Adm'rs of Barton v. Rector

• Decision Date: 31 August 1842
• Citation: 7 Mo. 524
• Parties: ADMINISTRATORS OF BARTON v. RECTOR AND OTHERS.
• Court: Missouri Supreme Court

7 Mo. 524

ADMINISTRATORS OF BARTON

v.RECTOR AND OTHERS.

Supreme Court of Missouri.

August Term, 1842.

APPEAL FROM THE CIRCUIT COURT OF COOPER COUNTY.

TODD, for Appellants.

ADAMS, for Appellees.

NAPTON, J.^a1

This was a bill in chancery, brought by the administrators of David Barton, deceased, against Nimrod Rector, Charles Rector, Jamison Samuel & Co., John H. Gay & Co., and others. The bill charges that Barton in his life-time contracted in writing with the Rectors for a lot in the town of Boonville, by the terms of which agreement they were to convey to said Barton the said lot by “deed of general warranty in fee,” so soon as Barton completed the payments of purchase money The price of the lot was three thousand dollars, payable in three installments, for each of which Barton gave separate notes bearing interest, & c. The bill alleges that these notes were assigned to Samuel & Co., Gay & Co., and others, made parties defendants. The bill further charges a payment of $672 10, by Barton on one of the notes, and that judgment at law had been obtained on the others. It is further charged, that the lot was incumbered by two deeds of trust, at the time of the sale; that these incumbrances were never removed, and that the Rectors were insolvent or in very embarrassed circumstances at the time of the sale. It is also alleged, that these incumbrances were concealed from Barton. The prayer of the bill is for a rescission of the contract, a perpetual injunction of the judgments at law, a cancellation of the notes unpaid, and a return of the $672 10, which Barton had paid in his life-time. The answers of the Rectors admit all the material allegations of the bill in relation to the terms of the contract, and the existence of the incumbrances; but deny all fraud and concealment. Both the Rectors admit their inability to remove the incumbrances. The answer of the assignees of the notes, who are the remaining parties to the suit, deny all knowledge of the transaction and rely on being protected as bona fide purchasers without notice. On the hearing of the cause, the complainants proved that under the deed of trust mentioned in the bill, a sale of the house and lot had been made to satisfy said liens; that at the time of the sale to Barton, the said Rectors were in embarrassed circumstances, and that neither of them discharged the liens, and further proved the payment by Barton of the $672.10, charged in the bill. The defendants proved, that at the time of the sale to Barton, he had actual notice of the incumbrances, and of their being on record, and also knowledge of the embarrassed condition of the Rectors; and was persuaded not to purchase, but that he avowed his confidence in their honesty and industry, and his belief that they would remove the incumbrances. The injunction was dissolved, and the bill dismissed. From this decree an appeal is now taken to this court.

In examining this decree we will first examine whether the assignment of these notes by the Rectors has in anywise affected the legal or equitable rights of Barton. This inquiry is an important one, and in this case, necessarily a preliminary one, as a decision favorable to the assignees, on this point, would render unecessary any further investigation of the rights of complainants against the assignee. The statutes of other States in pari materia, and the adjudication of the courts upon such statutes, have been much relied upon at the bar, with a view to elucidate the meaning of our act of Assembly concerning the assignment of Bonds and Notes. But our statute is so plain and explicit that human ingenuity would hardly torture its language into an ambiguity.

The third section declares that “the nature of the defense of the obligor or maker, shall not be changed by the assignment, but he may make the same defense against the bond or note, in the hands of the assignee, that he might have made against the assignor.” The fifth section further declares “that the assignee shall never obtain any greater title to, or interest in, any bond or note than the person had from whom he acquired it.

The defense spoken of in this third section, was clearly intended to embrace equitable as well as legal defenses; for the Court of Appeals of Virginia, in Norton v. Rone, 2 Wash. R. 233, so construed the act of the Virginia Assembly, which merely provided that the plaintiff should allow all just discounts and offsets, either against himself or his assignor before notice of assignment. A. similar statute in Kentucky was similarly construed, and the act held to save all equitable defenses, which the obligor had against the obligee, from being impaired or affected by the assignments. Rawlins v. Timberlake, 6 Monroe R. 234.

As to the distinction between equities existing at the time of the assignment and those arising afterwards, such distinction appears to be unfounded. The equity must of course exist at the time the note is made, and it is difficult, if not impossible, to conceive of...