*1 at home that J would “I have others take down to the sale to be arrangement at the That was the I AvithMr. sold sale. had Moore in bringing hog City.” this to Kansas admitting
In “I stated, evidence the court think isit relevant on AA’hat announcement Moore at sale.” ma.de strenuous- Defendant insists, ly noAV insisted, testimony Avasnot admissible for purpose. properly original We opinion held in the necessary that was not pass upon us question admissibility that evidence purpose slioAving for the having likelihood of Moore made the sale; statement attributed to him the because statement Aventto question estoppel case, Avhich find if, is not in in fact, avc testimony properly Avas purpose admitted for the assigned, it is not ruling. We material. still adhere to this We also adhere to our uoav ruling appear testimony does not that the was admitted for the purpose showing hog oAvnership merely in plaintiff, the. but be- cause estoppel. defendant claimed
But
there is
testimony
another element
the case
Avliiclithe
ahas
bearing,
direct
to-Avit,
defendant
AA'hom
desired
contract
hog.
question
preserved
for the
This
motion for a
Avas
nevv
argued
trial and
in defendant’s brief and
also in the motion
re
hearing.
disputed.
It will
not
Avetake
has
it,
right
party
to select the
Avith AA’homhe desired to contract. The
just
general application;
questioned,
rule
stated is of
but if it is
folloAving
may
profit:
citations
Avith
Keown,
be read
Baker v.
Ill.
Potter,
433;
App.
28;
Boston
Ice Co.
Mass.
Loeffel
Pohl
man, 47
App.
McCarthy,
Lansden
al. v.
n. *3 W. James Hull and c& Warding, Murphy appellant. Tucker for Riley respondent. Terrence for
FRANK, upon promissory C.—This is suit The in the trial court ivas for defendant. On motion of plaintiff, newa granted trial appealed. was and defendant
The note reads as follows: “$1500.00 City, Missouri, May 23, Kansas ‘‘ year promise One after pay date I the order of to. Robert Exactly Mitchell Co. Fifteen Hundred Dollars........Dollars. For value received 8 per from date at the per interest rate of cent payable. annum. Interest “G. L. Miller.”
The following appears indorsement the .back on of the note.
“Robert Co., S. Mitchell Paul L. Mitchell.” petition, The alleging after corporate plaintiff of existence bank and note.-pleads maturity the execution of the that before of Company, said note the S. payee, Robert Mitchell endorsed the in writing same thereof, across back and plaintiff delivered' 'to value, whereby plaintiff the owner said note. became Th.e incorporation answer admits the bank and the execution of note, generally allegations petition. then denies other pleads (1) following answer also affirmative defenses: that payee preferred note sued on was for fifteen shares Company, and fifteen in E. J. shares common stock Hunter a cor- poration and that the consideration of said note failed the reason that never defendant received the stock or which said note was exe- cuted; (2) agreement that there an. between defendant and-E. was Company (through Mitchell, Paul repre-
J. Hunter its authorized sentative) by E. non-performance which, virtue of the J. Hun- void; (3) pur- never Company’s part, ter the note that therefor, gave anything value but obtained chased said note agreement possession knowledge of said of same with full between Company Hunter full defendant and said E. J. and with knowl- edge passed that no to defendant for the execution of consideration n said thereof; (4) that or since execution said time relying stock was worthless and defendant on the false and fraudu- representations Paul to and did lent of sa.id Mitchell induced (Executesa.id note. testimony May 23, Defendant the effect that Miller’s is to he, 1.921, .approached represented one Paul him Company, the-agent corporation; Mitchell, was E. J. Hunter corporation rich and represented owned defendant said stock in gold purchase mines valuable .and solicited defendant representation corporation; said made said relying Mitchell, common fifteen purchased fifteen shares corporation preferred shares of stock said executed stock; prior to and price suit in said purchase orally contemporaneous agreed of said note was with the execution through its Company, E. between the defendant and J. Hunter agent, date Mitchell, that within six months from the fif- Company pay that, defendant, said E. J. Hunter would use teen shares of common stock discharge pay received the note in and that so off Mitchell Com- E. J. nor the neither said Hunter Robert pany, payee note, in said other would ever demand *4 or the sum deliver to further defendant but would from satisfied; paid in that after the-execu- note in marked full and suit that he would delivery of told defendant tion and the note Mitchell for which of stock representing mail him the the shares to certificates any received said slock or given; was defend ant-never that note. other consideration for said County the organization plaintiff hank Platte State
