Mayers v. Groves Bros. & Co.

• Decision Date: 11 November 1929
• Docket Number: No. 16673.,16673.
• Citation: 22 S.W.2d 174
• Parties: MAYERS v. GROVES BROS. & CO. et al.
• Court: Missouri Court of Appeals

22 S.W.2d 174

MAYERS v. GROVES BROS. & CO. et al.

No. 16673.

Kansas City Court of Appeals. Missouri.

November 11, 1929.

Rehearing Denied December 2, 1929.

Appeal from Circuit Court, Macon County; Vernon D. Drain, Judge.

"Not to be officially published."

Suit by Raymond E. Mayers against Groves Bros. & Co. and others. Judgment for plaintiff, and defendants Groves Bros. & Co. and another appeal. Affirmed.

R. D. Groves, of Kansas City, and John V. Goodson, of Macon, for appellants.

George N. Davis and Charles W. Shelton, both of Macon, for respondent.

ARNOLD, J.

This is an action in equity whereby plaintiff seeks to have established his nonliability on the unpaid balance of $6,000 of his certain promissory note for $6,650, executed on May 2, 1923, due five years after date, payable to Groves Bros. & Co., secured by a deed of trust on 120 acres of land in Macon county, Mo. Concurrently with the execution of the principal note and deed of trust, plaintiff executed five other notes of $66.50 each, payable in one, two, three, four and five years, respectively. These were commission notes and were secured by a second deed of trust on said land. The petition states: "Shortly after the execution of said notes and deed of trust * * * the Penn Mutual Life Insurance Company, by assignment from Groves Brothers & Company, became, was and is, the owner of said notes secured by deed of trust aforesaid." Subsequently, and in August, 1923, plaintiff sold the land in question, subject to the incumbrance of $6,650, the deed containing the following clause: "* * * Which said incumbrance and indebtedness the grantee herein expressly assumes and agrees to pay." Thereafter, and early in the spring of 1928, near the time of the due date of said notes, plaintiff called upon one E. Shoush, the person who took the original application for the loan to plaintiff in 1923, and sought information as to the possibility of his grantee Pohlman getting a new loan or a renewal. There is a dispute between the parties as to the exact purport of the information sought by plaintiff. It is plaintiff's contention that he sought information as to the possibility of Pohlman getting a new loan, while defendants assert plaintiff asked if Pohlman could get "a loan or renewal," and this is a point at issue in the case. Plaintiff's chief concern, as disclosed by his evidence, is that he did not want the farm to come back to him under foreclosure proceedings. Pohlman was interviewed by plaintiff, and plaintiff was informed that Pohlman was unable to pay the interest, principal, and three years back taxes. Mayers agreed to advance $650 on the principal demanded by Groves Bros. & Co., in order to secure for Pohlman a new loan for a period of another five years. Pohlman made application for the loan at the office of Shoush. Plaintiff was present at the time and paid over the money for interest, taxes, and part of the principal, amounting to a total sum slightly in excess of $1,100. And, as security therefor, plaintiff took a deed of trust on the residence and lots owned by Pohlman in the city of Macon. At this point there is a dispute as to just what was the understanding of plaintiff and Pohlman as to the new loan or renewal. Defendants state: "Mayers agreed to pay the interest and taxes and finally the $650.00 on the principal demanded by Groves Brothers & Company, in order to grant an extension for a period of another five years. * * * It would appear from the evidence that neither Shoush, Pohlman nor Mayers knew just what form the extension of time on the farm loan would take."

Plaintiff's contention is that: "* * * The understanding of Mayers through the entire proceeding was that Pohlman was securing a new loan for $6,000 on the property and that the $6650.00 note signed by Mayers would be cancelled and returned to him and that Mayers never knew until long after the extension agreement had been executed, when the failure to return his notes aroused his suspicion, that an extension agreement had been entered into. This information he acquired by having his attorney examine the records in the recorder's office of Macon County, Missouri. The transaction being contrary to the understanding of Mayers and without his consent was immediately repudiated and he was compelled to either stand by and acquiesce in this transaction or to take some action to relieve him from the appearance of acquiescence in the unwarranted arrangement; consequently he brought this suit."

