Collins v. Gaskill

• Decision Date: 11 April 1949
• Docket Number: 40865
• Parties: Erastus C. Collins and Thornton Jennings, Trustee for Erastus C. Collins, Under Order of the Circuit Court of Henry County, Missouri, Plaintiffs-Respondents, v. I. E. Gaskill and W. W. Johnston, Defendants, I. E. Gaskill, Appellant
• Court: Missouri Supreme Court

221 S.W.2d 181

359 Mo. 171

Erastus C. Collins and Thornton Jennings, Trustee for Erastus C. Collins, Under Order of the Circuit Court of Henry County, Missouri, Plaintiffs-Respondents, v. I. E. Gaskill and W. W. Johnston, Defendants, I. E. Gaskill, Appellant

No. 40865

Supreme Court of Missouri

April 11, 1949

Opinion Modified on Court's Own Motion May 9, 1949. Motion for Rehearing on Modified Opinion or to Transfer to Banc, Overruled June 13, 1949.

Appeal from Cass Circuit Court; Hon. James R. Garrison Judge.

Affirmed.

SYLLABUS

Defendant mortgagee agreed if plaintiff mortgagor would negotiate a loan on a life insurance policy pledged with the mortgage, the proceeds would be accepted in full satisfaction of the mortgage debt. There was a sufficient consideration for accepting less than the full amount of the debt. Subsequent letters written by defendant or his agent indicated that the proceeds were to be applied on account. But defendant was also acting as trustee and knew that plaintiff, inexperienced in business matters, understood that the proceeds would be accepted in full satisfaction. The decree holds that the mortgage has been satisfied and that the life insurance policy should be surrendered to plaintiff.

H. E. Sheppard and Elmer E. Hall for appellant.

(1) The first letter called for an acceptance of proposition looking to a completed transaction. Daggett v. Kansas City Structural Steel Co., 334 Mo. 207, 65 S.W.2d 1036; 17 C.J.S., Contracts, p. 387; Williston's Treatise on Contracts (1926), pp. 115-116; Cook v. Kerr, 192 S.W. 466. (2) The court erred in finding and holding that there was never thereafter any other contract changing the original agreement. The substituted offer was made, accepted and carried out by the parties. Wentzel v. Lake Lotawana Development Co., Inc., 226 Mo.App. 996, 48 S.W.2d 185; Porterfield v. American Surety Co. of New York, 201 Mo.App. 8, 210 S.W. 119. (3) The substituted offer and acceptance was based upon a valid and legal consideration. (4) The court erred in finding and holding that a full and complete contract of accord and satisfaction was made by the parties. There was no dispute. Kahn v. Brunswick-Balke-Collender Co., 156 S.W.2d 40; Zinke v. Knights of the Maccabees of the World, 275 Mo. 660, 205 S.W. 1; Goldernstern & Cohn, Inc., v. Butler Iron & Steel Co. Inc., 49 F.Supp. 122; Regopoulos v. Kirvan, 140 F.2d 506, 151 L.R.A. l.c. 1129. (5) The claim against the plaintiff, Collins, was liquidated. Bingham v. Browning, 64 N.E. 317; Fredman v. State Mutual Life Assur. Co. of Worcester, Mass., 108 S.W.2d 156; Zinke v. Knights of the Maccabees of the World, 275 Mo. 660, 205 S.W. 1. (6) There was no performance by plaintiff and it is not shown that the defendant accepted anything in full satisfaction of the trust. Western Military Academy v. Viviano, 133 S.W.2d 1098. (7) There was a meeting of the minds of the parties as to the second proposition. The court erred in the admission of correspondence between the parties relating to the understanding of the parties as to the contract between them. Campbell v. Snoddy, 249 S.W. 131.

Delton Houtchins, Charles A. Calvird, Crouch & Crouch and William M. Kimberlin for respondents.

(1) The trial court ruled correctly in finding and holding there was a contract of accord and satisfaction between the parties. Defendant actually received more than the amount for which he had agreed to settle in the original offer. The claim was unliquidated and in dispute and the acceptance by defendant of the funds constituted a full accord and satisfaction. Pollman & Bros. Coal & Sprinkling Co. v. St. Louis, 145 Mo. 651, 47 S.W. 563; Harlin and Griffin v. Mo. State Highway Comm., 51 S.W.2d 553; 1 Am. Jur., p. 221; 1 C.J.S., p. 518. (2) When a trustee buys assets at a discount, the profit or benefit inures to the estate. 54 Am. Jur., Trusts, p. 249; 128 A.L.R. 918; Arpe v. Brown, 227 Mo.App. 60, 51 S.W.2d 225. (3) The trial court ruled correctly in finding and holding that the original contract which became effective by the Collins letter of January 10, 1939, was never changed by any other contract. Since there was a contract, to change or abandon it requires a new contract; a new meeting of the minds. Phillips Pet. Co. v. Rau Const. Co., 130 F.2d 499; Pitcairn v. Am. Ref. Transit Co., 101 F.2d 929; 12 Am. Jur., Contracts, sec. 431. (4) There was no consideration for a new contract. All that was done was done in compliance with the original contract and such acts are not consideration for a new agreement. 12 Am. Jur., Contracts, sec. 88; In re Woods Estate, 288 Mo. 588, 232 S.W. 671; Weber Imp. & Auto Co. v. Goswell, 299 S.W. 152.