Before the hanking banking conducting a business in Bank, corporation was July 5, 1921, Paul S. Mitch- On Ferrelview, county, Platte Missouri. payable the promissory $1500 ell in sum to executed the n Platte time, acquired County Bank. after the Some Mitchell State County pledged he it to State defendant, Platte $1,500 he, Bank the note that payment as collateral to secure July 1921. At the time bank Mitchell, had executed to said n pledge, there was due Bank indebted in County was October, 1921, In Platte State banks, -for from other it was $35,000 money borren ed sum $35,000 pay. to Notes to the were taken out of the unable amount they placed bank and delivered to the directors and turn to bank which was used $35,000 sum of cash to the credit pay among The. Mitchell the notes said indebtedness. note was dc: plaintiff bank was livered to October the directors. On County Bank organized Platte State and took over the assets deposits. approved was and assumed the its This transfer of- the old bank of Finance. directors the Commissioner guaran- $32,000 bank executed á bond the sum of against deposits and assumptions of said tee it loss reason of amounting notes, by separate assignment pledged the written bank, old out of the which had been theretofore taken guarantee testified Defendant collateral to the. of said bond. suit, plaintiff acquired he notified before the note direc- bank, who bank, tors of the old also became directors any buy note; not to illat never received consideration he representations procured by and fraudulent it was false it: receiving denied pay that he did not intend it. The directors they talk with had no notice from and each testified that defendant, acquired it bank after the old about note until assigned plaintiff. after it had been to the as collateral Appellant the note respondent accepted contends that a, a holder pre-existing debt and this reason of sections involved the construction for value. This contention (Statutes 1919. Law, Negotiable and 838 Revised Instrument
n Said read as sections follows: support a. sim- any “Sec. 812: consideration Valued is sufficient value, pre-existing debt constitutes ple contract. An or antecedent or or demand payable such, and is deemed whether the instrument at a time. future has taken holder who 838: A course .a
“Sec. holder (1) it com- following Hie conditions: instrument under face; itof (2) the holder plete regular upon its that he became notice, previously it had been before it was without overdue and good (3) faith fact; that he took dishonored, such was time, negotiated to him (4) value; and for defect infirmity in the instrument had no notice person negotiating.” title of the was com- in suit
Plaintiff’s tends to show that evidence the Platte Coun- plete regular upon and was transferred its face Mitchell, without notice maturity ty Bank Paul before *5 title of said in the any infirmity or defect to said bank therein County ac- State Bank Platte Later, Mitchell. directors of said and before quired stated title to said note in the manner heretofore 638 plaintiff assigned. transferred it to as
maturity note, and security of the Platte which the directors collateral to a bond plaintiff for County Bank theretofore executed to State had note was transferred purposes stated. At the time the heretofore any any in said note or plaintiff, notice infirmities it had no bank, who transferred of the old defect in-the title of directors plaintiff. plaintiff and defendant The evidence of relative note being acquisition conflict- attending plaintiff’s the facts question acquired the note before ing, plaintiff whether or not in the infirmity defect maturity, therein or without notice of of the facts to be deter- persons negotiating same, was one title by jury. mined plaintiff
It holds -parties both conceded authority weight of security pre-existing debt. The collateral value. In Bank a for holding- is that holder constitutes App. 172 Railroad, 662, 675, v. Mo. the court said:— face, regular upon complete “Each its note ivas Negotiable maturity. became Under our the holder before thereof con Instrument an antecedent debt affords sufficient Law, existing instrument, ma negotiable before accepting sideration a to make one debt, turity, a security pre-existing holder collateral for such of Com 9998; Bank Stat., value. 9996 National sections [Rev. contrary App. 43, merce v. 156 135 S. W. Morris, Mo. 1008.] formally (see v. For doctrine which in this Loewen obtained 380, 130 see, 712; Grayson, 137 38 S. W. v. 230 Mo. Mo. Johnson Negotiable 673) abrogated by S. W. enactment has been taking plaintiff in Therefore, case, Instrument Act. the instant ¡as pre-existing a debt became collateral . " holder thereof value 156 135 W. Morris, App. To the Bank Mo. S. same effect: v. 1008; 245; Goodrum, Bank Lyda, v. 191 S. W. Thomas v. Columbia 231 8 571; page 488, S. W. J.,C. sec. We have examined Supreme appellate cases cited courts from both the State, announcing contrary of this and find that in each doctrine App. 648, 144 cited, except Wright Co., of the cases v. Trust Mo. dealing prior the court with -a had been transferred although Negotiable the enactment of Instrument Law some of the cases said law. v. were decided after the enactment of [Loewen Forsee, 712; Grayson, 230 29,Mo. S. W. Johnson v. Mo. Simonds, 107; Wright 130 W. 19 Mo. v. S. Goodman Trust Co., App. 648; Fry Wood, 192 Mo. Board of Trustees abrogated c. has been l. The doctrine announced in these cases Negotiable the enactment Instrument Law. Rail [Bank road, supra.]
