Moffett Bros. & Andrews Commission Co. v. Kent

• Decision Date: 11 April 1928
• Docket Number: No. 26678.,26678.
• Citation: 5 S.W.2d 395
• Court: Missouri Supreme Court
• Parties: MOFFETT BROS. & ANDREWS COMMISSION CO. v. KENT.

5 S.W.2d 395

MOFFETT BROS. & ANDREWS COMMISSION CO. v. KENT.

No. 26678.

Supreme Court of Missouri, Division No. 1.

April 11, 1928.

Appeal from Circuit Court, Buchanan County; L. A. Vories, Judge.

Action by the Moffett Bros. & Andrews Commission Company against Luther A. Kent. Judgment for defendant, and plaintiff appeals. Affirmed.

Randolph & Randolph, of St. Joseph, and Harding, Murphy & Tucker, of Kansas City, for appellant.

Myers & Snerly, of Chicago, Ill., and Mytton & Parkinson, of St. Joseph, for respondent.

RAGLAND, J.

"This is an action by a chattel mortgagee against a live stock commission merchant for conversion of mortgaged cattle. From the verdict and judgment in favor of the defendant, March 21, 1925, the plaintiff mortgagee prosecutes this appeal. Plaintiff's petition originally contained 16 counts covering cattle of various brands, but at the trial plaintiff struck out certain paragraphs of its petition and dismissed as to all, except counts 1, 7, 8, 13, and 14 covering a part of the one lot of 650 head known as the Bar O cattle.

"Compressed into one bird's-eye view paragraph the facts are: That in the latter part of October, 1920, plaintiff, of Kansas City, Mo., sold one De Lair of Coldwater, Comanche county, Kan., 650 head of steers and took back mortgages thereon, subsequently renewed in other mortgages; that in the fall of 1921 De Lair shipped to plaintiff 404 head of these cattle, the proceeds of the sale of which were retained by plaintiff and applied on De Lair's account, only partially, however, satisfying the mortgages in question; that about the same time De Lair, without plaintiff's knowledge, was shipping some of these cattle to defendant in St. Joe for sale and appropriating the proceeds. Defendant principally contends that the brands were not sufficiently distinct to put him on notice, that plaintiff by a course of dealing with De Lair waived its mortgages, and that after the discovery by plaintiff of the disappearance of the cattle involved plaintiff accepted other securities in lieu thereof and thereby effected an accord and satisfaction wiping out any obligation it might otherwise have against defendant for conversion."

The foregoing brief outline of the case which we have appropriated from appellant's statement requires some amplification. The errors complained of relate for the most part to the instructions given on behalf of defendant. The questions raised with respect to them do not go to the pleadings, but to the evidence. It will be necessary therefore to set out all the pertinent facts of which there was substantial evidence, whether such evidence was given on the part of the plaintiff or on that of defendant, and whether it was undisputed or opposed by countervailing evidence.

For many years prior to the 6th day of February, 1920, De Lair, the mortgagor, owned and operated a large ranch in Comanche county, Kan., consisting of approximately 7,800 acres. On 160 acres of it there was a dwelling and other improvements; this tract constituted his homestead; it was located about 12 miles southeast of Coldwater, Kan. He was a dealer and speculator in cattle. He was engaged in buying, conditioning, marketing, and selling cattle on a large scale. Sometimes he would buy cattle and ship them immediately. At other times he would buy them, keep them for a short period of two or three weeks, and sell and ship them. At still other times he would buy them and keep them for a period of three or four months. When he bought cattle that he did not ship, he would take them to his ranch for the purpose of conditioning them for market. Any cattle he had there were for sale. Through continuing purchases and sales the cattle on his ranch were changing from time to time, from week to week, and from month to month.

De Lair's business was carried on largely upon borrowed capital. For many years he borrowed a great deal of money from the plaintiff. Some of this indebtedness would be evidenced by notes secured by mortgages on cattle. Other indebtedness would be evidenced by unsecured notes. And still other would be carried as an open account. He did not keep his cattle separated as to mortgages or brands. There would be cattle on one part of the ranch, in the same field, mortgaged to several different owners, running together. "He would take the cattle regardless of mortgages or brands, and when they had attained a certain condition he would place them in a certain field." In other words, he classified and separated them according to quality, condition, age, size, and sex, without reference to either brands or mortgages. And he marketed them in the same general way. These practices of De Lair were all well known to plaintiff, and it never at any time voiced any objection to them.