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

OPINION

VAN OSDOL

Action to determine if there was an accord and satisfaction of indebtedness described in a certain "deed in trust," and for a judgment ordering that the described land be reconveyed and that a life insurance policy, which had been assigned, be returned to plaintiff Collins; or for alternative relief and for an accounting.

The trial court found there was an accord and satisfaction and ordered defendant-appellant Gaskill to surrender the life insurance policy; and decreed defendant-appellant Gaskill had no interest, and that he be barred from claiming any right, title or interest in the described land.

The case has its origin in the business and affairs of Brinkerhoff-Faris Trust & Savings Company, which have been the source of litigation heretofore appealed to this court. See In re Collins' Trust Estate, 354 Mo. 614, 190 S.W. 2d 259; Winchell v. Gaskill, 354 Mo. 593, 190 S.W. 2d 266; Brinkerhoff-Faris Trust & Savings Co. v. Gaskill, 356 Mo. 61, 201 S.W. 2d 274.

In reading the opinion, In re Collins' Trust Estate, supra, it is observed that Erastus C. Collins, a plaintiff-respondent herein, and his wife were grantors in the "deed in trust" involved in that case, which instrument is also involved in the instant action; that Thornton Jennings, a plaintiff-respondent in the instant case, was appointed successor trustee by the Circuit Court of Henry County; that I. E. Gaskill, defendant-appellant herein, was the purchaser of the remaining assets of the Brinkerhoff-Faris Trust & Savings Company, by which purchase he became entitled to the beneficial interest Company had under the trust instrument; that defendant W. W. Johnston, who died after the institution of the instant action, was the special deputy commissioner of finance in charge of the liquidation of Company's affairs; that Johnston, when in charge of the Company's affairs, took over the duties of trustee and so functioned until February 16, 1939, at which time Gaskill (defendant herein) purchased Company's assets and took over as trustee. And, in the instant case, it is, in effect, admitted Brinkerhoff-Faris Trust & Savings Company, before its liquidation, had acquired the beneficial interest the Bank of LaDue had under the "deed in trust."

Some circumstances of the execution of the "deed in trust" are stated; and the terms of the instrument, including the powers of the trustee, are correctly summarized in the case of In re Collins' Trust Estate, supra (354 Mo. at page 618, 190 S.W. 2d at page 260).

It is to be particularly noted in reading the opinion of In re Collins' Trust Estate, supra, that a $ 5000 policy on the life of Erastus C. Collins was assigned as security for the indebtedness mentioned in the instrument.

In the instant action it is alleged by plaintiffs that defendant Gaskill, hereinafter referred to as "defendant," received the proceeds (with some deductions) of a loan of $ 2410, procured by plaintiff Collins, hereinafter referred to as "plaintiff," on the insurance policy, in satisfaction of the indebtedness scheduled in the trust instrument. It is alleged in defendant's answer the indebtedness as of January 1, 1946, was $ 10,371. Hence the value in money to plaintiff of the relief sought by him and the loss to defendant by the satisfaction of the indebtedness exceeds $ 7500. This court has appellate jurisdiction of the case on the ground of "amount in dispute." Section 3, Article V, Constitution of Missouri, 1945. See Higgins v. Smith, 346 Mo. 1044, 144 S.W. 2d 149.

It seems the primary questions presented are -- in the circumstances and in view of the relation of the parties, did written correspondence between defendant and plaintiff amount to an accord, and did defendant's receipt and acceptance of the proceeds of the loan procured by plaintiff on the life insurance policy amount to the execution or performance of the accord with consequent discharge of indebtedness secured and extinguishment of defendant's beneficial interest under the trust instrument. In order to grasp the significance of the correspondence it is necessary to extend this opinion by selecting and quoting the letters or parts of letters material to the issues.

While acting as trustee, Johnston, admittedly the agent of defendant, wrote plaintiff, then living in Chino, California, a letter of December 17, 1938, as follows,

"This letter is written you in reference to your note to the Brinkerhoff-Faris Trust & Savings Company with collateral security constituting of life insurance policy dated July 28 1920, payable to Minnie Collins, and assignment of such policy by Minnie Collins to the Company; also the Trust Company to rent and retain net rentals from the 240 acre farm to apply on your note. . . . As you know, the past six years have been very bad in the agricultural sections, and the collections and expenses have come out about even. The remaining assets of the Company have been sold and the party purchasing the same is desirous of closing out these matters at the very earliest moment. We note from the...