639 Co., supra, were that "Wright v. Tlie facts before tlie court in Trust receipt to defend delivered for a of wheat was a’warehouse carload delivered receipt ivas security pre-existing debt. The for a ant 1906, passage January which was after the 18, to defendant facts, Springfield Negotiable Law. On this state Instrument holder Appeals was not a bona-fide that defendant Court held re the warehouse receipt, because it took value, of the warehouse Evidently provisions pre-existing secimty for a debt. ceipt escaped court Negotiable the attention Law Instrument French, case, S. 279 subsequent of Aab v. in that in the case because 449, 290 W. McDaniel, 435, Republic W. v. S. Bank State cases in effect contrary These doctrine. same court announced a Co., v. Wright also cites Kincaid supra. Appellant overrule Trust on this Estes, App. 117, support 218 l. contention Mo. c. point. appellant upon which language case, of the court necessary to decision of relies, clearly a here obiter because not following quo point clearly appears there considered. This from case: — tation from that held of a note a transferee
“There is rule a this a debt is not merely security pre-existing a him as collateral [Wright v. Trust business. holder for value the usual course of 29, 640, Forsee, Co., App. 137 Mo. Mo. Loewen testimony this him shows But relied security collateral told him that held note as is him. ‘Where a note taken loan made at the time the note wras on the faith as thereof, for a debt at that time created collateral sufficient, a . . . and the indorsee the consideration ” purchaser for value in course of business.’ attempted transfer of next contended that the It authority and from the without the assets old bank to new was 1919, and to 11.701, void Revised Statutes because violative of section appellant, to the at- language use the taint attaches “the conveyance hank the new also attaches tempted from old Mitchell note convey of the old bank efforts of the directors to the bank.’’ new
Section bank Revised Statutes makes unlawful general assignment business voluntary to make a affairs and of its failing con provides and also finds itself to be in that when bank dition, immediately place hands the bank it shall itself Tindle, Supreme commissioner. The Trust Court in legislative pur l. c. statute indicative of a held this prohibit un pose liquidating their business insolvent banks that doubtful general der case show's law\ The record this bank and of the old ’notes the amount of wrere taken out replaced old and the with the in cash assets same amount guaranteed. All deposits with all
bank transferred tbe new bank of the bank knowledge, approval done with the consent old attempt part of the bank This was not an on the commissioner. liquidate the stat- general its affairs under the violation of law approval contrary was ute with the consent but on the done *7 compliance in of the bank commissioner and ivas substantial the statute.
Tn this, addition in that the Mitchell to admits brief the old bank to the included the transfer of assets the by new bank but the old bank personally was held the directors of assigned who- respondent collateral the bank as delivered to security by respondent which had bond been theretofore by the appellant, directors of bank. Tf as the the old admitted Mitchell note was not included in the transfer of the assets the old by bank the bank, personally to the new but ivas held directors of bank, the old understand, it is difficult to how transfer of such the could, assets manner, the the effect transfer of Mitchell note by thereafter made the note. This holders of such contention is against appellant. ruled
Appellant respondent, next contends that the as effect holds suit as guarantee collateral the of whatever may given by amount become due it on the bond directors the bank, oE recovery the old no can had in this be ease the reason nothing was shown be is due on the bond. Tt that re true spondent only is collateral, entitled to receive from the the due amount on the bond but this respondent does not mean that iva.it until must the definitely amount due on the bond is determined collect before ing the collateral. In v. French, Aab 279 S. 435, 437, the court W. saidi:
“The bank in this case Avasa holder course, in due and had the right due, to collect the collateral note when purpose ours.) to sue its oavh and in right-.” (Italics name its oavii
If pledged security, as collateral a valuable supported by is legal due, consideration and is collected Avhen but before the due, basic debt is it is concern of no the maker because he OAvesthe entire note overplus, any, and 'the if paid, after basic the debt go payee Avould to the 230 Mo. Grayson, of the note. [Johnson If, hoAvever, pledged consideration, the note Avas Avithout but was pledged maturity before pledgee without notice the of infirmities therein or defect pledgor, pledgee title of the only the would debt, entitled to the reeoAmr amount due basic the but suit be brought on the due, collateral note A\dien but before basic the debt due, pledgee the Avouldbe entitled to recover full the amount due the, on the collateral paying note and after the amount basic debt, surplus would the amount collected trustee for the maker hold pledged find French, supra, language, note. In Aab we bank, payee
“While original held collateral an upon right. note cannot maintain it in his own The relation que of trustee and cestui trust the bank Stonebraker between would not bank arise unless the amount collected collateral note should exceed the amount due from Stonebraker bank upon In that the bank hold sur- case would plus amount collected as ...” trustee. (1)
The granted grounds, court nisi a new trial on the (2) against evidence; newly- weig’ht because of (3) evidence; cliscovered error of the court because giving defendant’s instruction number regarding power grant rule a new trial on the trial court’s ground against weight the evidence verdict is Lyons Banc, Corder,
well stated l. c. Court en 561, in following language': judge
“The State, *8 law Avell a settled in this that where trial exercises judgment a the discretionary power setting his of aside on ground against evidence,’ AAreight in ‘that the the his action of doing except upon showing so will a not be reviewed that no verdict party granted in favor of the to Avhom the new trial would be alloAA^edto stand.”
