Bell v. Simpson

• Decision Date: 30 April 1882
• Parties: BELL et al., Plaintiffs in Error, v. SIMPSON.
• Court: Missouri Supreme Court

75 Mo. 485

BELL et al., Plaintiffs in Error,

v.SIMPSON.

Supreme Court of Missouri.

April Term, 1882.

Error to Carroll Circuit Court.--HON. E. J. BROADDUS, Judge.

REVERSED.

Marshall & Barclay for plaintiffs in error.

The settlement was a benefit to Chinn by discharging his debt to plaintiffs; and a contemporaneous benefit to a third person, based on the promise of another, is a valid consideration for the promise of that other. Cress v. Blodgett, 64 Mo. 449; Rogers v. Gosnell, 51 Mo. 466. Forbearance of legal proceedings against a debtor is a sufficient consideration for a promise by a third party to become surety or to do anything else in respect to the matter. Russell v. Babcock, 14 Me. 138; Vinal v. Richardson, 13 Allen 521; Read v. French, 28 N. Y. 285. The consideration for a contract need not appear on its face, but may be proved aliunde, or inferred from the terms of the agreement. Arms v. Ashley, 4 Pick. 71. Plaintiffs were not strangers to the consideration; the contract was made for their benefit. Flanagan v. Hutchinson, 47 Mo. 237; Meyer v. Lowell, 44 Mo. 328; Fitzgerald v. Barker, 70 Mo. 685. The assignment of a note, secured by a deed of trust, earries with it the security, as an incident. Mitchell v. Ladew, 36 Mo. 526; Watson v. Hawkins, 60 Mo. 550. The transfer of a note secured by the vendor's equity only has the same effect. Adams v. Cowherd, 30 Mo. 458; Sloan v. Campbell, 71 Mo. 387; Bailey v. Smock, 61 Mo. 213. An indorsement without recourse merely excludes the liability as indorser, nothing more. Daniel Neg. Insts., (2 Ed.) § 727; Ticonic Bank v. Smiley, 27 Me. 225; Calhoun v. Albin, 48 Mo. 304.

Shewalter & Mirick for defendant in error.

The alleged agreement has no elements of fairness or equity in it. It is an attempt simply to appropriate Simpson's property to the payment of Chinn's debt. Linville v. Savage, 58 Mo. 248; 1 Story Eq., (5 Ed.) §§ 188, 161. The agreement was purely voluntary on the part of Simpson. The bankrupt proceeding could not affect him in any event. His right to collect the purchase money for the land sold was not dependent upon the bankruptcy proceedings. Chinn's agreement to give a lien upon real estate was in law an agreement to give it upon unincumbered property, and the tender of a deed of trust upon property otherwise incumbered was not a compliance with the agreement; and his agreement could have no effect until executed. Ayres v. Milroy, 53 Mo. 516. A court of equity will not decree the enforcement of an executory contract, if it appears to be inequitable, injust or oppressive. 2 Story Eq., § 769; Taylor v. Williams, 45 Mo. 83.

HOUGH, J.

One J. F. Chinn, a merchant, being indebted to the plaintiffs for goods sold by them to him, in the sum of $1,000, sold his entire stock of goods in September, 1873, to one Wm. M. Kendrick, for forty acres of land, valued at $1,200, and about $600 in cash. On the 16th day of September, 1873, Chinn re-sold the same land to said Kendrick, and took in payment therefor Kendrick's note for $1.000, payable in twelve months from said date, with ten per cent interest from date. Chinn thereupon purchased from the defendant Simpson eighty acres of land estimated by some of the witnesses to be worth about $2,000, for which he paid some cash, and executed his two promissory notes each for $300, dated September 16th, 1873, one payable on or before March, 1875, and one payable on or before March, 1876, with interest, and also transferred to him the Kendrick note for $1,000, above mentioned, all of which notes were secured by a deed of trust on the land purchased, executed by Chinn and wife to the defendant Winfrey as trustee. The plaintiffs threatened Chinn with proceedings in bankruptcy, and he and Kendrick being desirous that their trade should not be disturbed, notified Simpson of the apprehended trouble, and they and an agent of the plaintiffs went together to the office of Hale & Eads, attorneys in Carrollton, on the 24th day of December, 1873, to confer with each other. Mr. Hale testified that there were then present, Mr. Rathell, agent for Henry Bell & Son, (the plaintiffs,) Mr. Kendrick, the maker of the note in question, Mr. Chinn, the grantor in the deed of trust, and Mr. Simpson, the beneficiary therein. These parties talked some two or three hours over their respective interests and at last mutually agreed that “Simpson should assign without recourse the said thousand dollar Kendrick note to the plaintiffs, Henry Bell & Son, in payment of their $1,000 debt against said Chinn, and deposit the same with Hale & Eads to be by us delivered to plaintiffs whenever the said Chinn should execute to said Simpson a deed of trust on the eighty acres of land, sold by Simpson to Chinn, for $1,000, with ten per cent interest per annum from September 16th, 1873. In execution of that agreement, the said defendant Simpson, thereupon assigned without recourse, by written indorsement thereon, the said $1,000 Kendrick note, and deposited the same with us, ( i. e., Hale & Eads,) to be by us delivered to Henry Bell & Son whenever said Chinn should comply with said agreement; and thereupon, with the knowledge and consent of all the parties to said transaction, we executed and delivered to Simpson the receipt or written indorsement.”

The instrument referred to is as follows:

“Hardin Simpson has this day left with us a $1,000 note, executed by Wm. M. Kendrick to James F. Chinn, which has been assigned to him; said note is assigned by him without recourse, and is to be delivered by us to Henry Bell & Son, whenever said Chinn executes to said Simpson a deed of trust on the eighty acres of land, sold by him to Chinn, for $1,000, with ten per cent interest per annum from September 16th, 1873.

December 24th, 1873.

HALE & EADS.”

Mr. Hale also testified that during these negotiations leading to the execution of the escrow agreement, he had suggested to Simpson that he had better get an attorney to advise him in the matter, that “he (witness) rather thought that Simpson supposed he was only releasing his claim on Kendrick to Bell, and was to get an unincumbered lien upon said real estate (subject only to his original deed of trust) in place of the Kendrick note; but Simpson did not so state, nor was there anything to that effect...