Paxston v. Gillam-Jackson Loan & Trust Co.

• Decision Date: 06 June 1927
• Parties: MINNIE PAXSTON, RESPONDENT, v. GILLAM-JACKSON LOAN & TRUST COMPANY, APPELLANT. [*]
• Court: Kansas Court of Appeals

297 S.W. 119

221 Mo.App. 1101

MINNIE PAXSTON, RESPONDENT, v. GILLAM-JACKSON LOAN & TRUST COMPANY, APPELLANT. ^[*]

Court of Appeals of Missouri, Kansas City

June 6, 1927

Appeal from the Circuit Court of Nodaway County.--Hon. John M Dawson, Judge.

AFFIRMED.

Judgment affirmed.

Shinabarger Blagg & Ellison, and McCaffrey & Cook for respondent.

Cook & Cummins and A. F. Harvey for appellant.

ARNOLD J. Bland, J., concurs. Trimble, P. J., absent.

OPINION

ARNOLD, J.--

This is an action for money had and received. Defendant is a trust company organized under the laws of Missouri with its place of business at Maryville in Nodaway county. S. G. Gillam is its president and F. R. Wolfers its vice-president and these two are its managing officers. Said company is engaged exclusively in the farm loan business and does no general banking. At Maryville is located, also, the First National Bank, organized under the Federal law governing such institutions and engaged in general commercial banking, but it does not farm loan business and is not a party to this action. At the time of the occurrence giving rise to this suit, one Joseph Jackson was its president and Roy F. Hanna its cashier.

The record discloses that the trust company and the bank are referred to therein as allied companies and that they so advertise themselves; that their places of business are in the same room, each occupying a separate portion thereof. The officers of the bank, in the main, are officers of the trust company and vice versa. Besides being president of the bank, Mr. Jackson is secretary of the trust company, and Mr. Gillam, president of the trust company, is vice-president of the bank. Roy F. Hanna, cashier of the bank, was not an officer of the trust company. There is testimony tending to show the two were allied institutions, working together to a common purpose, offering the public joint service, through newspaper advertising, and that their financial statements were made as one.

On March 23, 1922, one William R. Williams and his wife, Viola, executed and delivered to defendant a note in the sum of $ 2500, with interest coupons attached, and all secured by a deed of trust on lands in Nodaway county. Some time prior to March 23, 1922, Minnie R. Paxston, the plaintiff, an elderly woman living at the home of her great nephew, L. B. Tracy, in Maryville, requested Tracy to go to the First National Bank in Maryville which was her depository at the time, and to procure for her a loan in the sum of $ 2500 to draw seven per cent interest and secured by deed of trust on real property. Thereupon Mr. Tracy went to the said bank and interviewed Mr. Hanna, the cashier, relative to such a loan. Mr. Hanna told him "We will see what we can do."

As a customer of the bank, Mrs. Paxston had a private box for her use which was kept in the vault of the bank where other private boxes were kept and in which she deposited her private papers. A few days after the interview with Tracy, Hanna advised him that "We have a loan which is of the nature Mrs. Paxston is asking for." Tracy gave this report to plaintiff and Hanna called upon plaintiff relative thereto. Thereafter, at the direction of Mrs. Paxston, Tracy prepared a check in the sum of $ 2498.55, drawn on the First National Bank at Maryville and payable to said bank, which plaintiff signed. There was a notation on the check to the effect that it was given in payment of a seven per cent. loan. Plaintiff then placed in Tracy's hands a key to her private box. Tracy went to the bank and informed Hanna that he had brought the check for the loan. Hanna received the check, sent to the desk of Mr. Wolfers, vice-president of the trust company, and received from him the Williams note indorsed in blank by the trust company, together with the deed of trust, and delivered them to Tracy. There is no dispute that the instruments just mentioned are the ones delivered to Tracy. They were received by Tracy and placed in plaintiff's private box in the bank vault.

It appears the private boxes kept by the bank for the use of customers are so constructed that two keys are required to open them, one called the master key, kept in the bank's custody and the other retained by the customer. After placing the note and deed of trust in plaintiff's private box Tracy returned to the hospital where plaintiff was confined and delivered the key to her.

