Central States Life Ins. Co. v. Lewin

• Decision Date: 22 April 1938
• Docket Number: 34956
• Citation: 115 S.W.2d 801,342 Mo. 383
• Parties: Central States Life Insurance Company, a Corporation, Appellant, v. William Lewin and City Block Two Hundred and Ninety, Inc., a Corporation
• Court: Missouri Supreme Court

115 S.W.2d 801

342 Mo. 383

Central States Life Insurance Company, a Corporation, Appellant, v. William Lewin and City Block Two Hundred and Ninety, Inc., a Corporation

No. 34956

Supreme Court of Missouri

April 22, 1938

Appeal from Circuit Court of City of St. Louis; Hon. John A Witthaus, Judge.

Motion dismissed and appeal sustained.

Bryan Williams, Cave & McPheeters for appellant.

(1) Defendant William Lewin did receive a consideration for the execution of each of the notes sued on in plaintiff's petition. R. S. 1929, secs. 2654, 2658; Chaonia State Bank v. Sollars, 190 Mo.App. 284, 176 S.W. 263; Nelson v. Diffenderffer, 178 Mo.App. 48, 163 S.W 271; Montgomery v. Schwald, 177 Mo.App. 75, 166 S.W 831; Bank v. Railroad Co., 172 Mo.App. 662, 155 S.W. 1111; Hanson v. Yeary, 159 Mo.App. 151, 140 S.W. 753; Boettger v. Roehling, 74 Mo.App. 257; Gardiner v. Holcomb, 82 Cal.App. 342, 255 P. 528; Perlmutter v. Holsberg, 282 Mass. 421, 185 N.E. 357. (a) Regardless of whether or not William Lewin received a consideration for the execution of the notes sued on, each of them was executed by him as comaker and contained the expressed provision that the makers thereof should continue liable as principals until each of said notes be fully paid, and the court erred in admitting testimony on the part of defendant William Lewin tending to show that he was liable only as an accommodation maker, guarantor, surety or endorser. McMillan v. Parkell, 64 Mo. 286; Stephenson v. Joplin State Bank, 160 Mo.App. 47, 141 S.W. 691; Myers v. Chesley, 190 Mo.App. 371, 177 S.W. 326; First Natl. Bank v. Wells, 98 Mo.App. 573, 73 S.W. 293; Beers v. Wolf, 116 Mo. 179, 22 S.W. 620. (2) The interest coupons which were attached to the principal notes described in the plaintiff's petition were not accepted by the plaintiff in payment of the interest to accrue on the said principal notes, and regardless of the acceptance by the plaintiff of said interest coupon notes defendant William Lewin is liable for interest prior to maturity on the principal notes sued on. Lindley v. Waterloo First Natl. Bank, 76 Iowa 629, 631, 41 N.W. 381, 2 L. R. A. 709, 14 Am. St. Rep. 254; Pennington v. Baehr, 48 Cal. 565; Thayer v. Montgomery County, 3 Dill. 389, affirmed. Johnson County v. Thayer, 94 U.S. 631, 24 L.Ed. 133; Phelps v. Lewiston, 15 Blatchf. 