Costello v. Ashford et al.

• Decision Date: 03 April 1933
• Docket Number: No. 17767.,17767.
• Citation: 58 S.W.2d 755
• Parties: J. ED. COSTELLO, APPELLANT, v. J. DALE ASHFORD, DEFENDANT, EQUITABLE LIFE INSURANCE COMPANY OF IOWA, RESPONDENT.
• Court: Missouri Court of Appeals

58 S.W.2d 755

J. ED. COSTELLO, APPELLANT, v. J. DALE ASHFORD, DEFENDANT, EQUITABLE LIFE INSURANCE COMPANY OF IOWA, RESPONDENT.

No. 17767.

Kansas City Court of Appeals. Missouri.

April 3, 1933.

Appeal from Circuit Court of Nodaway County. — Hon. D.D. Reeves, Judge.

REVERSED AND REMANDED.

Ford & Wright for appellant.

F.P. Stapleton for respondent.

SHAIN, P.J.

This is an action to recover a balance on cash rent on a farm in Nodaway County, Missouri.

J. Ed Costello as plaintiff below, appellant herein, commenced the action against J. Dale Ashford, defendant below. Ashford, in his answer, admitted the debt but further set up the plea that the rent money was claimed by the Equitable Life Insurance Company of Iowa, a corporation, and Ashford asked that he be permitted to pay the money into court and further asked an order that the Insurance Company interplead. By permission of the court the amount of $442 was paid into the court and an order was made and thereafter the Equitable Life Insurance Company of Iowa, respondent herein, duly filed its interplea and the issue, under the interplea, was tried before the court, jury being waived, and by the judgment of the court the money was awarded to the Insurance Company. From this judgment, Costello appealed and the cause is duly before this court for review.

The facts are that Costello, hereinafter referred to as appellant, owned a large farm in Nodaway County, Missouri. On this farm he secured a loan from the Equitable Life Insurance Company of Iowa, hereinafter referred to as respondent. The amount of this loan was $18,000 and to secure same the plaintiff had duly executed a deed of trust on his aforesaid farm.

The plaintiff after the execution of the trust deed, rented the farm to the defendant, Ashford, for crop rent and for cash rent in the amount of $642, payment deferred.

Thereafter, the plaintiff became in default and to secure an extension of time executed "as additional security" an assignment of the rental lease to the respondent.

Thereafter, the plaintiff made further default and the respondent began foreclosure proceedings under the deed of trust. During the pendency of the foreclosure proceedings there is shown negotiations between the plaintiff and the agents of the respondent looking to an adjustment whereby the plaintiff could save his farm. The plaintiff failing in his plans foreclosure was had by sale of the farm on February 6, 1932. At this sale, the respondent bid the full amount computed as due from the plaintiff to the respondent.

The question here involved is as to the agreement, if any, had between the plaintiff and the respondent prior to the sale concerning the rent money. The respondent contends that there was an understanding had with the plaintiff, wherein their bidding of the whole amount of the debt was based upon an agreement with the plaintiff that the respondent was to receive the balance of cash rent due from the defendant, Ashford. It appears that $200 had been paid prior to foreclosure and duly credited on the debt, leaving a balance of $442. The plaintiff contends that there was no such agreement as above, and that as the entire debt was wiped out when the respondent purchased the farm on a bid equaling the full amount of the debt, that he is entitled to receive the rent money.

It stands undisputed, that the original assignment of the rent was for additional security. The issue, therefore, rests entirely upon the fact as to whether or not there was an inforcible agreement entered into between the plaintiff and the respondent to the effect that the respondent should receive the rent in consideration of bidding the full amount of the debt.

The trial judge decided that there was shown, by the evidence, such an agreement and upon such finding gave judgment for the respondent. It follows, that as the trial was by the judge, jury being waived, if there be any facts and circumstances in evidence from which such an agreement can reasonably be inferred, then it is our duty to uphold the judgment.

The positive testimony of the plaintiff is that no agreement, touching the rent money going to the respondent in consideration of its bid, was ever entered into.

The respondent placed upon the stand two witnesses, C.W. Spence and Paul Sisson, loan agents for the company, with whom the plaintiff had negotiated with concerning the matter of foreclosure.

