Missouri Discount Corporation v. Mitchell
| Decision Date | 07 April 1924 |
| Citation | 261 S.W. 743,216 Mo.App. 100 |
| Parties | MISSOURI DISCOUNT CORPORATION, Respondent, v. FRED MITCHELL, Appellant |
| Court | Kansas Court of Appeals |
Appeal from Circuit Court of Clay County.--Hon. Ralph Hughes, Judge.
REVERSED AND REMANDED.
Judgment reversed and cause remanded.
Craven & Bates for appellant.
William B. Bostian for respondent.
Plaintiff, as holder of a chattel mortgage given by Eby-Cheek Motor & Realty Company on an "Essex Coach Automobile built in 1922, Chassis No. 513,783 Motor No. 95,960" on which default had been made, brought replevin to recover possession of same, it having been sold by the Eby-Cheek Motor Company to the defendant Fred Mitchell without mortgagee's knowledge or consent. At the trial suit was dismissed as to the Eby-Cheek Motor & Realty Company, the defendant Fred Mitchell being in possession of the car at the time of filing the suit and refusing to give it up on demand. The petition, in the ordinary form of replevin, did not disclose on its face the grounds on which plaintiff claimed the right to the possession of the car. Defendant Mitchell filed answer setting up that he was the owner and entitled to the possession of the car, denying plaintiff's right to the possession thereof, denying that defendant wrongfully detained it and praying for its return with damages, it having been taken from him by the sheriff under the writ, plaintiff having given bond.
The jury returned a verdict finding that plaintiff was entitled to the possession of said automobile and that the same was in the possession of and detained by defendant Mitchell. From the judgment rendered on said verdict he has duly appealed.
The sole defense made was and is that the mortgage exacted usurious interest which, if true, rendered the chattel mortgage "invalid and illegal" under section 6496, Revised Statutes 1919.
The Eby-Cheek Motor & Realty Company was a local retail dealer in Excelsior Springs, selling Essex and Hudson automobiles which were manufactured and sold by the Hudson Motor Company of Detroit, Michigan. The Hudson-Brace Motor Company, located at Kansas City, is a corporation separate and distinct from the Hudson Motor Company, and was the distributing agent for said cars throughout the territory of which Excelsior Springs is a part. The plaintiff, Missouri Discount Corporation, was another Kansas City company, engaged in the business of helping to finance retailers and possibly others in the purchase of automobiles.
In November, 1922, the Eby-Cheek Motor & Realty Company desired to purchase for retail three automobiles, two Essex cars and one Cabriolet, but did not have sufficient cash to do so. The distributing agent, Hudson-Brace Motor Company, of Kansas City, arranged with the plaintiff, Missouri Discount Corporation, to assist the retail dealer in buying them.
The total amount necessary to buy the three cars was $ 3121.56, which was to be paid to the Hudson-Brace Motor Company. Of this amount, the Eby-Cheek Motor & Realty Company could and did raise $ 676.64, and the plaintiff, Missouri Discount Corporation, agreed to advance the balance, to-wit, $ 2444.92.
The three cars were shipped to Excelsior Springs, with bill of lading having attached thereto a draft for the $ 3121.56 drawn by the Hudson-Brace Motor Company on Eby-Cheek Motor & Realty Company, bill of lading and draft being sent to the Clay County State Bank of Excelsior Springs. The Hudson-Brace Motor Company wrote to the Eby-Cheek Motor & Realty Company that it should give to the bank a check for the $ 676.64 they were to furnish, and that the plaintiff (referred to in said letter as the "Finance Company") would send check for $ 2444.92 to cover the balance of the draft of $ 3121.56.
In this Hudson-Brace letter, the $ 676.64, to be furnished by the Eby-Cheek Motor & Realty Company, was stated to be made up of certain items, namely, fifteen per cent of the wholesale price of each car, certain fixed specific charges due the Hudson-Brace people and the "Finance Company's charges" which were stated to be $ 27.93 on one car, $ 30.38 on another, and $ 30.38 on the third (the car in suit), making a total for the "Finance Company's charges" of $ 88.69.
