Webster v. Sterling Finance Co.

• Decision Date: 07 September 1943
• Docket Number: 38451
• Citation: 173 S.W.2d 928,351 Mo. 754
• Parties: J. D. Webster, Appellant, v. Sterling Finance Company, a Corporation
• Court: Missouri Supreme Court

173 S.W.2d 928

351 Mo. 754

J. D. Webster, Appellant, v. Sterling Finance Company, a Corporation

No. 38451

Supreme Court of Missouri

September 7, 1943

Appeal from Circuit Court of City of St. Louis; Hon. David Murphy, Judge.

Reversed and remanded.

Sievers & Reagan for appellant.

(1) The pledge of personal property to secure a loan exacting usurious interest is invalid and illegal. Sec. 3231, R. S 1939; Gelhart v. Smiley, 114 S.W.2d 1029; Tourse v. Mound City Trust Co., 52 S.W.2d 611; Securities Inv. Co. v. Rothweiler, 7 S.W.2d 484; Missouri Discount Corp. v. Mitchell, 261 S.W. 743; Service Purchasing Co. v. Brennan, 42 S.W.2d 39. (2) The pledge of a note as collateral security is a pledge within Section 3231, R. S. 1939. Bahl v. Miles, 6 S.W.2d 661. (3) Section 3230, R. S. 1939, has no application to the pledge of collateral in the present case. (4) The petition and each count thereof states a cause of action for money had and received. Paxston v. Gillam-Jackson Loan & Trust Co., 297 S.W. 119; Murray v. Central Bank, 40 S.W.2d 721, 226 Mo.App. 400. (5) The assignment or endorsement of a part of the installment payments due under each note did not vest title to the entire note in respondent. Sec. 3048, R. S. 1939.

Joseph Boxerman for respondent.

(1) The trial court did not err in sustaining the motion of defendant to strike. Defendant's demurrer to the petition was properly sustained. (2) The action is one for alleged conversion. In each count of the petition plaintiff alleges (in the sixth paragraph) that defendant converted to its own use the note there mentioned. But plaintiff does not allege that he was entitled to the possession of the note at any time, or allege facts so showing. The petition therefore states no cause of action as for conversion of any of said notes. New First Natl. Bank v. Rhodes Produce Co., 332 Mo. 163; Sebastian County Coal Co. v. Fidelity Fuel Co., 310 Mo. 158; Citizens Bank of St. Louis v Tiger Tail Mill & Land Co., 152 Mo. 145; St. Louis Catering Co. v. Glancy, 294 Mo. 438; O'Toole v Lowenstein, 177 Mo.App. 662. (3) The contention of appellant in his brief that the petition may be sustained as one for money had and received of certain installments of the various notes, which, it is alleged, belonged to plaintiff and were collected by defendant, is wholly without merit. It is not charged that defendant collected the installments for the use and benefit of plaintiff, and that payment thereof was demanded, and refused. But, plaintiff alleges that defendant converted the notes, and that by reason of such conversion he has been damaged. (4) The nature of the action is to be determined from the substance of the petition, which in the instant case is for conversion, and not for money had and received. White v. Scarritt, 111 S.W.2d 18.

Van Osdol, C. Bradley and Dalton, CC., concur.

OPINION

VAN OSDOL

This case has been before this court heretofore. See Webster v. Sterling Finance Co. et al. (Mo. Sup.), 165 S.W.2d 688, wherein the former appeal was dismissed as premature, no action having then been taken in the trial court regarding Octozone Equipment Company, a defendant. Subsequently plaintiff dismissed as to that defendant, and has again appealed.

The statement of the case made by this court on the former appeal is adopted with some modifications necessary since the cause may now be more fully reviewed.

Plaintiff, by his second amended petition containing twelve separate counts, sought to recover $ 7790 damages. The counts are similar in form, but they describe different notes and the amount of damages claimed in the several counts varies from $ 400 to $ 900. Defendant moved to strike out a particular paragraph from each of the twelve counts. The motion was sustained.

Defendant further filed a separate demurrer to each count of the second amended petition assigning as a ground therefor that "said counts so amended do not state sufficient facts to constitute a cause of action in favor of plaintiff and against said defendant." The demurrer was sustained as to each count of plaintiff's second amended petition. Plaintiff refused to plead further and it was "ordered by the Court upon motion of the defendant, that plaintiff's causes of action on counts of the petition, be and the same are hereby dismissed, and that defendant Sterling Finance Company, a corporation, have and recover of the plaintiff, its costs and other charges herein expended, and that execution issue therefor . . ." Plaintiff has appealed from the judgment of dismissal.

