Gorin Sav. Bank v. Early

• Decision Date: 07 April 1924
• Docket Number: No. 14984.,14984.
• Citation: 260 S.W. 480
• Parties: GORIN SAV. BANK v. EARLY.
• Court: Missouri Court of Appeals

260 S.W. 480

GORIN SAV. BANK v. EARLY.

No. 14984.

Kansas City Court of Appeals, Missouri.

April 7, 1924.

Appeal from Circuit Court, Adair County; James A. Cooley, Judge.

"Not to be officially published."

Action by the Gorin Savings Bank against Henry Early. Judgment for plaintiff, and defendant appeals. Reversed and remanded.

Stewart, Frank & Stewart of Edina, for appellant.

Campbell & Ellison, of Kirksville, and, James C. Dorian, of Edina, for respondent.

TRIMBLE, P. J.

This is a controversy, between two creditors of one Mason Smith, over the proceeds of a sale of some of Smith's mortgaged personalty, which sale is charged to have been made by Smith without plaintiff's knowledge or consent and the proceeds received by defendant with notice and actual knowledge of plaintiff's mortgage lien.

Plaintiff held a chattel mortgage on personalty belonging to Smith and securing Smith's note to plaintiff for $2,000. Defendant Early held a deed of trust on Smith's farm for $16,500. A second deed of trust on Smith's farm secured a note for $2,300 held by some one not a party to this controversy, and the plaintiff held a third deed of trust on Smith's farm, securing a note for $3,000. Plaintiff's chattel mortgage was given May 26, 1922. At this time the interest on Smith's notes to the bank and on Early's deed of trust were due and unpaid. Plaintiff's chattel mortgage was duly and properly recorded. In February, 1923, Smith sold 40 head of hogs included in the personalty covered by the bank's chattel mortgage, and turned the proceeds over to Early to apply on Smith's interest on the debt secured by Early's deed of trust. It is agreed that the proceeds amounted to $717, and it is conceded that Early had actual knowledge of the chattel mortgage.

The answer of defendant admitted the execution and existence of the chattel mortgage, but set up as a defense "that after the execution and delivery of the chattel mortgage it was agreed between plaintiff and Smith that the latter should have the privilege of selling the property mortgaged and applying the proceeds to the payment of the interest on defendant's deed of trust, and that in accordance with such permission Smith "did sell said hogs and pay the proceeds of said sale to the defendant" to be applied on the interest due on the indebtedness secured by defendant's deed of trust. The reply denied that there was any permission to sell.

It was further agreed and admitted at the trial that on March 5, 1923, defendant's deed of trust on Smith's farm was foreclosed, the farm bringing at trustee's sale the sum of $20,000, and that on March 16, 1923, plaintiff's chattel mortgage on the remainder of the chattels was foreclosed, but lacked considerably more than the amount of the proceeds of the sale of the hogs to pay plaintiff's chattel mortgage note. It seems that the foreclosure of the defendant's deed of trust brought more than enough to pay defendant's debt in full and almost enough, but not quite, to pay the second deed of trust. However, this last-mentioned statement is not made because it is deemed to have any particular bearing upon the result of the case, but merely to show the relative situation of the parties, and it discloses that Smith was insolvent at the time of the alleged unauthorized sale.

At the conclusion of the evidence the court instructed the jury to find for plaintiff in the sum of $717 with interest at the rate of 6 per cent. from date of demand, if they, found that demand was made before the institution of the suit.

There was no error in excluding the evidence offered by defendant as to a conversation he had with Smith which was not within the presence or the hearing of the plaintiff bank or of any of its officers. Such evidence was clearly inadmissible, not being in any manner binding upon plaintiff, and was hearsay as to it. Zaring v. Bauman (Mo. App.) 223 S. W. 947; Vermillion v. Parsons, 107 Mo. App. 192, 80 S. W. 916.

Smith, who was a witness for defendant, in answer to a question whether, after the mortgage was executed, anything was said between him and the bank about permission to sell the property to pay interest, replied: "A. Yes; they gave me permission." This answer was objected to as a conclusion, and the objection was sustained. There was no error in this. The witness' province was to state facts and allow the jury to draw conclusions. The court ruled that the witness should "state what was said and done," and this ruling was proper. Wigginton v. Rule, 275 Mo. 412, 449, 205 S. W. 168.

The court excluded an offer of testimony on the part of witness and mortgagor Smith that, "on the day the chattel mortgage in question was executed and prior to the execution of the chattel mortgage in question," the officers of the plaintiff bank told Smith he could sell enough of the property included in the chattel mortgage to pay interest on the first deed of trust, and promised him he could dispose of the property during the life of the chattel mortgage, if necessary, to pay the interest on the first deed of trust. This was objected to, and the objection was sustained. The offer was clearly as to a parol agreement entered into before the execution of the chattel mortgage, and to have admitted the evidence would have violated the rule against varying the terms of a written instrument by prior or contemporaneous parol evidence. New England Loan Trust Co. v. Workman, 71 Mo. App. 275, 279; Tuggles v. Callison, 143 Mo. 527, 45 S. W. 291.

It is urged that defendant's demurrer to the evidence should have been sustained. The theory of this objection is that this is a suit in conversion, and since such an action is for a specific chattel, and requires an identification of the specific thing sued for, the action will not lie. The case of Anderson Electric Car Co. v. Savings Trust Company, 201 Mo. App. 400, 212 S.. W. 60, is cited as a case parallel to and identical with this one. We do not think so. In that case, each of the three counts of the petition declared on a particular check alleged to belong to the plaintiff, but which, coming into the possession of the defendant, was converted by it to its own use by paying it to some one else who, on the face of the check, was not entitled to it.

In the case at bar, no reference is made to any check or specific chattel sought to be recovered. The petition alleges plaintiff had a chattel mortgage on certain property; that the mortgagor sold the same without the knowledge or consent of the mortgagee and paid the proceeds to defendant, who received them with full and complete knowledge of plaintiff's chattel mortgage and refused to pay them over to plaintiff upon demand. The answer admitted that defendant received the proceeds, and on the trial it was admitted and agreed that hogs included in the chattel mortgage "were sold and the money paid to Mr. Early."

It is manifest, therefore, that there was no issue in the trial court over the fact that defendant received the money from the sale of the hogs, and there is nothing in the pleadings to indicate any attempt to recover a specific chattel, nor is the cause of...