Casper v. Bell's Estate

• Decision Date: 14 February 1949
• Docket Number: 41018
• Parties: Marie Casper, Executrix of the Estate of Henry Casper, Deceased, Appellant, v. Estate of Nina Z. Bell, Deceased, Respondent
• Court: Missouri Supreme Court

218 S.W.2d 606

358 Mo. 995

Marie Casper, Executrix of the Estate of Henry Casper, Deceased, Appellant, v. Estate of Nina Z. Bell, Deceased, Respondent

No. 41018

Supreme Court of Missouri

February 14, 1949

Rehearing Denied March 14, 1949.

Appeal from Jackson Circuit Court; Hon. James W. Broaddus Judge.

Reversed and remanded (with directions).

Kenneth I. Fligg, Warren E. Slagle and Lombardi, Robertson, Fligg & McLean for appellant.

(1) The circuit court erred in holding that a default occurred on appellant's claim more than ten years before this action was commenced in the probate court. This was error because the debtor was not bound to pay anything on appellant's claim, except conditionally, prior to ten years before the commencement of this action, as appears from the extension agreements themselves; and the undisputed evidence was that the conditions were never met. 3 Williston, Contracts, secs 619, 671; 17 C.J.S., Contracts, sec. 308, p. 725; South St. Joseph Live Stock Exchange v. St. Joseph Stock Yards Bank, 223 Mo.App. 623, 16 S.W.2d 722; Myers v. Union Electric L. & P. Co., 334 Mo. 622, 66 S.W.2d 565. (2) In holding that by reason of the acceleration clauses contained in the extension agreements such default set the Statute of Limitations in motion as to the whole of appellant's claim. This was error since all acceleration clauses are optional with the holder and, the option not having been exercised by claimant, the Statute of Limitations did not commence to run before the maturity dates fixed in the notes and extension agreements upon which appellant's claim is based. Tower Grove Bank & Trust Co. v. Duing, 346 Mo. 896, 144 S.W.2d 69; Putthoff v. Walker, 213 Mo.App. 228, 248 S.W. 619; Kleiman v. Kolker, 57 A.2d 297; Annotations 34 A.L.R. 872, 159 A.L.R. 1077, 161 A.L.R. 1211; Summers. v. Wright, 231 Ala. 372, 165 So. 87; Mayor and Aldermen of Town of Morristown v. Davis, 172 Tenn. 159, 110 S.W.2d 337; Moline Plow Co. v. Webb & Brothers, 141 U.S. 616, 35 L.Ed. 879; Burnes v. Ballenger, 76 Mo.App. 58; Givens v. Rogers, 182 S.W. 115; Walter v. Kilpatrick, 191 N.C. 458, 132 S.E. 148; Kennedy v. Gibson, 68 Kan. 612, 75 P. 1044; Bowman v. Rutter, 47 S.W. 52; Sherwood v. Wilkins, 65 Ark, 312, 45 S.W. 988; Insurance Co. of N.A. v. Martin, 151 Ind. 209, 51 N.E. 361; Union Central Life Ins. Co. v. Keith, 58 Idaho 471, 74 P.2d 699; 54 C.J.S., secs. 149, 150; 6 Williston, Contracts, sec. 2025; Chafee, Acceleration Provisions in Time Paper, 32 Harv. L. Rev. 747; McCarty v. Goodsman, 39 N.D. 389, 167 N.W. 503; Quackenbush v. Mapes, 123 A.D. 242, 107 N.Y.S. 1047; 8 Am. Jur., sec. 286, p. 31; Wurzler v. Clifford, 36 N.Y.S. (2d) 516; Belloc v. Davis 38 Cal. 242; Core v. Smith, 23 Okla. 909, 102 P. 114; Town of Cheraw v. Turnage, 184 S.C. 76, 191 S.E. 831; Batey v. Walter, 46 S.W. 1024.

Eugene C. Kane and Walter A. Raymond for respondent.

(1) A cause of action accrued to Henry Casper on the second mortgage notes upon Nina Z. Bell defaulting in the semi-annual interest payments due on the second mortgage notes on October 31, 1933, or at the latest on January 11, 1934, and the statute of limitations started to run on the entire obligations thirty days after the date of said default. The filing of this claim on April 17, 1946, was more than ten years after the time of said default and the claims thereon are barred by the ten year statute of limitations. Baron v. Kurn, 349 Mo. 1202, 164 S.W.2d 310; Coleman v. Kansas City, 353 Mo. 150, 182 S.W.2d 74; Boyd v. Buchanan, 176 Mo.App. 56, 162 S.W. 1075; McGrew v. Elkins, 36 S.W.2d 424, Schrabauer v. Schneider Engraving Product, 224 Mo.App. 304, 25 S.W.2d 529; Cleveland v. Laclede Christy Clay Products Co., 129 S.W.2d 12; Lewis v. Thompson, 231 Mo.App. 321, 96 S.W.2d 938; Boyd v. Buchanan, 176 Mo.App. 56, 162 S.W. 1075; Lackey v. Wilder, 33 S.W.2d 1011; Beard v. Citizens' Bank of Memphis, 37 S.W.2d 678; Magee v. Mercantile-Commerce Bank & Trust Co., 343 Mo. 1022, 124 S.W.2d 1121; Landis v. Saxton, 105 Mo. 486, 16 S.W. 912; Boyd v. Buchanan, supra; St. Charles Sav. Bank v. Thompson, 284 Mo. 72, 223 S.W. 734; Boyd v. Buchanan, supra; Carter v. Burns, 332 Mo. 1128, 61 S.W.2d 933. (2) Under the terms of the extension agreements default for thirty days in any obligation pertaining to the second mortgages and second mortgage notes automatically matured the entire obligations and started the running of the Statute of Limitations. Boyd v. Buchanan, 176 Mo.App. 56, 162 S.W. 1075; 34 Am. Jur., p. 120, sec. 151; 37 Am. Jur., p. 66, sec. 582; 34 A.L.R. 901; 161 A.L.R. 1221; Travis Co. v. Mayes, 36 So.2d 264; Perkins v. Swain, 35 Idaho 485, 207 P. 585, 34 A.L.R. 894; Burnes v. Ballenger, 76 Mo.App. 58; Tower Grove Bank & Trust Co. v. Duing, 346 Mo. 896, 144 S.W.2d 69; Putthoff v. Walker, 213 Mo.App. 228, 248 S.W. 619; Hughes v. Toledo Scale & Cash Register Co., 112 Mo.App. 91, 86 S.W. 895; Blaine v. George Knapp & Co., 140 Mo. 241, 41 S.W. 787.

