Avery Manufacturing Co. v. Leathers

BLAND, P. J. On January 7, 1903, defendant executed and delivered to plaintiff, an Illinois corporation, bis three several promissory notes, aggregating $1,874.25, one for $625, due October 1, 1903; one for $624.25, due October 1, 1904, and one for $625 due October 1, 1905. To secure tbe payment of these notes defendant gave a chattel mortgage on an engine and separator. Default was made in tbe payment of tbe first note. But on December 1, 1903, defendant paid $20 thereon and on tbe third day of tbe same month, in consideration of an extension of the time of payment of said note, defendant, as collateral security for its payment, gave plaintiff bis three several promissory notes for $219.55 each, due respectively April first, July first, and September 1, 1904, and to secure said collateral notes executed and acknowledged a chattel mortgage on some of bis horses and cattle. Tbe mortgage provided that- in tbe event of default in tbe payment of any one of said collateral notes, or any part thereof, or tbe interest thereon, when due, tbe whole should become due. Default was made in tbe payment of tbe first note, whereupon a demand was made on defendant for a delivery of tbe mortgaged property to plaintiff. Delivery was refused and plaintiff commenced this suit in replevin before a justice of tbe peace, to recover possession of tbe mortgaged property, [204] alleging its value to be $200. In due course the cause was appealed to the Douglas Circuit Court. A change of tbe venue of the cause wasi awarded to the Ozark Circuit Court, where the issues were tried to the court sitting as a jury. The court found the issues for defendant and rendered judgment accordingly, from which plaintiff appealed to this court. On May 8, 1904, the engine and separator mortgaged to secure the three original or principal notes were sold for the sum of $698, which sum was credited by plaintiff on two of the notes, the ones due respectively October 1, 1904, and October, 1, 1905. On May 5, 1904, plaintiff commenced its suit against defendant on the three original notes, having given credit thereon for $718, and also credit for $200, the supposed value of the hoi’ses and cattle mortgaged to secure the three collateral notes. At the close of plaintiff’s case, at defendant’s request, the court gave an instruction in the nature of a demurrer to plaintiff’s evidence. The granting of this instruction is assigned as error. 1. We are unable to understand upon what theory of the case the court sustained the demurrer to plaintiff’s evidence. Under the terms of the mortgage on the engine and separator, the whole of the debt secured by said mortgage was due and payable by reason of defendant’s failure to pay the first note to mature; and plaintiff, in the absence of any direction by defendant, had the right to apply the sum realized on the sale of the engine and separator as a credit on any' of said notes. [Lime & Cement Co. v. Citizens Bank, 158 Mo. 272, 59 S. W. 909; Cox v. Sloan, 158 Mo. 411, 57 S. W. 1052.] 2. The extension of time for the payment of the first of the original notes was a sufficient consideration for the giving of the mortgage on the horses and cattle, and therefore it cannot be held that the mortgage was [205] without consideration. [Cox v. Sloan, supra; Deere v. Marsden, 88 Mo. 512.] 3. The suit on the original note for the payment of which the chattel mortgage was given as collateral security did not operate as a waiver of -the security, nor was it a splitting of one cause of action, nor would a judgment on the note have the effect to discharge the mortgage. Only payment would have that effect. 4. The debt to secure which the mortgage was was given- was past due and under the terms of the mortgage and under the law, plaintiff was entitled to the possession of the property. Wherefore the judgment is reversed and the cause remanded. All concur.