Farm and Home Savings and Loan Assn. v. Stubbs

• Citation: 98 S.W.2d 320
• Decision Date: 05 October 1936
• Docket Number: No. 18187.,18187.
• Parties: FARM AND HOME SAVINGS AND LOAN ASSOCIATION, APPELLANT, v. C.G. STUBBS ET AL., RESPONDENTS.
• Court: Missouri Court of Appeals

98 S.W.2d 320

FARM AND HOME SAVINGS AND LOAN ASSOCIATION, APPELLANT, v. C.G. STUBBS ET AL., RESPONDENTS.

No. 18187.

Kansas City Court of Appeals. Missouri.

October 5, 1936.

Appeal from Circuit Court of Linn County. — Hon. Paul Van Osdol, Judge.

AFFIRMED.

Ewing, Ewing & Ewing, Randall R. Kitt and Paul D. Kitt for appellant.

Chapman & Chapman, Taylor & Taylor and G.W. Stubbs for respondent.

REYNOLDS, J.

The plaintiff is a corporation, duly organized, authorized, and existing under the laws of the State of Missouri as a building and loan association, with its home offices at Nevada, Missouri.

It appears that, on or before June 19, 1931, it was the owner of a certain promissory note in the principle sum of $5000, dated October 20, 1925, due ten years after date, executed to it by defendants C.G. Stubbs, Grace Stubbs, E.P. Stubbs, and Cora Stubbs, and that it was secured by a deed of trust of even date with the note executed by said defendants, which conveyed to Lee B. Ewing as trustee certain real estate situated in the city of Chillicothe, Livingston county, Missouri, described as follows: "Beginning 20 feet east of the northwest corner of Block 40, original survey of the town now city of Chillicothe, Missouri; thence east 20 feet; thence south 60 feet; thence west 20 feet; thence north 60 feet to the point of beginning, being a part of Lot No. 2, Block 40, original survey of said city of Chillicothe;" that said deed of trust was filed of record in the recorder's office in Livingston county on October 22, 1925, and is found recorded in book 216 at page 566 in the deed records of Livingston county, Missouri; that, on June 19, 1931, there was a balance due plaintiff on said note in the sum of $2722.05; and that, on June 25, 1931, the said note for $5000 was presented for cancellation to the recorder of Livingston county, together with a release deed from plaintiff and said note was cancelled by the recorder and notation made by him on the margin of the record of the deed of trust recorded in book 216 at page 566, releasing said deed of trust, and plaintiff's release deed was filed in said office and duly recorded.

This is a suit in equity by plaintiff to set aside and cancel the marginal release of the deed of trust and the cancellation of the note and to restore the lien of said deed of trust and adjudge it to be a superior lien to a certain deed of trust dated June 19, 1931, executed by defendants C.G. Stubbs and wife, Grace Stubbs, and E.P. Stubbs and wife, Clara Stubbs, to defendant John A. Ryan, trustee for defendant M.E. Ryan, which appears filed for record June 25, 1931, and recorded in book 240 at page 24 of the deed records of Livingston county and which appears to convey the same premises described in the deed of trust, the release of which is sought to be set aside.

It appears that plaintiff maintained an agency at Chillicothe, Missouri, on June 19, 1931, and for some years prior thereto, and that Mrs. Gladys R. McCall, the wife of one F.M. McCall, was its agent at such time; that she was assisted by her husband, F.M. McCall, in her duties as agent and in looking after plaintiff's business at Chillicothe, and by one Miss Lorna Coult (now Mrs. Foster but hereinafter, for convenience, referred to as Miss Coult) whom she employed; that the business of this agency was conducted in an office in the city of Chillicothe known as the office of plaintiff, over the door of which appeared the sign, "Farm & Home Savings & Loan Association," and was in charge of Mrs. McCall, her husband, and Miss Lorna Coult.

There is evidence in the record showing the following facts: Prior to June 19, 1931, G.C. Carnahan, who was representing E.P. Stubbs and C.G. Stubbs and their wives, defendants herein, advised F.M. McCall, one of the agents of plaintiff at Chillicothe, that E.P. Stubbs and C.G. Stubbs desired to take up the note held by plaintiff and secured by a deed of trust on land described in plaintiff's petition and requested Mr. McCall to ascertain for him the amount necessary to discharge the note and further requested him to get the papers of record necessary to be had to procure the release of the deed of trust securing the same. On June 19, 1931, some time before noon. Mr. McCall called the home office of plaintiff at Nevada and advised Mr. Carter, the secretary of plaintiff, that the said Stubbs wished to take up their note and asked for information as to the amount necessary for its payment. Some time before noon on June 19, 1931 (the same being Friday). Mr. McCall was advised by telegram from the home office of plaintiff of the amount necessary to retire the Stubbs' note; and this information was given to Mr. Carnahan before noon of the same day. On the afternoon of June 19, 1931, about 1:45 P.M., Mr. Carnahan went to the office, known as the office of plaintiff, which was in charge of F.M. McCall, Gladys R. McCall, and Lorna Coult, and there delivered to Miss Coult, who was then in charge of said office, two checks (one for $606.20, payable to plaintiff, signed by E.P. Stubbs; and the other for $2118.85, payable to plaintiff, signed by Ryan & Carnahan), both drawn on the First National Bank of Chillicothe, Missouri, totaling the amount due on the note together with the charges attending its cancellation of record. Miss Coult had the telegram to Mr. McCall giving the amount necessary for the payment of the note and upon the receipt of the checks, gave Mr. Carnahan a receipt which read as follows:

