State Bank v. Bartle

• Decision Date: 27 February 1893
• Citation: 114 Mo. 276,21 S.W. 816
• Parties: STATE BANK OF ST. LOUIS v. BARTLE et al.
• Court: Missouri Supreme Court

21 S.W. 816

114 Mo. 276

STATE BANK OF ST. LOUIS v. BARTLE et al.

Supreme Court of Missouri, Division No. 1.

February 27, 1893.

RES JUDICATA — PRINCIPAL AND SURETY — INDORSEMENT — WAIVER.

1. A judgment against two defendants jointly, in a suit in which they are not adversaries, is not conclusive, as between them, in regard to the matters litigated in the suit.

2. The loss of collateral security through the negligence of the creditor is no defense to a suit by him against one who is surety for the debt, where at the time of such suit the damage caused by such loss cannot be ascertained, because dependent upon litigation still pending.

3. A written promise to pay a note of which the promisor is indorser constitutes a waiver by him of presentment, demand, notice, and protest of the note.

Appeal from St. Louis circuit court; Jacob Klein, Judge.

Action by the State Bank of St. Louis against William G. Bartle and B. F. Doran. Plaintiff obtained judgment. Defendants appeal. Affirmed.

Smith & Harrison, for appellants. John C. Chandler, for respondent.

MACFARLANE, J.

This suit is in three counts, upon three promissory notes, against B. F. Doran, as maker, and William G. Bartle, as indorser. Defendant Doran answered, but made no active defense. Defendant Bartle answered in seven several defenses. Only one defense, made at the trial, applied to all the notes, and which may be stated, in substance, as follows: That defendant Bartle indorsed the notes sued on as security for Doran. That Doran, as collateral security, delivered to plaintiff a note for $20,000 and two deeds of trust to secure the same — one on land in Cooper county, and one on land in Morgan county. The plaintiff agreed to safely hold, keep, and manage such collaterals, for the protection of him as surety, as well as for its own security. That the plaintiff neglected to have said deeds recorded, as its duty required, for more than a year after their execution and delivery. That the Central National Bank of Booneville commenced a suit in the circuit court of Cooper county against said State Bank, Bartle, and Doran, charging that, in reliance on the apparently unincumbered real estate of Doran, in Cooper county, it had extended him credit, as an active trader in cattle, to an amount equal to the value of the said land, and the existence of the deed of trust thereon was unknown to it. That said deed of trust was withheld from the record, pursuant to a fraudulent agreement between the State Bank, Bartle, and Doran not to record it, so that the credit of Doran should not be impaired. That withholding the deed from the record, and concealing its existence, misled said Central Bank to give him credit. That it had obtained judgment on notes for money so loaned for $21,225.50, and prayed that said deed of trust be canceled, and said lands subjected to the payment of said judgment. That the bank and Bartle answered said petition, and denied its allegations, and, upon a trial, judgment was rendered postponing the lien of said deeds of trust to the lien of said judgment. And that said State Bank and Bartle appealed from said judgment. The answer then charges that, as between the State Bank and defendant Bartle, the facts are that said collaterals were lost, wholly by the negligence of plaintiff, said State Bank, in carelessly failing to record said deed, in violation of its agreement and duty to defendant Bartle, as surety to defendant Doran. On the trial, the court, on objection by defendants, refused to admit any evidence on this defense, and, on its own motion, instructed the jury to find for the plaintiff on each count of the petition. The third count was on a note made by Doran for $6,500, dated December 20, 1886, payable to Bartle on demand, and indorsed and delivered to plaintiff. On this note, over the indorsement by Bartle, was written a waiver of presentment, demand, notice, and protest. The answer to this count denied that indorsement.

1. If the deed of trust was delivered to plaintiff, as collateral security for the notes upon which defendant Bartle was accommodation indorser, with a view, as charged in the answer, of protecting the indorser, as well as affording additional security to plaintiff, then it became its duty to carefully and faithfully perform all acts necessary to make the collateral security available. This duty it owed to the surety, and, failing in it, by which the collateral is lost, the surety will be discharged to the extent he is thereby injured. Taylor v. Jeter, 23 Mo. 250; Brandt, Sur. §§ 384-387; Kemmerer v. Wilson, 31 Pa. St. 110; Pickens v. Yarborough, 26 Ala. 417; Grisard v. Hinson, (Ark.) 6 S. W. Rep. 906.

2. The deed of trust was void, except between the parties thereto, and purchasers and incumbrancers with notice thereof, until duly recorded. The duty, then, clearly devolved upon plaintiff, if the deed was intrusted to it for the purposes charged in the answer, to see that it was recorded, and given full force and effect....