Southern Missouri Trust Co. v. Crow

• Decision Date: 13 May 1925
• Docket Number: No. 3767.,3767.
• Citation: 272 S.W. 1040
• Parties: SOUTHERN MISSOURI TRUST CO. v. CROW.
• Court: Missouri Court of Appeals

272 S.W. 1040

SOUTHERN MISSOURI TRUST CO. v. CROW.

No. 3767.

Springfield Court of Appeals. Missouri.

May 13, 1925.

Rehearing Denied June 6, 1925.

Appeal from Circuit Court, Lawrence County; Charles L. Henson, Judge.

Action by the Southern Missouri Trust Company against J. W. Crow. Judgment for plaintiff, and defendant appeals. Affirmed.

Wright & Ruffin, of Springfield, for appellant.

G. M. Sebree, of Springfield, for respondent.

BAILEY, J.

Plaintiff, a banking institution located at Springfield, Mo., brought suit for $1,590 and attorney's fees, based on a promissory note, dated February 23, 1921, payable to the order of the Elgin Auto Company. Plaintiff purchased or became possessed of the note from the Elgin Auto Company before maturity. The answer charged as a defense that the note was secured by an instrument in writing, purporting to give as security for said note a certain Elgin automobile therein described; that plaintiff had knowledge of said instrument, and the assignment of said note carried with it said security; that one R. E. Umphres, acting for and in behalf of plaintiff, seized said automobile and took same from the possession of defendant, without defendant's consent, and over his protest, and delivered it into possession of plaintiff; that said instrument was in the nature of a mortgage, which was never foreclosed, and that plaintiff still retained possession of said automobile; that plaintiff unlawfully converted said automobile to its own use to defendant's damage in the sum of $2,100; that by reason thereof said note had been paid, and that there was a surplus, after offsetting the amount due on said note, amounting to $700, for which sum defendant asked judgment. The reply was a general denial of the new matter set forth in the answer. On trial to the jury, judgment was against defendant for $1,600, from which judgment defendant has perfected his appeal to this court.

The principal assignment of error, and the point decisive of this appeal, is the giving of a peremptory instruction directing the jury to find the issues in favor of plaintiff in the sum of $1,600.

In considering this case, it is well to state at the outset the long and well settled legal principle in this state, that a note and mortgage or other instrument securing same are separate and distinct contracts; that the holder of a note, secured by a mortgage, may enforce the personal obligation thereon, irrespective of the security, and without resort thereto. Allen v. Dermott, 80 Mo. 56; Maffat v. Greene, 149 Mo. 48, 50 S. W. 809; Hawes v. Mulholland, 78 Mo. App. 493.

In the case at bar, plaintiff brought suit direct upon the note without first selling the property covered by the instrument, which purported to be a conditional sale agreement in which title was reserved by the seller. This instrument also contained a clause providing that "upon the seller so taking possession of the car, seller may sell the car at public or private sale at any time thereafter, without notice to the buyer, and the seller may become the purchaser thereof, and if the proceeds thereof are insufficient to pay all sums remaining unpaid hereunder, and the expense caused by such repossession, removal, reparation, storage, liens, and sale, any deficiency shall be paid by the buyer; any overplus, shall be paid to the buyer." Whether this instrument be construed as a chattel mortgage or conditional sale agreement, this clause would have to be complied with by plaintiff if it did, in exercising its power under said instrument, take or retain possession of the car through an agent or otherwise. Upon thus taking possession, plaintiff would be required to sell the property within a reasonable time thereafter; otherwise, plaintiff would be guilty of conversion per se. Simpson v. Bantley, 142 Mo. App. 490, 126 S. W. 999.

This leads us to the defense pleaded, that Umphres, the manager of the Elgin Auto Company, while acting as agent for plaintiff, seized the automobile covered, by the chattel mortgage without defendant's consent, and, after obtaining possession, failed to sell the property as provided in the chattel mortgage, and that plaintiff has converted same to its own use. Since we have for consideration the propriety of the directed verdict for plaintiff, defendant's evidence should be taken at its face value, and if there was any substantial evidence in support of the defense pleaded, the peremptory instruction was wrong. Piper v. Allen (Mo. App.) 219 S. W. 98.

The testimony offered at the trial, which was very brief, developed about the following state of facts: Plaintiff is a banking institution. The Elgin Auto Company was engaged in selling automobiles in the city of Springfield, Missouri. Plaintiff was the depository of the Elgin Auto Company, and handled their notes derived from the sale of cars. The Elgin Auto Company was also largely indebted to plaintiff. Defendant, who was a stockholder in the Elgin Auto Company, purchased the car in question for the price of $1,661, which was the wholesale price on the car retailing at $2,100. He paid $200 cash, and gave...