Court Opinion

ID: 9833704
Source: CourtListenerOpinion
Date Created: 2023-09-01 22:57:29.024931+00
Date Added: 2024-06-11T07:44:06.035121
License: Public Domain

On Motion for Rehearing.
[6] Appellants in their motion for rehearing contend that we erred in holding that the sale by Plummer of appellees’ interest in the notes deposited with the Lotts as collateral constituted conversion. This holding was made in considering the assignment of error complaining of the refusal of the court to give a peremptory instruction requiring the jury to return a general verdict in favor of defendant. This request was not made on the theory that defendant was not indebted to plaintiffs, for there can he no doubt in regard to that matter. The main controversy was in regard to the amount of the indebtedness, but defendant also pleaded that he had never paid off the debt due by him to the Lotts, and therefore the plaintiffs should not be permitted to collect their portion of the proceeds of the notes deposited as collateral. Defendant did not ask the court to dismiss plaintiffs’ case because the suit was prematurely brought, but, without assigning any reasons, asked the court to instruct a verdict upon which a judgment upon the merits would have been rendered in favor of defendant. The court refused this request, and in the motion for new trial defendant contended the request should have been granted on the ground that the suit was prematurely brought. Plaintiffs pleaded that defendant's sale of the plaintiffs’ interest in the notes deposited as collateral pursuant to the Lott contract, which sale was made without their knowledge or consent, and the appropriation of the proceeds to defendant’s benefit by applying the same to the payment of his debt to the Lotts, constituted a conversion of such interest in said notes, hut plaintiffs also pleaded the contract. Therefore, if under the terms of the contract and the facts proven plaintiff was entitled to collect his debt at the date of the judgment, it is immaterial whether defendant’s acts constituted conversion.
*1043One of the clauses of the Lott-Pluinmer contract referred to in the original opinion provides that after Plummer has paid $30,000 of the purchase money a deed will be made him, retaining a vendor’s lien to secure the payment of five promissory notes by Plum-mer to the Lotts, one for $20,000, payable on or before 15 months from December 10, 190S, one for $18,041.85, passable on or before 18 months from December 10, 1908, one for $45,701.20, payable on or before 30 months from December 10, 1908, one for $45,761.20, payable on or before 42 months from December 10, 1908, and one for $45,761.20, payable on or before 54 months from December 10, 1908. Plummer is given the privilege of having released from the vendor’s lien retained in such deed tracts and subdivisions of land upon certain conditions, one of which is that the vendor’s lien notes given Plum-mer by the purchasers shall have been indorsed and delivered to the Lotts as collateral to secure the payment of the five purchase-money notes given by Plummer to the Lotts. The contract also provides as follows:
“All payments of principal or interest made on all purchase-money notes received by Plum-mer for tracts of the land sold by him to third parties, and which said notes have been theretofore indorsed by him to said first parties as collateral as provided in subdivision 9 hereof shall be retained by first parties, who shall receipt for said payments to the party paying same, and the same shall be credited by them on such notes. The first parties shall also at the same time receipt Plummer for saiíie and credit same as payment on Plummer’s purchase-money obligations to them, then maturing next after twelve months from December 10, 1908.”
