80 Mo. App. 657 | Mo. Ct. App. | 1899
Whether or not the deed of trust note was paid off and discharged prior to the commencement of the suit is the principal question presented for our decision. The material facts
It appears that a few days after the application for the loan had been made by said Kermehs, the cashier informed
The note which said Kermehs made to the German Savings Bank was a collateral note in form, in which was described the note and deed of trust which had been given to the People’s Bank. The cashier of the People’s Bank testified that in the transaction by which he received the $700 and indorsed the note “without recourse” he represented the bank, and that Kermehs represented the other parties. When the note was indorsed by the cashier of the People’s Bank", he was requested by said Kermehs not to release the deed of trust until requested by him to do so; that the cashier of the German Savings Bank testified that he thought that said Kermehs was entitled to some credit but perhaps not to the extent of the loan made to him and that he did not rely wholly on the collateral note and deed of trust in extending credit to him.
It further appears that the German Savings Bank did not place the amount of money it loaned to said Kermehs to his credit on its books but paid the same over to him; that it relied upon his statement to the effect that he would take the
The individual note was paid off and delivered by the cashier to said Xermehs. The other note secured by the deed of trust was retained by- the cashier as collateral security to the demand note which said Xermehs had given the bank for the loan. There was no indorsement by the receiver of either of the notes to the plaintiff. Said Xermehs failed to pay either the demand note or the deed of trust note.
The cashier of the People’s Bank, as he testified, understood that Kermehs was acting not for himself but for others. This is further shown by his refusal to release the deed of trust. If he had understood that the money received by him
Had defendant paid off the debt of Kermehs, she would liave been subrogated to the rights of the German Savings Bank, but it had no right to sue Kermehs until the maturity of the debt evidenced by his individual note. The defendant, by making the payment would, by subrogation, have taken the place of the German Savings Bank, and been compelled to wait until the maturity of the individual note of Kermehs before she could sue. Her right of action was therefore suspended until that time. She would have no right to proceed immediately against her principal on the payment of the deed of trust note.
H the bank had sued Kermehs on the deed of trust note he could have successfully defended the suit on the ground that the debt thereby evidenced had been extended by the taking of the new note. If the defendant had required the bank to bring suit against Kermehs on the deed of trust note it could not have done so for the reason the debt was not then due. The bank tied its own hands — it had disabled itself to take any step towards enforcing the collection of the debt until the maturity of the new note. The taking of the new note of Kermehs, under the authorities, we think, had the effect to extend the time of the payment of the debt and the consequent discharge of the defendant as surety on the collateral note. Bank v. Wood, 56 Mo. App. 214; Barrett v. Davis, 104 Mo. 549; Bank v. Leavitt, 65 Mo. 567; Kincaid v. Yates, 63 Mo. 45.
—:—: revivingdead security'!1"8' The security was dead when it reached the hands of the plaintiff. It was then overdue and the plaintiff succeeded to exactly the same rights, and none other, in respect thereto, that the German Savings Bank had. It was a dead security which could not be revived or made available Py plaintiff for any purpose. Even if the security was alive in the hands of the Germau Savings Bank, yet the payment by plaintiff of the individual
It follows that the judgment will be reversed.