Lakenan v. North Missouri Trust Company
| Decision Date | 21 February 1910 |
| Citation | 126 S.W. 547,147 Mo.App. 48 |
| Parties | J. G. LAKENAN, Appellant, v. NORTH MISSOURI TRUST COMPANY, Respondent |
| Court | Missouri Court of Appeals |
Appeal from Audrain Circuit Court.--Hon. James D. Barnett, Judge.
REVERSED AND REMANDED (with directions).
Judgment reversed and cause remanded.
Clarence A. Barnes for appellant.
(1) Plaintiff lost the value of $ 1493.02 as security by the negligence or design of defendants North Missouri Trust Company and J. C. Mundy and as surety on the note involved in this suit is dicharged to that extent from liability thereon. Murrell v. Scott, 51 Tex. 520; Bank v Bartle, 114 Mo. 276; Bank v. Kilpatrick, 204 Mo. 119; Taylor v. Jeter, 23 Mo. 244; 1 Brandt on Securityship and Guaranty (3 Ed.), p. 934, sec. 498. (2) If the creditor has the means of satisfaction from the property of the principal in his power and fails to avail himself of it, the surety is discharged. Clom to use v. Coal Co., 98 Pa. Rep. 432; Bank v. Thompson Grants Cas. (Pa.); Dawson v. Bank, 5 Ark. (5 Pike) 283; Molka v. Ins. Co., 29 Pa.Super. Ct. 149; Perrine v. Ins. Co., 22 Ala. 575; Hurd v. Spencer, 40 Vt. 410; Kiam v. Cummings, 13 Tex. Civ. App. 198; Joyce on Defenses to Commercial Paper, sec. 613, p. 768; Phares v. Barbour, 49 Ill. 370; Kirkpatrick v Howk, 80 Ill. 122; Stewart v. Davis' Ex'r, 18 Ind. 74; Hayes v. Ward, 4 Johns Ch. 123, 8 Am. Dec. 554; Pierce v. Atwood, 89 N.W. 669; Lowe v. Reddan, 100 N.W. 1038; Frost v. Wilson, 2 Am. Law J. 260, 2d Series, Vol. 9 Am. L J.; Ramsey v. Bank, 2 Pen & Watts (Pa.) 203; Richards v. Commonwealth, 40 Pa. 146; Gillespie v. Darwin, 6 Heisk (Tenn.) 21.
Robertson & Robertson for respondents.
(1) Applying the rule in equity cases that the finding of the chancellor will be deferred to by the appellate court determines this case in favor of an affirmance of the judgment of the trial court. Snell v. Harrison, 83 Mo. 651; Sharpe v. McPike, 62 Mo. 300; Hodges v. Black, 76 Mo. 537; Royle v. Jones, 78 Mo. 403; Broughton v. Brand, 94 Mo. 160; Erskine v. Lowenstein, 82 Mo. 301; Hard v. Foster, 98 Mo. 297; Benne v. Schnecko, 100 Mo. 250; Roberts v. Stone, 99 Mo.App. 432; Mining Co. v. Mining Co., 106 Mo.App. 66. (2) The failure of the plaintiff, Lakenan, to take the witness stand when Wilkins had testified that Lakenan was familiar with his stock, knew of the shipment of these cattle and knowingly accepted a check for part of the proceeds from the sale of the cattle and after Mr. Pollock had testified that Mr. Lakenan gave the trust company the first information it had of the shipment of the cattle long after such shipment, must be treated as an admission on the part of the plaintiff of this evidence. He must therefore stand convicted of the knowledge that the security in the chattel mortgage was being gotten away from the trust company, and is now precluded from the complaint made in his petition. Wigmore on Evidence, sec. 289; Bank v. Levy, 106 La. 586; Baldwin v. Whitecomb, 71 Mo. 651; Goldsby v. Johnson, 82 Mo. 602; Werner v. Litzsinger, 45 Mo.App. 106; Ins. Co. v. Smith, 117 Mo. 261; Stephenson v. Kilpatrick, 166 Mo. 262. (3) The note was not due August 18th. Neither by the terms of the mortgage nor the note did it become due until default in the payment. The disposal of the property gave the mortgagee the right to take possession of it, but that disposal would not change the obligation it was given to secure. Even if the note had been due for any reason, the trust company was under no obligation so far as this plaintiff is concerned to apply Wilkins' deposit to the payment of the note. Bank v. Booze, 75 Mo.App. 189; Harburg v. Kumpf, 151 Mo. 16; Insurance Co. v. Landis, 50 Mo.App. 116; English v. Siebert, 49 Mo.App. 563; Barnes v. Mowery, 129 Ind. 568; Bank v. Peck, 127 Mass. 298; Bank v. Lilliard, 55 Mo.App. 675.
