158 Mo. 632 | Mo. | 1900
This is a proceeding by garnishment begun in the circuit court of the city of St. Louis in aid of an attachment suit brought by the plaintiff against defendant T. W. Hermann in February, 1897. Judgment was rendered on the merits in the attachment suit against defendant Hiemann in June, 1898, on two counts, in th-e aggregate sum of of $5,312.18, from which no appeal was taken.
The writ of garnishment was served on the appellant herein in February, 1897, made returnable to the April term, 1897, of the circuit court, at which time the usual statutory interrogatories were filed, and the garnishee, Imboden, answered thereto in substance as follows:
That he did not have in his possession any goods, chattels, etc., -of the defendant now or at any time since the service of garnishment upon him; that he was not at the time of the
“$2,000. “St. Louis, Mo., July 9th, 1896.
“Thirty days after date I promise to pay to the order of L. E. Imboden, two thousand and no hundredths dollars, for value received, negotiable and payable without defalcation or discount, at tbe Cbemical National Bank, with interest after maturity at the rate of eight per cent per annum, he having deposited or pledged with L. E. Imboden as collateral security for tbe payment -of this note: One deed of trust, and one note for $3,700, executed by E. W. ILeimanu, dated February 26, 1893, and extended to February 26, 1899, also examination of title and insurance policy.
“Now, in the event of the non-payment of this note at maturity, the holder hereof is hereby invested with full authority, to use transfer, hypothecate, sell or convey the said collaterals, or any collaterals substituted for or added to the above, or any part thereof, or to- canse the same to be done, at public or private sale, with or without notice or demand of any sort, -at such place and on- such terms- as the said holder hereof may deem best, and the holder of this note is authorized to purchase said collaterals when sold for his own protection, and the proceeds of such sale, transfer or hypothecation shall be applied to the payment of this note, together with all protests, damages, interest, costs and charges due upon the note, or incurred by reason of its non-payment when due, or in the execution -of this power. The surplus, if any, after payment of this note, together with all charges above stated,*637 shall be paid to the drawer of this note, or at the election of the holder hereof, be paid on any other obligation of the drawer hereof, whether as principal debtor or otherwise, held by the holder hereof, and if the proceeds of the above s'ale shall not be sufficient to pay this note, the drawer hereof agrees to make good any deficit. In case of depreciation in the market value of any security pledged for this- obligation, he hereby agrees to deposit on demand a further amount of collateral, so that the market -value shall always be at least tens per cent more than the amount of this note, and failing to deposit such additional security, this note shall be deemed to be due -and payable forthwith, anything hereinbefore expressed to the contrary notwithstanding, and the holder may immediately reimburse himself by the sale of the security.
“Fred W. Ueimann.”
The plaintiff, respondent herein, filed her denial to the foregoing answer of garnishee, charging among other things not necessary to be considered here, that if the loan of $2,000 from Imboden to Ueimann- was made, the interest exacted and received by said Imboden for such loan or indebtedness was and is usurious, and prayed judgment for the delivery to her of the $3,700 note and deed' of trust named therein, or on failure to deliver same, for a money judgment. Upon the issues as thus made the ease proceeded to a- trial and the court rendered judgment in favor of plaintiff and against garnishee; and ordered that garnishee deliver the note of $3,700 and deed of trust securing same into’ court on or before January 14, 1898 to await its further order and judgment. On February 18, 1898, the garnishee having failed to comply with the court’s order, judgment was rendered against him for the face value of the note and the accumulated interest on same at that time due and unpaid, amounting in the- aggregate to $3,931.87 from which judgment the garnishee after the usual steps appealed the case to this court.
The simple facts of the case as gathered from the record are these: In February, 1893, the defendant Heimann made his note payable to the order of the plaintiff herein, Mrs. Annie Griebel, for $3,700, due three years after date, and to secure same a deed of trust was given upon certain property in the city of St. Louis, owned by the defendant Heimann. In time this note was indorsed by Mrs. Griebel, the payee therein, and through a course of negotiation not disclosed by this record, came into the possession of one B. Schnurmaeher and was owned and held by him on the 9th day of July, 1896, when the defendant Heimann induced the garnishee herein, L. E. Imboden, to buy this $3,700 note; or as the witness expresses it, to advance $2,000 to take up the note, Heimann agreeing to pay Imboden eight p er cent on the money so advanced by bim in taking up or buying the note, and promising in addition to pay him $30 per month by way of a commission (as it is called by the witnesses) so long as the amount of the advancement remained unpaid. Imboden paid the $2,000 to Schnurmacher, or rather to the Mississippi Valley Trust Co., for Mr. Schnurmaeher, and Mr. Sehnurmacher delivered to him the $3,700 note of defendant, and the deed of trust securing same. The defendant Heimann then executed and delivered to the garnishee Imboden the contract or note set out in his answer.
