Gardner v. Matthews

• Decision Date: 06 December 1881
• Citation: 11 Mo.App. 269
• Parties: THOMAS GARDNER, Respondent, v. LEONARD MATTHEWS ET AL., Appellants.
• Court: Missouri Court of Appeals

11 Mo.App. 269

THOMAS GARDNER, Respondent,

v.LEONARD MATTHEWS ET AL., Appellants.

St. Louis Court of Appeals, Missouri.

Dec. 6, 1881.

An agreement that a note is not to be paid at maturity, but is to be returned to the accommodation indorser upon the tender, by the maker, of another note secured upon real estate, is a defeasance, and can only be proved by a writing.

APPEAL from the Circuit Court of St. Louis County, EDWARDS, J.

Reversed and dismissed.

JOHN G. CHANDLER, for the appellants.

W. H. CLOPTON, for the respondent.

BAKEWELL, J., delivered the opinion of the court.

The petition alleges that defendants were partners in the business of lending money; that prior to August 28, 1874, one Bartlett applied to defendants for a loan on certain lands in and near Poplar Bluff, Missouri; that defendants then represented to plaintiff that they were satisfied that the property was security for the loan; that Bartlett wanted some money at once; that defendants could not then go to Poplar Bluff to supervise the satisfaction of some liens against the property; that defendants then agreed with plaintiff, for a valuable consideration, that, if plaintiff would indorse a note for $5,000, to be executed by Bartlett and secured by a deed of trust on the property aforesaid, and to be made payable at six months, defendants would let Bartlett have the money and would return the note, indorsed by plaintiff, to him, and would substitute therefor the note of Bartlett, to be secured on said property; that defendants caused to be prepared and executed the note for $5,000, due in six months from August 28, 1874, together with a deed of trust securing the same covering said property; that plaintiff, relying on said promises and agreement of defendants, indorsed and delivered the note to defendants on the express agreement that it was to be returned to him at maturity, as aforesaid; that defendants accepted the note and deed of trust; and, after deducting from $5,000, $500 as discount and commissions, paid the remainder of the loan to Bartlett; that at the end of six months, Bartlett offered to defendants to execute a new note and deed of trust on the property to secure the $5,000 note, and plaintiff then and there demanded of defendants a cancellation of his indorsement, and a return to him of the indorsed note; but defendants refused to take a deed of trust from Bartlett on the property to secure the note, and refused to deliver the note to plaintiff or to cancel his indorsement; that, at the maturity of the note, plaintiff, having received due notice of demand and non-payment by the maker, paid the note on March 3, 1875. Damages in the sum of $7,000 are asked for defendants' breach of contract.

Defendants demurred, on the ground that the petition did not set forth facts constituting a cause of action. The demurrer was overruled. Defendants then filed an answer, in which they deny any such agreement as that alleged by plaintiff, and aver that the note was indorsed by plaintiff, at the request of, and for the accommodation of, Bartlett, and that defendants discounted the note on the faith of plaintiff's indorsement only. Defendants deny that they ever agreed in writing, as alleged; and say that the only agreement of the parties was contained in the note and indorsement. Defendants deny any written agreement by Bartlett to deliver to them any deed of trust and any agreement to accept such deed in place of the note; and deny that Bartlett offered any such deed at the maturity of the note, and say that, by reason of encumbrances on the property, Bartlett could not then make a deed good to secure $5,000; they deny that plaintiff demanded a return of the note or cancellation of his indorsement.

In his reply, plaintiff says that the discount and charges of defendants were exorbitant; that no consideration moved from Bartlett to him for the indorsement. He denies that the note was discounted on the sole faith of plaintiff's indorsement, and denies all allegations about encumbrances.

The following instructions were given, the first at plaintiff's instance, and the second proprio motu of the court; and the court directed the jury that the instructions are to be considered as a whole:--

“1. The court instructs the jury that the pleadings admit that defendants were partners at the dates mentioned in the petition, and that they, as partners, discounted said note described in said petition. And the court instructs the jury that if they believe from the evidence that prior to the twenty-eighth day of August, 1874, one George T. Bartlett applied to defendants for a loan on the real estate described in the petition, and that one of said defendants, in the usual course of business of the partnership, represented to plaintiff, on or before said twenty-eighth day of August, 1874, that they were satisfied said property was sufficient to secure said loan of $5,000; that said Bartlett was anxious to have a part of said money at once; that there were certain liens on said property, and that defendants could not then go to the county in which said land is, to supervise the extinguishment of said liens; that defendants then and there agreed with plaintiff, that if plaintiff would indorse a note for $5,000, to be executed by said Bartlett, and made payable within six months from said date, they would let said Bartlett have said money, and that on the expiration of...