Turner v. Bank of Mountain View

• Decision Date: 12 July 1929
• Docket Number: No. 4578.,4578.
• Parties: TURNER et al. v. BANK OF MOUNTAIN VIEW.
• Court: Missouri Court of Appeals

19 S.W.2d 19

TURNER et al. v. BANK OF MOUNTAIN VIEW.

No. 4578.

Springfield Court of Appeals. Missouri.

July 12, 1929.

Appeal from Circuit Court, Howell County; E. P. Dorris, Judge.

Action by William Turner and another against the Bank of Mountain View. Judgment for plaintiff, and defendant appeals. Reversed and remanded, with directions.

M. E. Morrow, of West Plains, for appellant.

George T. Humphries and H. D. Green, both of West Plains, for respondents.

COX, P. J.

Action in replevin for possession of a promissory note for $1,350. Defendant filed an equitable counterclaim, which on motion of plaintiff was stricken out. Judgment went for plaintiff, and defendant appealed.

The facts which may be gathered from the pleadings and the testimony of plaintiff William Turner are substantially as follows: On October 1, 1927, plaintiff William Turner borrowed from defendant bank $125 and gave therefor his note for that amount due in three months, and deposited the $1,350 note in dispute here as collateral security. On October 28, 1921, Bessie L. Dixon and William Dixon gave to William Turner their promissory note for $920. Before maturity, the defendant bank bought this note from William Turner, and he indorsed and delivered it to defendant. This note was unpaid and held by defendant when it took the $125 note from plaintiff and accepted the $1,350 note from him as collateral security therefor. After the $125 note became due, the plaintiff tendered payment of it to the bank, and demanded a return to him of the $1,350 note which he had placed with the bank as collateral security for the $125 note. The bank refused to deliver the $1,350 note, unless plaintiff would also pay the Dixon note on which he was liable to defendant as indorser. This suit followed.

The equitable counterclaim filed by defendant, and which was stricken out by the court, alleged that the Dixons, who were the makers of the $920 note payable to plaintiff, William Turner, which the defendant had purchased, were now nonresidents of the state and insolvent; that, aside from his interest in the $1,350 note described in the petition, the plaintiff was insolvent, and defendant has no way of collecting its debts against plaintiff William Turner except by enforcing an equitable counterclaim against the $1,350 note held by it. Defendant then prays judgment against William Turner for the balance due on the Dixon note on which said Turner is liable to defendant as indorser, and that said $1,350 note be returned to it, with full authority to collect the same and pay itself out of the proceeds, and turn the balance over to plaintiff.

Section 1232, Rev. St. 1919, authorizes the filing of a counterclaim. Section 1233 provides the source from which the counterclaim must arise in the following language: "The counterclaim mentioned in the last section must be one existing in favor of a defendant and against a plaintiff, between whom a several judgment might be had in the action, and arising out of one of the following causes of action: (1) A cause of action arising out of the contract or transaction set forth in the petition as the foundation of the plaintiff's claim, or connected with the subject of the action. (2) In an action arising on contract, any other cause of action arising also on contract, and existing at the commencement of the action. The defendant may set forth by answer as many defenses and counterclaims as he may have, whether they be such as have been heretofore denominated legal or equitable, or both. They must each be separately stated in such manner that they may be intelligibly distinguished, and refer to the cause of action which they are intended to answer." This statute provides that the counterclaim must be one existing in favor of the party filing it against the plaintiff, and be of such a nature that a judgment could be rendered in his favor against the plaintiff in an independent action. The defendant's counterclaim comes within that provision. It is based upon a promissory note on which plaintiff is liable as indorser, and, if not paid, defendant could sue plaintiff and recover a judgment thereon against him. In addition to this general provision, the counterclaim must arise out of one or the other following causes of action: (1) The counterclaim must arise out of the contract or transaction set forth in the petition as the foundation of plaintiff's claim, or it must arise out of some matter between the parties that is connected with the subject of plaintiff's cause of action. (2) If plaintiff's action is one on contract, then the defendant may counterclaim on any cause of action on contract in his favor against plaintiff.

Plaintiff's action in this case is replevin based on the tortious action of defendant in retaining the $1,350 note after it became the duty of defendant to deliver said note to plaintiff. Plaintiff's action sounds in tort, and is not an action on contract; hence the defendant cannot counterclaim a cause of action arising on contract which is wholly disconnected with the subject of plaintiffs' cause of action. There was no connection whatever between defendant's right of action against plaintiff on the Dixon note and plaintiff's right of action against defendant for possession of the $1,350 note sought to be recovered in this action. Defendant's possession of the $1,350 note resulted from the plaintiff delivering it to de...