Cannon v. Gibson

• Decision Date: 09 January 1912
• Citation: 142 S.W. 730,162 Mo.App. 386
• Parties: WILLIAM A. CANNON, Respondent, v. PAUL H. GIBSON et al., Appellants
• Court: Missouri Court of Appeals

142 S.W. 730

162 Mo.App. 386

WILLIAM A. CANNON, Respondent, v. PAUL H. GIBSON et al., Appellants

Court of Appeals of Missouri, St. Louis

January 9, 1912

Appeal from Lincoln Circuit Court.--Hon. Jas. D. Barnett, Judge.

REVERSED AND REMANDED (with directions).

STATEMENT.--This is an injunction proceeding to restrain the sale of certain lands under a deed of trust in the nature of a mortgage plaintiff alleging that the note secured by the deed of trust had been paid off and discharged. Defendant Elizabeth Baskett is the owner or claims to be the owner of the note and defendant Paul H. Gibson is the trustee named in the deed of trust. Upon final hearing the court overruled a motion to dissolve the temporary injunction, theretofore issued, and made the injunction permanent. The defendants have appealed.

It appears from the evidence that on June 8, 1908, and prior thereto, John M. Gibson owned a tract of land in Lincoln county, which was subject to the lien of a deed of trust given to secure the payment of a note for $ 785. The note was owned by Elizabeth Baskett and was then past due and in the hands of her brother, Judge W. H. Baskett, of Elsberry, as her agent, for collection. He was not to press for the payment of the principal, she being content to keep her money out at interest as it was, but was to collect the interest as it became due and to receive the principal if Gibson desired to pay it. This note had originally belonged to her brother as executor and on its face was made payable to "W. H Baskett, Exr.," and by him had been turned over to her in partial payment of a legacy due to her on final settlement. The note bore the endorsement in blank of the payee. At all the times we are concerned with, Gibson had knowledge of the fact that the note belonged to Elizabeth Baskett and that W. H. Baskett was holding it as her agent for collection. On June 8, 1908, Elizabeth Basket was absent on a visit in California and had been so since November 1907. It was with affairs in this shape that on June 8, 1908, the plaintiff, Cannon, and John M. Gibson made an agreement of trade or exchange whereby Gibson, by warranty deed, was to convey to Cannon the land covered by the deed of trust and in consideration therefor Cannon was to transfer to Gibson certain unsecured notes of one Judge Reid for $ 2700. Cannon lost no time in complying with his part of this agreement but immediately on the same day and without waiting for any deed to be made to him, turned over all of the Reid notes to Gibson. The latter had told him of the deed of trust encumbering the property, saying it was held by Judge Baskett and had stated he would pay it off either in money or by having Judge Baskett accept some of the Reid paper for it. The next morning Gibson, Reid and Baskett met in Gibson's office at Ellsberry. Baskett was willing to take from Gibson part of the Reid notes at par in payment of his sister's note but requested that Reid make a new note for the proper amount--this old note being disfigured with credits, etc. Therefore Gibson wrote out a new note payable to Elizabeth Baskett, Reid signed it and Baskett received and accepted it. At Gibson's suggestion the mortgage note was marked paid, but Baskett retained it, promising that in a short time he would go over to Troy and release it of record. Gibson then asked Baskett "to show Cannon his land is clear," and Baskett said he would Baskett then went to Cannon's store and told him they had fixed up the papers and he had taken the Reid note for the mortgage note and was going to Troy in a few days to have the latter cancelled. Cannon testified as to this, "I supposed they were his notes. He took them out of his pocket and says 'here's these notes, been marked paid.' I never took them and looked at them. Said he would have the record satisfied." This was the first time Baskett and Cannon had said anything to each other about the matter. On cross-examination Cannon testified: "Of course I bought the land and he (Gibson) was to give me a warranty deed for it. That was the contract and I was to give him some notes aggregating something like $ 2700. . . . First I knew about Baskett, Gibson says, 'There's a mortgage on the place. I have got to satisfy that, of course. I give you a warranty deed.' I bought from Gibson. Baskett came by and told me what he was going to do. Showed me the notes. I never looked at them. Thought it would be all right. Had no dealings with Baskett except he voluntarily told me he had already taken these other notes, clean notes, from Judge Reid. The transaction had already been closed. . . . Gibson told me 'Baskett holds a mortgage' and spoke about the paper, if he didn't take that paper he would pay him the money, and of course he was to give a warranty deed, that was his business." It being suggested to Cannon on cross-examination that he had not relied on Baskett in the matter but had relied on Gibson to clear the title, he said he had "never thought anything much about it." He further testified that when he traded with Gibson he gave him the Reid notes; that that was on Monday, the day before he, Cannon, got the deed; that they traded one day and the deed was made the next day. On June 17, 1908, eight days after Baskett had taken the Reid notes in payment of the note he held for his sister, it developed that Judge Reid was insolvent and his notes worthless. All this time Elizabeth Baskett was in Colifornia and there is nothing in the evidence to indicate that she had any knowledge of this transaction, until July 8, 1908, when she received a letter from her brother advising her of it and also advising her that Judge Reid was insolvent. This latter fact she had learned from a home newspaper but did not know she had any direct interest in the matter until she received her brother's letter. Immediately after receiving her brother's letter she wrote him a letter as follows: "Huasna, July 9, '08. Dear Brother:--We learned from Democrat of Judge Reid's failure and I am most awfully surprised to find my note which I thought so well secured involved in this trouble. I am so worried, just to think it's half my living and I absolutely refuse to ratify your action in making the exchange of notes without my knowledge and that too without security, so I demand that you hold the old note instead of the note of Judge Reid. I empower you to represent me in this matter in securing my money. I expect to start for home about 20th of present month. Della will probably make trip with me. With love to all. Lizzie." After writing the letter to her brother, Miss Baskett remained in California until the last of July and then went to Hannibal, Missouri, where she stayed a week or two, arriving in Elsberry about the Middle of August. Her brother, W. H. Baskett, in the meantime held both notes until she arrived from California when he gave her the mortgage note and offered her the Reid note. The latter she refused to accept. It seems that he previously offered to return it to Judge Reid and then to Gibson and they would not accept it. When he offered it to Gibson, Gibson, according to his own testimony, told him he did not want the note; that he did not have any business with it; that he did not understand how Judge Baskett had authority to give him Elizabeth Baskett's notes. Gibson knew at that time that the mortgage note had not been released of record and W. H. Baskett had told him that Elizabeth would not give up the note. Told him that sometime between the middle of August and September first. It seems that Elizabeth Baskett never communicated directly with either Cannon or Gibson, but after her return home (she lived at a place called "Whiteside" near Ellsberry, and had gone there), she wrote to her brother W. H. Baskett telling him to see a lawyer about the matter. This he did and also talked to Paul H. Gibson, the trustee, about advertising a sale under the deed of trust. The sale was being advertised to take place on October 31, 1908, when this injunction proceeding was begun and the sale was enjoined.

Judgment reversed and cause remanded.

Dudley & Palmer for appellants.

(1) Judge Baskett had no authority whatever to take Reid and Welch paper in exchange for defendant's note. And this applies as well to Cannon as to Gibson who knew the ownership of the paper. It was no payment. Mechem on Agency, secs 375-383; Story on Agency, secs. 89, 181; 31 Cyc., p 1373-1375, par. 3, A. and B.; Graham v. Savings Inst., 46 Mo. 186; Nichols v. Jones, 32 Mo.App. 657; Knoche v. Whitiman, 86 Mo.App. 568; ...