschalk, his attorney, but he had previously stated that he had not seen the attorney before the transaction was closed, and we find the opinion of the attorney as to the title addressed to Uhlman. It is not shown, therefore, that he knew this property was then advertised for sale ; the contrary is established. Roemheld found endorsed on the note the following statement, signed by the trustee: “March 10, 1879, credited by proceeds of trustee’s sale this day $4,633.08.” He had the records examined and the abstract showed the former trustee’s sale to Turner. The attorney gave it as his opinion that the sale was void and that the note held by Million was secured by the deed of trust. Roemheld examined the property and regarded it as sufficient security. Now the above indorsement showed to him that the assignment only purported to convsy the balance due upon the note, and, of course, subject to the right of the purchaser to have refunded the amount of the former sale. But as to the residue of the note he found a full and complete transfer thereof by Turner to Million without any restriction or qualification whatever. Prom the allowance of the note by the probate •court, in the name of Million also endorsed thereon, Million appeared to have been the owner for nearly two years.

The transfer of the Rohn note carried with it the security, certainly so, as far as anything appearing upon the face of these transactions. It is true Roemheld did not inquire of either the trustee or Turner for further information ; but he appears to have been cautious in the transactions, and the evidence shows beyond. all doubt that he made the loan relying upon the security. He had no knowledge of the agreement between Million and Turner, nor was there a thing indicating to him the existence of any such an arrangement. That agreement was not designed by the parties thereto to go with the note, for it was in terms a contradiction of the endorsement. The purpose of it was to give Million the outward appearance of the full ownership that he might prosecute suits in his own name. Turner has been deceived by the confidence which he placed in Million, but it is the result of his own act, and as between himself and Roemheld, who took the note in good faith, he-ought to bear the consequences.

The judgment from which this appeal is taken is; reversed, to the end that that of the circuit court shall stand affirmed.

All concur.