Tyson v. Farm & Home Savings & Loan Ass'n

57 S.W. 740, 156 Mo. 588, 1900 Mo. LEXIS 333

Opinion

YALLIANT, J.

Suit in equity to set aside a deed of trust on the ground of fraud; the defense being a denial of the fraud and a cross-bill to foreclose the deed of trust. There was a finding for the plaintiff on the issues, and a decree cancelling the deed of trust, from which defendant appeals.

The following controlling facts are gathered from the evidence:

The defendant corporation had an agent, one Woods, at Norwood, Missouri, through whom its business at that point passed, and through whom the transactions we are now concerned with passed. Tyson owned a small farm, worth about $1,200, in Douglas county, on which he had given what is called in the record a fruit tree mortgage, or two such mortgages, to a fruit nursery concern in Pike county called Stark Brothers, the nature of -which was -an agreement on the part of the nursery concern to furnish a certain number of fruit trees to be planted on the farm and in payment for which they were to have the fruit ^crops for any two years within, fifteen years to be selected by them, and ■Tyson agreed not to sell the land until that obligation was satisfied. Those so-called mortgages were duly recorded; there was also evidence showing that Woods had actual knowledge of them. In this condition Tyson applied to defendant corporation through Woods for a loan of $250 to be secured by a mortgage on his farm. The application for the loan was made ont on an elaborate printed blank furnished by Woods for the purpose, signed and sworn to by Tyson before Woods as notary public. In this application one of the questions asked is, is the land free from incumbrance, and the answer is yes. The application was favorably 'received by the defendant corporation and in pursuance thereof Tyson and wife signed an obligation subscribing’ for $1,000 of stock in the corporation, assigning it to the corporation as collateral for the prospective loan, agreeing to pay semi-annually, dues, interest and premiums thereon amounting to $34.50 for a period of 144 months, and at the same time they executed the deed of trust in question on their .farm to secure that obligation, in which deed among’ other penalties it is stipulated that .if default be made in any one of the semi-annual payments the whole obligation may be treated as due, the collateral sold, the deed of trust foreclosed and Tyson held for the balance. Tyson also at the same time signed a paper in the form of an order on the corporation to pay the amount of the loan to Woods and that order should be a receipt for the same. Woods testified that it.was the invariable practice, when a loan was made through his agency, that the borrower gave him an order on the company for the proceeds of the loan and the company would send the money to him, giving him directions what amount of it he was to deduct for expenses and how much he -was to pay over to the borrower, and that in all such matters he obeyed the company’s instructions as its agent; that in this instance the company retained $41.50 out of the $250, being the $34 for the first semi-annual payment of dues interest and premium, $2.50 membership fee and $5 for examining title, and sent him, Woods, the balance $208.50 with directions to pay off the fruit tree mortgages and some other small items of expense and pay the balance over to Tyson. At that time the nursery company was owing Woods, and he arranged with them to release the fruit tree mortgages for $150, for which he gave them credit on his account, and took the $150 to himself out of the $208.50 the defendant had sent him as the proceeds of the plaintiff’s loan. The Nursery people gave him a deed of release of their claims, which was duly recorded. Who filed that release for record does not very satisfactorily appear from appellant’s abstract. After deducting the $150 and about $3 for some other expense items Woods tendered the balance, say about $55, to the plaintiff Tyson, as the net proceeds of the transaction, which Tyson refused. After the controversy had thus arisen, the president of the company came to the county and an effort was made to compromise it. This effort resulted in an agreement that Tyson should pay to the company the $41.50, Woods should refund the $208.50 to the company, and the deed of trust and obligation of Tyson should be cancelled. At the time appointed to consummate the matter, Tyson 'came forward ready to pay his part of the compromise agreement, but Woods did not respond, therefore the settlement failed, and this suit resulted.

