Cooper v. Commonwealth Trust Co.

• Decision Date: 24 May 1909
• Citation: Cooper v. Commonwealth Trust Co., 122 S.W. 791, 142 Mo. App. 610 (Mo. App. 1909)
• Parties: CHAS. B. COOPER AND WIFE, Respondents, v. COMMONWEALTH TRUST COMPANY, Appellant
• Court: Missouri Court of Appeals

122 S.W. 791

142 Mo.App. 610

CHAS. B. COOPER AND WIFE, Respondents, v. COMMONWEALTH TRUST COMPANY, Appellant

Court of Appeals of Missouri, St. Louis

May 24, 1909

Argued and Submitted April 5, 1909.

Re-hearing Granted July 20, 1909; Re-argued and Submitted October 4, 1909. Opinion Filed October 19, 1909.

Appeal from St. Louis City Circuit Court.--Hon. Matt G. Reynolds Judge.

REVERSED.

STATEMENT.--Salmon & Salmon, a co-partnership, were private bankers at Clinton Henry county, Missouri, Thomas M. Casey being the cashier and acting manager of their bank. On Wednesday, June 21, 1905 this bank failed and was on that day taken in charge by the secretary of state of Missouri and placed in the hands of a receiver. Subsequently, upon the petition of the creditors thereof, it was adjudged bankrupt by the United States Court.