The plaintiff, Missouri Discount Corporation, wrote the Clay County State Bank, inclosing a draft for the $ 2444.92, the part they had agreed to furnish, together with an "Option to Purchase" on each automobile for the Eby-Cheek Motor & Realty Company to execute, after which the bank could apply the plaintiff's draft of $ 2444.92 and the Eby-Cheek Company's $ 676.64 to the draft of $ 3121.56. These so-called "Options to Purchase" were in reality Chattel Mortgages, and one of them is the chattel mortgage on the car in question and referred to at the outset of this opinion as the basis of the plaintiff's claim of right to the possession of said car. These "options to purchase," or chattel mortgages, called for a total sum of $ 2533.61 placed against, or loaned upon, the three cars, which sum was divided up as follows: $ 867.77 against the car involved in this suit and in the chattel mortgage relied upon, $ 867.77 on the second car, and $ 798.07 on the third. The total sum secured by the three chattel mortgages, to-wit, $ 2533.61 amounted to $ 88.69 more than the amount of the plaintiff's draft of $ 2444.92.
The Eby-Cheek Motor & Realty Company paid their $ 676.64, which included the $ 88.69 "Finance Company's charges" (stated in the Hudson-Brace Motor Company's letter to the bank) and the bank had the Eby-Cheek Motor & Realty Company to execute the three "Option to Purchase" agreements, or chattel mortgages as we call them, and, with the money on the two checks, remitted to the Hudson-Brace Motor Company the proceeds of its draft for $ 3121.56. The three cars were placed in storage, or in the Eby-Cheek's warehouse, and the three chattel mortgages were duly recorded by plaintiff.
Thus, in paying the $ 676.64, Eby-Cheek Motor & Realty Company paid once for plaintiff's charges, that is, $ 30.38 on each of two cars and $ 27.93 on the third car, or $ 88.69 in all; and in plaintiff's "options to purchase" or chattel mortgages the same charges were also included in the amount secured thereby. When the Essex coach automobile not in controversy was sold by Eby-Cheek Motor & Realty Company in the course of their retail trade, the chattel mortgage was paid off by them and, in so doing, the $ 30.38 charges against that car were paid to plaintiff by said retail dealer, and they likewise paid to plaintiff the $ 2793 charges the Cabriolet when it was sold and the mortgage thereon paid off; and the charges of $ 30.38 are included in the $ 867.77 secured by the chattel mortgage on the car involved herein-However, plaintiff contends that the inclusion of its charges in the amount the Hudson-Brace people required Eby-Cheek Company to raise, to-wit, $ 676.64, was a mistake committed by the Hudson-Brace people, unknown to plaintiff; that the inclusion of said charges in said sum was not authorized by plaintiff, and that they did not receive, nor did they intend to receive, any benefit therefrom.
F. O. Trotter, who, at the time of and prior to the transaction in reference to the purchase of the three cars, was an employee and perhaps an officer in the plaintiff corporation and who is still connected with it in some capacity, was a witness for plaintiff. He testified that the total amount of plaintiff's charges for the three loans was $ 88.69 and that this "was for insurance and our charges." On cross-examination, after looking at plaintiff's records, he said that this amount of $ 88.69 was made up of $ 7.50 for insurance, $ 1.20 expense and $ 79.99 for "commission and profits" for the furnishing of the $ 2444.92 for ninety days, the length of time the "option to purchase" had to run. Although he finally admitted that from the Hudson-Brace letter, it "looked like" the plaintiff's charges were included in the $ 676.64 paid by Eby-Cheek Motor & Realty Company and were also included in plaintiff's mortgages, yet he insisted they were not included in the former with plaintiff's knowledge, and that plaintiff got no part of the money sent by the bank to the Hudson-Brace Motor Company.
He admitted that prior to the transaction in which the plaintiff undertook to finance Eby-Cheek Motor & Realty Company in the purchase of the three automobiles, he wrote a letter in behalf of plaintiff to Eby-Cheek Motor Company, enclosing a blank "financial statement" which he stated was sent at the request of the Hudson-Brace Motor Company, "who have made arrangements with us to finance you for Hudson and Essex Cars."
The letter further stated that:
The foregoing evidence of Trotter was given in the forenoon on the day of trial. In the afternoon, Pugsley, plaintiff's Vice President and Manager, went on the stand and swore that the $ 30.38 on each of the two cars and the $ 27.93 on the other one, aggregating $ 88.69 for plaintiff's charges were included by Hudson-Brace Motor Company, in their letter to the bank, by mistake; that plaintiff got no part of the $ 3121.56 sent by the bank to the Hudson-Brace Motor Company and consequently no part of the $ 88.69 charged and included in the payment of $ 676.64 by Eby-Cheek Motor Company to the Bank for the Hudson-Brace Motor Company; that plaintiff had never received from the Hudson-Brace people any of those charges, and had...
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