Seehorn v. American National Bank
| Decision Date | 21 February 1899 |
| Citation | 49 S.W. 886,148 Mo. 256 |
| Parties | Seehorn, Appellant, v. American National Bank |
| Court | Missouri Supreme Court |
Appeal from Jackson Circuit Court. -- Hon. J. H. Slover, Judge.
Reversed and remanded.
Peak & Ball and I. P. Ryland for appellant.
(1) The uncontradicted evidence establishes every fact which the given instructions declare entitles plaintiff to recover. The main proposition which plaintiff's instructions contain is: (a) If defendant received the notes as collateral and issued Thatcher its receipt therefor; and, (b) if the defendant surrendered any of these notes to the Ames State Bank, (c) without the direction, consent or knowledge of Thatcher -- then, these three things being true, defendant is liable for the value of the notes so surrendered. (2) (a) There was no such understanding as the second instruction supposes, when the defendant received the collateral. (b) Thatcher was not bound by such an agreement or understanding if there was one. (c) Not only is there no evidence that the withdrawn notes were replaced by about the same amount, but all the testimony on the subject shows that they were not. (3) It is impossible to tell from the conflicting declarations of law on what facts the court based its finding; in some instructions it declares the defendant liable unless Thatcher knew of or consented to the surrender of the collateral, and according to others, it holds defendant not liable, regardless of whether Thatcher knew of or consented to the surrender. This should work a reversal. Krider v. Milner, 99 Mo. 149; Suddarth v Robertson, 118 Mo. 293; Keyes v. Bank, 52 Mo.App. 330; 1 Morse on Banking (3 Ed.), secs. 194-196.
Gage Ladd & Small for respondent.
(1) The burden of proof was certainly on the plaintiff to show that the collateral for the alleged conversion of which the suit is brought, was pledged to secure one or more of the certificates mentioned in the petition. Inasmuch as the evidence conclusively shows that this collateral was pledged to secure a certificate of deposit for $ 5,000 and does not show that it was the $ 5,000 certificate mentioned in the petition, but tends to show that it was another certificate for $ 5,000 issued in 1888, there is a total failure of proof of the cause of action set up in the petition. It is therefore immaterial whether the declarations of law of which appellant complains were right or wrong. (2) If the collateral mentioned in the petition was not deposited for a different $ 5,000 certificate from that mentioned in the petition, as we claim it was, then, under all the testimony, it was a part only of the collateral to secure the payment of the certificates mentioned in the petition; another part of that collateral, and the principal part, being held by Mr. Thatcher, himself, and still another portion of it being held by the Union Investment Company, and all of it being held under one continuous contract, agreement and transaction, and therefore the collateral in the hands of the American National Bank, there being no evidence to the contrary, was presumably to be handled the same as the collateral in the hands of Mr. Thatcher and the Union Investment Company, and the evidence shows conclusively that it was handled in exactly the same way; Mr. Thatcher himself surrendering collateral when it came due, sending it to the Ames Bank, which collected and retained the proceeds, and generally returned other collateral to him in the place of that surrendered, but not always, so that in the end Mr. Thatcher himself had, proportionately, surrendered about as much collateral without receiving anything in return, as had the American National Bank. Consequently, for this reason also, appellant wholly failed to make out a cause of action against the respondent. (3) It is settled law that if a contract between A. and B. for the benefit of C., is rescinded before C. assents to or acts upon it, no one has a right of action thereon. Tribble v. Strother, 25 Ohio St. 378; Davis v. Callaway, 30 Ind. 112; Garland v. Bischoff, 47 Ind. 212; Brewer v. Maurer, 38 Ohio St. 543; Gilbert v. Sanderson, 56 Ia. 349; Jones v. Higgins, 80 Ky. 409; Talbert v. Ins. Co., 80 Ind. 434. So in order to constitute a pledge at all, there must be a delivery of the collateral pledged to the pledgee or to a third person agreed upon between the pledgor and pledgee. Colebrooke on Coll. Securities (2 Ed.), secs. 9 and 10; Succession of Lanaux, 15 So. Rep. 708. (4) Respondent had the right to surrender and substitute the collateral as it did do. Colebrooke on Collateral Securities (2 Ed.), secs. 14, 15 and 100. (5) The receipt is so incomplete and ambiguous on its face that the parol evidence which was introduced, and which in no way tends to contradict anything in the receipt itself, was perfectly competent. Union Depot Co. v. Railroad, 131 Mo. 305; Patterson v. Camden, 25 Mo. 22; Benson v. Peebles, 5 Mo. 132; Black River Lumber Co. v. Warner, 93 Mo. 384; St. Louis Gas Co. v. St. Louis, 46 Mo. 121; Ellis v. Harrison, 104 Mo. 270; Wolfe v. Dyer, 95 Mo. 545; Edwards v. Smith, 63 Mo. 119; Bunce v. Beck, 43 Mo. 266; Moss v. Green, 41 Mo. 390; Evans v. Western Bros. Co., 118 Mo. 554.