The Missouri Savings Association, also referred to as the Missouri Savings Association Bank or as "The Bank," and meant when hereafter referred to as the Association, was a Missouri corporation, doing business in Kansas City Missouri, and engaged in making loans on farm lands in this State and elsewhere. W. S. Webb was the vice-president and cashier of that Association, he and the Association having their offices in Kansas City. Otto Seigle was engaged in the lumber business at Clinton and was also a local agent or solicitor there for the Association, engaged in soliciting and procuring farm loans for it. His course of business under his employment appears to have been, that when applied to for loans, to have the applicant sign a written application for the loan, addressed to the Association, and forward the application to that institution at Kansas City, whereupon Mr Webb, acting for the Association, would examine the application and inspect the property offered as security for the loan. Upon his return to the office of the Association at Kansas City, the loan was approved or disapproved, as the case might be. The Commonwealth Trust Company, defendant and appellant, is a trust company in the city of St. Louis, doing a general trust company business, including the buying and selling of commercial paper and receiving deposits. The First National Bank of Kansas City is a national bank, doing business in Missouri and located at Kansas City in that State, and a correspondent there of the Commonwealth Trust Company of St. Louis. The Mutual Benefit Life Insurance Company is a life insurance company, making farm loans in this State and represented at St. Joseph, Missouri, by Bartlett Brothers. Charles B. Cooper and Lena M. Cooper, his wife, plaintiffs and respondents here, own a farm of one hundred and sixty acres in St. Clair county, this State, some twenty or twenty-six miles from Clinton. In the year 1904, Cooper and his wife had executed a deed of trust securing a note for $ 1500 on this one hundred and sixty acre tract, the note and deed of trust being in favor of the Mutual Benefit Life Insurance Company, which note matures on April 1, 1909. This deed of trust was duly recorded. Bartlett Brothers were handling this loan for the Life Insurance Company. Desiring to pay off and discharge this loan and also to raise additional money on his land, Cooper, according to his own testimony and to the testimony of Seigle, went to Seigle at Clinton, as the representative there of the Missouri Savings Association, and asked him for a loan of $ 3000 on his land. Whereupon Seigle, representing the Missouri Savings Association and acting for it, as the testimony shows beyond any dispute, took Cooper's application and sent it in to the Missouri Savings Association. To state the transaction in Seigle's own language, "Why, Mr. Cooper came to me for a loan of $ 3000 on his land and I took his application and sent it in just like I do all of them and it was accepted by the company and they sent the papers down to me, which they always do." This application appears to have been signed by Cooper and by him sent to Seigle at Clinton and forwarded by Seigle to the Missouri Savings Association at Kansas City. The written application is addressed to the Missouri Savings Association and applies for a loan of $ 3000 for six years, to bear interest at the rate of 8 per cent per annum, payable semi-annually, Cooper agreeing to secure the same by notes and mortgages or deeds of trust in the usual form of the Savings Association, which should be a first lien on the real estate described, he agreeing to furnish the Missouri Savings Association with an abstract of title to the property from the United States down to and including the mortgage and deed of trust to be given to the Association, and to pay the expenses incurred by the Association in perfecting title and recording fees and to take the money at any time within thirty days; also agreeing that if the Savings Association negotiated the loan at a less rate than 8 per cent, to make his note in favor of the Association for the difference between that rate and the rate at which the loan was negotiated, this latter amount to be payable in six installments, corresponding with the interest payments on the loan and to secure it by a second mortgage or deed of trust on the same property. The agreement in terms constituted the Missouri Savings Association, under the name of "Missouri Savings Association Bank," the agent of Cooper to procure the loan for him and it authorized that Association to pay the proceeds of the same "to my said agent, and whatever incumbrances the abstract shows upon said premises you are hereby authorized to pay to the party holding the record title thereto as shown by said abstract." It appears that after his preliminary negotiation with Seigle, Cooper and his wife had gone to Wagoner, in the then Indian Territory, and were residing there from that time on, Mr. Cooper apparently not returning to Clinton until sometime after the 21st or 22nd of June, 1905, and the written application referred to, as well as the deeds of trust and notes, were signed and executed by the Coopers at Wagoner. After receipt of this written application at its Kansas City office, to which place it had been forwarded by Seigle, Mr. Webb went down to St. Clair county, Missouri, inspected the farm, approved the loan, prepared the two deeds of trust, the note or bond, as it is called, and the coupons and forwarded them to Seigle. Seigle, upon receipt of the papers, sent them to Cooper, at Wagoner, accompanied by a letter instructing him to execute them and return them to the Salmon & Salmon bank at Clinton. This letter of instruction was not produced in evidence and plaintiff Cooper testified that so far as he knew it was not in existence. Seigle testified that he had no copy of this letter and that all the instructions contained in it were for Cooper to send the papers back to the Salmon & Salmon bank. Cooper testified that after he received these papers he held them for some time, then signed them and returned them to the Salmon & Salmon bank, as instructed by Mr. Seigle and that he also wrote that day to Salmon & Salmon, that he had sent the papers under the instruction of Mr. Seigle to their bank. Cooper testified that he had no copy of this letter of transmittal to Salmon & Salmon, nor was the original produced, but he testified that all that was in it was merely that "inclosed they (Salmon & Salmon) would find the deeds of trust and papers for the loan which he (Cooper) had made with the Missouri Savings Association Bank and that he had sent them to Salmon & Salmon under the instruction of Mr. Seigle." He further testified that on the same day he had written to Mr. Seigle, which letter was neither produced nor a copy of it in evidence, but was mailed at Wagoner, Indian Territory, June 16, 1905, and that the substance of the letter was that he "had returned the papers which he (Seigle) had sent him to the Salmon & Salmon bank, as he (Seigle) had instructed him to do." The envelope in which the letter was said to have been contained was produced, the letter itself, however, was not. After testifying in chief to having sent these papers, accompanied by a letter, to Salmon & Salmon, and also writing to Seigle to the effect that he had done so and that he had never received any money from anybody in the transaction and had never authorized Salmon & Salmon to collect the money for him or to draw any draft, and that the prior deed of trust had not been paid off, plaintiff Cooper, in cross-examination, reiterated that he had made the application for the loan through Seigle and in sending the papers to Salmon & Salmon had been acting under the direction of Seigle. He was asked whom he understood Seigle to represent in the matter and he answered that he understood Seigle to represent the Missouri Savings Association Bank. His attention was then called to this clause in his application for the loan: "I hereby appoint Missouri Savings Association Bank my agent to procure the loan for me, and authorize you to pay the proceeds of the same to my said agent," and he was asked if he had appointed the Missouri Savings Association his agent in this matter. He answered, "Yes." Asked if Mr. Otto Seigle was the agent of the Missouri Savings Association, he said, "Yes." Asked if he had authorized Salmon & Salmon to draw a draft for that money, he said he had not. Asked when Salmon & Salmon drew that draft, whether they were acting as his agents according to his theory of the case, he answered, "They were not." Asked when Salmon & Salmon received any money on that draft, if they were not acting as his agents according to his theory, he answered, "They were not." Asked why he sent the bond and note to Salmon & Salmon bank, he said that he did that because he was instructed to do so by Mr. Seigle. He was asked if he had not been ...