                "$2722.02         6-19    1931
                

"Received of E.P. & C.G. Stubbs "Two Thousand Seven Hundred & Twenty Two and no/100 ____ Dollars

                "Full paym't in      Farm & Home
                "Paying off loan.     By L. Coult"
                

The evidence in the record further tends to show the following: The next day (Saturday) the checks were endorsed by Miss Coult with the rubber stamps used by the agency and, about 11:30 A.M. were deposited by her in the Citizens National Bank of Chillicothe in an account which was carried in the name of Farm & Home Savings & Loan Association, by G. Watts — Agent. The endorsement on each of the checks was as follows: "Pay to order of Citizens National Bank, Chillicothe, Missouri, Farm & Home Savings & Loan Ass'n, F.M. & G.R. McCall, Dis. Agents." Miss Coult usually attended to the actual endorsement of checks and to the making of deposits in the bank. On some days she made two deposits and on other days one only. These checks, given and delivered as above stated, were not presented to the First National Bank of Chillicothe, Missouri, on June 19 or 20, 1931; and had they been presented by plaintiff or its agents on either of said dates, they would have been paid by it. The makers of both checks had sufficient money on deposit in said drawee bank or credit with it that, had said checks been presented, they would have been paid. Such drawee bank paid all checks presented to it on June 19 and 20, 1931. On Monday, June 22, 1931, such bank did not open for business, but remained closed on account of insolvency; and said checks were never actually presented to it for payment.

The evidence further tends to show that, when F.M. McCall called plaintiff's office in Nevada, his wife, Mrs. Gladys R. McCall, was in Nevada and Mr. Carter, plaintiff's secretary at that time, delivered to her the Stubbs' note and mortgage to be paid, together with a deed of release, to be brought by her to Chillicothe and delivered to defendants Stubbs or their agent, Mr. Carnahan; that Mrs. McCall did bring the note and release to Chillicothe and, on Saturday afternoon, June 20, 1931, they were delivered to Mr. Carnahan; that the First National Bank and its assets were taken over on June 22, 1931, by the Comptroller of the Currency of the United States for the purposes of liquidation and have since been in his hands in the process of liquidation; that common creditors and depositors have been paid dividends of 16% on the amount of their deposits and common creditors would not be paid in full and would suffer a loss on their deposits in said bank; that, from 1922 to 1930, the plaintiff's district agents at Chillicothe, who preceded Mrs. McCall as district agents, were J.M. Phelps and W.Y. Griffiths and later her husband assumed and performed the duties of agent along with her; that all of these persons were known as district agents and sold the stock of plaintiff, took applications for loans, collected monthly payments on stocks and monthly payments of interest and principal on loans, received payment of loans that were paid off, handled the making of loans after their approval, collected rents, and looked after the renting of houses and property in Chillicothe owned by plaintiff; that they had certain subagents who sold stock, over whom they had supervision; and that there were over 325 persons making monthly payments on loans and on stock purchased of plaintiff through the Chillicothe district agency and also about 30 persons paying rent to plaintiff's agents in Chillicothe in June, 1931.

The evidence tends to show that, when J.M. Phelps was district agent of plaintiff at Chillicothe, he had assisting him in his work. Several persons, including Miss Nylene Morris and Miss Edith Holmes, and that each of them received many checks in payment of monthly dues on stock and loans, payable to plaintiff, and that they or any of them or others in the office would endorse these checks in the name of plaintiff and deposit them in some bank in Chillicothe to the credit of plaintiff; that, while Mr. Phelps was agent, he had a large sign on his window, "Farm & Home Savings & Loan Association of Missouri, Nevada, Missouri;" that, when Miss Holmes received checks payable to plaintiff, she would endorse passbooks in her own name; that, during the time W.Y. Griffiths was district agent, Miss Leona Darr and Miss Edith Holmes were in his employ and assisted him in the agency work for plaintiff and received many checks payable to plaintiff in payment of...