Crawfis v. Edwards, Brewster & Clover

MELVIN, J.

Plaintiff sued as mortgagor to cancel fourteen promissory notes secured by a mortgage and also to cancel the mortgage itself. Edwards, Brewster & Clover,

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corporation defendant, is the mortgagee, and the interveners, appellants, are persons who acquired the fourteen promissory notes prior to maturity, paying for the said notes their face value. Interveners appeal from the judgment in favor of plaintiff.

The facts, about which there is little if any dispute, are as follows:

Crawfis owned certain real property and desired to place a building thereon. Patton, a contractor, undertook to secure a loan for Crawfis if he, the said Patton, should be given the contract to erect the building on the land belonging to Crawfis. Accordingly, arrangements were made with Edwards, Brewster & Clover, and Crawfis executed the mortgage here in question and fourteen promissory notes aggregating twelve thousand dollars in face value. The notes and mortgage were delivered on November 23, 1914, and on the same day and as part of the same transaction Crawfis entered into a contract by which he was required to deposit with the corporation six thousand dollars. By the latter contract it was recited that the “cash received and the notes enumerated,” making the sum of eighteen thousand dollars in all, was to be delivered to G. A. Crawfis in specified installments as progress payments became due on the building to be thereafter erected.

The building was constructed and as the work went on the corporation paid $6,060, according to agreement, but failed and refused to pay any further sum either to Dr. Crawfis or to his building contractor.

Interveners purchased the notes before maturity and it is not denied by them that these instruments are non-negotiable in form. It is contended, however, that plaintiff is estopped by his conduct from questioning the validity of the claims of interveners, and that it was the intention of all of the parties to the transaction that the fourteen notes should be treated and offered for sale as negotiable instruments. The judgment provided that plaintiff should restore the $60, the amount in excess of the six thousand dollars deposited by him, which was paid for the purposes of the building by the corporation, but the further contention is made by appellants that inasmuch as some of the money realized from the sale of the notes came into the hands of Edwards, Brewster & Clover on the very days upon which certain payments were made on the building contract, it is fair to assume that the money so paid and not a part of the six thousand dollars de