Farmers & Merchants Bank v. Siemers
| Decision Date | 13 June 1922 |
| Citation | 242 S.W. 417,210 Mo.App. 247 |
| Parties | FARMERS & MERCHANTS BANK, Appellant, v. F. W. H. SIEMERS, Respondent |
| Court | Missouri Court of Appeals |
Appeal from Cape Girardeau Court of Common Pleas.--Hon. John A Snider, Judge.
AFFIRMED.
Judgment affirmed.
A. M Spradling for appellant.
Wilson Cramer, for respondent.
--This is a suit on a promissory note executed by defendant for five hundred dollars, dated October 27, 1917, and payable one day after the date thereof to the order of A. E. Feuerhahn, which note was alleged in the petition to have been endorsed and delivered by said Feuerhahn to plaintiff.
The answer admitted the execution of the note but put in issue plaintiff's title thereto. It pleaded that the money received by defendant on said note was borrowed by him from the estate of John Eggimann, deceased, and was loaned to him by A. E. Feuerhahn as the agent of the administratrix of said estate, and that said A. E. Feuerhahn had no right or interest in said money or any part thereof; that said note, while made payable to the order of A. E. Feuerhahn, was in fact payable to the estate of John Eggimann, deceased, as shows on the face by a memorandum made by A. E. Feuerhahn before its execution and delivery; that said note was not the property of A. E. Feuerhahn, but belonged to the estate of John Eggimann, deceased, and was unlawfully delivered by the said Feuerhahn to plaintiff as collateral to secure his own note for three hundred and fifty dollars without the knowledge or consent of the administratrix of said estate; and that plaintiff accepted said note as collateral with full notice and knowledge of all the facts, and was not entitled to recover thereon, but that defendant owed the amount of said note to the estate of John Eggimann, deceased.
The replication interposed a denial of the allegations of new matter.
A trial of the cause was had before the court, a jury having been waived, which resulted in a judgment for defendant, from which plaintiff has appealed.
The facts are uncontradicted and are, in substance, as follows:
Mrs. Emelia Eggimann was the administratrix of the estate of her deceased husband, John Eggimann, and had appointed her nephew, A. E. Feuerhahn, as he agent to attend to the business of said estate.
On October 27, 1917, the defendant desired to borrow five hundred dollars and was informed by Feuerhahn that he could get the money from John Eggimann's estate. Thereupon the loan was made as evidenced by the note in question. The note was drawn up by Feuerhahn and before it was executed by the maker he wrote thereon the words--"Payable to John Eggimann estate."
Thereafter, on the 28th day of Juune, 1918, long after the maturity of the note, Feuerhahn, without the knowledge or consent of Mrs. Eggimann, endorsed and delivered said note to the plaintiff bank, as collateral for his individual debt to said bank. The endorsement on the back thereof is as follows: "A. E. Feuerhahn." Feuerhahn's debt to the bank, secured as aforesaid, was evidenced by two notes, one for four hundred dollars, executed on the 28th day of June, 1918, and the other for three hundred dollars, executed prior to that time. The business of pledging the note was had with plaintiff's cashier, who admitted at the trial that he read the words--"Payable to John Eggimann estate," written on the face of the note, before it was assigned to plaintiff but that he did not ask Feuerhahn any question about it.
Appellant contends that the words: "Payable to John Eggimann estate," written on the face of the note, are no part of the instrument but are to be taken as a mere private memorandum and therefore immaterial.
It is further contended by appellant that the administratrix of the Eggimann estate clothed her agent, A. E. Feuerhahn, with full power of disposition over the note and that plaintiff, having been led into dealing with such apparent owner, will be protected in said dealings.
To these contentions we cannot agree. Inasmuch as the words: "Payable to John Eggimann estate" were written on the face of the note before the execution of the instrument they must be regarded as part of the contract between the parties. Thus considering the instrument they must be construed as limiting the authority of Feuerhahn over the note.
The question arises whether the note itself with the said memorandum thereon was sufficient to impart notice to the plaintiff of the defect in the title of the note at the time it was assigned to it by Feuerhahn?
The negotiable instrument law provides that: "To constitute notice of an infirmity in the instrument or defect in the title of the person negotiating the same the person to whom it is negotiated must have had actual knowledge of the infirmity or defect, or knowledge of such facts that his action in taking the instrument amounted to bad faith." [Sec. 842, R. S. 1919.]
In disposing of the note in question, as security for his own debt to the bank, Feuerhahn was guilty of a flagrant breach of trust, and if plaintiff knew this he acquired no title to the note.
The words: "Payable to John Eggimann estate," written on the face of the note imparted actual knowledge to the plaintiff that the note did not belong to Feuerhahn in his own right but that he held it as trustee for the estate of John Eggimann, deceased. The character of the note as trust property was stamped upon its face as fully as if the note had contained the words--payable to A. E. Feuerhahn, trustee, for account of John Eggimann estate.
The pledging of the note, held in trust, as security for the trustee's private debt was an act prima facie unauthorized and unlawful, and in itself a suspicious circumstance, imposing...
To continue reading
Request your trial