Bailey v. Smock

• Decision Date: 31 October 1875
• Citation: 61 Mo. 213
• Parties: PERRY A. BAILEY, Defendant in Error, v. JAMES F. SMOCK, Plaintiff in Error.
• Court: Missouri Supreme Court

61 Mo. 213

PERRY A. BAILEY, Defendant in Error,

v.JAMES F. SMOCK, Plaintiff in Error.

Supreme Court of Missouri.

October Term, 1875.

Appeal from Saline Circuit Court.

S. S. Boyd, for Plaintiff in Error.

I. Defendant's statements as to the title were mere opinions, not statements on which plaintiff had reason to rely. And

defendant made no attempt to prevent his examining the records. They were easily accessible, and the failure to examine them was his own negligence. (See Hodges vs. Torrey, 28 Mo., 99; Bryan vs. Hitchcock, 43 Mo., 529; Holland vs. Anderson, 38 Mo., 55; Langsdon vs. Green, 49 Mo., 363.)

The duty of defendant in error, when he ascertained that other liens were upon the land, was to surrender the note to plaintiff in error, and demand of him what was due upon it, and his costs, and thus give plaintiff an opportunity to protect himself. This he does not do, but proceeds to sell and to buy at a sacrifice and afterwards re-sell at full or nearly full value to third persons, and then complains of the fraud. This equity will not assist or permit. (See Lawrence vs. Dale, 3 Johns. Ch., 23; also s. p. 24; Bryan vs. Hitchcock, 43 Mo. 529.)

II. Any words expressing the fact that the note is for value received, or for a valuable consideration are sufficient. (Pars. Notes and Bills, 194, note “““ u.”)

The diligence here required was in obtaining judgment against the maker of the note and not against the land securing it, and that shown was not sufficient. (O'Fallon vs. Kerr, 10 Mo., 553; Stone vs. Corbett, 20 Mo., 350; Collier vs. Riley, 3 Mo., 203.)

J. P. Strother, for Defendant in Error.

I. Under the statute, (Wagn. Stat., 216, § 15) the note was not negotiable, not containing the words “for value received.” (Beatty vs. Anderson, 5 Mo., 448; Austin vs. McDonald, 6 Mo., 265; Pocoke vs. Blount, 6 Mo., 338.)

II. Smock's representation to Bailey, when he sold the note, that the land was free from encumbrance, practically operated a fraud on Bailey, and even if the note had been negotiable, would dispense with the necessity of protest and notice. (1 Pars. Bills and Notes, p. 582.)

III. It was only necessary for Bailey, as assignee, to use that diligence that a prudent man would exercise in regard to his own affairs, in order to bind Smock. (Jacobs vs. McDonald,

8 Mo., 565.) This Bailey did, for Magoffin having nothing but the land, Bailey brought suit to the first term of that court, in which he could soonest find judgment in rem against the land.

The rule requiring suit to be brought to first term of court having jurisdiction, does not apply where there is a reasonable excuse for not so doing. (O'Fallon vs. Kerr, 10 Mo., 553; Collier vs. Warburton, 3 Mo., 203; Stone vs. Corbett, 20 Mo., 350.)

WAGNER, Judge, delivered the opinion of the court.

From the record it appears that Smock, the defendant, sold to one Magoffin, a tract of land, and for part of the purchase money took his note, which is the note here sued on. The note is in words and figures as follows: “$1,716.60. On or before the 5th day of March, eighteen hundred and seventy (1870), I promise to pay to James F. Smock or order, seventeen hundred and sixteen dollars and sixty cents, being the last payment on one hundred and twenty-five-eighth-hundreths acres of land purchased by me of said J. F. Smock, all in Saline county, Mo. A title bond executed for a deed and held by J. P. Strother, at Marshall, Mo. This note to bear interest at the rate of 10 per cent. per annum from March 5th eighteen hundred and sixty-nine, (1869).” (Signed.) “E. Magoffin.”

On the 23d of October, 1869, Smock sold and transferred the note to the plaintiff Bailey, and the petition alleges that he falsely and fraudulently represented at the time, that the note was secured by the land, and that there was no use in examining the records; assuring Bailey that the land was not encumbered and was worth double the amount of the note, and that Bailey relied on these assurances and purchased the note and paid the money on it without making any examination of the title. Smock, in his answer, and in his testimony, denied the fraudulent representation, but admitted that his statement was not true, as there was a prior encumbrance which he says he erroneously supposed was paid off. The incumbrance consisted of a deed of trust for $1,462, dated August 3d, 1868, bearing ten per cent. interest, which Smock had made on the land previous to his sale to Magoffin, and which Bailey subsequently paid off in order to secure a good title. The note was due on the 5th day of March, 1870, and at that time there were two courts in Saline county having jurisdiction of the case. The circuit court was held in April, and the common pleas court was held in June. There were but two terms a year of the circuit court, and there were four terms of the common pleas. The second term of the common pleas court was in the next succeeding September and the second term of the circuit court was not till November. It sufficiently appears from the record that Magoffin, the maker of the note, was insolvent, and nothing could be made except from the land.

Bailey therefore brought his suit to foreclose a vendor's lien, returnable to the June term of the common pleas court, and obtained a final judgment at the September term, and sold the land at the December term then next. At the sale he became the purchaser, and after satisfying the prior lien by which he acquired a good title, he sold the same.

As the land did not bring enough to satisfy the note, this suit was brought against Smock for the balance on the assignment.

The main features of the defense were, that there was no false or fraudulent representation respecting the title when the note was sold to the plaintiff; that the note was negotiable and had not been protested, in consequence of which defendant was discharged; that the plaintiff did not use due diligence in prosecuting his action, and that before sale of the land took place, defendant requested plaintiff to send him word and inform him of the day on which the sale would be had, and he would attend and make the land bring enough to satisfy all the indebtedness, but that defendant failed to give the information and the land was sold at a sacrifice. Upon this last point the evidence was conflicting, but with that we have nothing to do.

For the plaintiff the court declared the law to be, that if the defendant at the time of the sale of the note to the plaintiff falsely induced the plaintiff to believe that there were no encumbrances on the land, and that it was worth far more than the debt, and the plaintiff believed the same and rested feeling secure until after the note was due and suit brought against Magoffin, then there should be a finding for the plaintiff. A further declaration was given, that the note was not negotiable and no protest was necessary.

For the defendant the court declared that if the evidence showed that the note sued on was a negotiable note, endorsed by the defendant before maturity to plaintiff, and that the note was not protested for non-payment at maturity, or defendant was not notified of protest, then the finding should be for the defendant, unless the failure to protest was occasioned by a false and fraudulent representation made by defendant, and plaintiff was induced thereby to neglect suchprotest.

An instruction was refused, that if after judgment on the note, plaintiff agreed or promised to send defendant word as to the time and place of sale of the land, under an assurance that defendant would make the land bring plaintiff's debt, and plaintiff failed to give such notice and defendant had no knowledge of the time when the sale would take place, then the verdict should be for defendant.

There was a verdict and judgment for plaintiff.

In reference to the first instruction for the plaintiff, the...