Luechtefeld v. Marglous

Decision Date04 January 1944
Docket NumberNo. 26433.,26433.
Citation176 S.W.2d 674
CourtMissouri Court of Appeals

Appeal from Circuit Court, St. Louis County; Julius R. Nolte, Judge.

"Not to be reported in State Reports."

Action in replevin by Joseph J. Luechtefeld, doing business as Forest Park Lumber & Supply Company, against Theodore H. Marglous to recover notes and a trust deed securing them and damages for taking and retention. Judgment for defendant, and plaintiff appeals.


N. Murry Edwards, of St. Louis, for appellant.

Taylor, Mayer, Shifrin & Willer and Ben L. Shifrin, all of St. Louis, for respondent.


This is an appeal from a judgment for defendant in a replevin action brought to recover possession of certain promissory notes claimed by plaintiff as his property and alleged to have been wrongfully taken from his possession by the defendant. It is the second appeal in the case. On the first appeal, we reversed a judgment for defendant and remanded the case for retrial because of an erroneous instruction given at defendant's request. Luechtefeld v. Marglous, Mo.App., 151 S.W.2d 710.

The notes sued for consisted of one principal note, dated August 18, 1930, for $3,250; and nine semi-annual interest notes, alleged on information and belief to have been executed in August, 1936, for $82.50 each. Charles F. Vatterott, Jr., and Jeannette Vatterott, his wife, executed the principal note, and the deed of trust securing same; and one Elizabeth Rush, acting as a straw party for plaintiff, was the payee in the principal note, and the beneficiary in the deed of trust.

On October 31, 1930, the real estate, upon which said deed of trust was a lien, was sold to George Engler and Pearl Engler, his wife; and on August 12, 1933, the Englers made a $500 payment upon the principal note, thus reducing the amount payable to $2,750. At the latter date, the principal note was extended for three years from said date, and the Englers executed six interest notes for $82.50 each, payable 6, 12, 18, 24, 30, and 36 months after date respectively.

In August, 1936, the $2,750 loan was extended for five years, with accompanying interest notes of $82.50 each.

The petition prayed for the recovery of possession of said $2,750 note, and nine alleged unpaid interest notes, claimed to have been executed in August, 1936, when said principal note was extended for a period of five years, together with said deed of trust, and $500 damages for their taking and detention.

By an amended answer, defendant alleged that prior to August 18, 1936, plaintiff agreed to sell the note and deed of trust in question to defendant for $2,750, the amount due on said note; that at said time plaintiff advised defendant that said note and deed of trust would be delivered by plaintiff's agent upon the payment of the purchase price to said agent; that defendant paid the purchase price to said agent, and said note and deed of trust were delivered to defendant by said agent pursuant to plaintiff's authority; that said note was made payable to Elizabeth Rush, and endorsed by her, so that, in effect, it was payable to bearer; that the said note, so endorsed, was in the possession of plaintiff's agent; that at the time of the negotiations between plaintiff and defendant, and on many occasions prior thereto, plaintiff held out said agent as being authorized to deliver notes and deeds of trust, and receive payment for notes and deeds of trust which plaintiff owned, negotiated, and sold; that plaintiff made a business of selling deeds of trust by himself and by and through his agent, who dealt with defendant herein in connection with the sale of the note and deed of trust in question; that plaintiff, with knowledge of all the facts, after the purchase in question, the delivery of said note by plaintiff's agent, and the payment by defendant of the purchase price, ratified the acts of his agent in delivering said note and deed of trust and in collecting therefor; that plaintiff retained the benefits of said payment, and never repudiated the acts of his said agent; that at the time of the filing of the suit, plaintiff had no title to the note and deed of trust, and defendant was the legal owner of same; that plaintiff permitted Sylvester Voss to have access to his safe, wherein were placed the note which was endorsed in blank and the deed of trust in question; that plaintiff knew that said Sylvester Voss was accustomed to handle notes and deeds of trust and to accept payment therefor for plaintiff; that plaintiff held said Voss out as his agent, authorized to handle transactions involving deeds of trust, and that by said conduct plaintiff induced defendant to deal with Sylvester Voss as plaintiff's duly authorized agent, and that defendant relied upon plaintiff's said conduct with reference to said Voss in the payment of said note and deed of trust in question; that by reason of the matters alleged, the plaintiff was estopped to deny the authority of said Voss or to claim title to said note and deed of trust.

