Monett State Bank v. Eubanks

• Decision Date: 16 April 1907
• Citation: 101 S.W. 687,124 Mo.App. 499
• Parties: MONETT STATE BANK, Respondent, v. EUBANKS, Appellant
• Court: Missouri Court of Appeals

101 S.W. 687

124 Mo.App. 499

MONETT STATE BANK, Respondent, v. EUBANKS, Appellant

Court of Appeals of Missouri, St. Louis

April 16, 1907

Appeal from Lawrence Circuit Court.--Hon. F. C. Johnston, Judge.

AFFIRMED.

STATEMENT.--The action is on the following promissory note, indorsed in blank by the payee, William McCormack:

"$ 500. Monett, Mo., July 27, 1905.

"October 1, 1905, after date I promise to pay to the order of Wm McCormack five hundred dollars, for value received negotiable and payable without defalcation or discount, at the office of the Monett State Bank, Monett, Mo., and with interest from date at the rate of seven per cent per annum and if the interest be not paid annually to become principal and bear interest at the same rate. J. C. EUBANKS."

The petition is in the usual form. The answer admitted the execution of the note, but as a special defense, stated, in substance, that in 1904, defendant bought a threshing machine of McCormack which McCormack represented to him to be free of all incumbrances; that for the purchase price defendant gave McCormack his three promissory notes aggregating about $ 1,800, which he secured by chattel mortgage on the threshing machine; that afterwards McCormack borrowed $ 550 of the Citizens' Bank of Monett and delivered said notes and chattel mortgage as collateral to secure said loan; that on the maturity of McCormack's note to the bank, he was unable to pay it and at his request defendant executed to him three new notes and a new chattel mortgage, whereupon McCormack renewed his note to the bank and deposited the three new notes and the chattel mortgage as collateral security, and the note sued on is the first to mature of the said new notes; that at the time defendant purchased the threshing machine it was incumbered by a mortgage given by McCormack to Nichols, Shepherd & Co., who took possession of the machine and sold it under their mortgage a short time after defendant's purchase, and by reason of these facts the notes, including the one sued on, are wholly without consideration. It is also stated in the answer that the new notes and chattel mortgage were executed for the purpose of renewing the first or original notes and chattel mortgage which were to be cancelled and delivered to defendant, but plaintiff bank refused to cancel said old notes and chattel mortgage or to deliver them to defendant. On motion of plaintiff that part of the answer which alleges the threshing machine was mortgaged to Nichols, Shepherd & Co., and was by that company taken and sold under its mortgage was stricken out.

The facts are, McCormack borrowed from the Citizens Bank of Monett $ 550, for which he gave the bank his note and indorsed the notes of defendant, secured by the chattel mortgage on the threshing machine in blank and delivered them to the bank as collateral security for the payment of his own note. Afterwards the Citizens Bank was consolidated with or taken over by the plaintiff bank, which paid value received for the assets of the Citizens Bank, including the McCormack note. When McCormack's note became due he was unable to pay it. One of defendant's notes pledged to the bank as collateral was also due. McCormack went to defendant, related these facts and said to him that he (McCormack) could renew his note, if defendant would renew his notes and give him a chattel mortgage on the machine. Defendant agreed to do this and three new notes, including the one sued on, were given by defendant to McCormack and secured by a new chattel mortgage on the threshing machine, whereupon McCormack renewed his note to the bank and indorsed...