Commerce Trust Co. v. Langley
| Decision Date | 06 October 1928 |
| Docket Number | No. 26779.,26779. |
| Parties | COMMERCE TRUST COMPANY, Appellant, v. RALPH R. LANGLEY. |
| Court | Missouri Supreme Court |
Appeal from Jackson Circuit Court. — Hon. Samuel A. Dew, Judge.
REVERSED AND REMANDED.
Cooper & Neel and Wallace Sutherland for appellant.
(1) The admission in evidence of respondent's two self-serving letters constitutes error. 22 C.J. 305, 414, 421; 4 Wigmore on Evidence (2 Ed.) secs. 2113, 2119, 2120; Turner v. Pelden, 9 Mo. 797; Clark v. Hufaker's Admr., 26 Mo. 264; Hammond v. Beeson, 112 Mo. 190; Townsend v. Schaden, 275 Mo. 227; Southern Co. v. Smith (Mo.), 192 S.W. 754; Champion Paper Co. v. Shilkee (Mo.), 237 S.W. 109; Dietz v. Nix, 202 Mo. App. 639; Woolsey v. Haynes, 165 Fed. 391; Varley Duplex Magnet Co. v. Ostheimer, 159 Fed. 655; Gearty v. City of New York, 183 N.Y. 233; Riddle v. Jenkins, 95 N.Y. Supp. 702; Bank v. Delafield, 126 N.Y. 410; Roberti v. Barbieri, 105 Conn. 539; Leesville Mfg. Co. v. Morgan, 55 S.E. 768; McMaken v. Lennam, 193 N.W. 668; Adams v. Eames, 107 Mass. 275; O'Connor v. Padget, 82 Neb. 95; State v. Thompson, 116 La. 829; Lee v. Hamilton, 3 Ala. 529; Hazen v. Henry, 6 Ark. 86; Robinson v. Ferry, 11 Conn. 460; Nutter v. O'Donnell, 6 Colo. 253; Logansport v. Heil, 118 Ind. 135; Hatch v. Potter, 7 Ill. 725; Edwards v. Ford, 2 Bailey (S.C.) 461. (2) The error of the court in admitting respondent's two self-serving letters in evidence was highly prejudicial to appellant, and clearly constitutes reversible error. 4 C.J. 1165, sec. 3185; Dayharsh v. Ry. Co., 103 Mo. 577; Dietz v. Nix, 202 Mo. App. 639; Young v. Hoover, 233 S.W. 502; Gearty v. City of New York, 183 N.Y. 233; Riddle v. Jenkins, 95 N.Y. Supp. 703; Bank v. Delafield, 126 N.Y. 410. (3) Since the evidence in the case clearly showed consideration for the execution and delivery of the notes in question, the defense of a collateral agreement that respondent would not be liable on the notes was untenable. Wislizenus v. O'Fallon, 91 Mo. 184; Cox v. Sloan, 158 Mo. 411; Smith's Admr. v. Thomas, 29 Mo. 307; Jones v. Shaw, 67 Mo. 667; Bass v. Sanborn, 119 Mo. App. 103; First Nat. Bank v. Hubbard, 211 Mo. App. 9; England v. Hauser, 178 Mo. App. 85; Montgomery v. Schwald, 177 Mo. App. 83; Citizens' Bank v. Martin, 171 Mo. App. 194; Third Nat. Bank v. Reichert, 101 Mo. App. 242; Barnard State Bank v. Fesler, 89 Mo. App. 217; Skagitt State Bank v. Moody, 86 Wash. 286; Galena Nat. Bank v. Ripley, 55 Wash. 615; 38 Cyc. 1624, 1625; State Bank of Moore v. Forsythe, 41 Mont. 249; Boatwright v. Schever, 66 So. 819; Fox v. Brosius, 187 Mo. App. 476; Thornton Nat. Bank v. Robertson, 89 Kan. 509.
C.O. French for respondent.
(1) Respondent's letters were properly admitted. 22 C.J. 196; Bagnell Timber Co. v. Ry. Co., 215 Mo. 514; 1 Elliott, Evidence, secs. 190, 241. (2) The admission of respondent's letters, even if technically improper, was not prejudicial error. 22 C.J. 230, sec. 203. (3) Lack of consideration for respondent's notes was shown. That they were given at the request and for the accommodation of payee was shown. Appellant was not a holder in due course. Gansevoort Bank v. Gilday, 104 N.Y. Supp. 271; Secs. 815, 838, R.S. 1919; Wright v. Miss. Valley Tr. Co., 144 Mo. App. 640; Chicago Trust Co. v. Brady, 165 Mo. 197.