Bradley, C. Dalton and Van Osdol, CC., concur.

OPINION

BRADLEY

Henry Casper filed a claim in the probate court against the estate of Nina Z. Bell, deceased. The claim was based on two promissory notes. The defense was the 10 year statute of limitations. Sec. 1013 R.S. 1939, Mo. RSA Sec 1013. The claim was allowed in the probate court for $ 10,479.08, and appeal was taken to the circuit court. Henry Casper died after the appeal from the probate court and before the cause was tried in the circuit court, and his executrix was substituted as plaintiff or claimant in the circuit court. The claim was disallowed in the circuit court and this appeal followed.

The two notes upon which the claim is based were originally for $ 4250.00 each, payable to M. Loeffler (maiden name of Henry Casper's wife); dated May 31, 1930; signed by Nina Z. Bell. Each note was payable $ 100.00 July 1, 1930, and $ 100.00 on the 1st day of each succeeding month, except June and December, until paid in full. M. Loeffler (Mrs. Casper) endorsed the notes in blank and delivered them to her husband.

In May, 1930, prior to the execution of these notes, Bell purchased from Henry Casper two apartment buildings in Kansas City. There was at the time a separate deed of trust on each apartment securing two notes in the aggregate sum of $ 8000.00. Bell purchased subject to these deeds of trust. As a part of the purchase price Bell gave the two notes here involved and secured each by second deeds of trust on the apartment properties. Payments were made by Bell on the first and second mortgage notes, but not according to their terms, and on July 11, 1933, two extension agreements were executed by Bell, Henry Casper and the holders of the first mortgage notes. These extension agreements were identical in form except description of lot upon which each apartment was situate, hence we shall use the singular when referring to the extension agreements. There was at the time of the extension agreement a balance of $ 3250.00 due on each of the second mortgage notes, and under said agreement the monthly payments on these notes were suspended until June 21, 1936, at which time Bell was to commence the monthly payments and pay $ 100.00 per month until the balance on each note was paid in full. Bell died April 19, 1945, and thereafter the first deeds of trust were foreclosed. At the foreclosure sale Henry Casper, Jr., son of Henry Casper, became the purchaser; paid approximately $ 5300.00 for each of the apartments.

The extension agreement as to the second mortgage notes provided that Bell would "pay to the holder of the second mortgage interest thereon semiannually", but such interest was not paid. The extension agreement also provided that "default for thirty days in any obligation pertaining to either mortgage resting upon said Bell will mature all obligations thereof." Plaintiff (claimant) says that by the extension agreement (July 11, 1933) the monthly payments on the second mortgage notes were given a moratorium until June 21, 1936; that payment of semiannual interest was conditional (see infra); that the acceleration provision in the extension agreement that default for 30 days "will mature all obligations" was optional on the part of the holder of the notes; that the option was not exercised and that limitations therefore did not begin to run 30 days after failure to pay the semiannual interest January 11, 1934; that the first default was failure to pay the monthly payment June 21, 1936, after expiration of the moratorium; that the claim was filed in the probate court on April 23, 1946, less than 10 years from June 21, 1936; and that the claim therefore is not barred by the 10 years statute. On the other hand defendant (respondent) says that payment of the semiannual interest was not conditional; that the acceleration provision was not optional; that there was a default in the failure to pay the semiannual interest January 11, 1934, six months after the execution of the extension agreement and that limitations began to run 30 days from January 11, 1934; that the claim was not filed in the probate court until April 23, 1946, and therefore the claim is barred by the 10 years statute.

If the payment of semiannual interest was conditional and that condition prevented Bell from paying such interest, or if the acceleration provision is optional as plaintiff contends, then the claim is not barred.

As stated, there was a first deed of trust on each of the apartments when Bell purchased in May, 1930. These deeds of trust secured two notes, one for $ 1000.00, the other for $ 7000.00. Bell was paying on these notes and had made some payments on the second mortgage notes upon each of which there was a balance due of $ 3250.00 when the extension agreement was executed. The extension agreement provided that on July...