Vette v. Geist

• Decision Date: 20 February 1900
• Citation: 55 S.W. 871,155 Mo. 27
• Parties: VETTE v. GEIST.
• Court: Missouri Supreme Court

55 S.W. 871

155 Mo. 27

VETTE v. GEIST.

Supreme Court of Missouri, Division No. 2.

February 20, 1900.

NOTES AND MORTGAGES — USURY — COLLECTION — AGENT'S LIABILITY — ACCOUNTING — REFERENCE — OBJECTIONS — WAIVER.

1. Laws 1891, p. 170, declares that, when the validity of a lien on personal property pledged or mortgaged to secure indebtedness is questioned in an action to enforce the same, proof that the party holding the lien has received or exacted usurious interest for such indebtedness shall render the lien invalid. Held, that the fact that the notes and mortgages placed in defendant's hands under an agreement that he should collect the same and pay the proceeds over to plaintiff, less a commission, were usurious, did not exempt defendant from liability, for the proceeds in an action to recover the same, since such action was not for the enforcement of the lien, and defendant was not privy to the notes and mortgages, and could not claim adversely to his principal.

2. Under Rev. St. 1889, § 2138, providing that where the taking of an account is necessary for the court's information, before judgment, it may direct a reference of its own motion, action of the court in ordering the taking of an account in an action to recover the proceeds of notes and mortgages placed in defendant's hands for collection, before rendering a final decision on defendant's affirmative defense, will be presumed, in the absence of anything in the record to the contrary, to have been considered necessary by the trial court for its information.

3. Where defendant interposed no objection to a referee when appointed, failed to allege such appointment as a ground for his motion to set aside the reference, and made no objection until after the referee had filed his report, he waived all right to agree on a suitable referee.

Appeal from St. Louis circuit court; Leroy B. Valliant, Judge.

Action for an accounting by John H. Vette against William Geist. From a judgment in favor of plaintiff, defendant appeals. Affirmed.

Kinealy & Kinealy, for appellant. Lubke & Muench, for respondent.

BURGESS, J.

On the 25th day of April, 1895, plaintiff placed in the hands of defendant, for collection, notes and mortgages executed by different persons to him, aggregating about $30,000, upon the terms and conditions of a written contract entered into between them at the same time; and this is an action by plaintiff against defendant for an accounting of the collections made by him under that contract. The contract provides that Geist will make all reasonable efforts to collect said notes as same may become due, respectively, and on the 1st day of each month he will render an account of the collections made thereunder during said month, and turn over to Vette the amounts so collected, less the amount of 10 per cent., which he is to retain as compensation for his services, and that Geist will continue to render like accounts on the 1st day of each month until the whole amount of the notes placed in his hands under the contract is collected. All notes and accounts remaining unpaid in whole or part on April 27, 1897, were to be deemed uncollectible, and to be returned to Vette. The petition alleges that in pursuance of said contract the plaintiff delivered to defendant a large number of notes and mortgages, aggregating about $30,000, but that he rendered only one monthly statement, which was on May 1, 1895, and, although he collected a large amount of money on the notes and securities, the only payments that he made to plaintiff on said account were $54.95 on said 1st day of May, 1895, which was in payment of collections made prior to that date, and the sum of $590.94 on the 11th day of October, 1895, $22 on the 4th day of November, 1895, and $33 on the 6th day of November, 1895, — the sum total being $700.89, — and that the remaining sum of about $10,000 so received and collected by defendant to plaintiff's use, and as plaintiff's agent, the said defendant has converted to his own use, and has fraudulently refused to pay over and account for to plaintiff. The petition then prays for an accounting, and for judgment for the balance found due him thereon. In his answer the defendant admitted the execution of the written contract pleaded in the petition, but set up two affirmative pleas to the same: In the first it is alleged that plaintiff, Vette, had been engaged in the business of loaning money at usurious interest, and that the assets turned over by plaintiff to defendant had incorporated therein sums in excess of the actual amount loaned, and were therefore null and void in his hands, and the securities given for said debts could not be enforced; that, in order to collect such notes and mortgages, plaintiff conceived the idea of indorsing and transferring the same to defendant, so that defendant might represent and hold himself out as an innocent holder for value of the same, and thus be enabled to collect them; that plaintiff broached said scheme to defendant, and after due negotiations the same was consummated for the purpose aforesaid, and defendant accepted said securities for the purpose of collecting the same under the agreement so made, and thereupon the memorandum set forth in the petition was duly executed. And defendant pleads the said contract to be unlawful and contrary to public policy, because made in order to enable plaintiff to avoid the usury laws of this state. The second defense so affirmatively pleaded repeated the preliminary allegations of the first paragraph of the answer, and set forth additionally that defendant proceeded to collect upon the notes and mortgages so turned over to him, and on the 1st day of May, 1895, rendered a statement of the same under said contract, but that thereafter the plaintiff became dissatisfied with said contract, and on or about May 17, 1895, plaintiff and defendant entered into an oral agreement abrogating said written contract, and agreeing that plaintiff sold to defendant all said notes and securities upon the following terms, to wit: That defendant should continue to collect the same, and that if he should collect and turn over to plaintiff on or before January or February, 1896, the sum of $7,000, then defendant should become the absolute owner of all remaining unpaid securities, and that thereafter the defendant held and treated said securities as his own until about the 4th day of November, 1895, when, at plaintiff's request, defendant resold all remaining uncollected securities to plaintiff for the sum of $4,527 in cash, and defendant retained all the sums that he had theretofore collected on said securities, and that in pursuance of said agreement defendant delivered all remaining securities to the plaintiff. To the first paragraph of this affirmative answer the plaintiff demurred on the ground that said paragraph did not set up facts sufficient to constitute a defense; that defendant, having collected plaintiff's money, could not withhold the same from plaintiff on the plea that the parties from whom he collected the same should not have paid said moneys, and because defendant is estopped by his written contract from setting up such a defense. This demurrer was sustained by the court, leaving only the issue tendered by the second paragraph of the answer to be tried. On June 9, 1896, when the case came on for trial, the court ruled that the first issue to be tried was the affirmative defense set up in defendant's answer, with respect to which defendant assumed the burden of proof. After hearing the evidence of the respective parties upon...