Plaintiff, public administrator of Jackson county, and as such in charge of the estate of Charles Thatcher, deceased, prosecutes this suit against defendant for the alleged conversion of collaterals of the value of $ 6,000, the property of said Thatcher. The case was tried by the court, a jury being waived. The trial resulted in a judgment for defendant, from which plaintiff appeals.
At the time of his death Thatcher was a resident of Vermont.
On May 12, 1886, he deposited with the Ames State Bank, at Ames, Kansas, not subject to check, $ 7,000, and received from said bank its certificate numbered 1031, payable in one year, with interest at ten per cent per annum. On July 1, 1887, Thatcher deposited with said bank the sum of $ 5,000 and received from it a certificate numbered 1087, payable on demand, with interest at eight per cent. The interest was paid on this deposit to January 1, 1891. On August 1, 1887, Thatcher deposited with said bank the further sum of $ 1,500, and received from it a certificate numbered 1095, due in six or twelve months after date, with eight per cent interest, upon which said certificate, interest was paid by said bank to February 1, 1891.
Thereafter, in February, 1891, the Ames State Bank made an assignment for the benefit of its creditors, to E. K. Streeter, as assignee. On April 25, 1892, the assignee paid as dividends on certificate numbered 1031, the sum of $ 604.33; on certificate number 1087, the sum of $ 420.97, and on March 16, 1892, he paid on certificate number 1095, the sum of $ 974.25, and on April 25, 1892, the sum of $ 125.67, and on January 24, 1894, from the proceeds of a collateral note the sum of $ 204.
The petition alleges that on August 21, 1888, the Ames State Bank agreed with said Thatcher, to deposit and did deposit, with the defendant, as collateral security, for the payment of the certificates of deposits so issued and delivered to Thatcher, fifteen promissory notes, then held and owned by the Ames State Bank, aggregating the sum of $ 5,294.99; which defendant agreed with said Thatcher to take and hold as collateral security for said certificates of deposit, and duly issued and delivered to said Thatcher its receipt for said notes bearing date August 21, 1888, and signed by D. V. Rieger, its cashier; and that said collateral notes were thereafter delivered to said Ames State Bank against the will and consent of said Thatcher. All allegations in the petition were denied in the answer.
Defendant never gave to Thatcher a receipt for the notes or any of them, but did on August 21, 1888, receipt to the Ames State Bank for them, reciting in the receipt that they were as collateral to certificate of deposit held by Hon. Chas. Thatcher, and the receipt was afterwards found among Thatcher's papers by his Vermont administrator. Whenever Thatcher deposited money with the Ames State Bank, the bank sent him collateral as security, the collateral being intended to secure all certificates of deposit, whether held by Thatcher in person or by defendant bank for him, and whenever he deposited a thousand dollars he got a thousand dollars collateral as security.
Thatcher from time to time surrendered to the Ames State Bank collateral as it approached maturity, the bank generally returning to him other collateral in lieu of that surrendered, but it does not appear from the evidence that defendant bank had any authority from Thatcher to do so.
On March 3, 1890, Thatcher wrote to the Ames State Bank, as follows:
There was also an arrangement between the Union Investment Company and the Ames State Bank, by which the treasurer of the company guaranteed $ 5,000 of the indebtedness of the Ames State Bank to Charles Thatcher so long as an equal amount of money remained on deposit by the Ames State Bank with that company. This was in lieu of the collateral, and was subject to withdrawal at any time by the Ames State Bank. But Thatcher was not a party to this arrangement and knew nothing about it.
Prior to March, 1890, defendant bank without the knowledge or consent of Thatcher surrendered to the Ames State Bank at its request, all of the collateral notes for which the receipt to it for Thatcher had been given, except three notes amounting to $ 815.
The plaintiff asked the court to declare the law as follows:
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