Overall v. Ellis

Note. — When a holder of a note secured by mortgage had prior to his bankruptcy endorsed the note to third parties as collateral security for the performance of conditions, and the endorsees subsequent to the bankruptcy transferred the notes without endorsement to the plaintiff’s intestate; held, that the plaintiff, having the legal title, had the right to-enforce collection of the note and the foreclosure of the mortgage, and that the liability of the plaintiff to account to the assignee in bankruptcy did not affect the right of the plaintiff.

Error to St. Louis Land Court. Plaintiff filed his petition the 14th December, 1855, in the St. Louis Land Court, to foreclose a mortgage upon certain lands in St. Louis township, made by Vespasian Ellis in January, 1839, to secure, among other notes, three notes of five hundred and odd dollars each. The notes and mortgage were executed to John Riggin, mortgagee, who endorsed the said three notes before maturity to Thomas J. Payne for value. In 1840, before the maturity of said three notes, Thomas J. Payne endorsed and- delivered the said notes to Spalding and Tiffany, to be held by them as collateral security against certain encumbrances on other lots of ground sold by Payne to Spalding and Tiffany. The following is the receipt and agreement: “ Received of Thomas. J. Payne three notes, made by Vespasian Ellis, payable to John Riggin, and by him endorsed, and also by said Payne, dated May 1st, 1839, and payable, the first in six years, for five hundred and ninety-five f-0\ dollars; the second in seven years, for five hundred and fifty-six dollars; the third for five hundred and eighteen T\% dollars, in eight years, from the respective dates of said notes; which notes it is hereby agreed shall be held on the following condition,” &c. (See condition given in the opinion.) In August, 1842, Thomas J. Payne petitioned for the benefit of the bankrupt law, and was declared a bankrupt in December, 1842. In July, 1846, one Mary Jones, a widow, claiming to have a title paramount to said lot of thirty feet front on Main street, and also to certain other property of Spalding and Tiffany, compromised and arranged the conflicting title with Spalding and Tiffany, by making them a deed, on the 25th of July, 1846, (Rec. 41) for the said thirty feet of ground on Main street, on condition that said Spalding and Tiffany would give the said three notes for the said deed and property thereby conveyed by her, said Mary Jones, to them. In November, 1846, Payne and Mary Jones intermarried, and a full marriage contract was executed between them, providing that all the property, real and personal, dioses in action, and goods and chattels of the said Mary J ones, would continue to be hers, free from all control or debts of her intended husband. Upon the execution of this contract, the marriage of the parties was solemnized. Mrs. Mary Jones Payne died in 1853, and the plaintiff has been duly appointed her administrator, and brought this suit to foreclose the said mortgage for the payment of the said three notes. The plaintiff asked the following instructions: 1. That the marriage contract secured to Mrs. Payne her separate interest in the property. 2. That if the notes in question were transferred and delivered by Payne to Spalding and Tiffany, in 1839 or 1840, nothing more was necessary, so far as Payne was concerned, to pass to them his title to the notes. 3. That there is no evidence in this case of any cancellation, payment or satisfaction of the note in question. 4. That if Mary Jones, prior to her marriage with Payne, or afterwards, conveyed to Spalding and Tiffany her interest in a lot of ground in St. Louis, and in consideration thereof Spalding and Tiffany delivered over the notes to Payne for her use, nothing more was required to put the title of said notes in her. 5. That it can constitute no defence to this action, even should it appear that the notes were fraudulently transferred to Mary Payne (Jones) through the agency of Thomas J. Payne. 6. That in 1842, when Payne applied for the benefit of the bankrupt act, the notes in question belonged to Spalding and Tiffany, then the assignee of Payne in bankruptcy acquired no title to them. 7. That no property acquired by Thomas J. Payne, after his application in bankruptcy, would pass by virtue of said law to said Payne’s assignee in bankruptcy. Of the above instructions the court gave the first, second and fourth, and the others were refused. The defendants asked the following instructions, which were given by the court: 1. If the jury find from the evidence that Mary Payne was not the owner of the notes in question at the time of her death, they should find the first issue for the defendants. (The second instruction appears in the opinion.) 3. That if the jury believe from the evidence that any witness has wilfully testified falsely in respect to any material fact, they are at liberty wholly to disregard the testimony of said witness. The plaintiff excepted to the second instruction given for defendants, and to the refusal of the court to give those asked by the plaintiff, plaintiff submitted to non-suit with leave to move to set the same aside. 1. The notes were endorsed in blank by Riggin, and passed by delivery. The possession, therefore, was sufficient evidence upon which to maintain this suit, an action at law. (Odell et al. v. Presbury, 13 Mo. 330 ; Webb v. Morgan et al., 14 Mo. 428; Bennett v. Toney, 28 Mo. 598; Boeha v. Nuella, 28 Mo. 180.) 2. The defendants set up no equitable defence to this suit to foreclose the mortgage. The assignee in bankruptcy took no title to the notes. The most he could have had would have been a right to redeem by complying with the conditions of the agreement between Payne and Spalding and Tiffany. 1. There was no final judgment in the court below from which the plaintiff could appeal. 2. Plaintiff’s intestate was not the legal holder of the notes in question. They really belonged to the assignee of Payne in bankruptcy.