Grady v. O'Reilly
| Citation | 22 S.W. 798,116 Mo. 346 |
| Parties | GRADY v. O'REILLY et al. |
| Decision Date | 05 June 1893 |
| Court | United States State Supreme Court of Missouri |
1. Defendant, a financial agent, made a loan on certain property, and then resold the note and mortgage. As the interest became due he advanced the money, in order to maintain his credit with his customer. This was done with the knowledge and consent of the mortgagor, but not at his request. Held, that defendant was not entitled to be subrogated to the rights of the holder of the notes, so as to require a junior incumbrancer to refund such interest in order to redeem.
2. Defendant was entitled to be subrogated to the rights of the holder of the notes, as regards interest paid by him after having purchased a junior incumbrance on the same property.
3. Defendant purchased and assigned to H. a note and deed of trust, under an agreement by which defendant absolutely assumed the payment of the interest, and agreed to take the note back whenever requested by H. to do so. Held, that defendant was a surety of the maker of the note, and was entitled, on paying interest on the note, to be subrogated to the rights of the assignee of the note as against a junior incumbrancer.
4. Defendant was applied to for a loan, which he made, and then sold to another person, without the knowledge of the borrower. Defendant regularly collected the interest of 8 per cent., and paid only 6 per cent. to the purchaser of the loan, according to agreement. Held that, as there was no relation of confidence between the borrower and defendant, the latter was not bound to account for the difference between the interest received by him and that paid by him.
Appeal from St. Louis circuit court; Leroy B. Valliant, Judge.
Action by Bridget Grady against M. B. O'Reilly and others. From a judgment for defendants, plaintiff appeals. Reversed.
Edmond A. B. Garesche, for appellant. W. F. Smith and D. D. Fassett, for respondents.
This suit is against O'Reilly, Francis Fisher, John C. Hacken, Will J. Howard, Charles Moran, and Mary Moran, his wife; and its purpose is to have an accounting, and redeem lots 3 and 4, block 1, of Goff's addition to the city of St. Louis, from certain deeds of trust made to secure notes held by defendants, as is charged. It is charged in the petition and shown by the evidence that, on the 20th day of February, 1871, Robert Wright, being the owner of the property, conveyed the same to Andrew S. Barada, as trustee, to secure a note of $2,000, payable to Margaret Barada; on the 9th day of April, he conveyed the same property to the same trustee, to secure to the said Margaret another note for $1,000; and on the 24th day of April, 1875, he again conveyed the lots to one A. C. Taylor, as trustee, to secure a note of $500. These notes bore interest at 10 per cent. per annum. The notes and deeds of trust are in the pleadings and evidence designated respectively as "Exhibits A, B, and C." On the 28th day of August, 1875, the said Wright, by deed of warranty, conveyed the lots to defendants Moran and wife; Moran assuming as part of the purchase price the notes secured by deeds A, B, and C. On this purchase by Moran and wife, they gave back a deed of trust on the property to Wright, to secure $1,000, purchase price, which is called "Exhibit E." On the 5th of October, 1876, Moran and wife conveyed the same property to secure some notes due the Citizens' Bank. On the 3d day of March, 1877, Moran and wife conveyed the same property to a trustee to secure a note of $3,500 payable to Will J. Howard five years after date, with interest at 10 per cent., and ten semiannual interest notes of $140 each. This deed was designated as "Exhibit F," and its validity is in question. On the 2d day of February, 1880, the said Moran and wife conveyed the property to a trustee, with power of sale, to secure to plaintiff a certain note therein described, and on the 21st day of February, 1888, the trustee sold, and by deed conveyed, the property to plaintiff. Holding the equity of redemption under this conveyance, plaintiff asked that an account be taken of the amount due on the prior deeds of trust, and for leave to redeem. It was charged that the notes secured by Exhibits A, B, and C were held by defendant Fisher, and that secured by Exhibit E by defendant Hacken. It was also charged that the note for $3,500 was given to defendant O'Reilly (though made in the name of Howard) in consideration that he would pay the notes secured by Exhibits A, B, and C, and also that said defendant had collected from Moran and wife sums which had not been accounted for. A separate answer and cross bill were filed by defendant O'Reilly, in which he admitted the execution and delivery of all the conveyances mentioned in the petition; admitted that the note for $3,500 (F) was assigned by Howard to him; but he denied that he undertook and agreed to pay said first three notes, A, B, and C, as charged. In respect to the $3,500 note, (F,) said defendant charged that on the 3d day of March he was engaged in the business of financial agent in the city of St. Louis, and at the time the holders of notes A, B, and C, amounting to $3,500, were pressing Moran and wife for payment, and they applied to him for a loan of that amount with which to pay these notes, and undertook to give him as security a first lien on said lots, representing that there were no other liens on them. That he undertook to furnish them the money on this condition, and thereupon took the note and deed of trust, and had the latter recorded. That upon investigation he found the other deeds of trust, (E, and the one to the bank,) and declined to furnish the money on the deed of trust subject to those. That it was thereupon agreed that said defendant would furnish the money, but, instead of paying the notes A, B, and C, he would take an assignment of them, and extend the time of their payment for five years, and reduce the interest to 8 per cent. That this was done, and defendant thereupon reassigned the notes to defendant Fisher, from whom he got the money. That it was also agreed that defendant should retain and hold the $3,500 note and deed of trust (F) as additional security. He stated further that, at the request of said Moran and wife, he did, on the 27th of November, 1887, purchase from Wright the note for $1,000, (Exhibit E,) and assigned the same to defendant Hacken, who afterwards reassigned the same to him, and that he was then the owner thereof, and said defendant Hacken had no interest therein or in this suit. That in consideration that defendant would secure an extension of time on this note, (E,) said defendant Moran agreed to pay interest thereon at 9 per cent. semiannually; and on the 28th of February, 1882, in consideration of procuring a further extension, they agreed to pay 10 per cent. interest. That the interest was so paid by said Moran until February, 1884, after which and up to June, 1888, at the request of said Moran, he had advanced and paid the interest on said note. He charged that, on the expiration of the extension for five years of the notes A, B, and C, further extensions were made of two years, and then of one year. He charged, further, that after 1886, at the request of said defendant Moran, he advanced semiannually the interest due Fisher on notes A, B, and C, at 6 per cent., until October 10, 1888, making $420; and at like request he advanced to defendant Hacken, from 1885 to 1888, interest on the $1,000 note, (E,) making a total of $240; and said sums, amounting to $660, had not been refunded. He also charged that he had paid another debt of Moran's, at his request, amounting to $400. That at the time all said payments were made it was understood and...
To continue reading
Request your trial