McArthur v. Magee

Henshaw, J. Defendant’s general demurrer to plaintiff’s complaint having been sustained, and plaintiff having elected to stand upon his pleading, judgment passed for defendant, and plaintiff appeals.

The following are the facts pleaded, and claimed to constitute a cause of action in conversion: On October 15, 1891, defendant Magee loaned to plaintiff $10,500, payable one year from date, with interest at the' rate of eleven per cent per annum. On the same day McArthur and wife executed to Magee a mortgage on certain realty to secure this debt. At the same time, and as collateral security, they assigned to defendant four promissory notes secured by mortgage executed by Mrs. McCormick to McArthur. The notes were for $5,000 each.

After McArthur’s debt became due, Magee brought his action in foreclosure, obtained judgment, caused the mortgaged property to be sold, and himself became the purchaser thereof for the sum of $3,150. He caused a deficiency judgment to be entered against McArthur for the balance of the debt, amounting to $9,468.90.

The McCormick notes falling due and remaining [128]unpaid, Magee likewise brought suit in foreclosure upon them, and obtained judgment for the full amount due. The property was sold and purchased by Magee, who subsequently obtained the sheriff’s deed therefor.

The written assignment to Magee of the McCormick notes and mortgage contained the following provision: “In case default be made in the payment of said ten thousand five hundred dollar ($10,500) note, then said Magee may maintain immediately an action against the assignors of this mortgage for the purpose of procuring, and may procure, a judgment fixing the amount due to him under said note, and directing that said McCormick notes and mortgage be sold by the sheriff for the purpose of satisfying the amount to said Magee.”

It is averred that in foreclosing and merging the McCormick notes and mortgage into a judgment, Magee converted plaintiff’s property to his own use, to plaintiff’s damage, in the sum of $20,000. It is also averred that defendant Magee has paid no part of the sum, nor has in any way accounted to plaintiff for said notes and mortgage.

The prayer of plaintiff is that defendant be required to pay him $20,000, and to satisfy the deficiency judgment of $9,468.90 entered in the foreclosure suit of Magee v. McArthur. The demand, therefore, is for the face value of the McCormick notes thus alleged to have been converted, and for a satisfaction of the deficiency judgment.