What AA^e opinion have indicative our heretofore said is of had the been plaintiff, for court would not have been the trial say, authorized event, that in no such verdict allowed should stand. support
The Hope affidavit of for Dav-id Avas filed motion trial ground new affi- neAvly-discovered the evidence. This follorring: davit the recites, substance Hope
“David that he is a resident of Platte his oath states County, Missouri; G-. day April, appellant that on the 26th L. Miller was and him 1500 at at that had with shares home time Hun- of common stock and 1500 E. preferred shares of stock the J. Company; ter that he affiant at that time shoAved shares to value; inquired if the stock Arasof much that he stated that he given receiAmd for Avhich Company, the stock a note to Robert Mitchell defendant; was the G-.L. Avas note on in case which Miller sued the giAren that the stock shares of Averereceived E. Company. Robert states Mitchell The affidavit further J. Company gold Hunter is noAA' owner certain mines in Mexico the being company; and said are Avorked said that said mines norr at Company E. J. Hunter the mines Avas owned stock time L. affidavit further issued said G-. Miller. The recites that none Bank or facts were Farmers State of its offi- knoAA'nto these agents ease of Farmers or directors or until after the trial eers Miller; against facts first communi- G. L. said were State Bank Bank after the trial attorney Farmers State cated to the for said and defendant a the defendant ease; said was witness for that affiant did call affiant and defendant knew that affiant knew these facts until after facts trial; a one knew these as witness at said that no attorney Farmers said trial when same was communicated to State Bank.” and preferred in suit ivas common consideration for alleged One de- corporation. J. Company, E. Hunter
stock re- never appellant consideration failed because fense is that such stock given that such ceived for which the note was the stock tends to show alleged newly-discovered evidence was worthless. The given, was also did receive stock operating company that it if owned and was of some value authorized the gold "We material mines. think this evidence was request granting 2, given at the of new trial. Instruction number defendant, is as follows: jury may jury although “The believe court instructs the May, day from the 23rd evidence that or about the of Robert promissory payable to the order executed his Mitchell Com- Company and that thereafter the said Robert pany de- Avriting in' the back indorsed same across thereof evi- you livered from the plaintiff, yet the same further believe pre- dence that said shares of note Avas fifteen per ferred share Company, stock the E. J. valued Hunter J. Hun- and also for said E. worth of common stock you that as ter and if evidence further believe part agreed by and purchase stock, sale and Company, between the E. J. defendant and said Hunter *9 agent then Mitchell, you Paul Paul Mitchell was its if find that said agent part Company, was a of E. J. Hunter said agreement six stock, that Avithin purchase sale note, E. J. months of said giving the date of the said from for his com- Company up pay Hunter take the defendant would mon stock full of common stock and $1500 sum pay that said off could then be used defendant sum preferred discharge his note of Company or the Robert stock the E. J. Hunter Company further payment of other or would never demand dollar-payment sums which defendant than the fifteen hundred Company for defendant’s AArouldreceive said E. J. ITunter from the up then deliver common stock and that it would you §nd sums full defendant, satisfaction procured time further believe from the evidence that agents officers, knowledge its or actual said.note directors had said agreement Company, E. J. Hunter between defendant and said ” (Given.) your then must be the defendant. agreement parol ap- establish the between evidence tended to pellant instruction, and E. as in said J. Hunter recited but agreement, being oral, agree- such is no defense in this case. Parol prior contemporaneous ments made to or the execution of note, note, vary-the which tend to terms of the cannot contradict up be Bank Ava [Peoples set a defense to a on the cited; Rankin, 94, State Bank 91, S. W. and cases Farmers Sloop, 305, S. W. and cases cited.] agreement
If a valid recited had been writ- instruction agreement, ten would because it the instruction still erroneous purports to cover the case and verdict for whole directs .a knowledge requiring jury without to find that had the. $.t acquired agreement time the note, that such had been breached. Knowledge part respondent part on the the considera suit, agreement tion for the executory payee, was an respondent, performed, deprive has been will not character of knowledge a bona-fide unless also holder, has executory agreement [Leoy Artophone has been breached. Co., 249 S. W.
We have granting concluded that the the trial court in action á new trial should not judgment. be disturbed therefore affirm the Williams, G., concurs.
PER Frank, C., foregoing opinion hereby CURIAM:-—'The adopted concur, except Trimble, All opinion J., P. of the court. absent. Respondent.*
F. L. Williamson, Frank, v. A. L. Appellant, City Appeals. January Kansas Court of