198 Mo. App. 195 | Mo. Ct. App. | 1917
The suit, out of which the controversy now before us has evolved, arose- because of the fact that plaintiff Yeomans and defendant Nachman each owned and held a Real Estate Mortgage Bond, or note, similar in date, amount and terms, and stating therein that it is secured by a first deed of trust, of even date. There is but one such deed of trust, and only one note described in and secured thereby; and as both of the above-named parties claimed the security, if became vitally necessary to ascertain which, was
The two notes or bonds, each dated January 15, 1912, were for $2000, payable to the order of the J. S. Chick Investment Company, due five years after date and signed by C. B. Wescott. They bore six per cent interest payable semi-annually evidenced by coupon notes attached.
The defendant Ice Company, in its answer to the petition, admitted that it owned tfie real estate mentioned and that said real estate was subject to said deed of trust, but denied all other allegations.
In her answer to the petition, the defendant Minnie Nachman asserted that she was the owner of the note described in and secured by said deed of trust, and was entitled to its security; that, if plaintiff held such a note as he claimed, it was a duplicate of the one she held, and was fraudulently issued by Wescott; and the plaintiff’s rights were inferior to hers.
She further set up that at the time Wescott executed the deed of trust he was the holder of the legal title to the real estate described therein, but that the same was really owned by the Ice Company who had caused the said real estate to be conveyed to him for
To this answer and cross petition on the part of defendant Nachman, the Ice Company filed an appropriate reply and answer, in which the. allegations and charges made in said cross-petition were denied and it was alleged that if defendant Nachman held a note as she claimed, it is a counterfeit and forged note neither executed, uttered nor negotiated by Wescott, while he was the owner and holder of said property, nor at any other time.
The chancellor heard the evidence and rendered a decree finding that the note held by plaintiff Yeomans “was the first of the two notes for $2000 executed by said C. B. Wescott negotiated and delivered by the said J. S. Chick Investment Company under and in
The Tee Company, conceding that its land is subject to the deed of trust, is willing to pay the debt secured thereby to whomsoever is the true holder thereof, but it very strenuously opposes the idea that it should be required to pay more than one note. We do not understand that Mrs. Nachman now questions that part of the decree which finds that the Yeomans note is the one secured by the deed of trust and which awards to him the right to the security thereof. Indeed, there can be no doubt that' the decree is correct in this regard. The deed of trust was executed January 15, 1912. Yeomans bought his note of the Chick Investment Company on February 19, 1912, and received it in due course, for value and duly endorsed, scarcely more than a month after its execution and long before any interest thereon had accrued. Mrs. Nachman did not obtain her note from the Chick Investment Company until September 2, 1914, a little more than two years and a half after its execution, and after five interest coupons had become due. So that the .controversy now is no longer between Yeomans and Mrs. Nachman but solely between the latter and
' The theory, upon which appellant seeks to hold the Ice Company and its property liable for the payment of her note, is that she is an innocent holder thereof, having purchased it for value before maturity and without notice, actual or constructive, of the fraudulent duplication; and the Ice Company, having placed the title of its lot in a straw man for the purpose of obtaining a loan thereon, and having carelessly left said matter entirely to its agent, J. S. Chick, Jr., or which is the same thing the Chick Investment Company, and .having negligently allowed the legal title to its property to be placed in Weseott’s name, said company thereby became bound by the fraudulent acts of Wescott or Chick, and, since said company’s negligence made possible the fraudulent duplication, it should stand the loss, on the principle that where one of two innocent persons is to suffer, it should be that one whose carelessness and confidence put into the hands of the wrongdoer the opportunity and means of doing the wrong; and that the Ice Company, having placed the title to its property in a straw mortgagor and carelessly left said matter to its agent Chick, one or both of whom made her note and perpetrated the fraudulent duplication, is now estopped from disputing appellant’s right to a lien. The principles on which appellant’s theory rests are well established. [National Safe Deposit Co. v. Hibbs, 229 U. S. 391, 396; Fairgate Realty Co. v. Drozda, 181 S. W. 398, 400, 402; Allen v. South Boston R. Co., 5 L. R. A. (Mass.) 716; 5 Thompson on Corp., sec. 6325; Brown v. Kansas City Southern R. Co., 187 Mo. App. 104, 112; Leonard v. Shale, 266 Mo. 123; Schultze v. McLean, 93 Cal. 329, 357; 27 Cyc. 1036; Guffey v. O’Reiley, 88 Mo. 418; Burson v. Huntington, 21 Mich. 415, 432; 2 Herman on Estoppel, secs. 766, 777; 16 Cyc. 773; Roumeloitis v. Missouri Pac. R. Co., 165 S. W. 818; Houtz v. Hellman, 228 Mo. 655, 669-71; Rieschick v. Klingelhoefer, 91 Mo. App. 430, 433; Riley v. Vaughn, 116 Mo. 169, 178; Barrett v.
