Laclede Nat. Bank v. Richardson

Decision Date15 May 1900
Citation56 S.W. 1117,156 Mo. 270
CourtMissouri Supreme Court
PartiesLACLEDE NAT. BANK v. RICHARDSON.

1. Plaintiff held $40,000 in notes, part of which were secured, as collateral to secure other notes made to it by defendant's intestate, under an agreement which provided for a public or private sale of such notes, and that plaintiff could purchase said notes in its own name. Plaintiff turned the collection of such collateral over to an agent, who published notices of a public sale for four days prior to the sale, which did not show the authority to make the sale, that it was made by the bank, to whom the notes belonged, or the terms of the sale. A similar notice, but stating that the sale was made by the bank, was given to the defendant. Held, that the sale under such notice was invalid.

2. A public sale of collateral of a face value of $40,000 was made by the holder under a power in the notes secured by the collaterals. Only four days' published notice of the sale was given, and, the weather being inclement on the day of sale, it was held inside the storm doors of the court house, and out of public view, instead of at the door thereof, as advertised. But few persons were present at the sale, and the bank purchased the collateral for $8.825, which was an inadequate consideration. Held, that the sale should be set aside, as it was the duty of the holder to have continued the sale.

3. Where a question was not presented to the trial court, it will not be considered on appeal.

4. Where counsel for the owner of collaterals was present at a sale thereof by the holder, and announced before the sale that he would present his objection to such sale to the court, the owner will not be held to have acquiesced in the sale by failure to make further objection.

Appeal from St. Louis circuit court; P. R. Flitcraft, Judge.

Proceedings in probate by the Laclede National Bank against W. C. Richardson, administrator of the estate of J. H. Simpson, deceased. From a judgment of the circuit court reversing a decision of the probate court in favor of plaintiff, it appeals. Affirmed.

The Laclede National Bank of St. Louis presented to the probate court of the city of St. Louis for allowance against the estate of J. H. Simpson, deceased, its claim based upon two promissory notes made by the deceased in its favor, dated, respectively, February 6, 1893, and February 15th, payable to the order of the bank, and due 90 days after date, each for the sum of $20,000. These notes are in the form of what is known as "collateral notes," containing provisions whereby certain personal property is pledged as security for their payment, with power to sell such security in event of nonpayment of the notes, and contain the following power of sale: "In default of payment of this note at maturity, I hereby authorize said Laclede National Bank, or any of its officers, to sell said collateral at public or private sale, or otherwise, at its option, without notice, and to apply the proceeds to the payment of this note, with all damages, interest, charges, and costs. Said Laclede National Bank of St. Louis shall also have the right at any such sale to bid for or purchase said pledged property, or any part thereof, in its own name, and for its own use and benefit." The property mentioned in these notes as pledged for their payment, respectively, was numerous promissory notes secured by several deeds of trust on real estate. Some of these deeds of trust so pledged were first liens on the real estate therein described, while others were second, and still others third, liens. It seems that Simpson during his lifetime was a regular customer of the bank, keeping a deposit there, and that in the course of his dealings with the bank the latter made these loans, taking the notes and deeds of trust as security therefor, and held them at the time of Simpson's death, which occurred on February 23, 1893. After the death of Simpson the bank employed one F. W. Mott, a real-estate broker, to take charge of and attend to the collection of the collaterals in question, placing the entire matter in his hands, for the purpose of realizing on them. During the following year Mott succeeded in collecting about $15,000, and thereupon the bank concluded to sell the collaterals remaining uncollected, at public sale, under the power contained in the notes in question, and directed Mott to proceed accordingly. On February 16, 1894, written notice was served on defendant Richardson, public administrator in charge of the Simpson estate, that the bank would on the 19th day of February, at 11 o'clock a. m., sell at public sale all the Simpson securities remaining uncollected, at the east front door of the court house in the city of St. Louis. This notice contained a description of the collaterals to be sold, and was signed by the bank itself. A notice of sale to occur at the same time and place was also published in the St. Louis Daily Post-Dispatch on the 15th, 16th, 17th, and 18th days of February. This notice, like the former, contained a description of the collateral securities to be sold, with reference to the book and page of the record of the deeds of trust securing the same, and was signed by "F. W. Mott, Agent." The opening paragraph in this notice is in the following words: "Notice is hereby given that the undersigned will, at the east front door of the court house in the city of St. Louis, Missouri, on Monday, February 19, 1894, at 11 o'clock, sell, for the benefit of whom it may concern, the following described promissory notes." Here follows a description of the securities remaining unpaid, formulated in the manner above indicated. At the time fixed for the sale the president of the bank, Mr. Hoffman, and his attorney, J. S. Hornsby, together with Mr. Mott, the agent of the bank, and those in attendance at the sale, congregated just immediately outside of the east front door of the court house; and, the weather being cold and disagreeable, it was suggested that those present repair to the inside of the glass storm doors at the entrance, where it would be more comfortable. These doors are temporarily placed at the entrance of the court house during the winter season, and are glazed for a distance of about three feet from the bottom. The printed notice of the sale, as published in the Post-Dispatch, was then read by Mr. Mott, and there, out of view of the passing public, the collateral securities were offered for sale by him, and were all ultimately bid in by the bank at the grossly inadequate sum of $8,825, — far below their actual cash value. There were only three or four bidders at the sale, which was conducted by Mott as agent, and lasted about 30 minutes. The face value of the collateral notes sold by Mr. Mott amounted to upwards of $40,000. The testimony is conflicting as to the number of persons present at the sale; some witnesses fixing the number present at 15, while others testified that the attendance did not exceed 6, at the outside. The information given at the sale was very meager. The defendant's attorney, R. M. Nichols, who was present at the sale, on being asked by Mr. Hoffman, president of the bank, if he had anything to say about the sale, replied, in substance, that he objected to the sale being made under the circumstances, but would make his objections to the court thereafter. Previous to the advertisement of the sale there had been several interviews between the president of the bank and Mr. Nichols, on behalf of the administrator, touching the collaterals held by the bank, in which it was agreed that the administrator and the bank should act in harmony in collecting these collateral notes, and that the balance collected after paying the bank, if any, should be turned over to the administrator. As the result of such interviews, Mr. Nichols testified that he was induced to believe that the bank would not exercise the right to sell given in the collateral notes. After giving the estate credit for the amount for which the securities were sold, the bank presented its claim against the estate to the probate court of the city of St. Louis for the balance claimed to be due on the collateral notes, which claim was by the probate court allowed for $21,704.66, with interest at the rate of 8 per cent., and placed in the fifth class of demands. Thereupon defendant duly appealed to the circuit court, and the cause having been referred to A. N. Crane, to try all the issues, the referee decided that the sale of those securities so made by Mott under the power contained in the collateral notes was void, and required the bank to account for all the notes purchased by it...

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  • St. Louis v. Senter Comm. Co., 32488.
    • United States
    • Missouri Supreme Court
    • February 19, 1937
    ... ... Jackson County v. Chick, 48 S.W. 829, 146 Mo. 645; Laclede Natl. Bank v. Richardson, 56 S.W. 1117, 156 Mo. 270, 79 Am. St. Rep. 528; ... ...
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