Maget v. Land & Loan Co.

• Decision Date: 15 June 1931
• Docket Number: No. 16243.,16243.
• Citation: 41 S.W.2d 849
• Parties: WILLIAM J. MAGET, RESPONDENT, v. BARTLETT BROS. LAND AND LOAN CO. ET AL. DEFENDANTS. BURNES NATIONAL BANK, APPELLANT.
• Court: Missouri Court of Appeals

41 S.W.2d 849

WILLIAM J. MAGET, RESPONDENT, v. BARTLETT BROS. LAND AND LOAN CO. ET AL. DEFENDANTS. BURNES NATIONAL BANK, APPELLANT.

No. 16243.

Kansas City Court of Appeals. Missouri.

June 15, 1931.

Appeal from Circuit Court of Buchanan County. — Hon. Sam Wilcox, Judge.

AFFIRMED.

Eastin & McNeely for respondent.

John C. Landis, Jr., and John C. Landis, III, for appellant.

CRANE, Sp. J.

This case has been the subject of most careful and elaborate consideration by the court. It has been briefed and argued with signal ability by counsel for both of the litigants. Judge BLAND and Judge ARNOLD have both written well considered opinions arriving however at different conclusions. On this account, because of the absence of Judge TRIMBLE, it was necessary that a special judge be called in. The writer of this opinion finds that there is very little difference in the statement of the case and facts in the opinion written by Judge BLAND and the one written by Judge ARNOLD. Finding himself in accord with the conclusion reached by Judge ARNOLD, the statement of the case and of the facts made by him is adopted as follows:

"This is a suit in equity seeking the recovery of two promissory notes secured by deeds of trust on real estate, or the equivalent thereof in cash, the petition alleging that possession of said securities was procured by defendants through fraud. At the close of plaintiff's case the court rendered judgment in favor of the loan company and at the close of all the evidence a decree was rendered in plaintiff's favor in the sum of $4490.60, against defendant Burnes National Bank. Said defendant bank has appealed.

The petition alleges that plaintiff on September 27, 1923, purchased from the defendant Loan Company securities valued at $6300 and gave his check to it in a like amount, drawn on the Bank of Dearborn; that said check was indorsed by the payee and deposited by it with the defendant bank "for credit:" that the payee received credit therefor on its account with said defendant bank; that the bank indorsed the check and forwarded it to the Bank of Dearborn, plaintiff having to his credit with said Dearborn bank more than sufficient funds with which to pay said check: that the Bank of Dearborn accepted plaintiff's said check and turned over to the defendant bank the sum of $50 in cash and its two drafts, one for $1750 and the other for $4500: that defendant bank received the drafts and money in payment of plaintiff's check to the Bank of Dearborn, whereupon that bank stamped the check as paid and charged the same to plaintiff's account: that subsequently the Dearborn bank suspended payment and was taken over by the State Finance Department for liquidation: that after its failure defendants falsely and fraudulently represented to plaintiff that his said check had not been paid and requested him to return the securities purchased by him as aforesaid and plaintiff was thus induced to surrender his said securities. The petition prays that the court enter a decree "restoring to him said note and deed of trust or its equivalent in value, and for all proper relief."

The defendant bank, in its answer, denies all of the allegations contained in plaintiff's petition and alleges that "subsequent to the transactions set out in plaintiff's petition" plaintiff and the Loan Company agreed to rescind the contract relative to the sale and purchase of the securities, and with "full knowledge of all of the facts and circumstances set out in plaintiff's petition," plaintiff surrendered and returned to the Loan Company the securities and received as full consideration therefor the sum of $50 in cash and the $4500 and $1750 drafts referred to in the petition. The answer further pleads —

"That this plaintiff had received and still is in possession of the consideration given to him by the Bartlett Brothers Land & Loan Company for the promissory note as aforesaid: that plaintiff did with full knowledge of all facts and circumstances alleged in his petition present to the commissioner of finance his claim against the Bank of Dearborn evidenced by the drafts above and herein referred to, and has received dividends declared by the said commissioner of finance on his said claim."

Plaintiff's reply to the answer of the defendant bank consists of a general denial and sets up that he had filed the claim with the State Finance Commissioner "at the urgent request and solicitation of this defendant and on behalf of this said defendant" and in order to prevent a bar of his said claim and that "all dividends declared and paid on said claim constitute a proper reduction of the amount sued for in this action."

