Court Opinion

ID: 8011786
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:59:02.485399+00
Date Added: 2024-06-11T16:36:06.914920
License: Public Domain

Sherwood, J. —
The evidence incident to the prominent features of this litigation has been set forth with sufficient fullness in the accompanying statement, in order that the controlling facts may be readily apparent ; and when thus apparent, the proper conclusions of law arising on those facts will not be difficult.
I. Upon those facts we determine that there was no sale of the twenty shares of stock by the Franklin Bank to defendant, George Wilson. A sale of personal property at common law consisted of the elements of a proper subject, a price and the consent of the contracting parties. Cunningham v. Ashbrook, 20 Mo. 553; Nance v. Metcalf, 19 Mo. App. 183; 1 Benjamin on Sales [3 Ed.], secs. 2 and 3.
*573Lacking any one of these constituent elements, of course there could be no sale. There was no mutual assent of the parties in this case, and no price was fixed up'on. The transfer of Mrs. Greer’s note and the stock which accompanied it, to defendant George Wilson, under Ms own order of July 20, 1891, as president, was but the result of an arbitrary direction to that effect, and not the result of a reciprocal agreement between meeting and contracting minds. In consequence of no sale having occurred, the title of the article pledged remained as it was before its attempted transfer.
II. But there is another view to be taken of the facts of this case, and that is this: There can be no doubt that though the time of the payment of Mrs. G-reer’s note was stated therein to be three months, yet the positive testimony of Mr. Greer as to the original transaction shows, and that of Mrs. G-reer shows, also, that the time was extended, in fact was not regarded as material, so long as the interest was paid. But the testimony of plaintiff and her husband may be entirely discarded, and still the acts of the defendant bank in accepting, without objection, payments of interest from time to time for a period of years, as well as payments in like manner of portions of the principal, are alone sufficient to warrant the conclusion that the time for the payment of the principal was extended indefinitely and regarded as immaterial. This long course of dealing between the parties must be regarded as materially qualifying the terms of the note as regards time of payment; it ceased to be a note payable at three months and became one payable on demand. And where a sale of collaterals occurs, which are held for a loan payable on demand, without notice to, or demand of, the pledgor, it is invalid, and may, at the option of the *574latter, be affirmed or treated as a conversion. Colebrooke, Collat. Secur., sec. 121, and cases cited.
In this case, as before noted, there was neither notice nor demand of Mrs.Gireer that her note should be paid; in fact she was ignorant it had ever changed hands, and was not informed of the transfer until by the letter of Wilson of date January 6, 1892.
III. Not only must the pledgee, as a general rule, give reasonable notice to the pledgor of his intention to sell, but he is prohibited from; buying at the sale made by himself, or whether made by his agent or broker. The result of the purchase in either event is the same. Such a sale is a breach of the contract of pledge, and the pledgor may treat such sale and purchase as a conversion and will be entitled to redeem on payment or tender of the principal debt. Colebrooke on Collat. Secur., see. 332, and cases cited. 1 Cook on Stock and Stockholders [3 Ed.], sec. 479, and cases cited.
Now, if the sale in this'instance, conceding it to be otherwise valid, had been made to the defendant danlc, no doubt could arise under the authorities that such sale made to the bank by its chosen agent, the Franklin Bank, would have been invalid for reasons already stated.
But the case is not favorably altered for the individual defendant Wilson, for he it was that, as president of the defendant bank, planned the whole scheme, which resulted in this litigation. Discerning the real actor through the thin ■ disguises of carefully prepared forms, we shall not allow him to shield himself from liability behind a corporate organization, but shall apply to him the rules already mentioned, such as govern in ordinary cases and similar transactions.
IY. Comment is unnecessary as to the fraudulent aspects of this case as disclosed by the evidence; *575a reference to that evidence is all-sufficient. And defendant Wilson being the accredited agent of the defendant bank, the latter would of course be bound by the acts done in the course of his employment, even though of a fraudulent character. Story, Agency [9 Ed.], secs. 139, 453, and cases cited; Whart. Agency, secs. 164, 540.
Y. It is contended that there is no evidence in the record showing the value of the stock in question. The evidence shows the whole financial situation of the State National Bank of El Paso; shows the bank to be on a sound basis, and shows also that the stock had been paying an annual dividend of twelve per cent. In our most recent adjudication on this subject, we have held that though there be no evidence of the market value of stock, yet that its actual value may well be established by showing its dividend earning capacity, just as was done in the case at bar. Trust, etc., Co. v. Lumber Co., 118 Mo. 447.
YI. The second instruction given at plaintiff’s instance in all probability is- not a correct exposition of the law; but inasmuch as the verdict was the only one the jury, on the evidence, could properly have returned, the error will be held harmless, and the judgment affirmed. Fitzgerald v. Barker, 96 Mo. 661; Keen v. Schnedler, 92 Mo. 516; Otto v. Bent, 48 Mo. 23; Bushey v. Glenn, 107 Mo. 331; Macfarland v. Heim, 127 Mo. 327; Brobst v. Brock, 10 Wall. 519.
All concur.