Hunleth v. Leahy

• Decision Date: 06 December 1898
• Citation: 48 S.W. 459,146 Mo. 408
• Parties: Hunleth v. Leahy et al., Appellants
• Court: Missouri Supreme Court

48 S.W. 459

146 Mo. 408

Hunleth v. Leahy et al., Appellants

Supreme Court of Missouri, Second Division

December 6, 1898

Appeal from St. Louis City Circuit Court. -- Hon. Jacob Klein Judge.

Affirmed.

L Frank Ottofy and John P. Leahy for appellants.

(1) The rule or principle applicable to a negotiable promissory note acquired after maturity, viz., that the indorsee takes it subject only to such equities as are connected with its inception, has no application in this case. The plaintiff received the note after maturity; it had then been paid and extinguished, and was dead paper as to the defendants. Henner, from whom he acquired it, could reissue it only as against himself, or the firm which had paid for it. The plaintiff secured no better title than Henner then had, as against the defendants. Kellogg v. Schnaake, 56 Mo 136; Swope v. Leffingwell, 4 Mo.App. 538; Allen v. McDermott, 80 Mo. 59; Ashbrook v. Letcher, 41 Mo.App. 372; Sater v. Hunt, 66 Mo.App. 527; Henley v. Holzer, 19 Mo.App. 245; Murphy v. Simpson, 42 Mo.App. 654; Turner v. Hoyle, 95 Mo. 345; Ford v. Phillips, 83 Mo. 523; Julian v. Calkins, 85 Mo. 202; Payne v. First Nat'l Bank, 43 Mo.App. 377; Kelly v. Staed, 136 Mo. 438. (2) When either of the Henner firm acquired the note, which they were in duty bound to pay, the legal and equitable title to the property was merged in them, and the note thus extinguished. 15 Am. and Eng. Ency. of Law, 321; Atkinson v. Angert, 46 Mo. 518; Jones on Mortg. [3 Ed.], sec. 865; Sater v. Hunt, 66 Mo.App. 527; Nelson v. Brown, 140 Mo. 580; Collins v. Stocking, 98 Mo. 290; Thompson v. Holden, 117 Mo. 118; Evans v. Gibson, 29 Mo. 223; Shaw v. Shaw, 86 Mo. 594; Freeman v. Moffitt, 119 Mo. 280. (3) The Storm contract, or paper, was in admissible in evidence: First. Because it was never delivered. Second. Because it purports to be executed by Padersky, under seal, and is not signed by him. Third. Because he never authorized its execution in his behalf, nor ratified it. Fourth. Because the evidence shows Henner wanted it only to show his creditors. Indeed, there would have been nothing in this record concerning it, had not counsel for plaintiff advised the court he would himself offer it in evidence, which, however, he studiously avoided. Schuetze v. Bailey, 40 Mo. 69; Story on Agency, sec. 148; Mantz v. Maguire, 52 Mo.App. 49.

John A. Gilliam and John W. Drabelle for respondent.

(1) Appellant, David P. Leahy, absolutely failed to follow his pleadings, to prove or offer in evidence the written contract pleaded by him, and repudiated and abandoned his pleadings at the trial, and therefore absolutely failed in his defense. Wright v. Mfg. Co., 42 S.W. 789; Tracy v. Union Iron Works Co., 104 Mo. 193; Miller v. Municipal E. L. & P. Co., 133 Mo. 205; State ex. rel. v. Hoshaw, 98 Mo. 358; Hyde v. Hazel, 43 Mo.App. 668; Greenleaf on Evid. [Lewis Ed.], secs. 50-51; Haynes v. Christian, 30 Mo.App. 203; State v. Jackson, 95 Mo. 649; Iron Mountain Bank v. Murdock, 62 Mo. 70. (2) The obligation of Jacob F. Storm by Emil Henner, his agent, could not be held an obligation by George E. Henner. A party must abide by the security he takes. If he takes the obligation of one man he can not claim it to be the obligation of another. Farmers Bank v. Bayliss, 41 Mo. 274; Farmers Bank v. Bayliss, 35 Mo. 428; Sparks v. The Dispatch Transfer Co., 104 Mo. 531; Kelly v. Thuey, 102 Mo. 522. (3) The Union Trust Company held this note as collateral from George E. Henner, and obtained it before it was due. Leahy's pleadings show these facts. Hunleth bought it from them, and on this phase of the case, they being holders before maturity, he obtained an unimpeachable title. Deere v. Marsden, 88 Mo. 512; Logan v. Smith, 62 Mo. 455; Merchants' Nat. Bank v. Abernathy, 32 Mo.App. 211; Fitzgerald v. Barker, 96 Mo. 661; Daniel on Neg. Inst. [4 Ed.], sec. 803. (4) Respondent took this negotiable note subject only to equities inherent in the note itself, and free from set-off or counterclaim, and is not subject to equities or defenses which grow out of distinct and independent transactions. Cutler v. Cook, 77 Mo. 388; Barnes v. McMullins, 78 Mo. 260; Haeussler v. Greene, 8 Mo.App. 451; Grier v. Hinman, 9 Mo.App. 213; Knaus v. Givens, 110 Mo. 58; Kelly v. Staed, 136 Mo. 430; Loewen v. Forsee, 137 Mo. 29; Arnot v. Woodburn, 35 Mo. 99; Mattoon v. McDonald, 34 Mo. 138; Gullett v. Hoy, 15 Mo. 399; Burrough v. Moss, 10 Barn. & Cress. 558; Whitehead v. Walker, 10 Mee. & W. 698.

