[Copyrighted Material Omitted]
Appeal
from Ray Circuit Court. -- Hon. E. J. Broaddus, Judge.
Action
by plaintiff for damages because of the fraudulent conversion
by defendants of twenty shares of stock in the State National
Bank of El Paso, Texas, of the face value of $ 100 each. The
record discloses that: In 1881 plaintiff became the owner of
twenty shares of the capital stock of the State National Bank
of El Paso, Texas. The stock of this bank was $ 55,000 fully
paid up, as required by the act of congress; there was $
35,000 surplus fund, $ 12,906 undivided profits. In addition
to the accumulation of this $ 35,000 and of $ 12,906, the
stock had paid an annual interest of $ 240, or twelve per
cent.
In the
latter part of March, 1888, Robert Greer applied to George
Wilson, as president of the defendant bank, for a loan of $
1,500 for his wife, offering as collateral the twenty shares
aforesaid, which Wilson, by correspondence with the First
National Bank of El Paso, ascertained to be ample security
for the loan. Greer testifies that when the loan was made
that is, April 21, 1888, it was distinctly understood between
Wilson and himself that, though the note was drawn payable in
three months, yet so long as "we kept the interest paid
it would be satisfactory;" that Wilson said: "Just
run it as long as you need it, so you keep the interest up
the collateral is good enough for me."
On the
date last mentioned, plaintiff borrowed of the defendant bank
$ 1,500, for which she and her husband executed their note
payable three months after date, with interest after date at
eight per cent., by which she also hypothecated, as security
these twenty shares of stock in the State National Bank of El
Paso, Texas, authorizing their sale in case of nonpayment,
without notice, at public or private sale; providing further,
that said bank on payment of the amount loaned, as specified
therein, and at any time before said collateral security
shall have been sold, to surrender the same. At different
times plaintiff paid the interest upon the note and part of
the principal, but the defendants insisted on continuing the
loan, as it was well secured, and the evidence shows that
plaintiff could have procured the money at any time on the
collateral for that purpose, also letters of defendants
acknowledging partial payment. No demand or request for
payment was ever made. The only thing testified to by Wilson
was that, on some of these partial payments being made, the
note was laid down on the counter and which he states he
regarded as a "demand," but the evidence on the
contrary is clear that from time to time the loan, by the
assent and agreement of the parties, was extended.
January
5, 1892, plaintiff notified the defendants by letter that she
did not desire to continue the loan longer, and to send the
note and stock to the Aullville Bank for payment. In answer
to this request, she received from defendant Wilson a letter,
dated the sixth of that month, which was the first intimation
she had received of the alleged sale of her stock and its
purchase by defendant Wilson. In this communication he
stated: "The Lafayette County Bank some time ago found
it had too much loaned out and sold off some of its outside
paper (by outside we mean the notes of persons who do not
keep a regular and constant deposit with us). The note of
Kittie J. Greer and R. L. Greer, along with other paper, was
sold in St. Louis. The purchaser afterward wanted the bank to
buy back your note; but as the bank has entered on a policy
of lending only to those who keep good deposits with us, it
did not suit the bank to do this. I arranged the matter by
buying for myself the stock, which had gone along with the
note when it was sold. The stock thus became my property. * *
* I call your attention to the laws of this state as to debts
owed to bankers. If a banker can not pay his depositors what
is owing to them, he stands in the law on the same footing as
if he had stolen that much money and must go to prison, but
if any one else owes the banker he can quietly tell the
banker that he is not able to pay and there is an end to it.
This being the case I ask you to put yourself in my place and
say if you would miss a chance to get back a thousand or so
out of any member of a family, if the rest were owing you
nearly $ 5,000. * * * But in the purchase of this stock I
have acted strictly according to law and the contract and
under the best legal advice at every step and the result can
not now be changed."
On May
21, 1891, Wilson, as president of the defendant bank, began a
correspondence with the Franklin Bank of St. Louis. These
banks had long been doing business with each other. The
correspondence and its incidents, as shown by the deposition
of Garrels, the cashier, taken in narrative form, are as
follows:
"'Lexington,
Missouri, May 20, 1891.
"'Franklin
Bank, St. Louis:
"'We
wish to use some money on outside discounts; I prefer to sell
them outright and will make you a separate and formal bond or
guarantee that we will pay them in four months if the makers
do not. Our reason for this is that they need not then appear
as rediscount in our statement to the secretary of state. If
this suits you, place the proceeds to our credit. Number 2963
is on sixty-five acres of land two miles from town, worth
only, say, fifty per cent. over the note. We expect to get
par and interest for it, and the value of the number 2963
balance and interest on it. Does this suit you?
