State ex rel Kennan v. Fidelity & Deposit Co.
| Decision Date | 15 April 1902 |
| Citation | 67 S.W. 958,94 Mo.App. 184 |
| Parties | STATE ex rel E. C. KENNAN, Respondent, v. FIDELITY & DEPOSIT CO. et al., Appellants |
| Court | Missouri Court of Appeals |
Appeal from Audrain Circuit Court.--Hon. Elliott M. Hughes, Judge.
AFFIRMED.
Judgment affirmed.
J. F Woodson for appellants.
(1) And a part of the mortgage indebtedness being thus void so far as the security was concerned, the entire mortgage was vitiated. State to use v. Hope, 102 Mo. 410; Boland v Ross, 120 Mo. 208; Gregory v. Sitlington, 54 Mo.App. 60; Ball v. O'Neill, 64 Mo.App. 388; Lumber Co. v. Mining Co., 78 Mo.App. 676. (2) The relationship of attorney and client is one of trust and confidence, and dealings between them are carefully watched and guarded the same as that of guardian and ward. 3 Am. and Eng. Ency. Law (2 Ed.), 334-335; not mentioned supra. (3) Plaintiff's instruction No. 7 was erroneous for the reason that it uses the words "in good faith for the purpose of securing an honest debt." In commenting upon an instruction containing these words Judge SMITH, of the Kansas City Court of Appeals, says: "The language of an instruction should be plain, unambiguous English that a wayfaring man, though a fool, may not err therein." And that court held that such words in an instruction were highly improper and reversible error. Dry Goods Co. v. Schooley, 66 Mo.App. 406.
Fry & Clay for respondent.
(1) There are no elements of estoppel in this case. To constitute estoppel in pais there must have been a false representation or a concealment of material facts, made with knowledge of such facts, to one who was ignorant of the truth of the matter, with the intention that he should act upon it and that he was induced to do so. Shields v. McClure, 75 Mo.App. 631; Blodgett v. Perry, 97 Mo. 273. (2) Fraud is an essential element of estoppel. No man can set up another's conduct as a ground of estoppel unless he has himself been misled by such conduct, nor when he knew or had the same means of knowledge as to the truth, nor when he has not suffered loss. Hequembourg v. Edwards, 155 Mo 522. (3) The mortgage, by its terms, while it provided for the mortgagor to remain in possession and sell, further required him to apply the proceeds to the mortgage debt, and was valid on its face, and plaintiff's first instruction was properly given. Bank v. Powers, 134 Mo. 432; Dunham v. Stevens, 160 Mo. 95. (4) The issue as to fraud, in fact, was submitted to the jury by the court under instructions 7 and 8, given at the request of defendants, and the finding being against defendants, that issue is not reviewable on appeal. Hardware Co. v. Randall, 69 Mo.App. 342.
Appellants are a mercantile firm doing business in the city of St. Joseph, Missouri. The respondent is an attorney at law residing at Laddonia, Audrain county, Missouri. J. G. Harley and M. G. Harley, composing the firm of J. G. Harley & Company, on and prior to January, 1900, were doing a small general mercantile business at the town of Laddonia and were, prior to January, 1900, indebted to the appellants in the sum of four hundred and fifteen dollars. On or about the third day of February, 1900, appellants, through their attorney, J. F. Woodson, at St. Joseph, transmitted their account against J. G. Harley & Company to respondent for collection, with instructions to collect or sue immediately. Respondent received the account for collection and made demand on Harley & Company for payment. The account was not paid. Afterwards respondent procured the promissory note of J. G. and M. G. Harley for the amount of the claim and brought suit in the Audrain Circuit Court thereon and, on the twelfth day of June, 1900, obtained a judgment for the amount due on the note.