131; Blair v. Cuming County, 111 U.S. 368, 4 S.Ct. 449, 28 L.Ed. 457; Jones on Corporate Bonds (4 Ed.), sec. 715; City of Kenosha v. Lamson, 9 Wall. 477, 19 L.Ed. 725; Howard v. Bates County, 43 F. 276; McCoy v. Washington County, 3 Wall. 281; Paridge v. Lake Placid Co., 271 N.Y.S. 714, 151 Misc. 542; Bailey v. County of Buchanan, 115 N.Y. 297, 22 N.E. 155; Goodjon v. United Bond & Bldg. Corp., 234 N.Y.S. 522, 226 A.D. 137; Mississippi P. & L. Co. v. Kusterer & Co., 156 Miss. 22, 125 So. 429; Townsend v. Alewell, 202 S.W. 447; 8 C. J. 1094; 50 C. J. 74; 28 C. J. 966, 967. (3) The legal effect of the agreement, dated August 10, 1932, between plaintiff and Aaron Ferer & Sons, Inc., was not to extend the interest notes described in plaintiff's petition and to postpone plaintiff's right to demand payment thereof, but was only that of a covenant not to sue thereon, and did not have the effect to waive the right of acceleration of any of the principal notes sued on on account of the failure to pay interest until August 1, 1937, and plaintiff's cause of action, therefore, on Counts 3, 4 and 5 is not, by reason thereof, premature and can be maintained against defendant William Lewin. 50 C. J. 143; Kaufman v. Penn. Mut. Life Ins. Co., 64 F.2d 160; Casner v. Heaton, 237 S.W. 1042; 8 C. J. 429; 43 L. R. A. 472; Atwood v. Lewis, 6 Mo. 392; Bircher v. Payne, 7 Mo. 462; Bridge v. Tierman, 36 Mo. 439; Bank v. Martin, 171 Mo.App. 194, 156 S.W. 488; Rucker v. Robinson, 38 Mo. 154; Hosea v. Rowley, 57 Mo. 357; Stillwell v. Aaron, 69 Mo. 539; Boatmen's Savings Bank v. Johnson, 24 Mo.App. 316; Bank v. Rogers, 123 Mo.App. 569, 100 S.W. 534; Bank v. Bunch, 212 Mo.App. 249, 251 S.W. 742; 23 R. C. L. 376; Roberts v. Strang, 38 Ala. 566, 82 Am. Dec. 729; Mendenhall v. Lenwell, 5 Blackf. 125, 33 Am. Dec. 458; Dow v. Tuttle, 4 Mass. 414, 5 Am. Dec. 226; 36 Am. St. Rep. 147; St. Louis v. Wright Contracting Co., 202 Mo. 451, 101 S.W. 6; 6 R. C. L. 887; Pennsylvania Steel Co. v. New York City Ry. Co., 198 F. 721; 21 R. C. L. 1031; Washburn v. Williams, 10 Colo.App. 153, 50 P. 223. (4) The net rents collected by City Block Two Hundred and Ninety, Inc., and paid to plaintiff did not inure to defendant William Lewin's benefit in equity and should not be applied toward the payment of interest so as to prevent rather than cause an acceleration of the principal notes sued on in Counts 3, 4 and 5 of plaintiff's petition. 48 C. J. 647; 21 R. C. L. 90; Thorn, etc., Lime Co. v. Citizens Bank, 158 Mo. 272, 59 S.W. 109; Beck v. Haas, 111 Mo. 264, 20 S.W. 19; McCune v. Bell, 45 Mo. 174; 48 C. J. 654; State ex rel. Dunklin County v. Blakemore, 275 Mo. 695, 205 S.W. 626; Cox v. Sloan, 158 Mo. 411, 57 S.W. 1052; Case Threshing Machine Co. v. Matthews, 188 Mo.App. 429, 174 S.W. 198; Miller v. Miller, 169 Mo.App. 432, 155 S.W. 76; State v. Globe Indemnity Co., 222 Mo.App. 153, 2 S.W.2d 815; Fagan v. Brock Motor Car Co., 282 S.W. 135; Haynes v. Waite, 14 Cal. 446; Starrett v. Barber, 20 Me. 457; Bobe's Heirs v. Stickney, 36 Ala. 482; Mayor of Alexandria v. Patten, 4 Cranch. 317, 2 L.Ed. 633; Michigan Commercial Ins. Co. v. Rodger, 191 S.W. 1066; Henry v. Safford, 211 Mo.App. 308, 241 S.W. 951; Goetz v. Piel, 26 Mo.App. 634; Poulson v. Collier, 18 Mo.App. 583; Price v. Merritt, 55 Mo.App. 640; McMillan v. Grayston, 83 Mo.App. 425; Lyons v. Carter, 84 Mo.App. 483; 48 C. J. 659.

