Cordia v. Richards

• Decision Date: 02 April 1932
• Docket Number: 29755
• Citation: 48 S.W.2d 878,329 Mo. 1166
• Parties: E. F. Cordia and Clara Cordia, His Wife, v. Stephen T. Richards, Sheriff of Washington County, Missouri, Frank Dietrich, Special Deputy Finance Commissioner in Charge of the Affairs of the Peoples Bank of De Soto et al., Appellants
• Court: Missouri Supreme Court

48 S.W.2d 878

329 Mo. 1166

E. F. Cordia and Clara Cordia, His Wife, v. Stephen T. Richards, Sheriff of Washington County, Missouri, Frank Dietrich, Special Deputy Finance Commissioner in Charge of the Affairs of the Peoples Bank of De Soto et al., Appellants

No. 29755

Supreme Court of Missouri

April 2, 1932

Appeal from St. Francois Circuit Court; Hon. Peter H. Huck Judge.

Reversed and remanded (with directions).

T E. Francis, Frank L. Dietrich, R. E. Kleinschmidt and J. F. Evans for appellants.

(1) This being a suit in equity to enjoin the foreclosure of deeds of trust, the case is triable de novo on appeal, and this court will determine the facts irrespective of the findings of the Chancellor. Johnson v. Antry (Mo Sup.), 5 S.W.2d 405; Schwartzman v. Fire Ins. Co., 318 Mo. 1089, 2 S.W. 593; Barron v. Store Co., 237 S.W. 786; Washburn v. Gaslight Co., 223 S.W. 725; Gibson v. Shull, 251 Mo. 480, 158 S.W. 324. (2) Plaintiffs' prayer for equitable relief is based upon the alleged payment of the two promissory notes in question, and, inasmuch as the original indebtedness was admitted, the burden of proving payment was on plaintiffs. Erhart v. Dietrich, 118 Mo. 418, 24 S.W. 192; Harrison v. Doyle, 163 Mo.App. 602, 147 S.W. 504; West Pub. Co. v. Corbett, 165 Mo.App. 7, 145 S.W. 868; Union Biscuit Co. v. Grocer Co., 143 Mo.App. 300, 126 S.W. 996; Barrett v. Kern, 141 Mo.App. 5, 121 S.W. 774. The findings of the Chancellor, that the notes had been paid in full, are squarely against the weight of the evidence and against plaintiff E. F. Cordia's own admissions. In determining the weight of an issue of fact, consideration should be given to the inherent probabilities of the verity of the evidence, and an explanation of a transaction given in writing before any differences have arisen is of more weight as evidence than a subsequent oral explanation at variance with the writing, given after differences have arisen. Schenkmeyer v. Altheimer, 37 S.W.2d 948. (3) The trial court erred in admitting evidence of transactions which were entirely outside of the scope of the pleadings and erred in rendering a decree based upon such evidence. A decree must be founded upon facts consistent with and embraced within the pleadings, and, even though a state of facts not pleaded is developed at the trial, they cannot be made the basis of any relief. Newham v. Kenton, 79 Mo. 382. (4) In equity appeals, the court considers only such evidence as it finds to be competent under the issues, and disregards all other evidence, regardless of the trial court's rulings thereon. Rinkel v. Lubke, 246 Mo. 377, 152 S.W. 81; Griffin v. Nicholas, 224 Mo. 275, 123 S.W. 1063.

Terry & Terry for respondents.

(1) When the findings of the trial court are questioned in a suit where equitable relief alone is sought the appellate court will defer to the conclusions of the trial court, because such court has the advantage of seeing the living witnesses and hearing them testify. Sinnett v. Sinnett, 201 S.W. 887; Hunter v. Briggs, 254 Mo. 28; Huffman v. Huffman, 217 Mo. 182; Kidd v. Brewer, 317 Mo. 1047; Vining v. Ramich, 319 Mo. 65. (2) The spoliation by a party of documentary evidence which may or may not be valuable to his antagonist has always received the strongest judicial condemnations and the rule of the ancient maxim (Omnia praesumuntur in odium spoliatoris) that all things are presumed against the spoliator, has always been applied with the utmost rigor and sternness. Shawhan v. Shawhan Distilling Co., 195 Mo.App. 445; Pomeroy v. Benton, 77 Mo. 64; State ex rel. v. Ellison, 200 S.W. 1042; Morrow v. Railroad, 140 Mo.App. 200; 22 C. J. 113, 114. (3) Whenever the cause of action set forth in a counterclaim arises out of the contract or transaction stated in the petition it is immaterial whether the counterclaim is legal or equitable or based on liquidated or unliquidated demand. Miller v. Crigler, 83 Mo.App. 395; Howard v. Haas, 131 Mo.App. 507; Graham Paper Co. v. Nat. Newspaper Assn., 193 S.W. 1003; Sec. 1233, R. S. 1919.

