Keim v. Vette

• Decision Date: 25 February 1902
• Citation: 67 S.W. 223,167 Mo. 389
• Court: Missouri Supreme Court
• Parties: KEIM v. VETTE.<SMALL><SUP>†</SUP></SMALL>

67 S.W. 223

167 Mo. 389

KEIM v.VETTE.^†

Supreme Court of Missouri, Division No. 2.

February 25, 1902.

REPLEVIN — AFFIDAVIT — PETITION — USURY — PLEDGE.

1. Affidavit appended to petition in replevin stating that all the matters and things in the petition are true, will be treated as containing the statement in the petition.

2. Affidavit not being necessary for maintenance of replevin, but merely to prevent retention of property by defendant by giving bond, its insufficiency is not ground for not admitting evidence under the petition.

3. The owner of notes which one has obtained by fraud and pledged as security for a usurious loan can raise the point of usury, under Rev. St. 1899, § 3710, making a pledge based on usury "invalid and illegal."

Appeal from St. Louis circuit court; H. D. Wood, Judge.

Action by Philip Keim against John H. Vette.Judgment for plaintiff, and defendant appeals.Affirmed.

Collins, Jamison & Chappell, for appellant.Carl Otto, for respondent.

GANTT, J.

The facts over which this litigation arose are few and simple.Philip Keim, a citizen of St. Louis, a butcher by trade, in December, 1895, bought for full value, before maturity, one principal negotiable promissory note for $7,000 and ten interest notes for $210 each, all executed by the J. W. Stewart Real Estate Company, bearing date October 11, 1895, and payable to the order of Charles Kuhn, and by him indorsed in blank, and received the same into his possession from Kuhn.These notes were secured by a first lien on three brick houses in the city, and were worth their face and interest.Afterwards, when one of the interest notes fell due, Keim, who kept the notes and deed of trust in a wrapper, took them all together to collect the interest, as instructed by Kuhn, to Kuhn's real estate office, and, having a number of purchases to make, and having known Kuhn for some three years, and having confidence in him, said to Kuhn, "I will leave these papers here till to-morrow," and Kuhn said, "All right; I will give you a receipt for them," and thereupon wrote and handed this receipt: "St. Louis, 4-14-96.Received of Philip Keim one deed of trust for seven thousand dollars, and nine interest notes, each $210.Charles Kuhn."Kuhn then, in Keim's presence, put the bundle of papers in his office safe.Keim called the next day for his papers, and was informed Kuhn was temporarily out of the city.He went three times, and about that time it was noised abroad that Kuhn had decamped, and thereupon he brought replevin for said papers, making Kuhn and John H. Vette, defendants.An order of delivery was made, and the sheriff took said notes from defendant Vette.Kuhn was served by leaving a copy of the writ at the usual place of abode of said Kuhn with a member of his family over the age of 15 years, said Kuhn being the last defendant served.Kuhn has never since returned to the state.The petition, after stating the ownership by plaintiff of the notes, and a specific description of them; that they were secured by deed of trust, and describing the mortgaged property; that plaintiff was entitled to the possession of the notes; that they were of the value of $7,000, and were wrongfully detained by defendants Vette and Kuhn; that they had not been seized under any process, execution, or attachment against the property of plaintiff; that his cause of action had accrued within one year prior to the commencement of the suit, and he was in danger of losing his said property unless it was taken out of the possession of the defendants, — plaintiff prayed judgment.

To the petition was appended this affidavit:

"State of Missouri, City of St. Louis — ss.: Philip Keim, above named, being duly sworn, on his oath says that all the matters and things, and each of them, set forth in the foregoing statement, are true.Philip Keim.

"Subscribed and sworn to before me this 27th day of April, 1896.My term expires June 28th, 1897.Enrique Parmer, Notary Public, St. Louis, Mo.[Seal.]"

