Court Opinion

ID: 7993171
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:33:38.998139+00
Date Added: 2024-06-11T16:35:13.920375
License: Public Domain

Ethridge, J.,
delivered the opinion of the court.
This was a suit brought by E. E. Green and others, appellants, against J. E. Morris and H. B. Johnson,, paying for a foreclosure and sale of land to pay notes-held by E. E. Green and others, as assignees, which said notes and other notes held by J. E. Morris were-secured by deed of trust upon certain. lands in Union county, sold by J. E. Morris to H. B. Johnson. The complainants allege that they are bona-fide holders for-*643value without notice of certain of these notes, being the last notes (amounting to two thousand, five hundred dollars) of a series of notes for the purchase money amounting to sis thousand dollars. They allege that the notes were indorsed by J. E. Morris, and were past due, and that they had requested Morris to pay the notes, and had also requested him to have the. land sold to pay the notes, which he refused to do. The notes were all payable.to J- E. Morris, and the deed of trust provided that in case the notes, or any of them, should become due and were not paid, that the trustee named in the deed of trust, who is also a complainant in this suit, should, on the demand of the third party, which is the appellee Morris, foreclose the deed of trust and sell the lands to satisfy the debt. Morris answered the bill, denying that the appellants were purchasers for value without notice, and alleging that the' whole transaction Avas a scheme to defraud him out of his' lands; that his brother and his brother’s son-in-law, who were real estate agents in Memphis, Tennessee, came to him, and that his brother solicited him to sell his plantation, representing that he could ' live upon the interest of the money it would bring; that he was getting old and unable to manage the plantation; and that he agreed that his brother might sell the property. He alleges that his brother and King, his son-in-law, procured one Johnson to buy the lands, knowing that Johnson was insolvent, and Avith a view to defrauding complainant of. his lands, and prayed that the deed of trust and the deed to. Johnson be canceled and declared a fraud upon him- and if that relief were not granted, that he be decreed to have first satisfaction of his indebtedness out of the proceeds of the land, and prayed for a personal judgment against T. J. Morris, his brother, for the money due on the notes held by the complainants, in case the proceeds of the land was decreed by the court to *644pay the', notes held by the complainants. In the evidence J. R. Morris testified that he did not indorse the notes to T. J. Morris, and had never seen, the notes until they were presented at the bank for payment, and that the signature upon the back of. the notes, purporting to be the signature of J. R. Morris, was a forgery and a fraud. He also produced' several witnesses to testify that the signature on the back- of the notes was not a genuine signature, and there was' a direct and irreconcilable conflict in the evidence as to whether J. R. Morris indorsed the notes.
The chancellor refused to decide this conflict of evidence, holding that there was no consideration for the indorsement by J. R. Morris, if he did indorse it, and then decreed a sale of the lands to pay the notes, giving J. R. Morris a preference by making his notes a preferred lien to be paid first, and charging J. R. Morris with rents upon the lands (he having come into the possession of the lands after the sale to Johnson), and for certain moneys received on a judgment in attachment against Johnson, in which certain personal property was sold. Johnson failed to answer the bill and a pro confesso. was taken against him. It appears in the evidence, without dispute, that in closing the transaction between J. R. Morris and T. J. Morris, that T. J. Morris held a contract by which J. R. Morris was indebted to him in the sum of nine hundred and fifteen dollars for a stock of merchandise, and'this was surrendered by T. J. Morris, and it was agreed that two thousand five hundred dollars worth of the notes maturing last would go to T. J. Morris and his son-in-law for making the sale as a commission. This agreement it appears was made, provided that J. R. Morris would first be paid, and the notes held by J. R. Morris were the first to mature. Johnson defaulted and moved off the place, and J. R. Morris moved into possession of it, attached Johnson and certain personal property upon the place *645and bad tlie same sold, and a judgment secured against Johnson and enrolled in the county. The appellants, Green and the other holders of the notes outstanding, each testified that they were bought in good faith, before maturity, and at practically face value. T. J. Morris appears to be solvent, and is a complainant in the bill, though he does not appear to have any interest in the notes, except that he is liable as indorser upon the notes. The chancellor granted a decree,, as above stated, giving J. E. Morris a preference, his claim to be first paid, and postponing claim of the appellants until J. E. Morris’ claim was first satisfied.
We think that this decree could only be upheld by the chancellor finding as a fact that J. E. Morris did not indorse the. notes held by the appellants. The appellants are bona-fide purchasers,' and if the indorsement is genuine, no oral agreements between J. E. and T. J. Morris would affect them, unless they had notice thereof. Our court has held in several cases, where a series of notes are all secured by a common deed of trust and a common security, that the holders of the notes are entitled to share pro rata in case the security is not sufficient to pay all. Cummings v. Oglesby, 50 Miss. 153; Murphree v. Countiss, 58 Miss. 717; Henderson v. Herrod, 10 Smedes & M. 631, 49 Am. Dec. 41.
A consideration of these cases makes it evident that the chancellor’s decree was erroneous, and must be reversed. If the chancellor believes from the evidence that there was an agreement between J. E. Morris and T. J. Morris, by which J. E. Morris’ notes were to be first paid, a personal judgment should be rendered against T. J. Morris in favor of J. E. Morris for any losses that may come to J. E. Morris on liis notes by-reason of prorating the proceeds of the sale .among all the holders of the notes.
*646,If the chancellor believes from the evidence that there was no indorsement of the notes by J. E. Morris, of course the, holder of the notes would be postponed, and they would take only such rights, in that event, as T. J. Morris secured by the transaction; provided, of course, that the chancellor believes from the evidence that there- was an agreement between J. E. and T. J. Morris that J. E. Morris was to be first paid. The release of the nine hundred and fifteen dollars claim for merchandise purchase money in the evidence would be a sufficient consideration for the assignment of the notes, and there seems to be no dispute as to this fact.

Order reversed, and cause rew/mded.