Mellon v. Webster

• Decision Date: 02 April 1878
• Parties: JOHN S. MELLON ET AL., Respondents, v. BENJAMIN F. WEBSTER ET AL., Appellants.
• Court: Missouri Court of Appeals

5 Mo.App. 449

JOHN S. MELLON ET AL., Respondents,

v.BENJAMIN F. WEBSTER ET AL., Appellants.

St. Louis Court of Appeals, Missouri.

Apr. 2, 1878.

1. Where it is agreed that a conveyance of land shall be made subject to the encumbrance of a deed of trust to secure the payment of notes, a tender of a deed which recites that the grantee assumes the payment of the deed of trust is not a compliance with the contract, and the grantee is not bound to accept such a deed.

2. Where a layman, dealing with a lawyer, manifestly against his intention and in plain ignorance of law, is led to do the very opposite of what he expresses his intention to do at the time, and to release another's rights as well as his own, and where the consideration for such release has never passed, a court of equity will disregard such release as obtained by imposition and misrepresentation (which may occur though not a false word has been said), misplaced confidence and surprise. The release not having been fairly entered into according to its tenor, a court of equity will neither enforce its execution nor make a new agreement for the parties.

3. Where there is evidence to support the finding of a referee, it will not be disturbed on the suggestion that it is against the weight of evidence.

APPEAL from St. Louis Circuit Court.

Affirmed.

LEE & ADAMS, for appellants: A misrepresentation of a matter of law does not constitute fraud at law, because the law is presumed to be equally within the knowledge of all the parties; and the misrepresentation of the legal effect of a written agreement, which a party signs with a full knowledge of its contents, is not a sufficient ground for avoiding the agreement.-- Platt v. Scott, 6 Blackf. 389; Russell v. Branham, 8 Blackf. 277; Starr v. Bennett, 5 Hill, 303; Martin v. Wharton, 38 Ala. 637; Fish v. Cleland, 33 Ill. 238; Goode v. Hawkins, 2 Dev. Eq. 398; Harney v. Charles, 45 Mo. 157. A contract cannot be made in such a way as that the obligees may, at their election, join or not. If it is joint, all must sue; if it is several, it cannot be sued on jointly.-- Clark v. Cable, 21 Mo. 223.

POPE & MCGINNIS, for respondents: An agreement to convey “ subject to an encumbrance” is not complied with by the tender of a deed stating that purchaser “ assumes and agrees to pay the encumbrance.”-- Rogers v. Gosnell, 51 Mo. 465; Luckett v. Williamson, 31 Mo. 56; Fitzgerald v. Barker, 4 Mo. App. 105. If, in an action for specific performance of a contract to convey real estate, defendant, pending the suit, incapacitates himself to convey to plaintiff, court will retain the suit and give damages for breach of contract.-- Hamilton v. Hamilton, 59 Mo. 232; Holland v. Anderson, 38 Mo. 55; Woodman v. Freeman, 25 Me. 531; Woodcock v. Bennett, 1 Cow. 711; Morss v. Elmendorf, 11 Paige, 277. If a lawyer, dealing with a person who is not, induces that person to execute a written instrument, and the lawyer perceives, at the time, that the other party is misled as to the legal effect of such instrument, and is unconsciously doing precisely what he said he would not do; and the lawyer admits that in the preparation of the instrument he designed such results, and seeks an advantage from it; and, besides, has parted with no consideration in order to obtain it, such instrument so procured is void, both because of fraud and want of consideration.-- Colter v. Morgan, 12 B. Mon. 278; Kerr on Fraud (ed. 1872), 90, 400; Pars. on Part. (2d ed.) 116, 117; 16 Am. L. Reg. 575.

BAKEWELL, J., delivered the opinion of the court.

This was a proceeding in equity to enforce the specific performance of a contract to convey lands. It appears that plaintiffs and defendants were in the real-estate business in St. Louis, and, at a time when plaintiffs were copartners and defendants were copartners, owing to some business transaction, the nature of which does not appear, they became interested together in a tract of land fronting fifty feet on Lafayette Avenue, in St. Louis, on which certain buildings were erected, and which was encumbered by a deed of trust for $6,000. The land was conveyed to defendants, who held the legal title to it, and on the 11th of July, 1874, as a settlement and compromise of a controversy which had arisen regarding the respective interests of plaintiffs and defendants in the property, and in settlement of all claims that one party might have against the other, in regard either to that land or certain other land in Illinois for which it had been exchanged, they entered into a written agreement, by which Webster and Flanagan undertook to convey to Mellon and Tippett the property in question, subject to the deed of trust for $6,000, due 18th of December, 1876, and to an interest-note for $270, due 18th of June, 1874, in consideration of $930, to be paid to them by Mellon and Tippett on 20th of July, 1874. Accordingly, Webster and Flanagan executed a deed to plaintiffs for the land in question, which they deposited in bank, to be delivered on payment of this money. This deed stated the consideration at $7,500; used the words “grant and quitclaim;” contained covenant of warranty only against the acts of the grantors; stated that the grantees assumed the payment of the principal note of $6,000, and of the interest-note of $270; and that the conveyance was subject to taxes for 1874. Respondents went to the bank on the day named with the money, according to agreement, but refused to receive the deed, on the ground that it was not according to agreement, and on the ground also that there was a two years' lease of the premises. On 15th of September, 1874, this suit was brought for specific performance. A few days after the suit was begun, defendants conveyed the equity of redemption to one Allen, for the nominal consideration of $10,000. The real consideration was certain property in Carthage, Jasper County, subject to a small encumbrance. This deed was dated 14th of September, but was not acknowledged and delivered until the day after defendants were served with summons in this suit. The week preceding the trial, defendants obtained from Tippett, who was the son-in-law of his co-plaintiff, Mellon, a release, under his seal, of all claims under the contract, to enforce which the suit was brought. It is claimed by plaintiffs that this release is void for fraud. On the trial, some evidence was introduced as to the value of the land. But the court declined to receive further testimony on that point, stating that if the issues were found for plaintiffs, the question of damages would be referred. The court found for plaintiffs. The referee took testimony as to the value of the property, and fixed the damages at $1,218.24. The report was confirmed, against the exceptions of both parties. Judgment was for the amount found by the referee; and defendants appeal.

1. It is claimed by defendants that the deed tendered to plaintiffs was a compliance with the agreement. It is manifest, however, that it was not. The agreement was that respondents should take the land subject to the encumbrance, not that they should assume the encumbrance. If respondents had accepted the deed as executed, they might, in case of depreciation of the property by fire or otherwise, have been liable, after losing the property, for a balance due upon the notes at the suit of the holder. Fitzgerald v. Barker, 4 Mo. App. 105. This was not their agreement. It is unnecessary to say in what other respects the deed may not have been such as they were entitled to under the agreement to convey.

2. It is claimed that the release by Tippett was a full discharge. The consideration named in the release is five dollars. The consideration agreed upon between the parties was that Flanagan should remit an indebtedness of $50 due by Tippett to Webster and Flanagan, and for which they held a conveyance of certain lands in Illinois, and that they should reconvey this land to...