Troll v. Daugherty & Bush Real Estate Company
| Decision Date | 08 December 1914 |
| Citation | 171 S.W. 665,186 Mo.App. 196 |
| Parties | HARRY TROLL, Public Administrator, in charge of Estate of HECTOR A. PIEDNOIR, JR., deceased, Respondent, v. DAUGHERTY & BUSH REAL ESTATE COMPANY, Appellant |
| Court | Missouri Court of Appeals |
November 4, 1914, Argued and Submitted
Appeal from St. Louis City Circuit Court.--Hon. J. Hugo Grimm Judge.
Judgment affirmed.
S. T G. Smith for appellant.
(1) A person holding commercial paper as collateral security for a debt due him has no right to compromise with the parties who owe the paper held as security for a less sum than the sum due on the paper held as security, and if he does he will be compelled to account to the pledgor for the full value of the security so released. Wood v. Matthews, 73 Mo. 477; National Exchange Bank v. Kilpatric, 204 Mo. 119; Union Trust Co. v. Rigdon, 93 Ill. 458; Griggs v. Day, 32 Am. St. 704 (136 N.Y. 152); Fisher v George S. Jones Co., 108 Ga. 490; Brown v. First National Bank, 112 F. 901; Harrell v. Citizens Banking Co., 111 Ga. 846. (2) The pledgee of commercial paper as collateral security for the payment of a debt has no authority to sell the commercial paper held by him, either at public or private sale, but is bound to hold and collect the same as it becomes due and apply the net proceeds to the payment of the debt so secured. Richardson v. Ashby, 132 Mo. 238.
J. L. Hornsby for respondent.
(1) A pledgee may, with the consent of the pledgor, compromise or release the security held by him. (2) The appellate court will give much deference to the findings of the trial court on account of the superior advantages the latter possesses for weighing the evidence and judging of the credibility of witnesses. Parker v. Roberts, 116 Mo. 667; Snell v. Harrison, 83 Mo. 651; Loan & Trust Co. v. Browne, 177 Mo. 412; Crawford v. Dixon, 97 Mo.App. 558.
--This is a suit in equity by respondent, as public administrator in charge of the estate of one Hector A. Piednoir, deceased. The petition sets up that Piednoir in his lifetime held notes secured by a deed of trust on various properties, one note being for $ 10,000 and fifty notes for $ 200 each, aggregating $ 10,000, all executed by appellant, all the notes representing but one indebtedness of $ 10,000. During the lifetime of Piednoir the indebtedness had been reduced until, as it is claimed, it amounted to $ 1400 with accrued interest, and all the collaterals had been released except a deed of trust on a certain lot on Wyoming street and fifty-seven notes executed by one Lila Drumm, and also a certain leasehold to a building on Chestnut street in the city of St. Louis. Averring that this $ 1400 and accrued interest still remains due and unpaid, plaintiff prays judgment for the debt and interest, for reasonable attorney's fee, and that the equity of redemption of defendant in these fifty-seven notes, together with the deed of trust securing the same and covering the lot on Wyoming street, as well as the leasehold on Chestnut street, might be foreclosed and that the collaterals, or so much thereof as may be necessary, be sold to pay off and discharge the debt.
The answer challenges the claim of any remaining indebtedness, averring that one of the pieces of property pledged, consisting of parts of two lots in Temple Place, had been discharged from the lien of the deed of trust without the knowledge and consent of defendant and for the sum of $ 2500 (at the trial it appeared that this should have been $ 2000), when in point of fact the equity of the defendants in it was worth $ 5000, and judgment over is asked by the defendant for this difference.
The trial was before the court, as in equity, and resulted in a finding for plaintiff as prayed by it, save as to attorney's fees, the claim to which was not pressed, and a denial of the relief asked by defendant. From this defendant has appealed.
There are but two points that need be considered in the determination of this case. First, whether the evidence warranted the learned trial court in finding that the Temple Place property had been released with the consent of defendant, and, second, if that consent had not been given, whether defendant had sustained any loss by the release of that property.
Turning to the evidence in the case, it appears that there had been a practical dissolution of the corporation defendant and a distribution of its assets among the two gentlemen, Messrs. Dougherty and Bush, who appear to have been practically the sole owners of its stock and to have composed the corporation, as well as of another allied one, called the Hampton-Russell Investment Company. It appears that on this dissolution, Mr. Dougherty took over certain of the assets, including the properties which are here in controversy, all under various mortgages, the defendant company holding merely equities in them subject to two or more prior encumbrances. Being indebted to a Mr. Dowling and being pressed by Dowling for a payment of his indebtedness, Dougherty told Dowling that he had not the money to pay him, and telling him that he and Mr. Bush had divided up their interest and that he (Dougherty) had taken over the equities in a lot of property, he would turn that equity over to Dowling. Dowling figured on the value of the property, and finding it all under two or more deeds of trust, and that the only interest of the defendant corporation was in the equities, and figuring up the encumbrances, agreed that if Dougherty would straighten up some of the indebtedness, taxes, etc., he would take it. Dougherty told him he could not do anything of the kind; that he (Dowling) would have to take it just as it was. Dougherty explained to Dowling that the properties were tied up in the blanket deed of trust which was held by Piednoir, and if he took the properties subject to this encumbrance, he (Dowling) would have to work his way out of it the best he could, and if he sold any of the property which Dougherty was transferring to him, he (Dowling) could get a release of the property so sold from the Piednoir deed of trust; that "by making a right payment to Mr. Piednoir he would release;" that he (Dowling) would have to satisfy Mr. Piednoir before he would give a release to any of the property. Dowling finally agreed to take the properties but objected to taking them in his own name as he did not wish to personally assume the encumbrances. Accordingly the Temple Place with other properties, but not the leasehold nor the Wyoming street lot, were deeded over to his wife by the Hampton-Russell Investment Company, the subsidiary company of the defendant corporation, above referred to, by a deed of warranty, subject, however, to taxes and "all encumbrances of record," title to the equities in the properties being in the Hampton-Russell Investment Company by mesne conveyances from the defendant company.
The indebtedness of defendant to Piednoir originally was $ 10,000, evidenced by a $ 10,000 note as well as by fifty notes for $ 200 each, the latter payable monthly. Mr. Hornsby was the agent and attorney for Piednoir in the collection of this indebtedness during the latter's lifetime and from time to time Dowling paid off several of these collateral notes to Hornsby as such agent, and as he paid off any of the notes he secured releases from Piednoir on various pieces of property that he, more accurately his wife, had thus acquired and which Piednoir held. That is, he and Hornsby or Piednoir agreed upon the price which should be paid for the release of these separate pieces of property. It does not appear that either Dougherty or Bush were consulted or had anything to do with these releases, or the terms upon which they were made. As Dougherty would sell any of these pieces in which he held equities of the Hampton-Russell Investment Company, he would procure a release from Piednoir for that piece, paying him what was agreed upon apparently between Piednoir, or Hornsby as his representative, and Dowling. It is in evidence that both Dougherty and Bush knew of Dowling obtaining these releases from time to time and had never made any objection to them; on the contrary, when informed from time to time of what had been done with reference to them, Dougherty and Bush appeared satisfied and told Dowling that he was "doing fine in getting rid of the stuff and reducing the indebtedness." It does not appear from any evidence that Dougherty or Bush suggested that they were to be consulted in the matter of releases, or that they were to have anything to do with that, or that they ever set any amount that was to be paid on any particular piece of property for its release or set any terms which Dowling would be authorized to make with Piednoir or with his representative in obtaining the...
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