The most direct and positive statement by the witness, C.W. Spence, as to the question of the agreement in issue is shown by two questions and answers to-wit:

"Q. Then did the Equitable proceed to go to the sale and bid the farm in for the full amount? A. Yes, sir.

"Q. Was any question there raised by Mr. Costello as to what would happen to the rents at all if you didn't bid the full price? A. No, sir."

During the examination of witness, C.W. Spence, this colloquy took place between the court and counsel for the respondent:

"THE COURT: Well, if by reason of some consideration that you received, you had agreed to do that, then you would have to do it, but I haven't seen anything yet that indicates any binding agreement to do that.

"COUNSEL FOR INTERPLEADER: Well, that is just what the facts are, if the court please.

"THE COURT: Of course, it is stated here, that he had just told him they would bid it in. I don't see that binds them to do it; as a matter of law, I don't think they were required to do it. Do you think so?

"COUNSEL FOR INTERPLEADER: Well, I don't know that they would be bound to do it."

In the course of the examination of witness Sisson, these questions prior to the morning of February 6th, the date of the sale,

"Q. Well, tell the court what conversations were had between the three of you in regard to this foreclosure? A. The conversations prior to the morning of February 6th, the date of the sale, were generally in regard to his ability to pay the mortgage and to pay the arrearages. The morning of February 6th, Mr. Costello was in the office, and he and Mr. Spence talked together a great deal of the morning. I recall that I figured up the amount of the loan, what it would be in toto, that was the principal and interest and expenses of the foreclosure, taxes for 1929, which we paid October. '31, which we paid after taking a chattel mortgage, and I gave them those figures, and I think that was about all the conversation I had that morning.

"Q. Do you know what the total of those figures were? A. $21,296.53.

"Q. Now. Mr. Costello has made some reference here to the eight per cent proposition that you wanted to have figured, you remember that conversation about the eight per cent and five and a half per cent, when that occurred? A. In my opinion, that conversation occurred that morning, February 6th, when I gave him the figures of what the loan amounted to. I had to figure according to a contract. He gave us to understand that morning that he could go no further so his purpose in figuring the five and a half per cent interest had nothing to do with the case.

"Q. Now, did you have any discussion with Mr. Costello, either in the presence of Mr. Spence, or otherwise, as to the amount the Equitable intended to bid at that sale that afternoon? A. Yes, sir.

"Q. When was that? A. Mr. Costello came up in the afternoon, and he and Mr. Spence were in the office just before we came over to the courthouse. I went back to where they were, and I says, `Ed, I understand the company wished to treat you nice in this matter, and we will bid the full amount of the loan.' I said, `isn't that right, Clarence' And Clarence nodded his head yes.

"THE COURT: Who is Clarence? A. Mr. Spence. Mr. Costello took all the figures down, had them itemized, and attended the sale.

"Q. Anything said at all about the rents at that time in your presence? A. Not at that time.

"Q. Had you heard any discussion of the rents between Mr. Spence and Mr. Costello previous to that time? A. I do no recall.

"Q. Or had you had any yourself with Mr. Costello in regard to these rents? A. I do not recall in regard to the foreclosure.

"Q. Now, Mr. Sisson, when did the question of Mr. Costello's claim for these rents first come up, so far as you know? A. It was either the next day or the second day after the sale he appeared in the office and wished to know what was my understanding about the rents?

"Q. What did you tell him? A. I told him the rents were coming to the company."

It is shown that the court had witness Spence recalled for further interrogation concerning a conversation had between the witness and the plaintiff concerning the assignment of the rent lease. This was a conversation that occurred before the sale.

Concerning such conversations occurring before foreclosure and at a time, as is shown, before the $200 payment was made, the witness Spence had given testimony as follows:

"Q. Now, Mr. Spence, after this assignment was made did the question of immediate action, that is either payment or foreclosure of this farm come up? A. Yes, sir.

"Q. After it did come up, did you have any conversation with Mr. Costello in regard to the rent of this farm? A. Yes, sir.

"Q. Could you tell the court whether that was before or after the $200 had been paid, if you...