At the trial, plaintiff denied that he had ever sold defendant the note and deed of trust in question, and denied that his agent Sylvester Voss, from whom defendant claims to have received the note and deed of trust, had any authority to negotiate same.

Defendant testified that Mrs. Engler came to his house several weeks before August 18, 1936, and on that occasion he agreed with her to take up her deed of trust. He stated that he then went to see Mr. Luechtefeld and told him he was willing to take up the loan if he could have the papers uncancelled, and plaintiff said that "that was perfectly O. K." Plaintiff denied having had any such conversation with defendant.

Mrs. Engler testified that about a year before the loan came due, she had a conversation with plaintiff, in which he told her that she would have to reduce the loan; that thereafter she again went to him, telling him that she could not reduce the loan and asking him to renew it, whereupon, after thinking awhile, he said, "Do you think you can get somebody to take it over?" She said, "Well, I will try." He replied, "Well, I need the money in my lumber business. If you can get them, get them." She further testified that immediately after this conversation with Luechtefeld, she went to see Mr. Marglous; and, about two months before August 18, 1936, the due date of the note, she called up Mr. Luechtefeld, telling him that she had a man by the name of Marglous who would take up the note. Mr. Luechtefeld said that it would be all right, and for her to send him out.

Plaintiff denied having a conversation a year prior to August, 1936, with Mrs. Engler, and denied ever having told her that he needed this money in his business. He testified that he did have a conversation with her about six weeks or two months prior to the maturity of the note, at which time he told her he would be glad to renew it.

According to defendant's evidence, defendant met Mrs. Engler at a real estate office on August 14, 1936, and executed an extension of the note, after receiving from her a check for $82.50 to satisfy the last interest note due August 18, 1936. Mrs. Engler testified that she delivered this check to defendant instead of to plaintiff at the latter's direction given a few days before over the telephone. The evidence further shows that on August 20, 1936, defendant secured a bank draft at the Southwest Bank for $2,700, payable to himself, and that thereafter he delivered the draft, endorsed in blank, to Mr. Voss, with his personal check for $50, together with Mrs. Engler's check for $82.50, and that he received from Voss the note and deed of trust in question. The evidence also shows that his $50 check and Mrs. Engler's $82.50 check were deposited in the plaintiff's bank account, and the $2,700 check was appropriated by Voss.

In order to properly determine the issues on this appeal, it will be necessary to review the evidence touching upon Voss's authority as agent of the plaintiff to deal with plaintiff's property.

Plaintiff testified that, at the time of the trial below, Voss had been in his employ for ten or eleven years; that at no time did Voss ever deliver papers on deeds of trust sold by plaintiff; that plaintiff did not know whether Voss ever received payments of interest due on notes belonging to him. He also testified that Voss did not have authority to sell, without his approval, any deeds of trust, and that he did not give Voss authority to sell, give, or transfer the deed of trust in question to defendant.

He further testified: "Q. Well, I will ask you this: If deeds of trust are ever paid off and the transfer made either by Mr. Voss or anybody else in your office besides yourself? A. Why, that is always taken up with me, always was, and nobody could pay off a deed of trust unless they take it up with me. That was the orders."

Mrs. Engler testified that from 1930 to 1933 she paid interest on the deed of trust in question to Mr. Voss at the Forest Park Lumber Company office. She stated that, not knowing to whom it should be paid, she spoke to plaintiff about it and he told her to transact her business with Mr. Voss. In 1933, she reduced the loan by the payment of $500 on the principal, and received a receipt made out in the handwriting of Voss and signed by him. Also, at that time she executed renewal interest notes. This receipt was offered in evidence, and plaintiff admitted that it was in Voss's handwriting and signed by him.

Defendant testified:

"I know Mr. Luechtefeld, the plaintiff in this case; I first met him in late '29 or early '30. Mr. Vatterott took me in and introduced me. I bought some first deeds of trust from Mr. Luechtefeld at that time; it seems to me like there was five. I had quite a conversation with him in 1929 or '30. Mr. Luechtefeld told me he was selling deeds of trust, and would have them from time to time,...

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