Miller v. Stephenson

Dissenting Opinion on Petition foe Reheaeing.

Roby, J.

The special finding shows the following facts: (1) That appellee was a farmer and stock raiser in Washington county, and prior to July 8, 1898, had never met or known appellant Chas. Miller. (2) That Chas. Miller was at that time a citizen of Orange county, and had been for four years; that he had no occupation; that during said time he was at divers times employed as a farm hand by various persons; that he was a man of no property or money, except such sums as he may have received at divers times for his manual labor as a farm hand. (3) That appellants McCart and Talbott were and are partners engaged in the practice of law in Orange county. (4) That on July 7, 1898, appellant Chas. Miller was in Crawford county making inquiries of various persons “about cattle feeders of about 1,000 pounds” for sale in the neighborhood, and stated that his name was D. D. Eisher, and that he wanted to buy feeding cattle for “a man up in Ohio” who lived about eighty miles from Cincinnati; that he remained in the neighborhood over night, and the next day repeating *280the above statements and asserting that he had $4,000 deposited in the Bank of Orleans with which to pay for the cattle he might bny; that he visited the appellee at his farm, and repeated to him all the statements aforesaid; that appellee offered to sell fifteen steers at four cents per pound; that he remained in the neighborhood until the 13th of said month, buying cattle during that time of various persons, and executing checks to them upon the Bank of Orleans in payment, signing such checks “I). D. Eisher”; that the checks were all protested later for want of funds. (9) That on the 11th of July, relying upon the representations made to him as aforesaid, appellee sold to Miller, by the name of I). D. Eisher, fourteen steers at four cents per pound. (10) That appellee delivered the fourteen steers to Miller at Livonia on the 13th of July. The amount of the purchase price fixed by weight was $559.60. That Miller made a check for $560.60 upon the Bank of Orleans, adding $1 for cost of collection, and delivered the same to appellee. That appellee in receiving it relied upon the statements of Miller as above set out, and upon his further statement that he had $4,000 on deposit in the bank named. That the check was signed “D. D. Eisher.” That appellee transferred such check to the Bank of Salem, and that the same was in due time presented to the Bank of Orleans for payment. That payment was refused, for the reason that there was no such man as D. D. Fisher, and no funds in said bank to his credit. (11) That the false pretenses made by Miller and by which he obtained possession of appellee’s cattle were such as would induce an ordinarily prudent man to part with the property. (12) That Miller by reason of said false pretenses obtained possession of twenty-four head of cattle in all. That before shipping he traded four of appellee’s cattle to one Earr, and received from Farr three other cattle in exchange. That on July 13th he shipped said cattle to Louisville, Kentucky; that they were unloaded and sold by commission men for $902.07, net, as the *281property of D. D. Fisher; that Miller received a check payable to bearer for said sum; that he indorsed the same by the name of D. D. Fisher, and received the money thereon. (14) That on July 14th Miller went to Mitchell, Indiana, and on the 15th to Orleans. That he never had any funds at the Bank of Orleans, or any credit there, or any money or property at said time, either in or out of bank. (15) That soon after reaching Orleans he exhibited sums of money; deposited $250 in the Citizens Bank, receiving a certificate of deposit therefor; paid off debts due from him to divers persons, amounting to about $400. (17) That on July 18th Miller was identified by appellee as D. D. Fisher; that thereupon Miller was arrested by the marshal of Orleans, without any warrant, and searched. That there was found $185 cash on his person and the certificate of deposit in the Orleans Bank for $250. Appellee was with the marshal when the search was made, and then made claim to the certificate and money as his own, as coming from the sale of his cattle. That Miller protested against the marshal or appellee taking such money or certificate, but agreed that George M. Albert-son might take and keep the same pending the preliminary examination of Miller on the charge of procuring property under false pretenses, and until some legal disposition was made of such money and certificate. That Albertson took the money and certificate, and kept the same until he brought them into the court below. (18) That Miller was taken to the town of Salem by said marshal and the appellee, without a warrant, and when on the way they were overtaken by appellants McCart and Talbott, who had been sent for to defend him. That appellee then and there claimed to them-that Miller was the man who got his cattle. (19) That July 18th Miller was charged before a justice of the peace with the crime of having obtained appellee’s property by false pretenses. That appellants McCart and Talbott appeared as his attorneys; that he waived arraignment and procured a continuance to get witnesses. (20) That on the *28219th of July McOart and Talbott made a contract with Miller to defend him against the charge made, for which he agreed to pay them $500 and to turn over to them the certificate of deposit for $250 and the $185 cash held by Albert-son to apply on such sum; and that he executed a written order upon Albertson directing him to deliver said property to them. (21) That on the 19th of July McCart and Talbott presented said order to Albertson and demanded said property. That Albertson refused to deliver said property to them, but afterward filed his interpleader and delivered the said property over to the court, where it is now held. That the said order was on said day exhibited to the cashier of the Orleans bank, and a demand made for the $250 evidenced by the certificate of deposit, which demand was refused. That on the same day this action was instituted and a writ of attachment issued against Miller to Orange and Washington counties and duly returned no property found. (22) That on the 22nd of July, summons and garnishment were served on the garnishee defendants. (23) That Miller, when he executed the written order on Albertson, orally authorized McOart and Talbott to indorse his name on the back of the certificate of deposit, but “no indorsement was ever made on said certificate either by Miller, or McCart and Talbott, or either of them, McOart and Talbott never having got possession of said certificate.” (24) Miller “was disposing of the money derived from the sale of all the cattle purchased by him, under the false pretenses as aforesaid, at the time of the institution of the attachment, with no intention of paying the plaintiff [appellee] and was disposing of the money derived from the same, with the intention of cheating and swindling the plaintiff and other persons from whom he purchased the cattle.” (25) That the money found on Miller and that evidenced by the certificate of deposit was derived from the sale of the cattle purchased, by false pretenses, of appellee and others, “but what part of it was derived from the sale of plaintiff’s ten head and the three *283head received from Farr, the court can not state.” (26) That McCart and Talbott have “ably defended” Miller “in all the criminal proceedings against him, growing out of the transactions of said Miller in purchasing and obtaining said cattle under the false pretenses aforesaid”, and that $500 is a reasonable fee for their services. (27) That McCart and Talbott knew when they took the order from Miller, that appellee was claiming that Miller had defrauded him by false pretenses, and that such money and certificate, together with $15 in the hands of one Easly, was all that Miller then had. (29) That the representations made by Miller to the plaintiff in reference.to the purchase of said cattle and the giving of said check were made designedly, knowingly, falsely, and feloniously with intent to defraud appellee, who believed the same, relied upon them, and was induced to part with his property thereby, and that the same was true of other persons named from whom cattle had been procured.