Kuhn made default.Vette's answer, omitting caption, was as follows: "Comes now the above defendant, and admits that at the time of the institution of this suit he was in possession of the notes and deed of trust mentioned in plaintiff's petition, having lawfully and in good faith acquired the same for value from the holder thereof as security for a loan then and there made to such holder for $5,500 and eight per cent. interest, without any notice of plaintiff's pretended claim thereto; and each and every other allegation in plaintiff's said petition contained this defendant denies generally, and this defendant therefore asks judgment for the return of said notes and deed of trust to him, for damages for the detention thereof, and for costs."To which plaintiff replied as follows: "Now comes the above-named plaintiff, and for a reply to the new matter contained in the answer of defendant says that he denies each and every allegation therein contained.Further replying to the new matter aforesaid and in said answer contained, this plaintiff says that Charles Kuhn had no title at the time, or any other time, to said paper, and could not transfer any, all of which defendant well knew, or by the exercise of ordinary diligence could have learned, prior to and at the time of his alleged purchase.Further replying, this plaintiff says that whatever transaction the defendant had with said Kuhn whereby he wrongfully obtained from said Kuhn the possession of the paper in the petition described, was a loan, and not a sale; that then and there said loan was for the sum of fifty-five hundred dollars, and that defendant was, by the terms of said loan, to receive and charge interest for a greater amount than that allowed by law, and said loan was at the time when made and is affected with usury, and was and is illegal, and defendant has and had no right to the possession of said paper.Wherefore, and by reason of the premises, plaintiff prays for judgment for the possession of the papers heretofore described, for costs, and for such other and further relief as to the court may seem just and proper."

On the trial it was conceded in open court that the notes were of their face value, and that the question was, to whom did the notes belong?On the part of defendant the evidence was that his business was loaning money; that when he was served with the writ in this casehe was in possession of all the notes described in the petition; that he got them from Charles Kuhn, his codefendant; that on the 14th day of April, 1896, he loaned Kuhn $5,500 on these notes, and took them as collateral.Said note and collateral agreement are as follows:

"St. Louis, April 14th, 1896.Ten days after date I promise to pay to the order of J. H. Vette five thousand five hundred no one-hundredths dollars, for value received, negotiable and payable without defalcation or discount at No. ____ street, St. Louis, Mo., with interest at rate of 8 per cent. per annum from date until paid.If interest is not paid semiannually, same to be added to principal, and bear same rate of interest.Charles Kuhn. $5,500.

"Having executed my note as above, and being desirous of securing the same, as well as all other debts and liabilities for which I am now bound, or until the maturity of said note may become bound, to said J. H. Vette, do hereby pledge as collateral security for said note and debts and liabilities ten notes, — nine for $210 each, and one for $7,000, — made by J. W. Stewart Real Estate Company, and payable to Charles Kuhn or order, dated October 11, 1895, and agree to give additional security whenever the market value of the above collateral should decline and on notification of said J. H. Vette, when notified: Now, in the event of the non-payment of this note at maturity, or the payment of any such other obligation at maturity thereof, or in default of me giving such additional security when notified, the holder hereof is hereby invested with full authority to use, transfer, hypothecate, sell, or convey the said property, or any part thereof, or to cause the same to be done, at public or private sale, with or without notice or demand of any sort, at such place and on such terms as the holder hereof may deem best; and the holder of this note is authorized to purchase said collaterals when sold for his own protection, and the proceeds of such sale, transfer, or hypothecation shall be applied to the payment of the above note, together with all protests, damages, interest, costs, and charges due on the note, or which may be incurred by reason of its nonpayment when due, or in the execution of this power.Also a commission of five per cent. on the gross amount of said collaterals sold.The surplus, if any, after payment of the above note, together with all the charges above stated, shall be paid by the drawer of the above note, or at the election of the holder hereof be paid on any other obligation of the drawer hereof, whether as principal debtor or otherwise, held by the holder hereof; and, if the proceeds of the above sale shall not be sufficient to pay the above note, the drawer hereof agrees to make good any deficit.Charles Kuhn."

In answer to his counselhe stated he kept a set of books in his loan business.He identified certain books kept by his bookkeeper, Shortal.He was asked to refer to his books, and state what he gave Kuhn on April 14, 1896, as consideration for the note of $5,500.He said, "He[Kuhn] had a couple of matters with me that he took up that day; deeds of trust, as well as I remember," — one for $3,000, the other for $2,500.These had been pledged to him by Kuhn prior to this.He gave Kuhn these two papers, and Kuhn owed him some other money, and paid him the cash over and above the $5,500.Kuhn was a good customer.They had traveled together in Europe.He was cross-examined on his books, and stated that when he began loaning to Kuhn that Kuhn said to him, "Now, if I allow you interest at the...