When by the terms of this writing, called a collateral note, the two thousand dollars named therein (which represented the amount the garnishee had advanced to take up or
In January, 1897, the garnishee refused to grant to the defendant ‘any further extension of time upon the so-called collateral note of two thousand dollars, and under the teams and powers vested in garnishee by that instrument he advertised and' offered for sale the $3,700 note and deed of trust (which he had previously purchased of Schnurmacher and at all times thereafter held and retained the control and custody of) and as he says became the purchaser thereof for the alleged consideration of $2,030. At the time of the service of the writ of garnishment upon the garnishee Imboden, in February, 1897, he still held both the $2,000 note made to him by the defendant and the note of the defendant for $3,700 which he had gotten from Schnurmacher. The real estate niamed in the deed of trust securing the thirty seven hundred dollar note of defendant was shown to be worth from four thousand to forty-five hundred dollars, and nothing was made to appear showing that 'any part of the principal of the note was ever paid.
Under this state of facts the trial court, after finding that the garnishee, in good faith 'and with no design or intention on his part, to assist defendant in hindering and delaying or defrauding his creditors in the collection of his debt, did advance the two thousand dollars with which to buy or take up the $3,700 note of defendant in the hand of Schnurmacher, rendered judgment, a® above indicated, in favor of plaintiff
I. In the first place, the $3,700 note of defendant held by garnishee could in no sense' be considered and treated as an asset of defendant in the hands of garnishee. The designation of it as a- pledge in the two thousand dollar note held by garnishee set out in his answer does not operate to change its real character, or to convert the liability imposed by it upon defendant, by its issue and circulation, into an asset of the defendant, available as a pledge to secure the payment of -a principal obligation in the hands of the garnishee. The $3,700 note was not an .asset of defendant, but a liability of his, coming to the hands of garnishee, by reason of his pay
Despite the name and designation given to the transaction, its real character is not changed or transformed. It is certainly a most novel proposition that because the parties dealing with a note of the defen dant’s call, name or designate it in such a manner, that ordinarily it would indicate an asset of defendant, it in fact becomes an asset, attachable as such by a third party.
While calling the $3,700- note a pledge would indicate that it was -an asset of the defendant, a thing of value of the pledgor in the hands of the pledgee to secure the payment of some demand owing, or some obligation to be performed, of necessity it must be otherwise. As long as the note has life it must even remain a liability against defendant, and can never become an asset of his. To get, own, or be entitled to its possession by defendant would work its extinction for all purpose, and its character can not be transferred by naming or designating it as a pledge.
II. But if we now suppose that this $3,700 note had been taken up by the defendant, and that -same had been reissued and given to garnishee as a pledge to secure the $2,000 obligation of defendant due on account of the money advanced by garnishee for the defendant, and that the plaintiff could show the usurious exaction by garnishee of defendant on account of said $2,000 note to invalidate the pledge in garnishee’s hand, what better would be plaintiff’s condition ? If
III. Finally, plaintiff’s judgment in this proceeding can not be sustained upon any possible view of the facts, for the reason that a general creditor can not invoke the provision of session acts 1891, now section 3710, Revised Statutes 1899, in this character of an action, to invalidate a pledge, given by his debtor to a third party to secure an obligation upon which usury has been exacted by that third party. That is a privilege conferred by statute upon the debtor alone or upon bim and his privies in estate or blood, but is unavailing to a creditor or stranger. So then in that view, if the $3,700 note in controversy be considered as an asset of defendant in the hands of the garnishee as a pledge to secure the payment of a two thousand dollar obligation of defendant upon which usury has been exacted by the garnishee, the plaintiff can not avail himself of that fact, and have the pledge in garnishee’s