Kincaid v. Estes

• Decision Date: 26 May 1924
• Docket Number: No. 15045.,15045.
• Citation: 218 Mo. App. 109,262 S.W. 399
• Parties: KINCAID v. ESTES.
• Court: Missouri Court of Appeals

262 S.W. 399

218 Mo. App. 109

KINCAID v. ESTES.

No. 15045.

Kansas City Court of Appeals, Missouri.

May 26, 1924.

Appeal from Circuit Court, Boone County ,3 David H. Harris, Judge.

Action by J. C. Kincaid against A. J. Estes. Judgment for defendant, and plaintiff appeals. Reversed and remanded.

Meriwether & Meriwether, of Monroe City, and McBaine & Clark and Paul M. Peterson, all of Columbia, for appellant.

N. T. Gentry, of Columbia, for respondent.

BLAND, J.

This is a spit upon a promissory note in the sum of $2,000, executed by the defendant as maker on November 1, 1921, falling due 12 months after date, with interest at'6 per cent. and payable to H. L. Yager or order. There was a verdict and judgment for defendant, and plaintiff has appealed.

The petition alleges that plaintiff acquired the note by indorsement "on the — day of December, 1921." The answer consists of a general denial, and pleads fraud in the execution of the note and a lack of consideration therefor, all of which plaintiff was aware when he purchased the note, and denies that the note was indorsed or transferred to plaintiff for value or before maturity, and denies that plaintiff is the owner of the note. The reply consists of a general denial, and alleges that plaintiff acquired the note before maturity, without any knowledge of the defenses pleaded in the answer.

It is admitted that the facts show that the note was procured by fraud, and was without consideration as pleaded in the answer. Defendant testified, and his testimony was, uncontradicted, that Yager, prior to the procurement of the note from defendant, had sold to the latter $1,000 worth of stock in the Jiffy Rim Lock Company, and that the stock proved to be worthless; that on November 1, 1921, Yager came to defendant's office in Columbia and admitted to the latter that the stock was worthless, and that he wanted to repay to defendant the $1,000 that defendant had invested in it; that Yager told defendant that he would sell him $2,000 worth of stock in the United States Mining Corporation, which defendant knew something about, as he had previously purchased some of it, and that, while the par value of the stock was $2,000, it was actually worth $3,000, because the board of directors had recently made a raise in the price of the stock from $1 to $1.50 a share. Yager told defendant that, if he would take this mining stock and give him his note for $2,000, he would give defendant credit for the $1,000 on the purchase price of the stock. Yager told defendant that he owned the stock, but that he did not have it with him, but would assign and mail it to defendant in a short time. Relying upon these representations, defendant signed and delivered the note in suit to Yager. Yager never delivered the stock, although defendant made repeated demands of him for it, and the statement of Yager to defendant that the price of the stock had been raised from $1 per share to $1.50 proved to be untrue. Defendant had known Yager for four or five years before he gave him the note in suit, and during that time had had a number of business transactions with him.

Plaintiff testified that the circumstances under which he purchased the note were as follows: That he and Yager had for some time lived in Monroe City, Mo.; that prior to the buying of this note he had one business transaction with Yager, which took place about six years before the trial, when Yager purchased from plaintiff a Ford sedan; that Yager was engaged in representing a company in selling stock food, and that plaintiff had heard that he handled some oil stock; that in November, 1921, Yager called on plaintiff who was engaged In the real estate business in Monroe City in a small way, and at times made a few loans, and borrowed of him $10 in cash; that at this time nothing was said about security; that about one week thereafter, and on November 28, 1921, Yager returned and asked plaintiff for a loan of $100, and offered the note sued on as security, and showed plaintiff a letter from a bank in Columbia, where defendant resided, addressed to a bank in Monroe City, relative to the financial responsibility of defendant. Plaintiff lent Yager at this time $100, and the latter indorsed the note in blank and left it with plaintiff as security for the money he owed him. On December 3, 1921, plaintiff lent Yager another $100, and on December 13 he lent him $155. On December 20th or 21st Yager, desiring to go to Colorado, wanted another loan, and at that time plaintiff borrowed from the bank the sum of $300 on their joint note, which plaintiff agreed to pay and did pay. In addition to these loans plaintiff gave Yager his note for $100, and afterwards sent Yager a check to take it up. When the $300 transaction was had, the parties went to an attorney, who drew up a note in favor of plaintiff in the sum of $915, due 90 days after date and signed by Yager, reciting that Yager had deposited with plaintiff as collateral security therefor the note in suit. This $915 note was introduced in evidence, together with the three cheeks in the sum of $100 each, and one check in the sum of $155, These checks bear the indorsement of Yager, except the first one for $100, which plaintiff testified he cashed and gave the money to Yager.

