St. Louis-Carterville Coal Co. v. Southern Coal & Mining Co.
| Decision Date | 06 June 1916 |
| Citation | 186 S.W. 1152,194 Mo.App. 598 |
| Parties | ST. LOUIS-CARTERVILLE COAL COMPANY, Appellant, v. SOUTHERN COAL & MINING COMPANY, Respondent |
| Court | Missouri Court of Appeals |
Appeal from St. Louis City Circuit Court.--Hon. James E. Withrow Judge.
AFFIRMED.
Judgment affirmed.
James R. Van Slyke for appellant.
(1) The coupons sued on are negotiable instruments under the law merchant and statute. Daniel's Negotiable Instruments (6 Ed.), sec. 1487; Ogden's Negotiable Instruments, p. 193; 10 Cyclopedia of Law and Procedure pp. 1173-1174-1175; Jones on Corporate Bonds, sec. 238; Kenosha v. Lamson, 76 U.S. (9 Wall.) 477; Conn. M. L. Assn. Co. v Railroad, 41 Barb. 9; Railroad v. Cleaney, 13 Ind. 161; Craig v. Vicksburg, 31 Miss. 216; Manning v. Norfolk, 29 F. 839; R. S. 1909, sec 9972. (2) The plaintiff is the bona-fide holder for value before maturity without notice. (3) The conditions and stipulations in the mortgage are not restrictions and limitations of plaintiff's right to recover because plaintiff was without notice of said terms and conditions contained in said mortgage. Manning v. Norfolk, 29 F. 828; Haskins v. Railroad, 74 A.D. 31; Guilford v. Railroad, 48 Minn. 560; Muren v. Southern Coal & Mining Co., 177 Mo.App. 600.
Kramer, Kramer & Campbell and Fordyce, Holliday & White for respondent.
(1) Where, upon their face, the coupons referred to the bonds to which they were attached and purported to be for the semi-annual interest accruing thereon, the purchaser of them is charged with notice of all that the bonds contain. McClure v. Oxford, 94 U.S. 429; Muren v. Coal & Mining Co., 177 Mo.App. 600. (2) The reference in the coupons to the mortgages and bonds, and in the bonds to the terms and conditions of the mortgages, clearly charges the holders of both coupons and bonds with notice of the provisions contained in each of such instruments. McClellan v. Railroad, 110 N.Y. 469. (3) Plaintiff was fully advised through constructive notice of the terms of the mortgages securing the payment of the bonds and coupons attached thereto at the time it accepted the coupons. Muren v. Coal & Mining Co., supra; Belleville Savings Bank v. Coal & Mining Co., 173 Ill.App. 250. (4) Plaintiff's rights under the coupons are subject to all the valid provisions of the mortgages securing the payment of said coupons. Muren v. Coal & Mining Co., supra; Belleville Savings Bank v. Coal & Mining Company, supra.
--This is a suit, in as many counts, on ten separate interest coupons detached from mortgage bonds. The finding and judgment were for defendant and plaintiff prosecutes the appeal.
Two of the coupons expressly recite that they are subject to the terms of the mortgage, and it is, therefore, conceded that plaintiff may not recover on these, in event its right to recover in this suit is denied on the remaining eight. In the view we take of the matter, no recovery may be had on any of the coupons declared upon, and, therefore, we will treat of the first eight only.
It appears the eight coupons were issued by defendant corporation, attached to its mortgage bonds, and were secured by a mortgage deed of trust on its property situate in Illinois. Plaintiff purchased the coupons for a valuable consideration before maturity, as expressed on their face, and after they were detached from the bonds. Plaintiff was not the holder of any of the bonds and possessed no actual knowledge of their provisions; neither was it actually advised of the terms and stipulations or conditions of the mortgage securing them, which was of record in the counties of St. Clair and Clinton, in the State of Illinois, where defendant's real estate was situate.
It is conceded that the mortgage on defendant's property, securing the bonds from which the coupons were detached provides:
"That no holder or holders of any bond or bonds or coupons secured hereby shall have the right to institute any suit, action or proceeding in equity or at law upon any of the bonds or coupons hereby secured or for the foreclosure of this indenture or execution of the trust hereof or for the appointment of a receiver or any other remedy upon said bonds or coupons or under this indenture without first giving notice in writing to the trustee of the fact that said default has occurred and continued as hereinbefore provided; nor unless the holders of a majority in amount of the bonds hereby secured and then outstanding shall have made a request in writing to the trustee and have afforded the trustee a reasonable opportunity to exercise the powers herein granted and to institute such action, suit or proceeding in its name; nor unless the trustee shall, for thirty days after such request in writing, have failed so to do, and such notification and request are hereby declared to be conditions precedent to the execution (except by the trustee) of the powers and trust of this indenture or the appointment of a receiver or any other remedy hereunder or upon such bonds or coupons."
Plaintiff sues on the coupons as if they are negotiable promissory notes, and seeks to recover judgment thereon notwithstanding the provisions of the mortgage above recited, because, it is said, they were not attached to the bonds when it purchased them and it had no actual notice of the contents of the bonds or the mortgage, other than that which appeared on the face of the coupons themselves.
The eight coupons under consideration are identical in form, save each bears a distinct serial number. We copy here the one first described in the petition, which will suffice.
"On the First day of October, 1908,
$ 25
the
$ 25
Southern Coal and Mining Co.
Will pay to bearer at the office of Mercantile Trust Co. in the city of St. Louis, Missouri, twenty-five dollars in gold coin of United States being six months interest then due on its first mortgage five per cent gold bond No. 813.
It is said the court gave judgment for defendant in the view that the coupons were subject to the provisions of the mortgage and, therefore, the right to sue thereon resided in the trustee as therein stipulated, and that it devolved upon plaintiff, as a condition precedent, to show the trustee had failed or refused to act after being requested to do so in accordance with the mortgage provision. The argument concedes such to be the rule in a case where the coupon holder has actual notice of the provisions of the bond and mortgage at the time of acquiring the coupons, as declared in Muren v. Southern Coal & Min. Co., 177 Mo.App. 600, 160 S.W 835. But it is argued that, here, plaintiff had no actual knowledge of the provisions of the bonds or the mortgage at the time it purchased the coupons, and it is said the coupons must be regarded as promissory notes, for that they stipulate an unconditional promise to pay the bearer a given amount at a definite time. If nothing more appeared on the face of the coupons, the argument would inhere with much force. [See section 9972, R. S. 1909.] But, by reference to the coupon, it will appear that it recites on its face a promise to pay "Twenty-five dollars in gold coin of United States being six months' interest then due on its first mortgage five per cent gold bond No. 813." Although plaintiff purchased the coupons after they were detached from the bonds and before maturity for a valuable consideration, it is manifest it knew they represented interest accruing on defendant's first mortgage bonds and...
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