The court concluded that the law on the foregoing facts was (1) that the cattle were obtained by criminal false pretenses as defined by §2204 R. S. 1881; (2) that whatever interest Miller had in the money and certificate was transferred to the other appellants; (3) that McCart and Talbott were not innocent holders; (4) that Miller had no interest in the property held by Albertson; (5) that appellee Stephenson was entitled to the $185 in money and the $250 evidenced by the certificate of deposit, and to have his title quieted thereto. There is some matter of an argumentative nature in the conclusions of law which has been eliminated.

The disposition of this appeal depends upon the facts thus found and the law thus stated. The pleadings are sufficiently comprehensive to allow either party any relief to which they might be entitled upon the finding.

Appellants assert that appellee has elected to treat the money derived from the sale of the cattle as the property of Miller. The first, paragraph of complaint upon which the *284attachment and garnishment were had avers that appellant Hiller was indebted to appellee in the sum of $560, which indebtedness was incurred under the name of Eisher in the purchase of fourteen steers. The second paragraph avers the procurement of the property as described in the special finding, the possession by Miller of the money for which he had sold it, and prays that appellee’s, title to such money be quieted. Authorities are cited as to the effect of an election to pursue one of two inconsistent remedies. This is not the question. The question is, does the record show such an election ? The utmost that it shows is a misjoinder of causes of action. It was sought to raise that question by demurrer, which was the proper method. There was no error in overruling such demurrer, as was done. §344 Burns 1894, §341 Horner 1897; Langsdale v. Woollen, 120 Ind. 16.