As stated, each count of the second amended petition involved a separate note and it will be necessary only to outline the allegations of the first count for the purpose of illustration. After naming the original two defendants and alleging that they were duly incorporated and engaged in business within the jurisdiction of the court, plaintiff alleged "that George T. Nuckles made, executed and delivered to Octozone Equipment Company, a corporation, his note for $ 1,500.00, dated August 1, 1938, payable in fifteen monthly installments of $ 100.00 each, beginning October 15, 1938; that on September 1, 1938, eight (8) monthly installments in the amount of $ 100.00 each, aggregating $ 800.00 of said note, was pledged to defendant, Sterling Finance Company to secure loan of $ 720.00." How the loan was evidenced, its due date, the rate of interest charged and when the loan was paid off is not alleged. Plaintiff further alleged "that on September 1, 1938, Octozone Equipment Company, a corporation, for valuable consideration assigned the last seven monthly installments of said Nuckles note of $ 100.00 each, making a total of $ 700.00, to B. K. Leach, H. C. Barker, Matt F. Morse and O. H. Stephen, of which said assignment the defendant, Sterling Finance Company, then and there had due and timely notice, and said equity of $ 700.00 in said note was by the said B. K. Leach, H. C. Barker, Matt F. Morse and O. H. Stephen, for valuable consideration on July 2, 1940, assigned to plaintiff, who is now the holder and owner thereof; . . . that the defendant, Sterling Finance Company, well knowing that the seven monthly installments of said note was the property of plaintiff and plaintiff's assignors, collected said note in full and converted all of said note to its own use, and even though plaintiff has made demand on said defendant, Sterling Finance Company, for said note, said defendant has refused to deliver same to plaintiff; that said seven installments of said note were of the reasonable value of $ 700.00."

In all counts of the petition the "installments" alleged to have been assigned to plaintiff are exclusive of and in addition to those "installments" which are alleged to have been pledged unto the defendant.

Plaintiff further alleged "that by reason of the above conversion by said defendant, Sterling Finance Company, plaintiff has been damaged in the sum of $ 700.00." Plaintiff then asked "judgment against the defendants in the sum of $ 700.00 and for all costs in his behalf expended."

Appellant assigns error on the action of the court in sustaining the motion to strike and in sustaining the demurrer to each count of the petition. There are other assignments of error to which reference will be made in connection with the consideration of the assignment of error in the sustaining of the motion to strike.

Of the assignment of error in sustaining the demurrer to each count of the petition.

A demurrer, on the ground that the petition does not state facts sufficient to constitute a cause of action, is confined to that objection, and does not reach any defect, imperfections or uncertainty in the pleading, provided a cause of action may be implied from its allegations by reasonable and fair intendment. Heitzeberg v. Von Hoffman Press, 340 Mo. 265, 100 S.W.2d 307; Tressler v. Whitsett, 321 Mo. 849, 12 S.W.2d 723; Eads v. Gains, 58 Mo.App. 586; State ex rel. Williams v. Carroll, 63 Mo. 156. If the facts essential to recovery are pleaded, however inartificially or defectively, a general demurrer will not lie. Heitzeberg v. Von Hoffman Press, supra, and cases therein cited. See also Whitecotton v. Wilson (Mo. App.), 197 S.W. 168. The form of the action is determined by the substance of the petition. White v. Scarritt, 341 Mo. 1004, 111 S.W.2d 18.

We believe that the facts essential to a recovery for money had and received are pleaded.

"The action for money had and received has always been one favored in the law and the tendency is to widen its scope -- it being a flexible form of action, levying tribute on equitable, as well as strictly legal doctrines; so that, it has become axiomatic that the action lies where 'the defendant has received or obtained possession of the money of the plaintiff, which, in equity and good conscience, he ought to pay over to the plaintiff.'" Clifford Banking Co. v. Donovan Commission Co., 195 Mo. 262, 94 S.W. 527.

See also Murry v. Central Bank, 226 Mo.App. 400, 40 S.W.2d 721; Whitecotton v. Wilson, supra. In such an action it is held that it is not necessary to allege an express promise to pay, nor is a privity of contract required. The law implies the privity. Third National Bank v. St. Charles Savings Bank, 244 Mo. 554, 149 S.W. 495; Clifford Banking Co. v. Donovan Commission Co., supra; Whitecotton v. Wilson, supra; Richardson v. Moffitt-West Drug Co., 92 Mo.App. 515, 69 S.W. 398; Hall v. Marston, 17 Mass. 574.

It is alleged in the various counts of the petition that the plaintiff through successive assignments became the owner of an "equity" in the notes. It may be here noted that the alleged assignment was not of the entire note subject to an alleged pledge, but it is alleged that certain installments of the note were...