Johnson v. Grayson

Decision Date19 July 1910
Citation130 S.W. 673,230 Mo. 380
PartiesJAMES B. JOHNSON, Appellant, v. LUCY H. GRAYSON
CourtMissouri Supreme Court

Appeal from St. Louis City Circuit Court. -- Hon. Warwick Hough Judge.


Chester H. Krum and Geo. B. Webster for appellant.

(1) The peremptory instruction for the plaintiff was properly given. (a) Excluding the testimony of Johnson, he was still entitled to recover upon the defendant's own evidence. Delivery is presumed from possession of a note. Pitts v Sheriff, 108 Mo. 110; Tapley v. Hermann, 95 Mo.App. 537. The law presumes a consideration. R. S. 1899 sec. 894; Bogie v. Nolan, 96 Mo. 85. The testimony proved the title in the plaintiff. The evidence given by Greenwood disproved the defense that the note sued on was without consideration, fraudulently obtained and improperly put in circulation. It showed that the note was given as part payment of the purchase price of real estate, and properly delivered and applied to the purpose for which it was intended. School Dist. v. Stocking, 138 Mo. 672; Fogg v. School Dist., 75 Mo.App. 159. The defendant's own testimony wiped out the so-called defense that she "signed it inadvertently and without intending to bind herself," and closed up her remaining avenues of escape. She admitted her signature and said she had no recollection of the circumstances under which she signed the note. Campbell v. Van Houten, 44 Mo.App. 231; Girard v. Car Wheel Co., 46 Mo.App. 79. She was estopped by her execution and acknowledgment of the deed of trust in evidence to deny the consideration, original validity and legal delivery of the note. Dawson v. Wombles, 123 Mo.App. 340. All the essential elements of the plaintiff's right to recover appear from the above, and the defendant having failed to sustain the burden of proving usury, past due indebtedness as a consideration of the collateral note given by Warner, and payment of Warner's debt, the plaintiff was entitled to recover, and the peremptory instruction was correct. Dawson v. Wombles, 123 Mo.App. 340. (b) There was no error in not submitting Johnson's testimony to the jury. It was not contradicted on any material point, nor was it at variance with the physical facts; neither was his credibility questioned. In such circumstances the jury is bound by the testimony and cannot reject it. Kavanaugh v. Wilson, 70 N.Y. 179; Engmann v. Immel, 59 Wis. 249; Evans v. George, 80 Ill. 53; Denton v. Carroll, 40 N.Y.S. 19; Littlefield v. Lawrence, 83 N.Y.S. 25; Boylan v. Meeker, 28 N. J. L. 274. Requiring plaintiff to prove facts which the law presumes from the existence of other facts shown in evidence, casts upon him a burden he is not required to bear and is therefore erroneous. Dawson v. Wombles, 123 Mo.App. 345. (2) There was no usury in the transactions between Johnson and Warner. When Warner, on March 16, 1893, got from Johnson the further sum of $ 1000, received back his $ 2000 note cancelled, and gave a new note for $ 3000 without deduction, a new contract was created which purged any usury. There was no evidence that there was any charge for this or any subsequent transaction, and it is under this that the plaintiff claims title to the note sued on. Chadbourn v. Watts, 10 Mass. 121; McClure v. Williams, 7 Vt. 210; Smith v. Young, 11 Bush. 393; Gerlaugh v. Bassett, 20 Wis. 671; Bank v. Ayers, 7 N. J. L. 130; Bailey v. Lumpkin, 1 Ga. 392; Clark v. Phelps, 6 Met. (Mass.) 296; Hoyt v. Bridgewater Co., 6 N.J.Eq. 253. If the execution of a new note for a different amount was not the execution of a new contract, then the note of $ 2300, under which Johnson acquired the $ 4900 note, was but the continuation and renewal of the original transaction. The defendant failed to show any other charge of commission or interest than the original one of $ 100. The total interest at eight per cent per annum on the several amounts which Warner borrowed, for the time he had them, is $ 126.32. There is no usury in this. R. S. 1899, sec. 3706. The statute only affects the lien under which the alleged usurer claims, not the title into which it subsequently ripens. The plaintiff is not within the purview of the statute as he is not a "person holding or claiming to hold a lien." R. S. 1899, sec. 3710; Knight v. Putnam, 3 Pick. 184. The defendant's construction would destroy the title of every innocent purchaser at a pledgee's sale, where there had been usury in the loan, and make the statute violative of both the State and Federal Constitutions. To escape this it is necessary to construe the statute as applicable only to direct and not collateral attacks upon the pledge or mortgage, and this is a collateral attack. (3) Even though there was usury, it was practiced upon Warner, and did not affect this defendant. She cannot plead it as a defense when sued upon another and different note, as to which there is no claim or pretense of usury. Hill v. Taylor, 125 Mo. 331; Zellner v. Mobley, 84 Ga. 746; Cody v. Goodnow, 49 Vt. 400; Littel v. Hord, Hardin (Ky.) 81; Stevens v. Reeves, 33 N.J.Eq. 427; Kendall v. Vanderlip, 2 Mackey 105; Clapp v. Hanson, 15 Me. 345; Knight v. Jutnam, 3 Pick. 184; Cutcheon v. Coleman, 13 Ind. 568; Biedler v. Malcolm, 105 N.Y.S. 642; Cook v. Dyer, 3 Ala. 643; Davis v. Tandy, 107 Mo.App. 442. And this is so where plaintiff acquired title to the collateral under a usurious transaction in the face of a statute more forceful than sec. 3710, R. S. 1899. Zellner v. Mobley, 84 Ga. 746.

