Commerce Trust Co. v. White

158 S.W. 457, 172 Mo. App. 537, 1913 Mo. App. LEXIS 500

Opinion

TRIMBLE, J.

On January 6, 1911, the defendants L. M. White, C. H. White, and K. P. Jones executed and delivered to the Commerce Trust Company their joint promissory note for $3300 due six months after date and bearing eight' per cent compound interest per annum from date until paid. This note was secured by a chattel mortgage executed by L. M. White on a livery stock, and the chattel mortgage was duly recorded.

Thereafter, the defendant, J. F. Burkhardt (who is the only one who appeals) acquired the livery stock subject to the chattel mortgage.

The note became due and, as it was not paid, suit was brought against the makers of the note and J. F. Burkhardt. The petition is in two counts, the first being a plain suit on the note against the signers thereof, the second being a count alleging the note and chattel mortgage, that Burkhardt acquired and has taken possession of said livery stock, subject to said mortgage, and, although having promised to pay said note, has failed to do so and is now claiming that plaintiff has no lien on said stock, nor right to foreclose the chattel mortgage; that said stock is of a perishable nature and liable to depreciate, and that said Burkhardt is disposing, and has disposed of a' portion of same; that a judgment has been rendered against Burkhardt and an execution is about to be levied on the property, and the same is liable to be wasted, dissipated and plaintiff’s security lost; that defendant Burkhardt is insolvent and plaintiff has no adequate remedy at law; wherefore a receiver is asked to be appointed to take charge of the property, and handle same under the directions of the court and that plaintiff’s lien be foreclosed, etc.

The signers of the note filed no answer and made no defense. But defendant Burkhardt answered in which he denied generally every allegation in the petition contained and then set up that the chattel mortgage was void because L. M. White had no interest in the livery stock at the time the chattel mortgage was executed and could convey no interest therein. He further set up that an agreement had been entered into between plaintiff and himself -whereby plaintiff was to accept from Burkhardt certain real estate in Nebraska as security for the above indebtedness in the place of said livery stock, and the latter was -to be thereupon released; that the security of the Nebraska real estate was to be given by defendant Burkhardt executing to plaintiff a warranty deed to said real estate and receiving back a contract agreeing to reconvey said real estate to defendant upon payment of the amount of said indebtedness within six months thereafter; that said deed was executed and delivered to plaintiff’s president, William T. Kemper, for and on behalf of plaintiff ,and that he, in plaintiff’s behalf, executed and delivered to defendant the contract to reconvey said premises to him when he should pay said indebtedness ; that said deed had been accepted and, recorded, and said real estate was now security for the indebtedness in place of the livery stock; that the substitution of the Nebraska real estate for thfe livery stock as security was the only consideration for him, Burkhardt, to execute said deed; wherefore, there was no further lien on said livery stock.

To this answer, the plaintiff filed reply denying generally everything in the answer not specifically admitted, and then setting up that L. M. White, at the time of executing the chattel mortgage, had a right to execute the same; that Burkhardt, at the time he acquired the livery stock, knew of said chattel mortgage, took said stock subject thereto, and by promises to pay the indebtedness secured thereby has induced plaintiff to postpone foreclosure thereof, and is es-topped to deny the validity of the same. • It was further alleged in the reply that plaintiff never agreed to release the livery stock and accept the Nebraska real estate as security in lieu thereof. But that it was expressly stated to Burkhardt that plaintiff would do so only on condition that the makers of the note would consent thereto, and upon the further condition that the Nebraska property 'should, on examination, be found to be of the character and in the condition he had represented it to be; and that said property, on investigation, proved not to be as represented in a number of particulars, not only as to character, worth and condition, but also as to title, and that Burkhardt was fully informed of this; that afterwards Burkhardt, through fraud and deceit, induced an employee of plaintiff, who was not conversant with the negotiations concerning the conditions on which the exchange of securities was to be made, to record the deed signed by Burkhardt and left with the employee and which purported to convey the Nebraska property to Kemper; that as soon as the fact was ascertained plaintiff caused said Kemper to, and he accordingly did, tender toBurkhardt a deed reconveying the Nebraska property to him.

On October 17, 1911, the court appointed John T, Wayland receiver who qualified and took possession of the livery property, and Burkhardt was restrained, from selling or disposing of it.

Upon the trial of the case, defendant Burkhardt. demanded a jury, and the court, although deeming it an equity case, concluded to grant the request and take the advice of a jury upon the issues of fact involved.