Gantt, P. J. Sherwood and Burgess, JJ., concur.

OPINION

Gantt, P. J.

This is an action on a negotiable promissory note, executed and delivered by the defendants, David P. Leahy and Charles Padersky, to Mrs. Anna Davis and secured by a deed of trust on certain real estate known as the Ramona Park Place tract, duly recorded. It was indorsed by Mrs. Davis and became the property of Alonzo F. Davis and was by him indorsed to George E. Henner, and by George E. Henner it was hypothecated with the Union Trust Company before its maturity for $ 4,200. Not having been paid at maturity the Union Trust Company caused it to be protested for non-payment. Subsequent to the protest, the plaintiff, Hunleth, paid the trust company $ 4,200 for its interest and traded George E. Henner plaintiff's equity in some real estate in the city of St. Louis, for his equity in the note. In this action the makers of the note make no claim that they had any defense to the note in the hands of Mrs. Anna Davis, or Alonzo Davis or the trust company. It is also admitted that the Union Trust Company caused the real estate, covered by the deed of trust given by defendants to secure this note, to be sold and realized $ 4,504, which sum was credited on the note and this suit is for the balance.

Defendants filed separate answers. Padersky denied the note was indorsed to plaintiff for value and then pleaded this special defense:

"Defendant admits the execution of said note, as alleged in said petition; admits that there is a credit of $ 4,504 on said note, the result of a sale of real estate by which said note was secured. Defendant states that, on or about October 8, 1892, for a valuable consideration received from defendants, David P. Leahy and Charles Padersky, Jacob F. Storm and Emile Henner his agent, contracted and agreed with defendants to pay up and cancel said note at its maturity; that in pursuance of said agreement, and after the maturity of said note, said Emile Henner fully paid and took up said note, that said Emile Henner, after he had fully paid and taken up said note, and after its maturity, indorsed and delivered said note to plaintiff, and that plaintiff took said note, after its maturity, from said Emile Henner, with full knowledge that the same had been fully paid by said Henner, in pursuance of his agreement made with defendants, and plaintiff paid no value for said note. Wherefore defendant says plaintiff is entitled to no recovery against him, and he asks to be hence discharged with his costs."

Defendant Leahy first denied every allegation in the petition and then for further defense pleaded: "That the note herein sued upon by plaintiff has been fully paid and satisfied when it came into the possession of plaintiff; that on or about the ninth day of August, 1892, the defendants acquired of one Anna S. Davis, by warranty deed in due form, a tract or parcel of ground situated in the county of St. Louis and State of Missouri, and known as Ramona Park Place, which said deed is of record in the recorder's office of said county, in book 59, at page 621; that as a part consideration of said tract or parcel of ground, these defendants executed to said Anna S. Davis the note herein sued upon, secured by a deed of trust of even date upon said property, which was duly recorded in the office of the recorder of deeds of said county, in book 59, at page 621; that thereafter, on or about the eighth day of October, 1892 the defendants bargained and sold said property to Emile E. Henner, George E. Henner, and Charles Sutter, composing the firm of Henner Bros. & Co., the same being conveyed to them by defendants by warranty deed, dated October 15, 1892, in the name of said Charles Sutter, one of said firm, said deed being of record in the office of the recorder of deeds, of St. Louis county, Missouri, in book 63, page 314; that it was the custom of said firm, owing to its impending financial straits, to purchase real property in the individual names of its partners, and in that of strangers, or "straw men;" that at the time said firm so purchased said property, one of its members, to wit, Emile E. Henner, acting for said firm, and in the name of one Jacob F. Storm, a nominal party, having no interest in the transaction, agreed by a written obligation, dated the eighth day of October, 1892, to assume the payment of the note herein sued upon as a part consideration for the purchase of said property which was conveyed to said Sutter, as aforesaid, subject to said deed of trust and note; that thereafter, to wit, on the day of October, 1892, the said firm of Henner Bros. & Co. was dissolved, and the said George E. Henner and Emile E. Henner succeeded thereto, under the firm name and style of Henner Brothers, and assumed all the obligations of said firm of Henner Bros. & Co.; that thereafter, to wit, on the nineteenth day of February, 1894, the said firm of Henner Bros., by one of its members, viz., George E. Henner, purchased from Alonzo F. Davis the note herein sued upon, and thereby acquired and became the owner of the equity of redemption therein and thereby satisfied and paid the same pursuant to its obligation to do so as aforesaid; that thereafter, to wit, on or about the twenty-third day of February, 1894, the said firm of Henner Bros.,...