Burnett, Stern & Liberman for William Lewin.

(1) The scope of the appeal is limited to a review by this court of the determination by the circuit court that the action on counts three, four and five was premature. The circuit court did not adjudge the merits on these counts. Abeles v. Pillman, 261 Mo. 359; Kansas City ex rel. Barrett Co. v. Spitcaufsky, 239 S.W. 808; Dillinger v. Kelley, 84 Mo. 561; Barnett v. Smart, 158 Mo. 167. (2) The respondent Lewin is not liable for interest on the principal notes prior to maturity. The unmatured principal notes therefore could not be accelerated for failure to pay interest. Ogden on Negotiable Instruments (3 Ed.), p. 422, sec. 279; Roswell Drainage Dist. v. Parker, 53 F.2d 793; Sears v. Greater New York Dev. Co., 19 F.2d 651, Id. 51 F.2d 46; Hamilton v. Wheeling Pub. Serv. Co., 88 W.Va. 573, 107 S.E. 401, 21 A. L. R. 433; Edwards v. Bates County, 163 U.S. 269, 41 L.Ed. 155, 16 S.Ct. 967; Johns v. Rice, 145 N.W. 290; Koehring v. Muemminghoff, 61 Mo. 402; Wilson v. Reed, 270 Mo. 400, 193 S.W. 819; Frye v. Sheppard, 173 Mo.App. 200; Canton Trust Co. v. Durrett, 320 Mo. 1208, 9 S.W.2d 925; Graves v. Davidson, 334 Mo. 882, 58 S.W.2d 711; R. S. 1929, sec. 2748; McDonald v. Goddard Grocery Co., 184 Mo.App. 432, 171 S.W. 650. (3) The payments were sufficient to prevent an acceleration of the unmatured notes on which Lewin was guarantor. 48 C. J., pp. 642, 653, secs. 84, 104; Shortridge v. Parde, 2 Mo.App. 363; Reinhard v. Fluckiger, 119 Mo.App. 465; Salinger v. Lincoln Natl. Life Ins. Co., 52 F.2d 1080; Savings Bank v. Asbury, 117 Cal. 96, 48 P. 1081; Doyle v. Di Medio, 99 N.J.Eq. 23; Rathbone v. Forsythe, 156 N.Y.S. 888. (4) Lewin was a guarantor or surety of the principal notes signed by him. As guarantor of part of the debt he has the absolute right to have the payments made applied in his favor. R. S. 1929, sec. 2686; Long v. Mason, 273 Mo. 266, 200 S.W. 1062; Tressler v. Whitsett, 12 S.W.2d 723; Mutual Life Ins. Co. v. McKinnis, 15 S.W.2d 935, 47 S.W.2d 564; Schelp v. Nicholls, 263 S.W. 1017; Eddy & Co. v. Sturgeon, 15 Mo. 199; Washington Credit Corp. v. Miller, 157 So. 343; Pulling v. Schreiber, 215 N.W. 381. (5) The court will not permit an acceleration where the default arises out of inequitable conduct on the part of the creditor or where an acceleration would have inequitable results. Pomeroy, Eq. Jr., sec. 439; Parker v. Mazur, 14 S.W.2d 174; Rathbone v. Forsythe, 156 N.Y.S. 888; French v. Row, 28 N.Y.S. 849; Kreiss Potassium Phosphate Co. v. Knight, 124 So. 751; Schwed v. Budlecki, 158 A. 418; Smith v. Cholstein, 164 S.E. 217. (6) The plaintiff's attempt to accelerate notes three, four and five is unauthorized by the notes and deed of trust. It was an attempt to accelerate a part only of the loan remaining unpaid, whereas the right granted was to accelerate all of the debt remaining unpaid. Canton Trust Co. v. Durrett, 320 Mo. 1208, 9 S.W.2d 925; Wilson v. Reed, 270 Mo. 400, 193 S.W. 819; Reitz v. Pontiac Realty Co., 316 Mo. 1257, 293 S.W. 382; Peoples' Bank of Ava v. Rankin, 282 S.W. 92; Slyman v. Simon, 48 S.W.2d 140; Grosmore v. Page, 73 Cal. 213; Seligman et ux. v. Burg, 251 N.Y.S. 689; Seidel v. Holcomb, 249 Ill.App. 10; Diversified Fruit Farms, Inc., v. Johnson, 58 S.W.2d 732; Pennsylvania Co. for Ins. on Lives, etc., v. Broadway Stevens Co., 148 A. 575; McFadden v. May's Landing, etc., Co., 22 A. 932; American Press v. St. Louis, 314 Mo. 288, 284 S.W. 482.

Gantt, J. All concur, except Hays, J., absent.

OPINION

GANTT

Action against Wm. Lewin on five promissory notes in the total principal sum of $ 45,000, and the interest coupon notes attached to said notes. They were dated August 1, 1932 and matured on August 1, 1933, August 1, 1934, August 1 1935, August 1, 1936 and August 1, 1937. The City Block Two Hundred and Ninety, Inc., borrowed the money from the plaintiff and signed both the principal notes and the interest coupon notes. Lewin signed only the principal notes. The first two notes had matured at the time suit was filed. The last three notes had not...