The first interest coupon upon the Williams note was due April 1, 1923, and about that time williams went to the offices of defendant, paid the interest and received the cancelled coupon; defendant issued its check therefor, payable to plaintiff and caused the amount to be deposited in the First National Bank to her credit. Soon thereafter the bank sent plaintiff a statement of her account which showed she had a credit of $ 175.20 in the bank as interest paid to her on the Williams loan. Thus the matter stood for some time.

In the fall of 1924, plaintiff, then in her 79th year, again became incapacitated and was in need of money. Sometime before this she had moved to Bedford, Iowa, some thirty or forty miles from Maryville. Mr. Tracy had left Maryville and was living at Marshall, Mo., and plaintiff wrote him asking him to go to Maryville and get the Williams note and deed of trust from her private box, and cash said note for her pressing needs in her illness. Thereupon Tracy went to Maryville and upon unlocking plaintiff's box, discovered the Williams note and deed of trust were not there, but, instead, he found another and worthless note and deed of trust for a similar amount. This situation was called to the attention of Joseph Jackson, president of the bank, and he went with Tracy to Mr. Wolfers. The latter upon referring to his files and index cards found plaintiff had purchased the Williams note from the trust company, and that the trust company had paid Roy Hanna the sum of $ 2500, plus interest to date, received from Hanna the original Williams note and deed of trust, and had caused same to be cancelled of record.

The investigation further revealed that sometime prior to the second interest-paying date, Williams, for the purpose of buying other interests in land, desired more money; for that purpose he and his wife executed a new note to defendant in the sum of $ 3500, secured by a new deed of trust, leaving the entire amount with Mr. Gillam, president, to pay off the original note of $ 2500, purchased by plaintiff, and to send the remainder to Williams. It appears this transaction took place early in 1924. There is testimony tending to show that at the time of this latter transaction, Gillam informed Williams that an old lady owned the original note, that the trust company would have to send for it and several days would be required to get it. The record shows Gillam told Hanna the original loan would be taken up. A few days later Hanna delivered the note and deed of trust to Gillam who instructed the bookkeeper to give Hanna a check for $ 2500, plus accrued interest to date, made payable to Hanna.

On cross-examination Gillam testified that at the time of the execution of the Williams second deed of trust, he assumed that Mr. Hanna did not own the original note and that at the time he gave him the check in payment therefor, he gave the matter of the ownership thereof no serious thought. He stated he assumed plaintiff owned the note but he gave no serious thought to the matter as to whether he was paying Mr. Hanna as the owner or as agent for plaintiff. It further appears that at the time he received the note from Hanna there was a lead pencil notation of the name "Minnie Paxston" on the mortgage in the handwriting of Wolfers. The witness further testified he did not know plaintiff still owned the original note and deed of trust, but believed she did.

The record shows that when the check given to Hanna by Gillam was returned to the trust company it was without any indorsement whatever. As above stated, the note and deed of trust purchased by plaintiff bore date March 23, 1922, due and payable April 1, 1927, with the privilege of paying $ 100 or any multiple thereof at any interest paying date, on or after the first year; and that the check given Hanna to take up the note was dated approximately a month prior to the due date of the second interest coupon.

The check given Hanna in the sum of $ 2663.70 was cashed by him and $ 163.70 thereof placed to the credit of plaintiff in the bank. What disposition Hanna made of the $ 2500 is not shown but plaintiff asserts a claim for this amount against the defendant trust company. The record shows Hanna was discharged from the bank and at the time of the trial was living in the city of St. Joseph. He was not at the trial, although subpoenaed, and did not testify. The death of the plaintiff, Mrs. Paxston, has occurred since the trial in the court below and the cause has been revived here in the name of the administrator of her estate.

The petition alleges that on January 4, 1924, defendant received from William R. Williams, to the use of plaintiff, the sum of $ 2675; that, being indebted to plaintiff in said sum, defendant promised to pay same to plaintiff and that payment thereof was demanded but refused. Plaintiff alleges that prior to said January 4, 1924, she was the owner of a certain real estate mortgage, executed by one William R. Williams and wife, dated March 23, 1922. Then follows a description of the note, its maturity date and description of the interest coupons attached, and the option or paying on the principal thereof at each interest paying date the sum of $ 100 or any multiple thereof.

The petition further alleges that said note and interest were payable at Gillam-Jackson Loan & Trust Co. at Maryville, Mo that on or...