Johnston v. Bank of Poplar Bluff
| Decision Date | 07 April 1927 |
| Citation | 294 S.W. 111,221 Mo.App. 127 |
| Parties | JAMES A. JOHNSTON ET AL., APPELLANTS, v. BANK OF POPLAR BLUFF, RESPONDENT. [*] |
| Court | Missouri Court of Appeals |
Appeal from the Circuit Court of Butler County.--Hon. Charles L Ferguson, Judge.
REVERSED AND REMANDED.
Judgment reversed and remanded.
J. C Sheppard for appellant.
(1) (a) The court erred in permitting witnesses, Cook, Horton Chambers and others to testify orally to facts contradicting and varying the written contracts offered in evidence, both the contract signed by Chambers, Johnston and the bank, and also the deed from the bank to plaintiffs. Oral testimony cannot be received to contradict, vary, add to, or substract from the terms of a valid written instrument. Jones on Evidence (Second Ed.), 554, sec. 434. Any number of cases, may be cited, of course, in support of this rule. (b) If it be contended that this evidence did not vary the written contracts, but merely was to show conditions surrounding them, and that the deed was merely the security for a debt on mortgage then this question was an equitable one, and should not have been submitted to the jury. Gay v. Ihm, 69 Mo. 584; Ely v. Koontz, 167 Mo. 371. (2) The court erred in refusing to give to the jury plaintiff's instruction No. 1 as asked and by modifying said instruction by adding the words thereto: "Unless you find and believe from the evidence that the defendant took and held the legal title to the land described in said deed merely as security for a debt owing from plaintiffs to defendant and conveyed the same to defendant, J. A. Johnston, by said deed solely for the purpose of transferring the title held by defendant as security for said debt." This was error for the following reasons: First, because there was no competent evidence to support the added clause to the instruction, and such evidence as there was contradicted the written contracts offered in evidence. Second, because if it was true that the defendant held the legal title merely as security for a debt owing from plaintiffs to defendant this was no defense to the action for a breach of covenant against incumbrances. See authorities cited under point 1. Also, Brady v. Peck, 32 S.W. 906. (3) The court erred in giving to the jury instruction No. A on behalf of the defendant for the reason that there was no evidence to support it. Gunn v. Hemphill Lbr. Co., 218 S.W. 978; Parker v. Drake, 220 S.W. 1000; McElvain v. Dorrah, 104 S.W. 824; Boken v. J. W. McMurray Const. Co., 221 S.W. 1070; Ostopshwok v. Kohen-Swartz R. & S. Co. , 227 S.W. 642.
Abington, Abington & Freer and Henson & Woody for respondent.
(1) It may be established by extrinsic evidence that a deed, absolute on its face, was intended to be, and was in fact, a mortgage to secure an existing debt. This is one of the exceptions to the rule that such evidence is not admissible to contradict or vary the terms of a written instrument. 27 Cyc., 991; Gibbs v. Hangowout, 207 Mo. 384; Duel v. Leslie, 207 Mo. 666; Carson v. Lee, 281 Mo. 166, 219 S.W. 629; Raybourn v. Benz, 217 S.W. 49; Constant v. Simon, 303 Mo. 203, 259 S.W. 424; 27 Cyc., 1018, 1020; Johnson v. Huston, 17 Mo. 58; Tent Co. v. Bank, 57 Mo.App. 19; Quick v. Turner, 26 Mo.App. 29; 27 Cyc. 1023; Northern Assur. Co. v. Chicago Mut. Bldg. Ass'n., 64 N.E. 979; Brick v. Brick, 98 U.S. 514, 25 L.Ed. 256. (2) The action of the court in giving defendant's instruction A, and modifying plaintiff's instruction No. 1, to harmonize with Instruction A, was amply justified by the evidence. (3) Where extrinsic evidence, other than written documents, is introduced to establish that a deed, absolute on its face, was given as a mortgage to secure an existing debt, such evidence raises an issue of fact proper for a jury under instructions of the court. 27 Cyc. 1028; Ullman v. Jasper, 7 S.W. 763; Bradford v. Malone, 77 S.W. 22. (4) Where issues, equitable in their nature, are submitted to a jury without objection, and are determined by the jury, the losing party cannot raise that question after verdict. Austin v. Brooklyn Cooperage Co., 285 S.W. 1015.