As stated before, the makers of the note made no-defense. There was, therefore, no issue raised over-the cause of action stated in the'first count of the petition, to-wit, the suit on the note. The answer filed by Burkhardt was in reality as answer merely to the-second count and ignored the first count. But even if Burkhardt’s answer can be stretched to cover this, first count because it contains the words ‘ ‘ deny 'each- and every allegation in said petition contained” still this would not be sufficient to raise a triable issue over the note if the pleadings subsequent to the petition showed on their face that Burkhardt was in no position to deny the validity of the note, and this they did. But, even if they did not, the determination of the issues raised by the second count and the pleadings filed to it would inevitably determine the issue of the-validity of the note as to Burkhardt. So that, as hereinbefore stated, there was no reason or necessity for litigating any question raised by the first count. The whole dispute, so far as Burkhardt (or any one else-for that matter) was concerned, centered around the issues raised by the second count, namely, the validity of the mortgage and whether or not the livery stock had been released. Hence the court did not err in not. having a separate jury trial as to the note, or in rendering judgment against the parties on the note after the verdict was returned by the jury on the second count. The cases cited by appellant were where there was an issue raised as to the note as well as to the foreclosure count. .

It is contended by the defendant Burkhardt that the entire suit is one at law, the first count being a mere suit on a note, and the second to foreclose a mortgage securing it, and that defendant, having demanded a jury, was entitled to have one and to have it pass on all the issues involved, the note as well as the foreclosure matter. But, while the count on the note was a suit at law, there was no issue raised as to it. And defendant is mistaken in thinking that the second count is one at law. It and the pleadings filed to it made the second count one in equity. If the allegations of the second count did not make it one in equity certainly the allegations of the answer and of the reply thereto did. However, it is unnecessary to dwell further on this point since this court has already held that the second count was one in equity. [Commerce Trust Co. v. White et al., 154 S. W. 864.]

Complaint is next made that the issues submitted to the jury were not broad enough to cover the issues raised by the pleadings under the second count. Broadly speaking there were but two issues: first, was the chattel mortgage valid, second, was the livery stock subject to or released from the lien thereof? These two issues were submitted. If defendant wished the jury told just what facts they were required to find in order to decide said issues either way, he should have submitted instructions to be given the jury, but he did not do so. The two issues submitted for the determination of the jury were all of the issues involved, but did not contain a statement of the facts necessary to be found in order to properly decide those issues. It is the province of instructions to tell the jury what facts are necessary to be found in order to decide an issue submitted, and not for the written issue to do so. For instance, the written issue submitted to the jury in a will contest case is whether or not the writing is the will of the deceased. The instructions, however, tell the jury the facts they are to find in order to determine whether it be a will or not.

Upon the question of whether the chattel mortgage was valid as to Burkhardt, the undisputed evidence was such as to estop Burkhardt from denying its validity. In fact, by insisting that the Nebraska property had been substituted for the livery stock as security for the chattel mortgage in order that the livery stock might be released, Burkhardt admitted the validity of the chattel mortgage but was claiming that the property therein had been released. So that, on that issue, there was no question of fact to be passed on by the jury, and the court very properly directed the jury to return a verdict for plaintiff on that issue.

Upon the question whether the Nebraska land had been by agreement substituted for the livery stock thereby entitling the livery stock to be released, the evidence was all one way. In the first place, the livery stock, so far as the records and documentary evidence showed, was not released. Prima facie therefore, the livery stock was still subject to the chattel mortgage. The burden was on defendant. Burkhardt to show that in equity it was free from the mortgage. All the evidence, however, was to the effect that the proposed substitution of the Nebraska land for and in lieu of the livery stock as security was never in fact consummated; that it was not to be done unless the makers of the note consented to it, and unless the property was in every way as represented, and that none of these conditions were performed; that instruments were drawn up by which the Nebraska property was deeded by Burkhardt to Kemper for plaintiff and Kemper gave back a written agreement to re-convey to Bnrkhardt whenever the note in question was paid. These papers were left with an agent of Kemper’s to be held by him until the consent of the makers of the note could be obtained, and until the character, value and title of the Nebraska property could be investigated. But they were not to become effective nor be delivered and accepted until these conditions were met; and the agent, not understanding the facts, inadvertently had them recorded as if they had been finally delivered and accepted; and he had no authority to accept delivery of them or to place them on record. These instruments concerning the Nebraska land said nothing about the release of the livery stock.- There was no release, or agreement to release, the livery stock, in writing, at all. And all' the testimony showed, without contradiction, that no release of the livery stock had been made. Defendant Burkhardt offered no testimony whatever. The livery stock being described in the chattel mortgage and it being still in force and there being no writing or other evidence to show it’s release, the burden was on Burkhardt to show its release, and as he did nothing whatever to maintain that burden in any way, plaintiff was entitled to a peremptory instruction to the jury in its favor on the second issue.