OPINION

Gantt, P. J.

Action to enjoin the foreclosure of two deeds of trust. One of the deeds was given by plaintiffs to secure the payment of their note of March 17, 1919, for $ 5,000, payable to the Peoples Bank of DeSoto six months after date. The other deed was given by them to secure the payment of their note of October 16, 1919, for $ 3,000, payable to said bank twelve months after date. The suit is by E. F. Cordia and Clara Cordia, husband and wife, against Stephen T. Richards, acting trustee in the deeds of trust, Frank Dietrich, deputy finance commissioner in charge of the Peoples Bank, and E. L. Cook, Cashier of the DeSoto Trust Company, with a liquidating interest in the Peoples Bank of DeSoto. The State Finance Department took charge of the Peoples Bank in January, 1921. The pleadings are not challenged. Plaintiffs alleged payment of the notes. Defendants denied payment. The court found that the notes had been paid; that the deeds of trust should be cancelled, and that defendants should be enjoined from foreclosing the deeds of trust and collecting the notes. Judgment accordingly, and defendants appealed.

Plaintiff, E. F. Cordia, owned timber lands and conducted an extensive tie and timber business. He did business with the Peoples Bank of DeSoto, Bank of Potosi and a St. Louis bank.

On the issue of payment of the $ 5,000 note, Cordia testified that it was given for a temporary loan until he could negotiate a loan from the Federal Land Bank, and for that reason the deed of trust given to the Peoples Bank was not recorded. He further testified that the Federal Land Bank loaned him $ 5,000 which was secured by a deed of trust on the land described in the deed of trust given to secure the $ 5,000 note held by the Peoples Bank; that on August 5, 1919, he mailed the Peoples Bank a draft for $ 4771.05, the net amount of the Federal Land Bank loan; that he did so as payment on the $ 5,000 note; that he did not remember of mailing a letter with the draft; that in a few days he went to the Peoples Bank and paid the balance due on the $ 5,000 note; that he did not know said note was in existence until it was delivered to the acting trustee for foreclosure; that R. B. Jones, Cashier, was present at the time he paid said balance. The records of the Bank of Potosi showed that on August 5, 1919, it issued a draft for $ 4771.05.

Isaac E. Letcher, abstractor, Alex Cordia, brother of E. F. Cordia, and L. R. Standforth, lawyer, testified that they knew that E. F. Cordia obtained a loan from the Federal Land Bank secured by a deed of trust on the land described in the deed of trust, securing payment of the $ 5,000 note to the Peoples Bank; that at the time of the Federal Land Bank loan there was no deed of trust of record on said land; that they had no knowledge of the disposition of the proceeds of the Federal Land Bank loan and could not testify that the $ 5,000 note had been paid.

L. R. Standforth testified that he did not know what was done with the money paid to Cordia on the Federal Land Bank loan; that loans were usually made to pay off a previous indebtedness; that he did not know what loan Cordia was getting the money to pay, but he knew it was to pay a loan.

Frank Lore testified that in the latter part of 1920 he was in the Peoples Bank and heard Cordia ask Jones, cashier, "for a note that was paid -- for some kind of a note, but I don't know what kind it was. He said he would give it to him later. I did not know what they were talking about."

The testimony of Lore does not tend to show payment of the $ 5,000 note. Cordia may have asked for another note which had been paid by him. And withholding the deed of trust from the record did not aid Cordia in procuring the other loan. If said deed had been recorded, the Federal Land Bank would have used the money loaned on the land to pay the $ 5,000 note held by the Peoples Bank so that its deed of trust would be a first lien. This tends to show that it was not the intention of Cordia and cashier Jones to use the money loaned on the land by the Federal Land Bank to pay the $ 5,000 note held by the Peoples Bank. It also tends to show that Cordia and the cashier were in collusion, and that the deed was not recorded that Cordia might be able to procure another loan on the land, thereby deceiving the bank directors as to his financial condition and the condition of his indebtedness to the Peoples Bank.

The other testimony above set forth does tend to show that the Peoples Bank received the net proceeds of the Federal Land Bank loan, but it does not tend to show that same was credited on the $ 5,000 note or that the Peoples Bank was directed to do so. The only evidence tending to show payment is the uncorroborated testimony of Cordia that he paid the balance due on said note and that he did not know the note was in existence until it was delivered to the acting trustee.

On the issue of payment of the $ 3,000 note Cordia testified that on June 25, 1920, a check was drawn on the Bank of Potosi for $ 3883.83 payable to the Peoples Bank; that the name of E. F Cordia was...