Plaintiff claims he was making the said payments in order to get the return of his original notes. Pohlman said he signed the application for a loan of $6,650, and that the company would only carry $6,000, and that he later, and in November, 1928, signed the extension agreement and five new commission notes of $60 each.

It appears that the real party to the extension agreement was the Penn Mutual Life Insurance Company, the assignee of the Mayers note of $6,650; that, when the proposal for a new loan or renewal was presented to the life insurance company, its agent and inspector was sent to view the land, and after his inspection a loan thereon of $6,000 was recommended to Groves Bros. & Co. This was $650 less than the amount of the original loan and was the occasion for the payment of $650 on the principal note as detailed above. Pohlman then gave his notes for $300, secured by a second deed of trust on the land, and the extension agreement was executed instead of a new loan. The payments under the new agreement were to be made as follows: $100 on each of the following dates: May 2, 1929, May 2, 1930, May 2, 1931, May 2, 1932. And $5,600 on May 2, 1933. It is charged by plaintiff that this extension agreement entirely changed the terms of payment of the original Mayers note, as to when the payments should become due.

The testimony in support of plaintiff's cause is to the effect that plaintiff was entirely ignorant of these matters; that he was told by Eugene Shoush (agent for defendants both before and after the extension agreement) that his note would be returned to him, and that at all times he believed a new loan was being made to Pohlman. Plaintiff conceived the situation to be that it became necessary for him to show that he had been released from liability on the note, and that he was compelled to take the action reflected in this suit.

The petition alleges the salient points indicated in the above statement of facts; that repeated demand for the return of his notes was refused by defendants and their agent Shoush. And —

"Plaintiff further states that by reason of the premises he is entitled to have said notes for $6,650.00, signed by himself, cancelled and for naught held.

"Plaintiff further states that said notes and the record thereof seriously affect the credit of this plaintiff; that he is not liable hereunder and that he has no adequate remedy at law.

"Wherefore plaintiff prays this court that he, by order thereof, be released from liability under the said notes and the same be cancelled as to this plaintiff, and that the defendants Groves Brothers & Company and the Penn Mutual Life Insurance Company be enjoined from transferring said notes and the extension thereof into the hands of innocent purchasers to the end that unnecessary litigation may not be instituted against this plaintiff and to prevent multiplicity of suits and for such other and further relief in the premises as to the court may seem fit and proper."

There were motions on behalf of defendants (1) to dismiss the cause for lack of jurisdiction; (2) to make the petition more definite and certain; (3) to make Lillian M. Pohlman, wife of George Pohlman, party defendant. All of which motions were overruled.

Defendant Groves Bros. & Co., in separate answer, admits its corporate existence, that plaintiff executed to it the principal note for $6,650 and deed of trust securing same, and five promissory notes of $66.50 each, securing same by a second deed of trust, all as alleged in the petition; admits extension of payment of said principal note for a period of five years for the unpaid $6,000, with the provisions therein contained, and the taking from said George Pohlman the five promissory notes of $60 each, secured by a second deed of trust, as alleged in the petition. These admissions were followed by general denials of all other allegations of the petition.

The separate answer of the defendant life insurance company admits its corporate existence; that the $6,650 note given by plaintiff to Groves Bros. & Co., secured by a deed of trust, was assigned before maturity to this defendant. These admissions were followed by general denials as to all other allegations of the petition.

The court, having heard the evidence, found the formal basic facts upon which the following holdings were based:

(1) That on August 29, 1923, plaintiff, by warranty deed, conveyed the land about which this controversy arose to George Pohlman who therein expressly assumed and agreed to pay the indebtedness expressed in the deed of trust, as part of the purchase price.

(2) That on May 2, 1928...