McFarland v. Melson
| Decision Date | 13 September 1929 |
| Docket Number | No. 27297.,27297. |
| Parties | OTHAR McFARLAND, Administrator of Estate of ORA A. McFARLAND, Appellant, v. EDMUND P. MELSON and JOHN G. HOYT. |
| Court | Missouri Supreme Court |
Appeal from Scott Circuit Court. — Hon. Frank Kelly, Judge.
AFFIRMED.
O.V. Seed and Ward & Reeves for appellant.
(1) The undisputed facts show that the indebtedness of Schoonover to McFarland, as evidenced by the notes in controversy and the deed of trust on the land, constitutes a part of the consideration for the land conveyed by Schoonover to the defendants. The true consideration for a deed can be shown by oral testimony, notwithstanding a different consideration stated in the deed, and the assumption by the defendants of the mortgage debt in question is not such an agreement as must be in writing, and the Statute of Frauds does not apply. Nelson v. Brown, 140 Mo. 580; Martin v. Harrington, 174 Mo. App. 707; Van Meter v. Poole. 130 Mo. App. 433; Gilmer v. Powell, 256 S.W. (Mo. App.) 125; Bank of Senath v. Douglass, 178 Mo. App. 664; 3 Tiffany on Real Property, 2487. (a) And it makes no legal difference whether the original debtor is released by the agreement or not. "Where one undertakes to pay the debt of another, and by the same act also pays his own debt, which is the motive of the promise, the undertaking is not one within the Statute of Frauds and needs not be in writing." Moore v. McHaney, 178 S.W. (Mo. App.) 260; Van Meter v. Poole, 130 Mo. App. 433. (b) Where the deed recites that the grantee takes the title subject to the deed of trust, and the amount secured thereby represents part of the purchase price (as here), the grantee is deemed to have assumed payment of the money secured by the deed of trust, and is not merely purchasing the equity of redemption. Gilmer v. Powell, 256 S.W. (Mo. App.) 124; Reed v. Steward, 276 S.W. (Mo.) 16; Landau v. Cottrell, 159 Mo. 319; 3 Tiffany on Real Property, 2489; Comstock v. Hitt, 37 Ill. 542. (2) It was incumbent on the plaintiff to prove by direct and positive testimony that there was an expressed agreement in specific language to assume the mortgage debt by the defendants; no set words were essential to such assumption of the mortgage debt. The agreement to assume the mortgage debt might be inferred or implied from the language used and from all the circumstances attending the transaction. Greer v. Orchard, 175 Mo. App. 494; Schley v. Fryor, 100 N.Y. 75; Thompson v. Dearborn, 107 Ill. 87; Stebbins v. Halls, 29 Barb. 523; Charley v. Fox, 38 Mich. 387; Eggleston v. Morrison, 84 Ill. App. 625; 1 Jones on Mortgages (3 Ed.) sec. 748; Twichell v. Mears, 8 Biss. 211, Fed. Case No. 14286. The defendant Melson admits receiving a letter from Schoonover, the maker of the notes, advising that the latter had been called upon for the overdue interest on the notes, and that the defendant thereupon notified Schoonover that the notes did not concern him, and that they (the defendants) would take care of the matter as they considered it their own business and not that of Schoonover's. Schoonover testifies on behalf of the defendants that, of course, he never intended himself to pay the notes after he had conveyed the property to the defendants. The defendants made several payments on interest due on the notes, and also entered into a valid agreement with the holder of the notes for the extension of the notes, which thereby released the original maker. Such facts should conclude and estop the defendants from now asserting that they do not owe these notes. Nelson v. Brown, 140 Mo. 580; Bank of Senath v. Douglass, 178 Mo. App. 664; Nelson v. Hudson, 299 S.W. (Mo. App.) 1111. (3) By the use of the words "profit" or "bargain" in connection with the land sale from Schoonover to the defendants, it is clear that it was considered and understood by the parties that the amount of the deed of trust against the land was a part of the consideration for the sale of the land to the defendants, and that the defendants were not merely buying Schoonover's equity. Morrow v. Railroad Co., 140 Mo. App. 200; Barry v. Bernays, 141 S.W. (Mo. App.) 933; Cook v. Cain, 77 Pac. 683; Mangham v. State, 75 S.E. 510; Providence Rubber Co. v. Goodyear, 76 U.S. 804; Hunt v. Adams, 5 Mass. 360; Kennilworth v. Scoffield, 2 Barn. & C. 945; Commonwealth v. Davis, 75 Ky. 240; Koenig v. Dohn, 209 Ill. 468.
Smith & Zimmerman for respondents.
