The clarion. [volume] (Jackson, Miss.) 1883-1888, 1886-11-03
:. /. NooLpRIpeE,

j. ID. II. BOWMAN, hecelNeI.t
Appeal from the Chancery Court of
Warren county. Hon. Warren Cowan,
Chancellor.
On the 9th dav of January 1881, L.
E. Crutcher executed eight promissory
notes for s., 500 each, payable to the
order of Geo. II. Klein, and falling due
due three In one year, three III
eighteen months, and two in two
wears. Those notes were secured by
mortgages on certain real estate. The
notes we're executed by Crutoher as
the friend and agent of Klein, AT his
request and for his benefit, he agreeing
10 nay them at maturity and TO save
Crutcher harmless. The property mort
Gagged 20 secure the notes belonged to
Klein. but was decided to Crutcher for
the purposes of this transaction. Klein
took these notes, endorsed them and
transferred them to ;. l.. Woodbridge.
The first two notes were taken up by
Klein when they Cell due, and he did not
cancel them, but deposited them with
other private papers. Soon afterwards
Geo. NJ. Klein made an assignment of all
his interests for the benefit of his credi-
tors. J. II. ID. Bowman was appointed
receiver by the Federal Court to take
charge of the assets of Klein. Among
the papers of Klein the receiver found
the two notes above mentioned, which
| had matured and been taken up by
Klein. Woodbridge had proceeded to
file bill before the Cbancery Court OF
| Warren to foreclose his mortgage given
bv Cruteher on the land and sell the
same to paw the notes still held by him
I - al
| decree was rendered in favor of Wool
bridge, the property ordered TO be sold
and the sale was made and the money
paid into Court. The receiver, Bowman
appeared before the court and asked
| that the sale be not confirmed, and that
a resale of the property be made, and
| that he be allowed to receive his pro rate
share of the proceeds, claiming that the
two notes taken up by Klein were prop
erly assets and entitled to a proportion
ate share of the proceeds resulting from
the sale of the property mortgaged to
secure them. The chancellor con armed
the original sale, but ordered that one
fourth Of the proceeds be paid over tC
Bowman, the receiver. Woodbridge APP
pealed.
COOPER. C. j., delivered the opinion o.
the Court.
On the facts disclosed by the record
it is clear that the notes executed by
Cruteher imposed no personal obligation
on him as between himself and Klein
and volunteers under him.
As between Crutcher and Klein, KleiI
would have been the real debtor to any
person to whom the notes had passed
for value, and it would have devolveC
on him to indemnify Crutcher agains
personal loss.
So far, then, as the notes in the posses
sion of Bowman are concerned, the,
must be disregarded or considered Al
the notes of Klein secured by mortgag,
on his own land.
There are two reasons, either of which
is sufficient, to maintain the prior RICH
of Woodbridge to the whole of the pro
ceeds of the sale. First-Bowmar, re
ceiver, stands il no better right thar
would Klein or his assignee. Ane
neither Klein nor his assignee claiming
under an assignment of all his estate
could have any interest in the notes a,
property. They might be valuable a
evidence Of the extent of Klein's riph
to the land held by Crutcher, but this j,
the sole purpose for which they coulC
be used, and when all the facts are
shown, it appears that the land itself j.
subject to a mortgage for the notes held
by Woodbridge, as against both Klein
aud 'Crutcher, and consequently against
Klein's assignee and the receiver of hi,
estate.
The second reason is that Crutcher i.
entitled to protection at the hands Of
Klein as against his liability to Wool
bridge on the notes held by him, and
since he is not liable ON the notes held
by the assignee, the court ought, in the
distribution of the fund in hand, to pro-
tect him by discharging those notes
which are binding upon him
The decree is reversed and a decree
ordered TO be made here directing pay.
ment of the whole fund to Woodbridge
A. B. Pittman, for the appellant.
Birchett & Gilland, for the appellee