On the fourth day of January, 1900, J. G. and M. G. Harley executed and delivered to respondent a chattel mortgage on their entire stock of merchandise, consisting in part of dry goods, boots and shoes, hats and caps, fancy goods, dress goods, notions, groceries and provisions, rubber goods and boys' and men's clothing, as well as their store furniture and fixtures, located in the DeLaporte storehouse in block five of the original town of Laddonia, to secure their promissory note of even date for the sum of nine hundred and eighty-eight dollars and eighty-two cents payable to respondent due ten days after date. The mortgage was made to include and cover all merchandise that thereafter might be from time to time added to the stock and the mortgagors were permitted to remain in possession and sell from their stock in the usual and ordinary course of business, at retail only, upon the express stipulation and agreement that they should keep a true and accurate account of each day's sale and sell only for cash, and that the proceeds of all sales made by them should, at the close of each week's business, be turned over to the mortgagee and applied to the first payment of the debt secured until the whole of the debt, interest, cost and expense should be paid. This mortgage was duly acknowledged on the day of its date and was filed for record on the third day of February, 1900. At the instance of appellants' attorney at St. Joseph an execution was issued on their judgment against Harley & Company on the twenty-second day of August, 1900, and delivered to the sheriff of Audrain county, who levied on the property described in the mortgage, being all the property then owned or possessed by Harley & Company. When the levy was made, respondent gave notice to the sheriff that he was in good faith the lawful owner of the whole of the property levied on and that the defendants in the execution had no right or title whatever in said property; that said claim was not made in collusion with the defendants for the purpose of delaying appellants in obtaining their rights, which notice was duly sworn to by respondent. Thereupon the appellants gave the statutory indemnity bond to the sheriff, on receipt of which, the sheriff proceeded to sell all of the goods levied on under the execution. The suit is on this bond for the recovery of the value of the property levied on and sold by the sheriff.
The answer was a general denial of the allegations of the petition and especially set up as a defense the recovery of the judgment against Harley & Company, the issuance of the execution thereon, and the levy and sale by the sheriff under the execution.
The answer further pleaded the execution by Harley & Company of the chattel mortgage of January 4, 1900, to respondent, alleged that said mortgage was fraudulent and void because given for the purpose of hindering, delaying and defrauding creditors of Harley & Company, including the appellants, which fraudulent intent, the answer alleged, was known to the respondent; that the mortgage was fraudulent for the further reason that it was agreed at the time of its execution, by and between the mortgagors and mortgagee, that Harley & Company might buy and sell merchandise in the usual course of business at retail and that the Harleys could retain the proceeds from the sale of the goods for their own use, and that they did keep and retain said proceeds of sales from the mortgaged stock with the knowledge and consent of the mortgagee; that respondent, knowing that the mortgage was fraudulent, was nevertheless acting as attorney for the appellants and that the appellants having no knowledge of the existence of the chattel mortgage or of the fact that the same was fraudulent and void, relied upon the respondent as their attorney to take such action for the collection of the debt as was necessary, but that, unmindful of his duty to appellants as his clients, he took no action at the time of the acceptance of his employment as the attorney of appellants for the collection or protection of their claim, but continued to participate in the fraud of permitting Harley & Company to sell the mortgaged goods and to use the proceeds for their own use; that respondent, still acting as attorney for appellants, was also the attorney of Harley & Company and failed and refused to have execution issued on appellants' judgment against the Harleys by reason of which failure and refusal the appellants were defeated in the collection of their claim and that respondent was estopped by his conduct to set up any claim to the goods levied upon under said chattel mortgage as against the appellants; that the mortgage was void for the further reason that it was understood by and between the mortgagors and mortgagee that the mortgagors should remain in possession of the stock of merchandise and buy and sell in the ordinary course of business and that the mortgage was to cover all the goods added to the original stock and that from and after the execution of the mortgage, by agreement, with the knowledge and consent of the mortgagee, the mortgagors did remain in possession of the stock of goods and continued to conduct the business of buying and selling goods in the ordinary course of business; that they failed to pay over and account to said mortgagee for the proceeds of sale of said merchandise covered by the chattel mortgage and that Harley & Company, by agreement and with the consent of the mortgagee, obtained the proceeds of the sale and used and disposed of the same as they saw fit.
The reply was a general denial.
Plaintiff to sustain the issues on his part offered and read in evidence the chattel mortgage executed by J. G. and M. G. Harley to the plaintiff, and also the promissory note to secure which the mortgage was given. On the note were indorsed the following payments:
To continue reading
Request your trial