Richardson v. Ashby

• Citation: 33 S.W. 806,132 Mo. 238
• Parties: RICHARDSON v. ASHBY.
• Decision Date: 28 January 1896
• Court: United States State Supreme Court of Missouri

33 S.W. 806

132 Mo. 238

RICHARDSON v. ASHBY.

Supreme Court of Missouri, Division No. 1.

January 28, 1896.

TROVER AND CONVERSION — REPLEDGE OF COLLATERAL PAPER — COUNTERCLAIM — DEMAND — DAMAGES.

1. In an action on a note it appeared that, at the time defendant made it, she pledged to plaintiff's intestate other notes as collateral security; that decedent had repledged them as collateral to a loan made to himself, and that plaintiff was unable to produce them; that defendant admitted her liability on her note, and, in a counterclaim, prayed judgment against decedent's estate for the difference between the value of the collateral notes and the amount due from her. Held, that the repledging of the notes was a conversion, and that defendant was entitled to judgment as prayed.

2. In such a case a demand for a return of the collateral notes was unnecessary, on the part of defendant, before filing her counterclaim.

3. The amount recoverable in such case for the collateral notes was the value of them at the time of their conversion.

Appeal from St. Louis circuit court; D. D. Fisher, Judge.

Action by W. C. Richardson, administrator of Jeptha H. Simpson, deceased, against M. Octavia Ashby, to recover on a promissory note payable to the order of plaintiff's intestate, and signed by defendant. From a judgment in favor of defendant, plaintiff appeals. Affirmed.

R. M. Nichols, for appellant. Collins & Jamison, for respondent.

ROBINSON, J.

This action was instituted by appellant, as public administrator of the city of St. Louis, having in charge the estate of Jeptha H. Simpson, deceased, to recover upon a promissory note payable to the order of Jeptha H. Simpson, and signed by the defendant. Petition in the usual form. The answer, after admitting the execution of the note in suit, avers that the defendant delivered to said Simpson, as collateral to secure the payment of her note, 16 negotiable notes, secured by deed of trust on real estate, of the aggregate value of $10,000; that, soon after the delivery of said collateral to said Simpson, he unlawfully disposed of and converted the same to his own use and benefit, by rehypothecating same to secure a loan of $5,000, and that said loan had not been paid off by the said Simpson, but that same had been probated against his estate, and remains yet unpaid; that, by the unlawful conversion of said collateral by said Simpson, his representatives are now unable to deliver up to her said collateral when this defendant shall pay her note now in suit; and that defendant has offered to pay to plaintiff the amount of her note upon delivery to her of the collateral left with the said Simpson, but that, on account of the wrongful and unlawful conversion of same by said Simpson, plaintiff, is unable to deliver them to defendant, to her damage in the sum of $10,000, wherefore she prays judgment against the estate of said Simpson, deceased, in the sum of $10,000, less the amount due on her note now in suit. Plaintiff filed his reply, denying the new matter set up as defense and counterclaim, and asked judgment in accordance to the prayer of his petition. Upon the issues as thus made up, without further objection, the case was tried by the court, without the intervention of a jury; resulting in a finding for plaintiff, on his note, for $3,708, and a finding for defendant, on her counterclaim, for the sum of $6,925, and an entry of judgment therein in favor of defendant for the sum of $3,217, and ordering same classified against Simpson's estate, to reverse which plaintiff has prosecuted this appeal.

At the close of the testimony, plaintiff asked three declarations of law, embracing his views of the case, all of which were refused by the court, whereupon the court made the findings, and rendered its judgment thereon, as above indicated, without the giving of any declarations of law whatever; and, as none were asked by the defendant, we must conclude, from the proof made and the result ascertained, that the case was tried upon the theory that if plaintiff's intestate disposed of the collateral notes left with him by defendant in a manner not within the purview of any power delegated to him expressly, and not within the manner prescribed by the policy and rules of law for the disposition and use of such collateral when left with a pledgee as security for a prescribed debt, and that the pledgee was answerable as for a conversion of the collateral, and that as the wrongful conversion was a violation of the contract of pledge, and was a part of the transaction that led up to the making of the original indebtedness, and as it was a wrong growing out of the same transaction that resulted in the making, signing, and delivery of the principal note, it was a proper matter of set-off against the note in suit, and that the true measure of damages to defendant, by way of set-off, when the facts show, as in this case, that the collateral was not worth its face value, was its actual value at the time of the disposition of the same by the pledgee. This conclusively follows from the finding of the court on the undisputed facts, as shown in evidence, which finding and conclusion we, in this opinion, indorse.

The following are the declarations of law asked by plaintiff that were refused by the court, and for which this appeal was prosecuted: "(1) The court declares the law to be that although it may find from the evidence that the defendant pledged with the plaintiff's intestate the Hellman notes, and deed of trust securing the same, and the said Totten notes, and deed of trust securing the same, shown in evidence, and although the court may further believe from the evidence that the said plaintiff's intestate, during his lifetime, and on or about, to wit, the 22d day of August, 1892, pledged the said collateral with one Henry Schmidt, for an amount greater than the sum borrowed from him by defendant, and to secure which said defendant pledged said collateral security...