Dalrymple v. Craig

• Decision Date: 31 March 1899
• Parties: DALRYMPLE et al. v. CRAIG.
• Court: Missouri Supreme Court

50 S.W. 884

149 Mo. 345

DALRYMPLE et al. v. CRAIG.

Supreme Court of Missouri, Division No. 1.

March 31, 1899.

APPEALS IN EQUITY — FRAUDULENT REPRESENTATIONS — EVIDENCE — PRESUMPTIONS — ACCORD AND SATISFACTION — TRUSTS — SETTLEMENT.

1. In equity cases the supreme court must find the facts, though the chancellor was in a better position to judge of the credibility of the evidence.

2. Where one occupies the nominal position of trustee, but his real obligation is contractual, and he is unable to perform it, his acts in obtaining a settlement with the beneficiary should not be subjected to the suspicion that would attach to a trustee who has violated the trust.

3. A representation made as to the value of a security is in the nature of an opinion, and, when the facts on which it depends are readily within reach of the person to whom it is made, he cannot complain of its falsity.

4. Where an alleged false statement is testified to by three interested witnesses, and denied by another interested witness, the preponderance of proof established by the greater number of witnesses is overcome by undisputed evidence that the contemplated conduct of the parties to whom the statement was made would reveal

its falseness before the only object for which it could be made was accomplished, and that the conduct of the parties subsequent to the statement was inconsistent with a belief on their part of its truth.

5. When direct and positive evidence is within the control of a party, the presumption is that he would adduce it, if favorable, and it cannot be supplied by inference.

6. The payment of a smaller sum of money by an insolvent debtor, in discharge of a larger sum, when made before the obligation is due, and out of a fund which could not otherwise have been reached by the creditor, is binding.

Appeal from circuit court, Dekalb county; W. S. Herndon, Judge.

Suit by Charles Dalrymple and another against Thomas Craig. Decree for plaintiffs, and defendant appeals. Reversed.

This is a suit in equity to set aside a deed releasing a deed of trust, on the ground, as alleged, that the deed of release was obtained by fraud. The petition states, substantially: That in 1886 the plaintiffs were minors, and that defendant was by the probate court of Dekalb county duly appointed and qualified as their guardian and curator. That as such curator he received large sums of money and property belonging to plaintiffs. That plaintiffs attained their majority in September, 1890 and 1891, respectively, and upon coming of age demanded of defendant the amount shown to be due them on his final settlement in the probate court, but he neglected to pay them; and on October 12, 1891, he was indebted to them on this account in the sum of $2,121.75. That to secure this amount he executed three negotiable promissory notes of that date, — one for $900 and one for $921.75, both due in 5 years, with 8 per cent. interest from date, and one for $300, due in 10 days, — and executed a deed of trust to secure the two 5-year notes, conveying two 80-acre tracts in that county. The defendant's wife joined in this deed. It was duly acknowledged and recorded. That in July, 1894, plaintiffs then living in Ohio, defendant visited them at their home, and, with intent to defraud them, falsely represented that "the lien of the deed of trust was not a good and subsisting lien," and he had employed a firm of lawyers in St. Joseph to defeat it; that he had delivered to plaintiffs' agent and attorney in Maysville, Mo., "one pair of mules, of the value of three hundred dollars, one good, bankable note, of the value of three hundred dollars, and cash of the value of one hundred dollars"; that the prior liens on the land were equal to its value; that he was insolvent, but that his father would let him have $1,000 to pay plaintiffs in full satisfaction of their debt, to avoid litigation. That plaintiffs believed these representations to be true, relied solely on them, accepted the $1,000 offered, and executed the deed of release in question, whereby the deed of trust was released. That all of these representations were false, and defendant knew it, and plaintiffs were deceived and defrauded thereby. Defendant, by his answer, denies the charges of false representations; admits that he was appointed curator, but denies that he ever received any money or property of plaintiffs. He avers: That one Austin Craig had been their curator, and, becoming financially involved, induced defendant to take the office and assume the liability, which he did, but found himself unable to pay it. Plaintiffs instituted suit and recovered judgment against him, and, being unable to pay the judgment, at the request of plaintiffs' attorney he executed the notes and deed of trust mentioned, with the understanding that they were in full satisfaction of the judgment. That afterwards, in 1894, plaintiffs having written to defendant, demanding payment, and he being insolvent and unable to pay the debt, he arranged to borrow $1,000, which was all he could do, to try to effect a settlement. Then he went to Ohio, where plaintiffs lived, and proposed to settle with them for $1,000, and requested them to correspond with such persons as they might see fit, at Maysville, to verify all statements he made. That he advanced them $50 on their agreeing to make the settlement, and returned home, and plaintiff Charles Dalrymple went to Maysville, investigated the matter, delivered the deed of release, and received the remaining $950. After due trial there was a final decree for the plaintiffs, at the October term, 1896, of the Dekalb county circuit court, setting aside the deed of release; declaring the deed of trust in full force for $1,489.85, the balance due on the notes after giving credit for the $1,000 paid for the release; directing a foreclosure of the deed of trust, application of the proceeds to payment of the amount so found due, and general execution against defendant for what might be left unpaid. Motions for new trial and in arrest followed, and the cause is here on appeal.