(1) The finding and judgment of the trial court are not against the evidence or the weight of the evidence. (a) There is no evidence of any contract, oral or written, that defendants agreed, at the time of the purchase, to assume and pay the Schoonover notes, and, the property being deeded to defendants subject to the deed of trust securing the notes sued on the defendants are not bound to pay the same. Hall v. Morgan, 79 Mo. 47; B. & L. Assn. v. Grocery Co., 82 Mo. App. 245; Ins. Co. v. Irwin, 67 Mo. App. 90; Adams v. Moody, 91 Mo. App. 41; Keifer v. Shackett, 85 Mo. App. 449; Frase v. Lee, 152 Mo. App. 56; Hicks v. Hamilton, 144 Mo. 495. (b) Where land is deeded, as in the case at bar, subject to existing deeds of trust and a contemporaneous contract is relied upon to bind grantees to pay notes secured by said deeds of trust, such agreement must be clearly shown. Keifer v. Sackett, 85 Mo. App. 452; Ins. Co. v. Irwin, 67 Mo. App. 94; Hall v. Morgan, 79 Mo. 50; Monett Lodge v. Hartman, 185 Mo. App. 152. The recital in the deed that the property was deeded subject to the deeds of trust, is strong presumptive evidence that defendants did not agree to pay the same. B. & L. Assn. v. Gro. Co., 82 Mo. App. 252. (c) Where the consideration actually paid and recited in the deed of conveyance includes only the equity of redemption of the grantor, and does not include the amount of the notes secured by the deeds of trust, the rule contended for by appellant in the case of Gilmer v. Powell, and the other cases cited, does not apply. Gilmer v. Powell, 256 S.W. (Mo. App.) 24; Reed v. Steward, 276 S.W. (Mo.) 16; Landan v. Cottrill, 159 Mo. 319; Van Meter v. Poole, 130 Mo. App. 433. In each of the above cases the consideration expressed in the deed included the amount of the deed, or deed of trust and, for that reason, was held to be assumed by the grantee, regardless of the language of the deed. (d) Schoonover thought he had an equity of $4800 in the land, i.e., what he had paid in cash and what he thought the land was worth above that sum, and that is what he sold to defendants, and that is what they bought. The deed recites $4800 as the consideration for the purchase, and oral testimony of the parties to the transaction supports the recital in the deed. Keifer v. Shackett, 85 Mo. App. 449; Monett Lodge v. Hartman, 185 Mo. App. 148; Landau v. Cottrill, 159 Mo. 320; B. & L. Assn. v. Gro. Co., 82 Mo. App. 251. The equity, or the estate of the mortgagor, is defined as the interest of residuum in the mortgaged property above the encumbrance. 42 C.J. 343; 3 Words & Phrases, 2447, 2448; Benton Land Co. v. Zeitter, 182 Mo. 251. (2) The finding and judgment were not against the law as applied to the evidence in the case. (a) There is no testimony in the case, either oral or written, from which the court could infer the contract pleaded, or upon which such an inference could be based. In fact, the testimony in the case negatives the existence of any such facts. 13 C.J. 241; Keifer v. Shackett, 85 Mo. App. 452. The case of Greer v. Orchard, cited by appellant, has no application, because in that case the deed expressly recited that the grantor was to be discharged from notes secured by deed of trust. Greer v. Orchard, 175 Mo. App. 494. (b) There can be no estoppel in this case because no estoppel was pleaded. Grofeman Dairy Co. v. Bank, 315 Mo. 849; Haley v. Seppley, 297 S.W. (Mo.) 362. The defendants had the right to pay part of notes, interest, taxes, etc., or let the land sell, if they did not choose to protect their equity, and the fact that they decided to relinquish their equity, after they had paid part of the notes, taxes and interest, could not create an estoppel. Frase v. Lee, 152 Mo. App. 562; Hiemenz v. Starck, 198 S.W. 449; B. & L. Assn. v. Grocery Co., 82 Mo. App. 245. (c) The consideration mentioned in the agreement relied on by appellant was that defendants would pay the taxes on the land for certain years and pay insurance policies on the houses on the land. For this Ora McFarland agreed to extend the time of payment of interest and one of the notes. This consideration could not support an agreement (made after the conveyance) binding defendants to pay the notes. Adams v. Moody, 91 Mo. App. 47; Sparing v. Dittemeier, 213 S.W. 176; Frase v. Lee, 152 Mo. App. 562; Hicks v. Hamilton, 144 Mo. 495.
The consideration which the defendants paid to McFarland for his extension of the time in which to pay interest and one of the notes was for the purpose of protecting McFarland's security for the Schoonover notes and could not be tortured into saying that the defendants would pay the notes in addition to the extension recited in the contract. To do so would be to create a new contract between the parties with the terms not set out in the written instrument.
Action at law to recover about $9,300 principal, with interest and attorney's fee in addition, balance due on certain mortgage notes, the foreclosure sale under the two deeds of trust securing them having fallen that much short of paying the full mortgage debt. The plaintiff's intestate was the payee and mortgagee and T.V. Schoonover and wife were the makers and mortgagors. About a week after the execution of the notes and deeds of trust they sold the mortgaged land to the defendants, Messrs. Melson and Hoyt, by general warranty deed expressly reciting the conveyance was subject to the deeds of trust, but the plaintiff contends that at the time of the sale and as part consideration therefore the defendants orally agreed...
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