Henderson v. Tolman

• Decision Date: 06 April 1908
• Citation: 109 S.W. 76,130 Mo. App. 498
• Parties: HENDERSON v. TOLMAN et al.
• Court: Missouri Court of Appeals

109 S.W. 76

130 Mo. App. 498

HENDERSON v. TOLMAN et al.

Kansas City Court of Appeals. Missouri.

April 6, 1908.

1. CHATTEL MORTGAGES—ASSIGNMENTS — ASSIGNMENT OF WAGES—SECURITY FOR DEBT.

An assignment of wages to secure money borrowed is in the nature of a chattel mortgage.

2. USURY—SECURITY FOR USURIOUS INTEREST — VALIDITY.

Under Rev. St. 1899, § 3710 (Ann. St. 1906, p. 2078), providing that proof that a person claiming a lien on personal property has received usurious interest on the indebtedness will render the lien illegal, an assignment which is in the nature of a chattel mortgage made to secure usurious interest is invalid.

3. CANCELLATION OF INSTRUMENTS—NECESSITY FOR PAYMENT OF SUM BORROWED.

An assignment of wages in the nature of a chattel mortgage to secure a loan, which is illegal and void because securing usurious interest, may be canceled in an equitable action without a tender of payment of the original sum borrowed.

Appeal from Circuit Court, Buchanan County; C. A. Mosman, Judge.

Action by David J. Henderson against D. H. Tolman and others to cancel an assignment of wages. Judgment for plaintiff on demurrer to petition, and defendants appeal. Affirmed.

W. B. Brown and Culver & Phillip, for appellants. James Moran, for respondent.

ELLISON, J.

This is a proceeding in equity to set aside and cancel a certain assignment of plaintiff's wages earned and to be earned from the Chicago, Burlington & Quincy Railway Company. Defendant demurred to the petition, which being overruled by the trial court, he has brought the case here.

The assignment by plaintiff of his wages was to secure money borrowed by him of defendant, and should be regarded as in the nature of a chattel mortgage. The allegations of the petition show that it was executed to secure a loan of $36 loaned at an exorbitant and usurious rate of interest theretofore paid and to be continuously paid. It is further alleged that defendants notified plaintiff's employer, the railway company, of such assignment, and warned such company not to pay plaintiff his wages, but that it should recognize and honor the assignment; that said assignment was being used thus to harass and annoy him. The prayer is that the assignment be canceled and set aside, and that defendants be compelled to desist attempting to collect his wages under the assignment. An assignment which is in the nature of a chattel mortgage made to secure usurious interest is "invalid and illegal." Section 3710, Rev. St. 1899 (Ann. St. 1906, p. 2078). Therefore the instrument described in the petition must be considered to be illegal, and consequently its use in diverting plaintiff's wages was an illegal use.

But the contention of defendant is that before plaintiff can have equity grant him the relief he seeks he must pay the original sum borrowed. We do not think...