Saml. G. Loring and Thos. J. Porter, for appellant. Hewitt & Blair and Harwood & Hubbell, for respondents.

VALLIANT, J. (after stating the facts).

1. There are several questions of law discussed in the interesting briefs with which the counsel have favored us, but the question of first importance in this case is one of fact. Did the defendant make those false representations with which he is charged? If yes, we will go on to other questions; if no, that is the end of plaintiffs' case. This is an equity case, and this court must weigh the evidence to find the facts. Sometimes it appears from the record in an equity case that the evidence is of such a character as to show that the chancellor was in better position to judge of its credibility than the appellate court. In such case there should be a corresponding deference to his findings, but even then the responsibility of finding the facts is not lifted from this court. Blount v. Spratt, 113 Mo. 48, 20 S. W. 967; Parker v. Roberts, 116 Mo. 657, 22 S. W. 914. In this case there is little, if anything, to indicate that the chancellor had any better point of observation than those who read this record. The plaintiffs' testimony on the main question was in the shape of depositions, and the defendant's testimony on the same point is very fully, and even graphically, reported, while the circumstances impeaching and corroborating are undisputed. Although, under the conceded facts of this case, the defendant, at the time of the negotiations under investigation, was indebted to the plaintiffs in the amount found due on his final settlement in the probate court, and which was afterwards merged in the judgment against him in the circuit court, and which he had again acknowledged in his notes and deed of trust of date October 12, 1891, yet that was only the obligation of a cold contract. He was so bound because it was so nominated in his bond. In point of fact, he had never received one cent of plaintiffs' money, had never handled anything of theirs. The estate their father had left them had been squandered by their former curator. And nobody was deceived by this defendant's assuming that burden. The sureties on the former curator's bond had moved against him in the probate court on the ground that he was squandering the estate. They knew, and the probate court knew, and the attorney and uncle of these plaintiffs, then minors, knew, that when this defendant came into the case he was simply assuming responsibility to those children for their estate that had already been squandered by their former curator. The attorney and uncle then representing those minors acted as the attorney in effecting the transfer of the curatorship from one to the other. This defendant agreed to assume that responsibility in consideration of the conveyance to him of an 80-acre tract of land, which, after the transaction was closed, he found to be mortgaged for as much as it was worth, and the attorney and uncle of these plaintiffs drew the deed. There is nothing in the evidence on that point to indicate that the attorney and uncle of the plaintiffs acted otherwise than in good faith, and with good judgment, to save what he could for them; but reference to his activity in that matter is made to show that, so far as this defendant was concerned, there was nothing concealed, and no deception practiced. The defendant became bound by that obligation, and was liable to its full extent, as a matter of contract, — as a matter of assuming another man's obligation; but he has betrayed no trust, and if, when his obligation became due, he had not the money to meet it, it was not because he had squandered funds that had been placed in his hands to take care of. The fact that nothing ever came into his hands as curator, — the fact that when he assumed the curatorship there was no estate to take care of, — does not impair his...