Kline v. McElroy

• Decision Date: 03 December 1956
• Docket Number: No. 22460,22460
• Citation: 296 S.W.2d 664
• Parties: Lillie KLINE and Sadie Whaley, Plaintiffs-Respondents, v. Perrin D. McELROY, Administrator, Appellant, and Arvid Owsley, Sheriff, Defendant.
• Court: Missouri Court of Appeals

Page 664

296 S.W.2d 664

Lillie KLINE and Sadie Whaley, Plaintiffs-Respondents, v. Perrin D. McELROY, Administrator, Appellant, and Arvid Owsley, Sheriff, Defendant.

No. 22460.

Kansas City Court of Appeals, Missouri.

Dec. 3, 1956.

W. Raleigh Gough, Kansas City, for appellant.

Louis W. Krings, Kansas City, for respondents.

CAVE, Judge.

This is an appeal by Perrin D. McElroy, Administrator of the Estate of Henry Hough Atwood, from a judgment of the circuit court perpetually enjoining the foreclosure of a deed of trust securing a note for $1,000, executed by the plaintiffs (respondents) to the said deceased, and cancelling said note and deed of trust of record.

The judgment does not involve the title to real estate, as a mortgage is a mere lien on real estate. The amount involved is $1,000, and this court has jurisdiction. Sec. 3, Art. V, Const.V.A.M.S.

The record discloses that plaintiffs executed a note in favor of Henry Hough Atwood on July 29, 1944, in the sum of $1,000 payable 10 years after date, without interest, and secured by deed of trust on real estate at 706 East 29th Street in Kansas City.

The note and deed of trust were introduced in evidence but are not copied into the transcript or filed as exhibits. However, it is agreed that the note was in the usual form, reciting that it was given for valuable consideration and contained a promise to pay, and that the deed of trust contained provisions for foreclosure in case of default. It is also admitted that there was endorsed on the note at the time it was executed, the following: 'In the event of my death before the makers of the note, I request and direct that this note and Deed of Trust be cancelled and released of record, otherwise to remain in full force and effect'. This endorsement was signed by the deceased, Henry Hough Atwood, the payee. It was also copied into the body of the deed of trust.

Atwood died November 15, 1952, and Perrin D. McElroy was appointed administrator of his estate. A controversy arose as to the legal effect of the above quoted clause and McElroy directed the defendant, Arvid Owsley, the sheriff, to foreclose the deed of trust, the note having then become due, the named trustee having refused to act, and the sheriff being named as substitute trustee in the deed of trust.

Thereupon, this suit was filed and a temporary injunction was issued restraining foreclosure pending final decree. Among other things, the petition alleges that the above quoted endorsement on the note and incorporated in the deed of trust 'is in fact a written contract' and, under the facts, renders the note and deed of trust void, and prays for a cancellation thereof and for a permanent injunction. Defendant McElroy's answer admits the endorsement on the note and deed of trust and admits that foreclosure will be had unless enjoined, but denies the other allegations of the petition.

After a trial, the court entered judgment finding that the endorsement on the note and in the deed of trust 'constituted a contract' between Atwood, as the holder, and plaintiffs, as the makers of said note; that such note and deed of trust were to be cancelled and released of record in the event said Atwood died before the death of plaintiffs and before the maturity of the note, which condition the court found had occurred, and ordered that the temporary injunction be made permanent and that the note and deed of trust be and were cancelled.

Defendant McElroy, as administrator, alone appealed. He contends that the court erred in finding that the 'endorsement' on the note and deed of trust constituted a valid 'contract', because a contract must be supported by consideration, and that there was no consideration moving from plaintiffs to Atwood; that the endorsement should be construed to be an agreement to make a gift, testamentary in character, which is unenforceable because not executed with the formality required of wills and not accompanied by full and final delivery of the subject matter of the attempted gift.

In addition to the note and deed of trust, there was oral testimony, without objection, to the effect that Mr. Atwood had lived with the plaintiffs as a roomer and boarder for more than 16 years prior to his death; that when Mrs. Kline, one of the plaintiffs, was negotiating to buy the property described in the deed of trust, she was required to make a down payment of $1,500 and needed to raise $1,000 of that amount; 'Mr. Atwood told Mrs. Kline he would give her the $1,000 on the house, because he had always lived there and it would be a home for all of them, * * *'; this was the $1,000 represented by the note in dispute. Mr. Atwood continued to live with the plaintiffs until his death.

The question of whether a notation or memorandum placed on a note contemporaneously with the execution thereof is a part of the contract and is enforceable or is testamentary in character and void because it fails to meet the formal requirements of a...