Chaonia State Bank v. Sollars
| Decision Date | 19 May 1915 |
| Parties | CHAONIA STATE BANK, Respondent, v. JAMES SOLLARS, Appellant |
| Court | Missouri Court of Appeals |
Appeal from Wayne County Circuit Court.--Hon. E. M. Dearing, Judge.
AFFIRMED.
Judgment affirmed.
O. L Munger and Daniel & Wise for appellant.
(1) The fact that under our statute an accommodation maker, or surety, is jointly liable as a comaker does not annihilate the equities which attend the relation of principal and surety. Stolze v. Fidelity & Guaranty Co., 153 Mo.App. 34. (2) An agreement to the effect that if the title to the land sold, and in payment for which a note is given shall fail, the payors will not be required to pay said note is, after the title thereto has failed, a complete defense to a suit on such note. Benton v. Klein, 42 Mo. 97; Wellman v. Dismukes, 42 Mo. 101; Bethel v. Franklin, 57 Mo. 466; Fisher v. Stevens, 143 Mo. 181; Holmes v. Farris, 97 Mo.App. 305; Garr v. Hill, 113 Mo.App. 10. (3) A note sued upon, and upon which suit is brought and a judgment procured is merged in the judgment. Cooksey v. Railroad, 74 Mo. 477; Kendrick v. Mfg. Co., 60 Mo.App. 25; Railroad v. Flannigan, 95 Mo.App. 485.
Anthony & Davis for respondent.
(1) The note sued on was given as a discharge of the old note of Sollars and Green, the judgment rendered in the attachment suit against Sollars and others, as well as the costs and expenses of the attachment proceedings. It further extended the time of payment to Sollars for one year. These facts constituted a sufficient consideration as against Sollars. Johnson v. Grayson, 230 Mo. 403; Babbit v. Railroad, 149 Mo.App. 439; Lecke v. Bennett, 160 Mo.App. 159; Secs. 9995, 9996, 10000, 10161, 10089 and 10090, R. S. 1909; Nelson v. Diffenderfer, 178 Mo.App. 48; Montgomery v. Schwald, 177 Mo.App. 75; Bank v. Graham, 74 Mo.App. 256; Hanson v. Yeary, 159 Mo.App. 155; Osborn v. Fredich, 134 Mo.App. 455; Bank v. Railroad, 172 Mo.App. 662. (2) The fact that the respondent bank may have taken a mortgage from the Eatons and Wrights on the lands purchased by them at Sheriff's sale to secure the note sued on, does not prevent the maintenance of this action. Moffat v. Green, 149 Mo. 55. (3) The deed executed by the sheriff was in the usual statutory form. It conveyed only the interest Green had in the land. It contained no covenants of warranty, title, season, possession or against encumbrances. The doctrine of caveat emptor applies to such an instrument. 24 Cyc., page 57; Rosenberger v. Jones, 118 Mo. 559.
This suit is on a promissory note. The principal defense is a failure of consideration in that the note was given for the purchase price of a tract of land the title of which failed. The court found against this defense and rendered judgment for plaintiff. The cause was tried to the court without a jury and no declarations of law were asked or given except that the court should find for the plaintiff under the law and evidence.
The facts leading up to the giving of the note in question are that originally defendant and one Green borrowed money from the plaintiff bank, giving their note, not the one here sued on, therefor. The defendant claims that he was an accommodation maker on this prior note for Green, while there is evidence to sustain the finding that both defendant and Green were interested in the money loaned them by the bank. The rights of Green and defendant with respect to each other, however, are not here in controversy. Their note to plaintiff was their joint and several contract. When this note became due Green was a nonresident and the note could and was about to be enforced against defendant. Green was supposed to own a tract of land, the one now involved. At defendant's request, and for his protection, the plaintiff bank brought suit by attachment against Green on this prior note, the defendant also being a party defendant, and attached Green's land. In order to have the plaintiff bank sue and attach Green's land the defendant agreed to pay all costs of the attachment suit. This suit ripened into judgment against this defendant and Green, a general judgment being taken against this defendant and a special judgment against Green's land. The land was then sold under execution and bid in by an officer of the plaintiff at a sum somewhat less than the judgment debt. The real arrangement, however, between the plaintiff and defendant was to sell the land to a third party for enough to pay plaintiff's judgment and the costs. The plaintiff had no other object than to realize enough to pay its judgment and costs and defendant was equally interested in so doing, seeing that he was liable for all of it.
There is evidence to show that defendant and plaintiff jointly negotiated the sale of the land to Eaton and Wright, who will be designated as the third party, who agreed to pay enough therefor to pay off the judgment and costs. This third party would buy the land only on time and agreed to give a note signed by himself and defendant, secured by deed of trust on the land, and to this defendant agreed. The arrangement was that plaintiff would pay the costs of the suit to the court officials, which, as we have noted, defendant had guaranteed, and add this amount to the judgment indebtedness, the judgment being against defendant, and take a note, the one now in question, for the whole amount signed by the third party and defendant, and have the sheriff make the deed to the third party as purchaser. This was carried out. The sheriff's deed was made to the third party, who thereby supposed he was acquiring title to the land, and such third party and defendant executed the note in controversy to plaintiff, the same being secured by a deed of trust on the land conveyed to the third party by the sheriff. If this note is collected, then plaintiff will have received the amount due it on the note given by Green and defendant together with the costs of the attachment suit instituted at defendant's request against Green; otherwise, not.
It turned out that Green had no title to the land attached and conveyed by sheriff's deed to the third party, or at least a suit was brought by an outside party against such purchaser, who notified plaintiff and defendant, and, none of them appearing, the title to the land was adjudged by default to be in the outside party. The plaintiff, though holding the deed of trust on the land, was not made a party to that suit. There is evidence to show that in order to induce this third party to buy the land and take a sheriff's deed to him, certain officers of the plaintiff, together with defendant or at least with defendant's approval, guaranteed, verbally, a good title to such land. This third party, having lost the land, refused to pay this note given by him as the purchase price thereof and the defendant also refusing to pay, this suit was brought.
It would seem from this statement of the facts that the trial court did the right thing in rendering judgment for plaintiff. By this means the plaintiff will collect what is justly due it--the judgment on the note given by Green and defendant with costs. The plaintiff could have at once collected this money from defendant and it ought not to be prejudiced in its rights, nor ought defendant to profit, by the fact that plaintiff, at defendant's request and for his supposed benefit, attempted to collect the same from Green as a comaker on the original note. It is certainly no fault of plaintiff that Green had no title to the land which was attached and sold and that thereby the plaintiff has failed to collect its judgment from that source. The defendant is in no worse condition than he would have been had the plaintiff compelled him to pay at once, except that certain costs have been added arising out of the attempt to collect from Green which costs were made at his request and for his supposed benefit.
Is there any legal barrier to the rendition of the judgment in favor of plaintiff by the trial court? We think not. It is said by defendant that the consideration of the note now in suit has totally failed and that no judgment should be rendered thereon. We will grant, as claimed by defendant that a note given in payment of land where the purchaser receives no title is without consideration. [Jones v. Shaver, 6 Mo. 642; Keith v. Hobbs, 69 Mo. 84.] But this rule applies here only to the third party receiving the sheriff's deed. This land was being sold to pay defendant's debt and he owed plaintiff the debt represented by this note independent of any such sale or transfer of the land. When we regard substance and not form, the note sued on, so far as defendant is concerned, was taken by plaintiff not to pay for land it was selling to such third party but in payment of the judgment...
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