After the suit had been begun the defendant gave notice to take depositions and caused a subpoena to be served on plaintiff to appear at the circuit clerk’s office in the court house and testify as a witness for defendant. Plaintiff did not appear at the place designated and his deposition was not taken. Thereux>on defendant filed a motion to strike out plaintiff’s petition and render judgment for defendant on its answer and cross-bill, but the court after hearing evidence overruled the motion and defendant excepted. On the hearing of the motion the evidence for defendant tended to show that the notice and subpoena were duly served, and plaintiff did not obey the writ. The plaintiff who was present was called by defendant as a witness on this question and testified that he came to the court house in obedience to the summons and waited in the hall nearly all day, but did not hear anybody call him and did not go to the clei’k’s office. He admitted that ,he talked with his attorney about it and he advised him to go home.

I. Sections 8920 and 8924, Revised Statutes 1889 (sections 4654 and 4658, Revised Statutes 1899), give the right to a party to call his adversary as a witness and impose on the party so called penalties for refusal to respond. This is a very wise provision of the code of procedure, taking the place of the old bill of discovery and affording a. much more speedy and efficient remedy than was given in that mode. Since a party is liable to be called before a notary or other such officer not in the presence and under the protection of the court, the power conferred by the statute is liable to be and sometimes is abused, but on the whole its results are good, and experience has approved it. As a general rule the high character of the men in the legal profession afford all the security against abuse that is required, but when over-zeal carries one beyond reasonable limits, the safeguard then lies in the sound discretion of the court when called upon to impose the penalties prescribed by the statutes on the party who has refused to testify at the call of his adversary. The striking of his pleading from the files involves his whole case, and is a consequence one is not likely, without what at least seems to him to be good reason, to incur. A party in the exercise of this right to search the conscience of his adver sarv should be given as large liberty as the right and justice of the occasion demands, yet it should be kept in mind that the only legitimate purpose of taking the deposition is to use it as- evidence in the.trial of the case and when the court is satisfied that the only purpose for which the deposition is sought is ulterior to that, the court is not required, and should not, impose the penalty prescribed by the statute on the party refusing to submit to the examination. The discretion in the trial court is not absolute nor entirely beyond the control of the appellate court on appeal, but still the power to strike out one’s pleading for refusal to give his deposition is within the discretion of the court to be exercised with justice and wisdom, in view of the surroundings, and when so exercised the court’s action will be approved. [Haskell v. Sullivan, 31 Mo. 435; Larimore v. Bobb, 114 Mo. 446; Matthews v. Railroad, 142 Mo. 645.] We are satisfied that the trial court exercised its discretion with wisdom and justice in this instance.

II. Upon the merits of the case, we have no doubt that the decree was right. The only ground that affords even a color of justification for the defendant’s conduct is the written order signed by plaintiff on defendant to pay the money to Woods. But defendant was not misled by that order; it knew that Woods was not the agent for the plaintiffs, it knew that that was the course of all loans passing through that agency, it knew that that order was only one of its own over-cautious methods for conducting its business. As a business method it was a mere device to shift upon its customers the responsibility for the possible misconduct of its own agent. It is the duty of a chancellor to brush away tlie mere sham-covering of such a transaction and lay hold of the real facts, and the learned chancellor in this instance did so. Woods testified in a sort of uncertain way that Tyson had authorized him to pay off the fruit tree mortgages, but Tyson testified absolutely to tbe contrary, and even with Tyson’s testimony out of the way the story is improbable. Tyson wanted that $250 for a purpose. There was no pressing demand of the nursery men; they were entitled to two crops of fruit within the fifteen years, and there is nothing to show that either they or Tyson were concerned about a settlement. The conclusion on Woods’ own testimony is irresistible that he saw an opportunity to cash his debt against the nursery men and availed himself of it. The learned counsel for defendant say that Tyson has accepted the benefit of Woods’ transaction with the nursery people and ought not to object to it. True, the release of the fruit tree contracts is on record, but who filed it for record is not very clear. The inference is rather tbat Woods did it.

But, however that may be, the .conduct of the defendant in paying off or buying off those fruit tree contracts was a mere voluntary intermeddling with plaintiff’s affairs, for the consequences of which the plaintiffs are not responsible, and defendant has no right to complain. The result of the -whole business is, that the defendant holds the plaintiffs’ obligation and deed of trust which were executed with the expectation on their part of getting a loan of $250, but for which they, have never received a cent.

The trial court took a correct view of this case and its judgment is affirmed.

All concur.