Boyle & Priest and Guy A. Thompson for respondent.

(1) Plaintiff was not a bona fide holder of said note, but acquired it as collateral security for a usurious loan to Warner, the payee, and under the statute the pledge was void ab initio, and plaintiff could not enforce it, neither could he acquire any rights under it. R. S. 1899, sec. 3710; Keim v. Vette, 167 Mo. 389; Davis v. Tandy, 107 Mo.App. 442; Osborn v. Payne, 111 Mo.App. 29; Weimer v. Shelton, 7 Mo. 237; Adler v. Coyle, 155 Mo. 155; Kreitbohn v. Yancey, 154 Mo. 67; Coleman v. White, 158 Mo. 253; Bank v. Donnell, 172 Mo. 384; Saylor v. Daniels, 37 Ill. 331; Cumberland Co. v. City, 127 F. 187; Jones on Pledges & Coll. Secy., sec. 938; Colebrooke on Coll. Secys., sec. 134, et seq.; Gaithels v. Bank, 1 Peters 37; Daniels, Neg. Instr. (4 Ed.), sec. 175, p. 192, sec. 751. (2) The court erred in giving the jury a peremptory instruction to find for the plaintiff for the full amount of the note with interest, because (a) the defendant was entitled to have the jury pass upon the facts in issue. Gannon v. Gas Light Co., 145 Mo. 502; Seehorn v. Bank, 148 Mo. 256; Wolff v. Campbell, 110 Mo. 114; Hahn v. Bradley, 92 Mo.App. 399; Hugemier v. Hines, 97 Mo.App. 346. (b) Under the evidence it was for the jury to say whether Johnson, when he took the note from Warner, knew the circumstances under which it was executed by defendant, and that she received no consideration therefor. Hahn v. Bradley, 92 Mo.App. 399; Wilson v. Riddler, 92 Mo.App. 335; Leavitt v. Taylor, 163 Mo. 158; Brown v. Hoffelmeyer, 74 Mo.App. 385. (c) Under the evidence it was for the jury to say whether Johnson had taken the note as collateral to secure antecedent indebtedness. See authorities above. (d) Under the evidence it was for the jury to say whether Johnson had sold this note as collateral and himself purchased it. Same authorities. (e) Even though Johnson did not know that the note was without consideration as to the defendant, yet inasmuch as it was, and Johnson held it merely as collateral, he could not recover more than the debt it secured. Grant v. Kidwell, 30 Mo. 455; Brown v. Calloway, 41 Ark. 418; Bell v. Bean, 75 Cal. 86; Hatcher v. Bank, 79 Ga. 547; Bank v. Butner, 60 Ga. 654; Valius v. Bank, 21 Ill.App. 126; Volette v. Mason, 1 Ind. 288; Bank v. Blevin, 46 Kan. 536; Lacroix v. Dubigny, 18 La. 27; Fischer v. Fischer, 98 Mass. 303; Trust Co. v. Bldg. Co., 166 Mass. 42; Rocher v. Ladd, 1 Allen 442; Bank v. Cannon, 46 Minn. 95; Haas v. Bank, 41 Neb. 754; Bank v. Roberts, 45 Wis. 373; Allaire v. Hartshorn, 21 N. J. L. 665; Morton v. Railroad, 79 Ala. 621; Bank v. Hemingway, 34 Oh. St. 393; Mayo v. Moore, 28 Ill. 428; Easter v. Minard, 26 Ill. 494; Gardner v. Maxwell, 27 La. 561; Bond v. Fitzpatrick, 4 Gray 934; Barmby v. Wolfe, 44 Neb. 77; Hayden v. Nicolette, 18 Nev. 290; Kelly v. Ferguson, 46 How. Pr., sec. 411; Bank v. Kingland, 5 N.D. 263; 1 Daniels, Neg. Instr., sec. 832 a; Jones on Pledges and Coll. Secy., sec. 675; 22 Am. and Eng. Ency. Law, 899. (f) Even though Johnson did not know the circumstances under which the defendant executed the note, yet if the defendant should be considered an accommodation maker thereof, still Johnson could not recover more than the debt the note was given to secure. Stoddard v. Kimball, 6 Cush. 469; Allaire v. Hartshorn, 21 N. J. L. 665; Duncan v. Gilbert, 29 N. J. L. 526; Bank v. Doyle, 9 R. I. 76; Maitland v. Bank, 41 Md. 540; Handy v. Sibley, 46 Oh. St. 9; Fischer v. Fischer, 98 Mass. 303; Williams v. Smith, 2 Hill 301; Bank v. Werst, 52 Ia. 685; Forestall v. Fuessel, 50 La. 249; Handy v. Hawkins, 141 Ill. 572; Jones on Pledges and Coll. Secy., secs. 673, 676; 1 Am. and Eng. Ency. Law, 369; Daniels, Neg. Instr., sec. 832 a.



This is a suit on a note for $ 4900, payable on or before two years after date to the order of Edward S. Warner, dated September 15, 1892, with interest at eight per cent from maturity, and signed by Robert K. Woods and Lucy H. Woods, brought by the plaintiff, who claims Warner pledged the note to him on August 19, 1893, as collateral security for the payment of note of that date for $ 2300 made by Warner to plaintiff as payee.

The trial court gave a peremptory instruction to the jury to find for plaintiff, and they, after some reluctance, returned a...

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