The facts considered necessary to an understanding of this feature of the case are these: J. S. Chick, Jr., was the president of the J. S. Chick Investment Company and so controlled and managed the same that for the purposes of this case the two, Chick and his company, may be treated as one and the same. He and it were engaged in the real estate and loan brokerage business. Chick was also the Secretary and Treasurer of the Ice Company; and whenever the latter needed anything in the way of real estate deals or loans, that matter was turned over to Chick, or his Investment Company, as the Ice Company’s agent to attend to same. Chick himself attended to it and did so in his capacity as agent for the Ice Company rather than as Secretary and Treasurer of the latter. Wescott was a man of straw in the office of the Investment Company. In the real estate matters turned over to Chick by the Ice Company, the latter trusted Chick implicitly and left the details to him and exercised no supervision over him as to how or in what way he transacted the real estate matters for the Ice Company.
The land described in the deed of trust is Lot 97 Campbell’s Addition to Westport. It is a vacant lot adjoining, and on the north side of, the land on which the Ice Company erected its plant. The Ice Company was incorporated the latter part ■ of 1906. Said Lot, 97 was acquired by the Ice Company August 15, 1908, but the title was not taken in its name but in that of Mary M. Winship, a bookkeeper in the Chick Investment Company. On the same day, she executed a deed of trust thereon for $2000, with the Chick Investment
On account of the foregoing facts and circumstances, it is claimed that in equity the Ice Company should be required to pay Mrs. Nachman’s note and is estopped to deny its validity.
By her pleading, Mrs. Nachman has planted her case on the premise that her note bears the genuine signature-of Wescott and that any fraud perpetrated was by him in" executing two notes in duplicate. So that in order for her proof to correspond strictly to her- pleading, the burden is on her to show that her note bears Wescott’s genuine signature and is not mere forgery afterwards committed by Chick a*nd sold by him to her. The Ice Company contends that there is no evidence to show that Wescott signed Mrs. Nachman’s note in addition to the one Yeomans got. We think the evidence tends to show her note bears his true, signature but that it does not show when it was signed. Miss Winship, who took the acknowledgment to the deed of trust, and who was acquainted with his signature, testified that the signature on the two notes is the same. When the deed of trust was executed Miss Winship .had no idea or knowledge of his signing more than one note; and
But appellant says that she is an innocent holder- and where one of two innocent persons must suffer for the act of a third, the loss should- fall upon that one who afforded the third party the opportunity of doing the wrong and enabled him to perpetrate the fraud and cause the loss. We do think that, under the facts of this case, Mrs. Nachman is an innocent holder, and, if she was not, then -also arises the question whether it was - her conduct and not the Ice Company’s that enabled the fraud to be perpetrated. Because, as to her, the fraud was not complete nor her loss accomplished until Chick sold her the note.
The note provided that if default was made in the payment of any of the interest when due, then the whole note, principal as well as interest, could become due. At the time she bought the note at least five of the interest coupon notes were past due and were
We do not understand that in her pleadings Mrs. Nachman has based her claim against the Ice Company upon the fraud of Chick as its agent, but if her plead
It is unfortunate and distressing that Mrs. Nachman has fallen a victim to the fraudulent practices disclosed hy the evidence in this case. But while she is entitled to sympathy, there is, in our view, no ground upon which a court of equity can rightfully require the Ice Company to make good her loss. The decree is, therefore, affirmed.