Just prior to going to Colorado; Yager was in plaintiff's office in Monroe City, when plaintiff told Yager that he had $1,000 invested in a Pike county, Mo., farm, which he would like to get out of, and authorized Yager to trade the farm for property in Coloredo. Plaintiff testified that he had lent his brother-in-law $1,000 upon the Pike county farm, and that his brother-in-law was unable to pay the loan; that the farm had depreciated in value and was not worth more than the amount of a deed of trust on it, together with the $1,000 that plaintiff had against it, so the brother-in-law turned the farm over to plaintiff. Plaintiff testified that there was a written agreement covering the transaction wherein the brother-in-law turned the farm over to him, but that it had been destroyed.

Yager went to Denver, Colo., and negotiated a trade of the Pike county farm for 214 acres of land, subject to a mortgage of $2,500, located in Elbert county, Colo., and owned by one Williams. Plaintiff then went to Denver with the abstract to the Missouri farm, the title to which proved to be defective, and deeds to the two properties were placed in escrow in a bank in Denver until plaintiff could have the title to the Missouri farm corrected. An agreement was drawn between plaintiff and Williams, which was introduced in evidence, designated as an escrow agreement, for the trade of the farms; each farm was to be traded subject to a deed of trust in the sum of $2,500. Plaintiff returned to Missouri and had the title to the Pike county farm perfected, but before the trade was made Yager proposed that he would take the Colorado land off of plaintiff's hands; in other words, would purchase the equity in the Colorado land on the following terms: Yager would give plaintiff a second deed of trust upon the Colorado land for $1,000 to cover plaintiff's interest in the Missouri land, which plaintiff desired to get out of, and in addition Yager would give plaintiff the note in suit, and that plaintiff should cancel Yager's indebtedness to him. This agreement, except the cancellation of the indebtedness, was evidenced in writing, dated March 18, 1922, and was introduced in evidence. This agreement further provided that Yager should have the right to the return of the note in suit with all interest thereon, if he should pay plaintiff on or before November 1, 1922, the sum of $1,700 in cash. The agreement was carried out, and Yager executed a note and deed of trust in the sum of $1,000 in favor of plaintiff's wife. The deed of trust securing this note was introduced in evidence. There also appears in evidence a warranty deed from Nettie C. Williams of Denver, Colo., to Yager, conveying the Colorado land subject to a deed of trust in the sum of $2,500; also a deed from Yager to Sebastian of Denver, Colo., conveying the Colorado land subject to two deeds of trust—one for $2,500, and the other in the sum of $1,000, the latter being the deed of trust in favor of plaintiff's wife. The deed from Williams was made to Yager in order to save the expense and trouble of two transfers; that is, one from Williams to plaintiff, and the other from plaintiff to Yager. Plaintiff testified that Yager never offered to repurchase the note in suit.

Plaintiff testified that he knew nothing of Yager's transactions with defendant prior to the time he obtained the note, and made no inquiry of Yager as to how the note was procured by him. However, he testified that prior to the time the note was placed with him as collateral security he went to Columbia and talked to one Smith, an officer in a bank there, in regard to defendant's financial standing, and that he attempted to see defendant, but learned that defendant was out of town and did not see him. Smith, the officer of the bank, testified that plaintiff was in his bank during the latter part of 1921 or the first of 1922, inquiring of defendant's financial standing, and that he gave plaintiff "some information along that line." After the note became due, plaintiff sent it to the Columbia bank for collection, but defendant refused to pay it. Plaintiff then went to Columbia to see defendant about paying it. This, plaintiff testified, was the first time that he learned that defendant was claiming that the note was procured by Yager without consideration and by false representations. He testified that defendant inquired of him concerning the transactions through which he procured the note; that defendant asked him to sign a statement in regard to the matter, which he refused, "because I didn't see any value in that statement at that time." Plaintiff testified that he had never before bought a note in the way he purchased the...