McKinney v. Lynch

• Decision Date: 01 March 1937
• Docket Number: 5598
• Citation: McKinney v. Lynch, 102 S.W.2d 944 (Mo. App. 1937)
• Parties: A.J. McKinney, Appellant, v. J. S. Lynch, Respondent
• Court: Missouri Court of Appeals

102 S.W.2d 944

A.J. McKinney, Appellant, v. J. S. Lynch, Respondent

No. 5598

Court of Appeals of Missouri

March 1, 1937

Appeal from the Circuit Court of Crawford County.Hon. J.H. Bowron Judge.

Affirmed.

Hiett Covert and Lay, of Houston, Attorneys for Appellant.

Wm. P Elmer, of Salem, and Harry Clymer, of Steelville, Attorneys for Respondent.

James F. Fulbright, J. Allen, P. J. concurs.Smith, J. concurs.

OPINION

Fulbright, J.

This is an action by plaintiff upon a promissory note.Defendant admits execution of the note, but alleges same was secured by a second deed of trust on 160 acres of land, which plaintiff released without defendants knowledge or consent, and that the equity in said lands over and above prior encumbrances was sufficient to pay the note in suit.Jury being waived, trial was had by the court and judgment for defendant.Plaintiff appealed.Throughout this opinion the appellant and the respondent will be referred to as plaintiff and defendant respectively.

For a second time we are confronted with this case, the opinion on the former appeal being reported in 45 S.W.2d 874 wherein the cause was reversed and remanded for the reason there was no evidence to sustain the finding of the trial court as to the value of certain lands involved.The facts in the second trial are substantially the same as in the previous one, except as to the value of the land, and are as follows:

The note sued on was executed January 25, 1922 for the principal sum of $4,698 and was signed by R. B. McKinney, J. L. McKinney, and this defendant, J. S. Lynch, and made payable to the Texas County Bank at Houston, or order.The bank having failed, its assets went into the hands of the State Finance Commissioner for liquidation.The note in question, with others, was sold by the Finance Commissioner to plaintiff.The evidence discloses that R. B. McKinney was principal in the note and the defendant, J. S. Lynch, was surety; that when the note was given, R. B. McKinney executed second deed of trust to the bank, subject to a first deed of trust of $3500 on 160 acres of land in Texas County to secure the payment thereof.Neither of these incumbrances was paid.On September 16, 1927, plaintiff sent the note in suit to C. E. Covert, an attorney at Houston, with instructions to have the second deed of trust satisfied on the record.This was done in the regular way, and the note was stamped canceled by the recorder of deeds.At the trial the court found that at the time of cancellation there was due on the note the sum of $5408, and the amount due on the note secured by the first deed of trust and taxes amounted to $4000.The court further found that at the time of the release of the second deed of trust the land covered was of the value of $10,000.Plaintiff closed his case by offering in evidence two additional notes secured by the second deed of trust, one for $1000 and interest thereon, and one for $1,913.30 and interest thereon, both falling due before the note sued on.

It is conceded in this case, as on the former appeal, that the release of the second deed of trust without the consent of the surety on the note secured by it released the surety to the extent of the value of the deed of trust released.This is in keeping with the well settled rule in this State.(Long v. Mason,273 Mo. 266, 200 SW 1062;Tressler v. Whitsett,321 Mo. 849, 12 S.W.2d 723.)

The court found the value of the land covered by the second deed of trust to be $10,000 at the time of the release; that the amount due on the note sued on and secured by the second deed of trust amounted to $5408 at that time, and that prior liens amounted to $4000.In other words, that the property released was worth more than the prior liens and the amount of the note sued on; and that the release of the second deed of trust which was given to secure the payment of the note on which defendant was surety, without his consent, would release him.

There are two questions presented by plaintiff in this court.First, Does the evidence sustain the trial court in finding the land to be of the value of $10,000 at the time the deed of trust was released; second, Is plaintiff right in insisting that the two notes, one for $1000 and interest thereon and the other for $1,913.30 and interest thereon, both secured by the second deed of trust, and falling due before the note sued on, had priority over the note upon which defendants name appeared as surety, and on which he is sued, and that, considering the farm to be worth $10,000, that in addition to the deduction of $4000 found by the trial court to be a prior lien, there should also be deducted the amount of these two notes together with interest thereon, before defendant should receive the benefit of any credit on the note upon which he was surety.We shall consider these questions in the order named.

Several witnesses, after qualifying for that purpose, testified for the defendant, fixing the value of the lands in question at $10,000 or more.J. S. Lynch testified the land was worth $65 per...