In appellant's supplemental record on rehearing is contained a separate demurrer by defendant bank to the petition on the ground that the petition "fails to state facts sufficient to constitute a cause of action." Said demurrer was overruled. Defendant again urges that plaintiff has no cause of action in equity, but as the case was tried by all parties as one in equity, it will be so treated here. [Stripe v. Meffort, 287 Mo. 366, 385, 386, 229 S.W. 762.]

The facts show that defendant, Burnes National Bank (hereinafter called defendant bank) is a national bank located in St. Joseph, Missouri, and that the Barlett Land & Loan Company (hereinafter called the loan company) is a corporation in said city engaged in making real estate loans; that on September 27, 1923, plaintiff, who lived at Dearborn, near St. Joseph, came with his father to the latter city, looking for a suitable investment for money plaintiff had on deposit in the bank of Dearborn; that plaintiff's father and and Mr. George A. Nelson, vice-president of the defendant bank, were boyhood friends and on account of this friendship they called upon Nelson and consulted him in respect to making the investment; that Nelson advised them to go to the loan company which they did and procured from it two notes secured by real estate mortgages aggregating $6300; that for these securities plaintiff gave his check to the loan company for $6300 drawn on the Bank of Dearborn; that plaintiff and his father then returned home, taking the securities with them.

On Friday, September 28, 1923, the loan company indorsed plaintiff's check to defendant bank and deposited it to its own account with the bank, receiving credit therefor. The check was deposited under a written agreement between the loan company and defendant bank, by the terms of which the defendant bank accepted checks from the loan company to be forwarded as its agent to banks outside of St. Joseph and without the assumption by defendant bank of any responsibility for the neglect, default or failure of such banks or for losses occurring in the mail; that should any bank convert the proceeds or remit therefor in checks or drafts which were dishonored, the amount for which credit had been given the loan company would be charged back to it, and it was further provided that in the absence of instructions to the contrary, items might be sent to the bank on which they were drawn without waiving or suspending the condition stated. The evidence further shows that in addition to said agreement there existed between the loan company and defendant bank, a custom that when any item or check of the loan company went through defendant bank which was not finally paid, the bank would charge it back to the account of the loan company; that sometimes bad checks deposited by the loan company were returned and sometimes they were not. The Bank of Dearborn was also a depositor in the defendant bank and had an agreement with that bank similar to the written agreement between the loan company and defendant bank.

Defendant bank, on September 28th, forwarded plaintiff's check to the Dearborn bank, together with some other remittances, and enclosed it in what is called its remittance letter, reading "we enclose for credit items as stated below;" then appears in the letter six items aggregating $6490.85, among which was plaintiff's check. Plaintiff's check was received by the Bank of Dearborn on the morning of Saturday, September 29th, and there being a credit to plaintiff in that bank in a sum greater than the amount of his check, the check was entered upon plaintiff's account in that bank as a charge and the check marked "paid."

When plaintiff's check was received by the defendant bank it was charged to the account of the Bank of Dearborn. On the morning of September 28th the Bank of Dearborn had on deposit with defendant bank the sum of $1358.91 and on that day defendant bank sent the remittances already referred to to the Bank of Dearborn, amounting to $6490.85. This created an overdraft in defendant bank at the close of business on September 28th of $5131.89. On the morning of the 28th the bookkeeper of the Dearborn bank procured $1000 in cash from defendant bank, which caused the books of the latter to show an overdraft of $6131.89. On the morning of the 29th the bookkeeper of the Dearborn bank, at the direction of its president, made a deposit of $6250 to defendant bank, which that bank credited to the account of the Dearborn bank. This $6250 was represented by a draft for $4500 drawn by the Dearborn bank on the Commerce Trust Company of Kansas City and another draft in the sum of $1750 drawn by the Bank of Dearborn on the St. Joseph Stock Yards Bank, both checks being made payable to the defendant bank. The defendant bank gave the Dearborn bank credit for $6250 on account of the transaction. On the night of September 29th, the balance that the Dearborn bank had on deposit with the defendant bank was $94.11 as shown by the books, but this was later raised to $118.11 by reason of certain transactions not necessary to relate. The Dearborn bank had on deposit with the Commerce Trust Company and the Stock Yards Bank sufficient money to pay the drafts drawn upon them but the Dearborn bank having closed its doors on Monday, October 1st,...