The contract between Plummer and the Lotts is made a part of the contract between Plummer and Simms, Harrison & Simms, and said last-mentioned contract provides that sales of land except those of ten-acre tracts shall be made as provided in the Lott contract, and provides, further, that at the expiration of the contract there shall be a complete settlement between the parties, and, if any purchase-money notes then remain pledged to secure Plummer’s debt to Lott, the share and interest of Simms, Harrison & Simms therein shall be designated and set apart to them, and shall be kept by the holders thereof in escrow, subject only to the pledge, and with the understanding that Plummer’s interest in such pledged notes shall be first exhausted if the collateral is subjected to payment of Plummer’s debt; that, when the debt for which said notes may be pledged at the time of such settlement has been fully paid off and discharged, then that amount of said notes designated and set apart' for Simms, Harrison ■& Simms shall be delivered by the holder thereof to them, and they shall have the benefit of all interest accruing thereon. The contract was terminated by Plummer on January 1, 1910, under the option given Mm in paragraph 6 of the contract between him' and Simms, Harrison & Simms. No settlement and'designation of the interest of Simms, Harrison & Simms,' in the notes ever took place'. There was a direct conflict in the testimony on the point whether a request was made that Plummer should designate and set apart said notes. The record shows that a deed was made by the Lotts to Plummer, and, while the testimony is not clear, we construe it as showing that such deed was not executed until about February 25, 1910. Nothing is said about the notes, so we assume they were as called for in the contract. When the purchasers had paid the first of the three notes, Plummer was able to sell the remaining notes, and did so without the consent or knowledge of Simms, Harrison & Simms, the proceeds being credited upon his notes to the Lotts. He did this because sales were so slow that money was pot provided to pay the interest and the notes when due. It was admitted that the Lotts have been fully paid through a loan negotiated by Plummer with the Central Trust Company. Plummer testified:
“The Lotts have been paid, but the debt was transferred and has not been paid by me.”
The date when this occurred is not shown.
If the deed and notes from the Lotts to Plummer were executed according to the terms of the contract, and we must presume they were, the last note from Plummer to the Lotts matured 54 months after December 10. 1908; that is, on June 10, 1913. This suit was filed on May 6,1913, but no tender of the amount due was made by defendant, and the judgment was rendered on May 8, 1911. about 11 months after the last note to the Lotts became due.
The contract between Plummer and Simms. Harrison ■& Simms was drawn with the view of protecting the rights of the Lotts under the other contract, and it was therefore provided that Simms, Harrison ■& Simms could not get their part of the notes until the Lott debt was paid off. It was the intention of the parties to show clearly that no demand for a half interest in notes could be enforced so long as such notes were deposited as collateral for the benefit of the Lotts. No provision was made to the effect that Simms, Harrison & Simms could not collect from Plummer their half of such notes as should be paid, even though the proceeds thereof had been applied by the Lotts to the payment of Plummer’s debt to them. Therefore, had the settlement been made as provided in the contract, plaintiffs would have received their part of the proceeds of notes which had been paid, but their interest in the unpaid notes would have been merely designated and set apart, “subject alone to said pledge,” as is stated in the contract. No settlement was made, and plaintiffs were forced to seek one in the courts. At the time the court compel' led a settlement no notes were on hand, and therefore there was nothing “subject alone to said pledge.” Plummer bad voluntarily changed the situation so that the proceeds of the notes had answered the same purpose as *1044if tlie notes had been collected. Thereby he deprived 'plaintiffs of their right to interest on their part of the notes, for which he would be answerable, but otherwise the transaction had the same effect as if the notes had been paid. In addition, it is to be noted that at the time the court by its judgment made the settlement between the parties all of the notes would have been paid, if paid at their maturity, and Plummer, having sold the1 notes cannot be heard to say that perchance some of them might not have been paid when due, and might still have been collateral had he not sold them. 'We believe there is no provision' of the contract which postpones until the payment of the T-iott debt, the collection by plaintiffs of their half of the proceeds of notes paid or sold. But, if such collection should be held to be postponed to the time when the Lott debt shall have been paid, we think that Plummer could not be permitted to take advantage of his failure to pay the Lott indebtedness when it matured, and, by getting some one else to carry it, keep plaintiffs from having a settlement until such time as suits his convenience. The parties contemplated that Plummer would pay his notes when due, and, while the Lotts could keep the proceeds of notes, or hold the notes themselves if not paid or sold, when their rights no longer interfere, Plummer cannot take advantage of rights they might have had in the notes liad he not sold them. The judgment was rendered 11 months after the last note to the Lottó would have been paid off had Plummer complied with his contract, and he cannot be heard to say that the time has not yet arrived when he should pay plaintiffs. We conclude that, aside from the issue of conversion, there is no merit in the first assignment of error.
The motion for rehearing is overruled.