Crone v. Stinde

• Decision Date: 06 February 1900
• Citation: 156 Mo. 262,55 S.W. 863
• Parties: CRONE v. STINDE.
• Court: Missouri Supreme Court

55 S.W. 863

156 Mo. 262

CRONE v. STINDE.

Supreme Court of Missouri, Division No. 2.

February 6, 1900.

MORTGAGE — ASSUMPTION — NOTE — LIABILITY.

Where a person took a deed to lands subject to a mortgage, the payment of which he did not assume, and subsequently conveyed to defendant by deed, warranting the title except as to the mortgage, which defendant assumed and agreed to pay as part of the consideration thereof, the payee of the note secured by the mortgage, or his assignee, might maintain an action on the note against defendant.

Appeal from St. Louis court of appeals.

Action by Charles C. Crone against Richard R. Stinde. From a judgment of the court of appeals reversing a judgment of the circuit court in plaintiff's favor, plaintiff appeals. Reversed.

B. Schnurmacher, for appellant. Lubke & Muench, for respondent.

BURGESS, J.

This suit was commenced in the circuit court of the city of St. Louis, where, upon a trial of the cause, plaintiff obtained judgment for the amount sued for $1,328.18. Defendant then took the case by appeal to the St. Louis court of appeals (68 Mo. App. 122), and at the October term, 1896, an opinion was rendered by the court of appeals, reversing the judgment, and ordering an entry of judgment in that court for plaintiff for one cent damages and costs; but at the same time it was ordered that the cause should be certified to the supreme court upon the ground of an apparent conflict between the earlier and later cases of the supreme court upon the principal question involved in this case. The facts, as stated by the court of appeals, are as follows: On January 3, 1893, one R. P. Jamison was the owner of certain real estate in the city of St. Louis, Mo. On that day he executed a deed of trust thereon to secure to defendant Charles Dexter the payment of a note for $4,000, to become due in two years, and certain semi-annual interest notes. Dexter indorsed the notes in blank, and delivered them to one Louis Kupferle. Three days after having executed the deed of trust above referred to, Jamison sold his equity of redemption in the property to one Arthur C. Knapp. Knapp did not assume the payment of the deed of trust, the conveyance to him being merely subject thereto. Thereafter, on June 22, 1893, Knapp conveyed the property to defendant Stinde. The deed from Knapp to Stinde contains general covenants of warranty, concluding as follows: "Excepting with respect to a certain mortgage amounting to four thousand dollars and accrued interest, which the purchaser hereby assumes and agrees to pay as part of the consideration hereof." The deed of trust was foreclosed by Kuperle, while one Kanther, the grantee of Stinde, held the equity of redemption in the property. After the proceeds of such foreclosure were credited on the $4,000 note, a balance of $1,251 remained due thereon. Kupferle thereupon assigned the note to the plaintiff, who instituted suit thereon against Dexter, Stinde, and Kanther, seeking to charge the former as an indorser of the note, and the two latter by virtue of their promise contained in the conveyances made to them respectively. The defendants answered by general denial. No objection was interposed for misjoinder of parties defendant, but upon the trial the plaintiff dismissed as to Dexter and Kanther. The court thereupon rendered judgment against the defendant Stinde for the balance due on the note. From this judgment Stinde appeals, and assigns for error that upon the conceded facts the court should have rendered judgment in his favor.

It has always been held by this court that where one person, for a valuable consideration, makes a promise to the person from whom the consideration moves for the benefit of a third person, that such third person may maintain an action in his own name against the promisor on the promise. Bank v. Benoist, 10 Mo. 519, was a case of this character, and Scott, J., in speaking for the court, said: "The position that when one person, for a valuable consideration, engages with another by simple contract to do some act for the benefit of a third, the latter, who would enjoy the benefit, may maintain an action for the breach of such engagement, is supported by a weight of authority in the American courts which we are not at liberty to disregard." Schemerhorn v. Vanderheyden, 1 Johns. 139; Felton v. Dickerson, 10 Mass. 287; Arnold v. Lyman, 17 Mass. 400; Hall v. Martin, Id. 575; Ellwood v. Monk, 5 Wend. 235; Farley v. Cleveland, 4 Cow. 432; Carnegie v. Morrison, 2 Metc. (Mass.) 381. That case was followed and approved in Robbins v. Ayres, 10 Mo. 538; Meyer v. Lowell, 44 Mo. 328. In discussing this same subject, Parsons, in his work on Contracts, says: "In this country the right of a third party to bring an action on a promise made to another for his benefit seems to be more positively asserted, and we think it would be safe to consider this a prevailing rule with us. Indeed, it has been held that such promise is to be deemed made to the third party, if adopted by him, though not cognizant of it when made." 1 Pars. Cont. (8th Ed.) 484; Lawrence v. Fox, 20 N. Y. 268; Steman v. Harrison, 42 Pa. St. 49. The same rule is announced in Rogers v. Gosnell, 51 Mo. 466; Fitzgerald v. Barker, 70 Mo. 685; Rogers v. Gosnell, 58 Mo. 589; Weinreich v. Weinreich, 18 Mo. App. 364; State v. Laclede Gaslight Co., 102 Mo. 482, 14 S. W. 974, and 15 S. W. 383; Ellis v. Harrison, 104 Mo. 276, 16 S. W. 198. It is said in the case of Fitzgerald v. Barker, supra, that this rule was extended in Rogers v. Gosnell, 51 Mo. 466, to covenants made for the benefit of a third person, the old rule that no one but a covenantee can sue on a covenant being distinctly repudiated by this court in that case; and that in the case of Heim v. Vogel, 69 Mo. 529, it was directly decided that when a grantee accepts a deed poll containing a statement that the land conveyed is subject to a mortgage, which the grantee assumes and agrees to pay, a promise by the grantee for the benefit of the mortgagor is implied therefrom, and the grantee thereby becomes personally liable to the mortgagee for the mortgage debt. The same question was before this court again in Sewer-Pipe Co. v. Thompson, 120 Mo. 218, 25 S. W. 522. While not in express terms overruling either of the cases before referred to, it was held that a stranger to a contract cannot, as a general thing, sue thereon, although it be made for his benefit; but that case was expressly overruled in the subsequent case of City of St. Louis v. Von Phul, 133 Mo. 561, 34 S. W. 843, in which it is stated: "That a contract between the parties upon a valid consideration may be enforced by a third party, when entered into for his benefit, is well-settled law in this state. This is so though such third party be not named in the contract, and though he was not privy to...