Plaintiff was also engaged in the live stock commission business, and in addition to that it owned and operated a cattle ranch in western Kansas. The latter part of October, 1920, it sold and delivered to De Lair at his ranch the 650 steers in question at $90 per head. De Lair paid a portion of the purchase money in cash and gave notes secured by mortgages on the cattle for the remainder. The 650 head were covered by six different mortgages as follows: One on 116 head, one on 115 head, one on 119 head, one on 91 head, one on 109 head, and one on 100 head. Each secured three or more notes given for allocated portions of the unpaid purchase money. The first mortgage and the notes which it secured were executed under date, October 25, 1920; all of the others, notes and mortgages, were dated November 3, 1920. All of the mortgages were filed for record in Comanche county, Kan., on November 6, 1920. Except for variation in the number of head covered and the amounts and due dates of the notes secured, all the mortgages were the same. A description of the property mortgaged in one will indicate the descriptions in the others:

"One hundred fifteen (115) head of high-grade coming three year old Hereford steers, all dehorned and branded thus ___ on left shoulder and thus O on left hip. They are native Kansas bred and are to be kept on my ranch located about 14 miles southeast of Coldwater in Comanche county, Kansas, being all of the cattle owned by first party bearing said marks and brands whether in excess of the above number or not."

The cattle covered by the six mortgages were in a general way uniform in size and color, with these exceptions: Their weight varied from 950 to 1,250 pounds, and 20 of them were black. There never were at any time any particular cattle of the 650 head selected, separated, designated, or agreed upon as being the cattle described in any particular mortgage. In this connection it is to be further noted that De Lair had on his ranch, at the same time that he was running there the cattle covered by the six mortgages, "a good many three year old white-faced Hereford steers" which did not bear the Bar O brand.

Almost as soon as they were taken, the notes secured by the mortgages in question were sold and discounted to different banks, plaintiff indorsing them with recourse. The mortgages on the 91 head, 109 head, and 100 head, respectively, were released of record, as having been paid, prior to the institution of this suit. The notes secured respectively by the mortgages on the 116 head and 119 head of cattle, at the time that the defendant received on consignment for sale cattle alleged to have been covered by those mortgages, were owned by the People's National Bank of Kansas City, Kan., and the notes secured by the mortgage on 115 head were at such time owned by the Westport Avenue Bank. At the time of the sale and discount of each of the notes, it was understood between the plaintiff and the assignee bank that plaintiff would attend to the collection of the note and look after the mortgage security. After the alleged cause of action for conversion of the mortgaged cattle accrued all of these note were taken up by plaintiff, it paying to the banks the balances due on them.

As stated, plaintiff loaned De Lair a large part of the money with which he carried on business. It also received on consignment and sold for him on commission a great many of his cattle. In its bookkeeping it kept but one account with him. In that account De Lair was charged with all of his indebtedness to plaintiff, regardless of whether it was in the form of notes or an open account, and, if notes, whether secured or unsecured. When payments were made by De Lair, and when proceeds from sales of cattle were retained by plaintiff at De Lair's direction, his general account was credited with the amount or amounts thereof. There was no specific application, for example, of the proceeds arising from the sale of cattle mortgaged to plaintiff to the particular indebtedness secured by the mortgage. De Lair was credited with the amount generally. The bookkeeping method of dealing with notes, secured or unsecured, seems to have been this: When De Lair gave plaintiff a note, he was credited with the note and charged with the proceeds of the loan evidenced by it. When the note became due, he was charged with the amount thereof, and if there was a balance to his credit in the general account such balance was applied as a payment on the note. If the balance was sufficient to discharge the note it was canceled; if not, balances were applied from time to time as they accrued until the note was paid. The balances shown by the general account were always applied to the oldest indebtedness.

When De Lair consigned cattle to plaintiff to be sold, the proceeds of the sale were applied by it as he directed; that is to say, it remitted the proceeds, or a part of them, to De Lair, or to some bank or individual, or retained them in whole or in part and credited his account therewith, as De Lair directed. This was true of all shipments to plaintiff, including those of cattle in which there were cattle on which it held mortgages. On...