On July 2, 1904, defendant James H. Wilkins made and delivered to defendant James C. Mundy a promissory note for $ 3928, due ninety days after date, drawing interest at the rate of eight per cent per annum, and signed by said Wilkins as principal and by plaintiff, Lakenan, as surety. The latter put the word "security" after his name to show the capacity in which he signed. James C. Mundy, the payee of the note, was at the time an officer of the North Missouri Trust Company, the trust company was the real party in interest in the transaction and Mundy at once transferred to it the note, which was executed to take up two earlier notes made by Wilkins to said company. One of the earlier notes was for $ 3000 and secured like the one in suit by a chattel mortgage on sixty head of cattle belonging to Wilkins. The money obtained on the note for $ 3000 was used, in the main, by Wilkins to buy cattle, and the money obtained on the earlier note for $ 700 was used to buy feed for the cattle. The note in controversy was secured by a chattel mortgage on sixty-one head of cattle belonging to Wilkins. This mortgage, which was executed simultaneously with the note, stipulated that Lakenan should sign the note as security, the cattle should remain on the farm in Audrain county where they were and ready to be exhibited to the mortgagee on demand, they should remain in the possession of Wilkins until default was made in payment of the debt, and interest, or some part thereof, but in case of disposal or attempt to dispose of them, or removal of them, or attempt to remove them, from the county, the mortgagee might take possession and sell at public auction to the highest bidder for cash. On August 16, 1904, and six weeks before the note fell due, Wilkins shipped the cattle to the Bowles Live Stock Commission Company, at the Union Stockyards in Chicago, to be sold, and accompanied the shipment. They were sold by said Commission Company and realized net $ 3446.02. Wilkins, in writing, directed the Bowles Commission Company to deposit this money, less $ 25, which he drew in cash, to the credit of the North Missouri Trust Company and subject to its order, in the National Live Stock Bank of Chicago. Pursuant to Wilkins' order the commission company deposited the proceeds, less $ 25, or $ 3421.02, in said Chicago bank to the credit of the North Missouri Trust Company, and subject to its order. The direction given by the Bowles Commission Company to the National Live Stock Bank about the disposition of the money was in a writing purporting to be signed by Wilkins by the commission company as his agent, and said there was handed to the bank $ 3421.02, to be placed to the credit of the North Missouri Trust Company, of Mexico, Missouri, subject to its order. The sale of the cattle in Chicago and the deposit of the proceeds to the trust company's credit, happened August 17th, and a letter was sent by the bank to the trust company on said day, notifying the latter of what had happened. This letter is not in the record nor are its precise contents shown. Mundy, the secretary of the trust company, testified he did not remember whether a letter of advice was received also from the Bowles Commission Company. The following document is in the record without any proof, further than appears on its face, that a copy of it was sent to the trust company. It was attached to the deposition of the secretary of the Bowles Commission Company, as a memorandum showing the sale of Wilkins' cattle, and as will be perceived at the bottom has the trust company's name and address, as though it was a report made to said company.
"Chicago, August 17, 1904.
Sold for account of J. H. Wilkins; P. O. Mexico, Mo.; No. 1 shipped from Mexico, Mo.
Armour
51 strs
5.20
3165.24
Ulmer P. C.
9 strs
4.40
459.80
U. P. C.
1 Dd chute
5.00
3630.04
Car No.
R. R. Weight.
Freight, including terminal
135.12
Yardage
15.25
Hay
3.15
153.52
Commission
30.50
184.02
Net Proceeds
3446.02
Cash
25.00
3421.02
Anything not satisfactory please call for explanation.
The witness said the document attached to his deposition was a copy of one rendered August 17th, without saying to whom it was rendered. After being advised this money had been put to its credit in the National Live Stock Bank at Chicago and was subject to its order, the North Missouri Trust Company drew a draft on said bank in favor of the Illinois Trust & Savings Bank, which was the Chicago Bank wherein the trust company kept an account. That draft was paid by the National Live Stock Bank at Chicago to the Illinois Trust & Savings Bank and was placed by the latter to the credit of the North Missouri Trust Company. Mundy testified that on August 18th, and before the trust company was opened for the day's business, he received the letter of the National Live Stock Bank stating the deposit had been made therein to the credit of the trust company, by order of Wilkins, and at once gave Wilkins credit on the books of the trust company for the amount, as he understood it was his money. Wilkins left for home on August 17th, on the 18th visited the trust company in Mexico, Missouri, and, as he says, asked Mundy if the company had had returns from the cattle and the latter said returns had been received. Wilkins then told him the money was the proceeds of the cattle on which the trust company held a mortgage; that he would like to borrow enough money from said company to pay off the note of $ 3928, which was secured by the mortgage, and leave him about $ 1500 over. The effect of Wilkins' testimony is that he asked this loan on the security of a chattel mortgage to be given on stock owned by him; that Mundy and Pollock, another officer of the trust company, talked the matter over and then...
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