But defendant contends that inasmuch as plaintiff’s evidence shows that the two instruments concerning the Nebraska land were left in escrow with Kemper’s agent this constituted a complete delivery and taking effect of the deed regardless of what may have been the intention of the parties. This is on the theory that a deed, when delivered to the grantee, ceases to operate as an escrow and becomes an operative deed free from any condition of the escrow not expressed in the deed itself. [1 Devlin on Deeds (3 Ed.), sec. 314.] But even if this is true, and ordinarily it is (but. not in this case), the deed in such case would operate to pass the title, hut that would he all. The mere passing of the title as a legal proposition would not operate to release the livery stock from the lien of the chattel mortgage. That was not to he done until the consent of the makers of the note had been obtained and the • character, value and title of the property had been examined. There was no statement in the deed that the mere conveyance of the title to Kemper should operate to release the livery stock. So far as the two instruments showed, the two constituted a separate and independent mortgage of the Nebraska property to secure the' note in question, and did not obligate the plaintiff to release the livery stock at all. Hence, until the conditions under which it was agreed to release the livery stock were complied with, the plaintiff was under no- obligation in law or equity to release the stock.

Besides, it must be remembered that the rule in reference to the delivery of a deed in escrow to the grantee or his agent is a rule at law, and not one in equity. As said by Justice Story in Flagg v. Mann, 2 Sum. 510, “Though there is a technical difficulty in the suggestion of the delivery of the deed to the grantee as an escrow, yet a court of equity will not govern itself exclusively by technical principles of law where the intention of the parties will be thereby defeated.” Again, the rule in reference to a deed delivered as an escrow to the grantee is not applicable-to this case, because the deed was in reality to the-plaintiff, though made to Kemper for it. There is not such a personal identity between a corporation and its officers, that a deed may not be placed in the hands of the latter, as an escrow until the performance of the condition upon which it is to be delivered and become operative. [Southern Life Ins. Co. v. Cole, 4-Fla. 359, 1. c. 274; 1 Devlin on Deeds (3 Ed.), sec. 316, p. 558.]

The final complaints made are that the'judgment is not responsive to the issues, and that the court erred in admitting evidence of certain record entries in the case and of the note sued on after the verdict of the jury was returned. But the trouble with the first objection is that it assumes the defendant Burkhardt asked and had a right to ask a trial by jury on the issue presented by the first count, which he did not as we have seen; there was no issue raised over that count, and, if there had been, Burkhardt was estopped from disputing the note so far as it affected him. The second objection misconceives the action of the trial court. There is nothing improper in joining a count at law on the note with a count in equity for foreclosure. [R. S. Mo. 1909, sec. 1795.] But the causes of action must be separately stated and separately tried. [McHoney v. German Ins. Co., 44 Mo. App. 426.] That is precisely what was done in this case. There was no issue raised over the note in the first count. The only issues in dispute were those raised by the second count. These were tried and a verdict received as to them, and then the court adopted the finding of the jury and rendered judgment on the note against the makers thereof and then rendered judgment of foreclosure as to the livery stock against Burkhardt. The two judgments were as separate and distinct as to the respective parties, and as to the costs due from each, as they could possibly be made. The fact that they were not rendered in two separate and distinct journal entries on the record makes no difference. In fact, when there are different counts united in the same petition, the judgment on the first count tried is merely interlocutory and cannot be made final until there is a finding or verdict on all the counts when a final judgment is rendered on the whole case on all the counts. [Boothe v. Loy, 83 Mo. App. 601, 1. c. 606.] • This is necessarily so because there can be but one final judgment in a case. [Ibid; R. S. Mo. 1909, sec. 1971.] The above procedure is precisely that followed by the court in this case. The objection made to what was done is founded on the erroneous view that there was an issue raised over, or jury demanded in the trial of, the first count. BurkbarcLt alone, of all the defendants, is complaining and he is concerned only with the issues involved in the second count. That was a suit in equity, and the court was not required to call a jury but did so, and when it appeared, as a matter of law and equity that he was not entitled to a judgment on that, count, the court rendered a final judgment covering both counts and keeping the respective rights of the parties defendant separate as to each count as though they were distinct suits. The judgment is affirmed.

All concur.