Court Opinion

ID: 8855683
Source: CourtListenerOpinion
Date Created: 2022-11-26 17:29:17.869472+00
Date Added: 2024-06-11T17:05:38.939498
License: Public Domain

PARDEE, Circuit Judge
(after stating the facts). The evidence in the ease is not conflicting, and shows the facts to be substantially as set forth in the pleadings. The legal conclusion from the contract between Murphy & Bolanz and Kruegel is that Murphy & Bolanz held the $3,100 as a depositary for both Bell & Co. and Kruegel, with the understanding that, if Kruegel made the improvements upon the property mortgaged as he had agreed to do, then he was to receive the $3,100, and owe the full amount of the note; if he did not make the improvements, then the money was to be held for the security of Bell & Co., and to be applied to reduce the note pro tanto. The improvements that Kruegel agreed to make were not made, and probably because of the failure of Murphy & Bolanz, resulting in this: that, of the $5,000 loan, Kruegel only received the sum of $1,900. In the view we take of the case, it is not material to determine whether Bell & Co. knew of and ratified the arrangement. If they did know of it, and ratified-it, then they can only recover from Kruegel the sum of $1,900, actually received by ldm. If they did not know of it, and the transaction in iiieii behalf, on the part of Murphy & Bolanz, was unauthorized, then Murphy & Bolanz made an unauthorized appropriation of Bell & Cods money to the extent of $5,000; and as $1,900 of the sura went into Kruegers hands, and is represented in the note and mortgage, a trust in favor of Bell & Go. resulted for that amount. There is no evidence showing Bell & Co. in any wise parties to, or bound by, the arrangement between Murphy’ & Bolanz and Kruegel by which part of the $1,900 was left on deposit with Murphy & Bolanz, to be drawn as Kruegel might go forward with the improvements. Krue-gel admits judicially, and testifies in the case, that he received this $1,900; that it was placed to Ms credit on the books of Murphy & Bolanz, and drawn against by him as he saw fit, until the failure of *584Murphy & Bolanz. Under these facts prove'd and judicially admitted, we are of opinion that Kruegel is liable for the sum of $1,900, with stipulated interest, and that equity will be done in the premises by allowing Kruegel a credit on the note at the date of execution of the sum of $3,100; reducing the coupons for interest pro rata; giving to Bell & Co. the possession of the note and coupons thus credited and reduced; and reserving to them the right to recover from Murphy & Bolanz the said sum of $3,100; and reserving to Kruegel the right to recover from Murphy & Bolanz such part of the $1,900 deposited with them as had not been drawn out at the time of the Murphy & Bolanz failure.
The following decree should be entered in the case: The court ■finding that the consideration of the note for $5,000, dated June 13, 3.893, payable to the order of C. S. Bell & Co., at the office of Murphy & Bolanz, in Dallas, Tex., three years after the date thereof, has failed to the extent of $3,100, and that the said deed of trust is, in equity, a security or lien for the sum of $1,900 only, it is ordered, adjudged, and decreed that upon plaintiff: KruegeFs paying to O. S.' Bell & Co. the sum of $1,900, with 8 per cent, interest thereon from June 13, 1893, on or before the date of the maturity of said note, to wit, June 13, 1896, at the office of McCormick & Spence, in the city of Dallas, Tex., the defendants, C. S. Bell, C. E. Bell, J. P. Murphy, Charles P. Bolanz, and E. T. Loughborough do deliver up to the plaintiff Kruegel, to be canceled, the said note, coupons, and deed of trust, as fully paid and satisfied; and that the said J. P. Murphy do reconvey unto the said plaintiff Kruegel, within five days after such payment, the property covered by the said deed of trust, free and clear of all incumbrance thereon by reason of such deed; and, in case the plaintiff shall not pay unto the said C. S. Bell & Co. said sum of $3,900, with interest as aforesaid, within the time aforesaid, the said J. P. Murphy and Charles F. Bolanz shall within a delay of five days from the 13th of June, 1896, indorse a credit upon the said note, of date June 3.3, 1893, in the sum of $3,100, and shall indorse a credit on each one of the six coupons given for payment of interest on such note the sum of $124, and shall then deliver said note and coupons to said C. S. Bell & Co. It is further ordered, adjudged, and decreed that the injunction formerly granted in this case be continued so far as to enjoin and restrain the defendants from indorsing, assigning, or negotiating said notes, coupons, and deed of trust until after June 13, 1896, and if said plaintiff shall pay the said sum of $1,900, with interest, as aforesaid, unto the said C. S. Bell & Co., on or before that date as hereinbefore provided, the defendants are perpetually restrained from assigning, indorsing, or negotiating the same. But if said plaintiff Kruegel shall fail to pay said sum of $1,900, with interest, as aforesaid, on or before June 13, 1896, as herein provided, then the defendants C. S. Bell and C. E, Bell are restrained from indorsing, assigning, or negotiating said note and deed of trust, except the same is charged with the credit of $3,100, as herein provided; otherwise than as herein provided, the injunction referred to is dissolved. It is further ordered and adjudged that the plaintiff Kruegel and the defendants Bell & Co. each *585pay one-half of the costs incurred in this cause. The decree appealed from is reversed, and the cause is remanded, with instructions to enter a decree in conformity with the views herein expressed.