Court Opinion

ID: 8795936
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:10:30.542435+00
Date Added: 2024-06-11T17:03:37.777607
License: Public Domain

On Petition for Rehearing.
[3] In our opinion filed June 8th instant, in discussing appellant’s contention that McMullin was not a good faith purchaser of the $17,-500 of the bonds in question, after stating that at the time of May-hon’s conveyance to the Stearns Company the former was the owner of these bonds, and his warranty that the property was free from incumbrance doubtless operated to give the Stearns Company an equitable title to the bonds as against Mayhon, we said:
“The bonds, however, were negotiable. Mayhon retained their physical custody, and later, in violation of his agreement with the Stearns Company, transferred them to McMullin, who took them without notice of the Stearns claim and in good faith paid Mayhon therefor.”
It is urged that the bonds in question were delivered by Mayhon to McMullin after the Stearns Company had acquired and paid for the transmission line, and only as collateral security for debts created previous to the time the Stearns Company acquired its rights, and that “since the Stearns Company became the equitable owner of the bonds” McMullin has parted with nothing of value, nor “surrendered or postponed any rights which he possessed to obtain possession of the bonds.” The record shows that, prior to Mayhon’s contract with the Stearns Company, McMullin had acquired an equitable right to the bonds as collateral security for a debt resulting from a prior canceled contract for the purchase by McMullin from Mayhon of the Interurban Company’s properties; that after Mayhon’s transaction with the Stearns Company the former delivered physical possession of the bonds to McMullin. The situation thus is that, as opposed to McMullin’s' legal right to the bonds, dhe Stearns Company has only an equity, and that this equity is later than and subordinate to McMullin’s equity. The fact that some of the bonds were past due is immaterial, as Mc-Mullin’s equity does not depend upon their negotiability. While, therefore, the statement in our opinion regarding Mayhon’s payment for the bonds is not strictly accurate, tne result reached was correct.
The petition for rehearing is denied.