Respectfully,
"(Signed)
'G.
Wilson, President.'
"Accompanying
this letter was plaintiff's note for $ 1,500, which had
indorsed thereon, the authority to sell the stock heretofore
mentioned, without notice, at public or private sale, etc. On
the back of said note the following credits appear:
"'February
5, 1889. Interest paid to date ($ 95) and $ 105 paid on
principal.'
"'Paid
$ 25 interest to April 26, 1889 (on June 22, 1889).'
"'July
17, 1889. Paid interest to July 16, 1889 ($ 25) and $ 95 on
principal.'
"'March
3, 1890. Paid interest to date and $ 55 on principal.
(Interest $ 65). Leaving balance $ 1,245.'
"'July
18, 1890. Paid interest to date and $ 87.65 on principal.
Balance $ 1,157.35 due.'
"'January
15, 1891. Interest $ 49.25 paid to date, and $ 74.25 paid on
principal. (Paid by draft on St. Louis.) $ 1,083 balance
due.'
"'Pay
Franklin Bank or order.
"'Lafayette
County Bank.
"'Pr.
Geo. Wilson, President.'
"The
further indorsements appear on the back of the note:
"'Paid
on this note July 21, 1891, $ 1,118, by sale of twenty shares
stock mentioned therein.'
"'Pay
Lafayette County Bank or order without recourse.
Franklin
Bank.'
"This
letter offered to us for sale two pieces of negotiable paper,
number 2963, being the collateral note of Kittie J. Greer and
R. L. Greer to which I have referred marked 'Exhibit
A'; the other item, mentioned as number 2900, was a real
estate note secured by deed of trust. We received these
securities at the same time we received the letter
'Exhibit B.' We bought them on the terms stated in
'Exhibit B,' and credited the account of the
Lafayette County Bank therefor in certain amounts stated in
my letter to Geo. Wilson, president, of date May 23, 1891, of
which letter I produce a letter press copy and the same is
hereto attached:
"'Geo.
Wilson, Esq., Pr., Lexington, Mo.
"'Dear
Sir: -- We would have preferred to discount your note with
paper sent as collaterals, but as you wished it, shall comply
with your request. We shall credit the note at face and
accrued interest and instruct our attorney to draw up a paper
to cover the case which we shall mail to you for your
signature as soon as received.
Yours
Truly,
"(Signed)
'G.
W. Garrels.
"'To
your credit.
"'$ 1,083.10.
|
4m, 8d, 30-80.
|
$ 1,112.90.
|
"'$ 2,084.63.
|
10m, 5d, 140-82.
|
$ 2,225.45.'
|
"The
bank held this note until the interest on the real estate
note of a Mr. Francisco became due and then we wrote to
Francisco that we would foreclose on the land unless the
interest was paid. Thereupon Mr. Francisco arranged with the
Morrison-Wentworth bank to take up that real estate note
which bank paid us principal and interest, whereupon we
turned that real estate paper over to it -- that ended our
connection with security number 2900, in the letter
'Exhibit B.' The collateral note of the Greers was
still in the possession of the Franklin Bank, but about the
same time with my letter to Francisco I wrote to the
Lafayette County Bank a letter July 18, 1891, a letter press
copy of which I produce and which is hereto attached:
"'July
18.
"'Geo.
Wilson, Esq., Pr., Lexington, Mo.
"'Dear
Sir: -- What action do you wish us to take in regard to the
papers we bought from you?
"'Yours
truly,
"'G.
W. Garrels.'
"In
which we inquired what action we were to take in regard to
the securities we bought as above stated. Thereupon we
received a letter from the Lafayette County Bank dated July
24, 1891, which I now produce and which is hereto attached.
"'Lexington,
Mo., July 24, 1891.
"'Franklin
Bank, St. Louis, Mo.
"'Gentlemen:
-- I saw H. C. Francisco last night, and he says that he will
arrange to get the money to pay off that note and asks me to
have it sent here and indorse it over to the person who is
going to furnish him the money. I told him that could not be
done; that he would have to make an entirely new loan and
this be put on the record satisfied. I suppose he can do this
just as well if he can get the money at all. I will write
again as soon as I see him again.
"'Yours
respectfully,
"'R.
A. Wilson, Cashier.'
"This
letter is an answer to our inquiry in so far...