BAILEY
BAILEY, J.--This is an action to recover money paid out by reason of alleged breach of the covenant against incumbrances contained in a general warranty deed executed and delivered by defendant to plaintiff James A. Johnston, conveying a part of Lot 125 in the City of Poplar Bluff. By the petition it is alleged that defendant corporation made the warranty deed to the property above referred to on the 3rd day of June, 1912; that the deed contained the granting clause, "grant, bargain and sell," and also the usual covenant against incumbrances; that at the time of the execution of the deed the premises were subject to a deed of trust, of record, dated April 8, 1908, given by J. C. Chambers and wife to Charles Mills for the Butler County Bank, securing a note in the sum of $ 635; that by reason of said incumbrance the plaintiffs were compelled to pay $ 1075.13, being the principal sum with interest to July 24, 1918. Plaintiffs further allege that at the time the said deed was delivered the property was subject to the lien of certain paving tax bills and by reason thereof they were compelled to pay the sum of $ 475, amounting with interest to $ 683.14. Judgment was asked in the total sum of $ 1758.27. The answer sets up as a special defense that prior to April 27, 1912, the Simmons Grocery Company, a Corporation of which plaintiffs were the principal stockholders, was indebted to defendant in the sum of $ 2500; that on said date James Johnston, representing himself and his co-plaintiff D. M. Johnston, purchased the property in question from J. O. Chambers and caused the said Chambers to make a deed to defendant to secure the $ 2500 debt of the Simmons Grocery Company, the assets of which, had been appropriated by plaintiffs to their own use; that defendant thereby became possessed of the legal title to said premises in trust, however, for plaintiffs who held the equitable title thereto; that defendant received no consideration for the transfer except the payment of said indebtedness. The record fails to show any reply was filed to this answer. On trial to a jury the verdict and judgment was for defendant and plaintiffs have appealed.
To sustain the issues on their part plaintiffs offered in evidence the warranty deed from defendant, which was regular on its face, containing the covenant against incumbrances, as alleged. The record showing the Chamber's Deed of Trust, dated April 8, 1908, made to a trustee for the Butler County Bank securing a note in the sum of $ 635, together with the entry of satisfaction thereof, dated July 24, 1918, and the lien of the paving special tax bills, were likewise shown. D. M. Johnston, one of the plaintiffs, testified that plaintiffs paid off the Chamber's incumbrance of $ 635 and paving taxes to the amount of $ 474. Plaintiffs further proved a written contract was entered into April 27, 1912, between the Bank of Poplar Bluff (defendant), James A. Johnston (plaintiff) and J. O. Chambers (who was also a stockholder in the Grocery Company), which contract, after reciting that Chambers and wife had conveyed the property in question to defendant in order to pay and satisfy their note in the sum of $ 2500, provided as follows: "the said Bank of Poplar Bluff agrees to convey said property, within six months from date, to James A. Johnston, upon the payment to said Bank of Poplar Bluff, by said James A. Johnston, the sum of twenty-five hundred dollars; and the said James A. Johnston hereby agrees to pay to said Bank of Poplar Bluff, the sum of twenty-five hundred dollars within six months from this date."
Defendant, to sustain the defense pleaded, submitted evidence tending to prove a state of facts as follows: Prior to the time the contract above referred to was entered into between plaintiff James A. Johnston and J. O. Chambers and defendant, plaintiffs and J. O. Chambers were jointly interested in the Simmons Grocery Company and controlled its affairs. The Simmons Grocery Company became indebted to the State Bank of Poplar Bluff in the sum of about $ 3000 and in May, 1912, this indebtedness had been reduced to $ 2500. At that time Chambers owned the real estate in question. Prior thereto Chambers and wife had given their note to plaintiffs, who were associated with Chambers in the grocery business, for $ 2500, securing the same by a deed of trust on this same real estate; plaintiffs transferred this note and deed of trust to the State Bank as collateral security for the indebtedness of the Simmons Grocery Company in which all were jointly interested. Thereupon it was decided to change the Simmons Grocery Company account to defendant Bank and after certain negotiations the contract dated April 27, 1912, heretofore set out, was entered into. In accordance with the terms of this contract the property owned by Chambers was deeded by him to defendant bank, the Chamber's note was satisfied and plaintiffs gave their note for $ 2500 of date May 1, 1912, to defendant, taking up the Simmons Grocery Company's note of the same amount. No money was actually paid by defendant for the Chambers deed. The note given by plaintiffs to defendant was not paid in full, although reduced in amount, at the time the warranty deed involved in this case was delivered to plaintiffs by defendant. This deed was dated June 3, 1912, and acknowledged June 30, 1914, when it was delivered and recorded.
There was evidence tending to show plaintiffs collected the rents from the property during the period the legal title was in defendant and also paid the interest on the note of $ 635 being the same note the lien of which plaintiffs claim...
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