The petition comprises two counts, in each of which plaintiff seeks to recover against defendant on a promissory note. The first count prays judgment for $201.56, with eight per cent interest from August 9, 1921, and a ten per cent attorney's fee. The second count prays judgment for $5802.68, with eight per cent interest from August 9, 1921, which, at the time of the trial, aggregated about $2200, and a ten per cent attorney's fee. The jury returned a verdict on each count in favor of defendant, and plaintiff appealed from the judgment entered thereon.
It is unnecessary to summarize the petition further than to say that the counts are actions upon promissory notes. The answer avers that the notes were given without consideration; that the notes were executed by defendant at the request of and for the accommodation of the Midwest Reserve Trust Company, the payee therein, and that the Midwest Company stated it would look to the Consumers Oil Company for payment of the notes.
The evidence most favorable to defendant warrants the finding that, at the time of the execution of the two notes in question, on August 9, 1921, defendant was president of the Consumers Oil Company. Prior to August 9th the Consumers Oil Company had borrowed from the Midwest Reserve Trust Company, hereinafter called Midwest Company, the sum of $17,500, and had executed its note as evidence of the indebtedness. This note was renewed from time to time and payments were made thereon, resulting that the principal, on August 9th, was reduced to $7500. As collateral thereto, the Consumers Oil Company deposited its bonds of the value of $7500. They were part of a $300,000 bond issue and were secured by a trust deed on property of the Consumers Oil Company. The treasurer of the Consumers Oil Company, of which respondent was president, testified that, upon the note for $7500 becoming due, he presented a renewal note to the Midwest Company for $7500, executed by the Consumers Oil Company, but that the president of the Midwest Company said that he desired to change the complexion of said note and would like to have defendant execute a renewal note this time instead of the Consumers Oil Company. The Midwest Company prepared the notes, and the treasurer took them to defendant and reported to him the conversation had with the president of the Midwest Company. The treasurer recommended to defendant that he comply with the request of the Midwest president. Defendant signed the notes, and the treasurer carried them to the Midwest Company. The first note sued on for $201.56 covered interest on the $7500 note. The $7500 note was reduced to $5802.68 through dividends paid on the collateral bonds upon liquidation. Defendant did not receive anything for the notes signed by him. The treasurer stated, on cross-examination, that the president of the Midwest Company said to him that there would be no liability against defendant on the note, for he wanted the note changed to change the complexion of it. The witness repeated these statements to defendant.
The evidence tends to show that the note of the Consumers Oil Company for $7500, which we assume was due on August 9, 1921, and which was secured by collateral, was not surrendered when the notes, signed by defendant, were delivered to the Midwest Company. The Midwest Company continued to hold the note for $7500 of the Consumers Oil Company and the collateral, but held by it in a separate file from that in which the notes signed by defendant were kept, and this was done at the instance of the president of the Midwest Company. The evidence most favorable to defendant shows that he did not indorse the note for $17,500, or other notes given in renewal thereof, and that no consideration passed from the Midwest Company to defendant, but the notes were executed at the request of and for the accommodation of the payee. The only note of the Consumers Oil Company that defendant was able to find or obtain from the files shows that he did not indorse it. The Midwest Trust Company, shortly after the notes became due, made an assignment for the benefit of creditors, and the plaintiff thereby became the holder of the notes sued on.
There was admitted in evidence, on the part of defendant, two letters written by him, which plaintiff objected to as self-serving. They were written by defendant to an officer of and to the attorneys for plaintiff. They are as follows:
A couple of years ago, Messrs. Rule and Rubey negotiated a $15,000 loan at the Midwest Bank. For several months this loan remained absolutely unsecured. I was not personally on the notes and did not personally negotiate the loan. In an adjustment of the Consumers affairs, I was able to pay half of the $15,000 in cash and gave them a new note for the remaining one-half with these Consumers secured notes as collateral. That certainly was putting the original loan in much better condition than it formerly had been in. The Midwest Bank was formerly in the position of an unsecured creditor. I was not a personal endorser on the note but I changed their position from that of an unsecured creditor of $15,000 to a secured creditor of $7500.
I do not just now recall the language of the persuasion or the reason for their wanting to substitute my personal note for the note of the company, but it was for some reason other than to hold me personally liable for the obligation.
While I do not feel and am satisfied that I could show that there is no legal liability, I do feel a moral responsibility and if I am allowed to work the matter out along lines which we have carefully and quite successfully developed, the bank will get all of the principal and interest without embarrassment or harm or loss to any of us.
I have therefore written Mr. Newman quite fully on the subject and while I appreciate the fact that this matter is probably not a direct asset or interest of the Commerce Trust Company, still I know that you have sufficient interest in it of some nature, and I hope...
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