Coleman v. Cole

• Decision Date: 06 August 1902
• Parties: COLEMAN et al. v. COLE (AURORA STATE BANK, Interpleader).
• Court: Missouri Court of Appeals

69 S.W. 692

96 Mo. A. 22

COLEMAN et al. v. COLE (AURORA STATE BANK, Interpleader).

Court of Appeals at St. Louis, Missouri.

August 6, 1902.

USURIOUS NOTE — RENEWAL — CHATTEL MORTGAGE TO SECURE — NEW TRIAL.

1. Where a promissory note, usurious as between the original parties, is discharged by a new note at a lawful rate of interest, which is received in payment of the old one, extending the time of the loan, and introducing a new party as maker of the second note, the usury of the first note is no bar to the enforcement of a chattel mortgage executed to secure the last note. Coleman v. White, 69 Mo. App. 530, distinguished.

2. A chattel mortgage executed to secure a usurious loan is void under the Missouri statutes. Rev. St. 1899, § 3710.

3. The granting of a new trial on the ground of newly discovered evidence rests in the sound discretion of the trial judge.

4. It is held unnecessary to decide whether attaching creditors may plead usury on behalf of the principal defendant to invalidate a chattel mortgage in favor of a garnishee who claims the mortgaged property attached.

(Syllabus by the Judge.)

Appeal from circuit court, Lawrence county; J. C. Lamson, Judge.

Action by M. L. Coleman and others against Eugene M. Cole. The Aurora State Bank, by its assignee, E. J. White, interpleaded. Judgment for defendant, and plaintiffs appeal. Affirmed.

H. H. Bloss and Cloud & Davis, for appellants. Edw. J. White and Jos. French, for respondent.

BARCLAY, J.

This litigation has been prolonged. After the first trial the cause reached this court by appeal, and was reported under the title of Coleman v. White, 69 Mo. App. 530, where a general outline of the case appears as the record stood at that time. The case began as an ordinary suit by plaintiff against defendant, Mr. Eugene M. Cole, on an account for merchandise sold, amounting to $601.84, in which an attachment was obtained, and was levied upon property of the defendant, Mr. Cole. The Aurora State Bank (by Mr. E. J. White, as its assignee) then filed an interplea, claiming the attached property by virtue of a chattel mortgage which forms the principal subject of contention now. The attachment was levied on a mining plant, consisting of an engine, boiler, pumps, etc. The claim of the interpleader includes the same property. After the decision in 69 Mo. App., the cause was tried again. The amended answer of the plaintiffs to the interplea charged, among other things, that the "pretended debts" due to the bank were fraudulent as to plaintiffs, because the interpleader had required the Davie Mining Company and the defendant, Mr. Cole, "to pay about twenty per cent. for the said loan" after the enactment of the law making 8 per cent. per annum the highest lawful rate of interest. But before the last trial the interpleader filed an amended reply (August 16, 1897), which is important to notice, because the court, on motion of plaintiffs, struck out all of it except the general denial contained in the first sentence. Its terms are as follows (omitting caption and signature): "Comes now the interpleader, and, for amended reply to the plaintiffs' amended answer to the interplea filed herein, denies each and every allegation of new matter in said answer contained. Further answering, interpleader says it is not true, as alleged in said answer, that any interest above the mortgage to the interpleader from the defendant, or that any interest at all, was ever paid on said note, or that any interest was ever exacted or received from the defendant on the debt secured by said mortgage, but interpleader states that the note secured by the mortgage in controversy was executed by the defendant and received by the interpleader as a full payment of two certain notes, payable to the order of R. L. McElhany, executed by R. L. McElhany, president, and N. L. Wickwire, secretary, in the respective sums of $1,000 and $350, on which the defendant had indorsed on the back as a guarantor, simply; that the defendant was not a party maker to said notes, nor a party to the payment of whatever interest may have been paid, if any, thereon, but was a separate, independent contractor with reference thereto, in no way connected with or interested in the payment of the interest thereon; that as such guarantor of said notes the said defendant is not in a position himself to set up the defense of usury paid on the notes of McElhany and Wickwire, not being in privity with the parties who paid such usury, not being interested therein or injured or prejudiced thereby, and the plaintiff, being simply his attaching creditor, has no stronger rights to such defense than said defendant himself has. Interpleader further says that if, by reason of the fact of his indorsement on the said notes of McElhany and Wickwire, the defendant could have originally claimed the defense of usury paid thereon by the makers of said notes, he waived such defense by the payment and discharge of said notes in full by the execution and delivery of the note secured by the mortgage in controversy, which was paid for and accepted as a full payment and discharge of said notes; that no interest, legal or otherwise, had ever been paid on the note secured by the mortgage, or on the indebtedness secured thereby, wherefore interpleader says its mortgage is not affected by the Laws of 1891, p. 170,...