The amended complaint has relation to the date of the commencement of the action, and was a matter occurring in the progress of the original case. Chicago, etc., R. Co. v. Bills, 118 Ind. 221; School Town v. Grant, 104 Ind. 168; Evans v. Nealis, 69 Ind. 148.

When Miller was first arrested, appellee claimed the certificate of deposit and the cash as being the proceeds of his cattle. The claim seems to have been persisted in and it became the duty of the court to render such judgment within the issues as should dispose of the case and be just to the parties.

The findings show that the $250 deposited in bank by and the $185 which Miller had upon his person was derived from the sale of cattle purchased by false pretenses as set out; “but what part of it was derived from the sale of plaintiff’s ten head and the three head received from Earr the court can not state.” That Miller had received more money from the sale of appellee’s cattle than the amount on hand is shown. The question now must be considered as one between Miller and the appellee alone. No other per*285son is making any claim to any part of such money. If appellee can not trace the fund it is because Miller has so commingled it with his own, no matter how procured, as to destroy its identity. “The rule is elementary that if property, in its original form and state, is covered with a trust in favor of the- principal, no change of that state or form can divest it of such trust, or give the agent or trustee converting it, or those who represent him in right, any. more valid claim in respect to it than they respectively had before such change.” Orb v. Coapstick, 136 Ind. 313, 315, and authorities there cited.

The law was very aptly stated by this court as follows: “The true owner of property has the right to have his property restored to him, not as a debt due and owing, but because it is his property wrongfully withheld. As between the cestui que trust and the trustee and all persons claiming under the trustee, except purchasers for value and without notice, all the property belonging to the trust, however much it may have been .changed in its form or its nature or character, and all the fruits'of such property, whether in its original or altered state, continue to be subject to and affected by the trust. * * * It was formerly held that these rules came to an end the moment the means of ascertaining the identity of the trust property failed. * * * In the case of trust moneys commingled by the trustee with Ms own moneys, it was held that money has no ear-marks, and when so commingled the whole became an indistinguishable mass and the means of ascertainment fails. But equity, adapting itself to the exigencies of such conditions, finally determined that the whole mass of money with wMch the trust funds were commingled should be treated as a trust.” Windstandley v. Second Nat. Bank, etc., 13 Ind. App. 544; Pearce v. Dill, 149 Ind. 136.

A substantial identification is all that is required. Shepard v. Meridian Bank, 149 Ind. 532; Bundy v. Town of Monticello, 84 Ind. 119, 128. The appellee’s cattle were *286stolen from him. Fleming v. State, 136 Ind. 149; Beasley v. State, 138 Ind. 552, 46 Am. St. 418; Crum v. State, 148 Ind. 401. The owner of property wrongfully taken has. a right to follow it and adopt any act done to it and treat the proceeds as his own. Neat v.' Harding, 4 Eng. Law & Eq. 494. Property unlawfully appropriated is held by the wrongdoer as trustee for the owner, and may be followed so long as it can be identified. Riehl v. Evansville, etc., Assn., 104 Ind. 70; Nebraska Nat. Bank v. Johnson, 51 Neb. 546, 71 N. W. 294.

Applying these legal principles to' the facts found, the conclusion is irresistible. The money that was in Miller’s possession is not his money. líe has no claim upon it. It is a less amount than he realized from the sale of appellee’s cattle, and he can get no advantage from Lis own act in commingling appellee’s money. If he were allowed to keep the entire fund as against appellee on account of the possible interest that some third person who is not before the court may have in it, then he would upon the same ground be able to hold the entire fund against the other person and thereby wholly defeat any attempt to regain any part of it. Whatever difficulty there may be in adjusting the rights of appellee to this fund as between himself and other persons who have been similarly defrauded, there can be none as between appellee and Miller. Miller probably would not be selected by the other parties as the guardian of their interests, and he can not be now permitted to assume that position, to his own advantage.

It is not the policy of the law in any case to permit the wrongdoer who commingles goods wrongfully procured to profit thereby. “All the inconvenience of the confusion is thrown upon the person who produces it, and generally it is for him to distinguish his own property or lose it.” 6 Am. & Eng. Ency. of Law (2nd ed.) 596.

. The wrongdoer forfeits his interests to the other party. 6 Am. & Eng. Ency. of Law, (2nd ed.) 594. Brackenridge v. Holland, 2 Blackf. 377, 383, 20 Am. Dec. 123.

*287The finding was sufficient, and the last conclusion of law, in so far as it was a conclusion of law, was correct as against Miller.

Do appellants McCart and Talbott occupy any better position than Miller? If so it can only be as bona fide purchasers or transferees for value and without notice.

It is the settled rule that if facts are not found in a special finding they will be presumed as against the party who has the burden of proof. Rice v. City of Evansville, 108 Ind. 7.

The appellants McOart and Talbott filed answers in the court below setting up good faith, valuable consideration and absence of notice on their part. These allegations are affirmative and the burden of proof upon the record will govern in the case. The record in fact shows such affirmative allegations by said appellants. 5 Am. & Eng. Ency. of Law (2nd ed.) 5. Aside from the “burden of proof upon the record” the law casts the burden upon them.

It is necessary in order to bring a man within the category of a bona 'fide purchaser for him to show (1) that he has acquired a legal title. (2) The party relying upon this defense must show that he gave a valuable consideration. (3) The purchaser must be free from notice up to and including the consummation of his purchase and the full payment of the price. Baily Onus Probandi, 303. 2 Pomeroy’s Eq. §752, et seq. Tone of these propositions are established by the findings.

The burden must of necessity be and is upon the claimant, since he knows the facts connected with his purchase as the plaintiff can not be expected to know. Palmer v. Poor, 121 Ind. 135, 6 L. R. A. 469; Harbison v. Bank, 28 Ind. 133, 92 Am. Dec. 308; Zook v. Simonson, 72 Ind. 83; Baldwin v. Fagan, 83 Ind. 447; Mitchell v. Tomlinson, 91 Ind. 167; New v. Walker, 108 Ind. 365, 373.

The defendant “sought to show that he purchased the property from an immediate purchaser for value and with*288out notice of any infirmity in the title of his vendor. The burden of the first issue was upon plaintiff and the burden of the last upon defendant.” Waterbury v. Miller, 13 Ind. App. 197, 209.

The special finding fails to show that appellants McCart and Talbott were innocent purchasers. They therefore are charged with notice of the infirmity of Miller’s title, and, as against the appellee, with regard to this money, occupy the same position that Miller does.

Indeed, if the burden of proof were otherwise, the facts displayed are sufficient to establish the negative proposition that they were not innocent purchasers. Shirk v. Neible, 156 Ind. 66.

This is not a case where money has been received in the usual course of business. Appellants McCart and Talbott have not received anything. In the language of the special finding “Rever having got possession of such certificate”. The transaction was hot a usual one. It was between a man then in custody upon a charge of a very grave crime, of Avhich it has transpired that he was guilty, and his lawyers, who had theretofore acted for and consulted with him relative to the facts. They knew the charge, the situation, and if they did not knoAv Avhose money it was they were proposing to take, it Avas their own fault. The law will not permit the money taken from appellee to be used for such purposes and under such circumstances. Said appellants were put on inquiry and are charged with notice. Mar honey v. Qano, 2 Ind. App. 107. Eor the reasons given I think the petition for a rehearing should be granted.

Black, O. J. — I am inclined to agree with the conclusion reached by Roby, J., in the foregoing opinion, but the majority adhering to the original decision the petition for a rehearing is overruled.