Nelson v. Brown
| Decision Date | 06 July 1897 |
| Citation | 41 S.W. 960,140 Mo. 580 |
| Parties | Nelson v. Brown et al., Appellants |
| Court | Missouri Supreme Court |
Appeal from Jackson Circuit Court. -- Hon. Edward L. Scarritt Judge.
Reversed and remanded.
Beebe & Watson for appellants.
(1) The court erred in excluding evidence offered by defendant to show that John W. Henry, as a part of the consideration for the conveyance from defendant to him, agreed to assume the indebtedness herein sued for. An agreement to assume mortgage as part of the consideration need not be in writing. Ely v. McNight, 30 How. Pr. (N. Y.) 97; Wright v Bridges, 99 Ind. 565. (2) The consideration of a deed is open to explanation for the purpose of showing the true consideration. Allen v. Kennedy, 91 Mo. 324; Bowen v. Kurtz, 37 Iowa 239. (3) If the deed from Brown to Henry be construed to convey the premises subject to the mortgage only, the mortgage is still the primary fund for the payment of the debt and Brown stood in the relation of a surety only, and an extension of time of payment of mortgage by the mortgagee without the consent of mortgagor discharges the latter, provided there was a consideration for such extension. Metz v. Todd, 36 Mich. 474; Orrick v Dunham, 79 Mo. 174; 1 Story, Equity, sec. 499; 3 Pomeroy's Eq. Jur., sec. 1205, and cases cited; Jumel v. Jumel, 7 Paige, 594; Halsey v. Reed, 9 Paige, 446; Ferris v. Crawford, 2 Denio, 595; Stebbins v. Hall, 29 Barb. 524; Johnson v. Zink, 51 N.Y. 336; Baker v. Terrell, 8 Minn. 195; Willard v. Worsham, 76 Va. 392. (4) There was a sufficient consideration to support the promise of Nelson to extend the time of payment of said notes. 1 Chitty on Contracts [11 Ed.], p. 36, note; King v. Upton, 4 Greenleaf, 552; Ellney v. Vanderlyn, 4 Johns. 237; Leemaster v. Burkhart, 2 Bibb. 25, 30; Hamaker v. Eberly, 2 Binn. 506; Glasscock v. Glasscock, 66 Mo. 631; Cass Co. v. Oldham, 75 Mo. 50; Martin v. Nixon, 92 Mo. 26; Calkins v. Chandler, 36 Mich. 320; Bank v. Bridges, 98 N.C. 67.
R. O. Boggess for respondent.
(1) A person for whose benefit an express promise is made in a valid contract between others may maintain an action upon it in his own name. Heim v. Vogel, 69 Mo. 529; Fitzgerald v. Barker, 70 Mo. 685; State ex rel. v. Laclede Gas Light Co., 102 Mo. 472; Ellis v. Harrison, 104 Mo. 270; Howsmon v. Trenton Water Co., 119 Mo. 304. (2) Henry owed the respondent herein no debt, duty or obligation; consequently there was no implied promise on the part of Baird, Henry's grantee, to pay the debt to appellant. Heim v. Vogel, 69 Mo. 529; Simon v. Brown, 68 N.Y. 355; Keller v. Ashford, 133 U.S. 610. (3) The record of the several deeds from Brown to Henry, Henry to Baird, etc., mentioned in defendant's answer, did not impart notice to the payee or indorsee of the note in suit. R. S. 1889, sec. 2419; Hull v. Lyon, 27 Mo. 570; Crockett & Risque v. Maguire, 10 Mo. 34; Digman v. McCollum, 47 Mo. 372; Tydings v. Pitcher, 82 Mo. 379; Sensenderfer v. Kemp, 83 Mo. 531. (4) The extension granted to Mitchell was of the time of the payment of the notes, not of the supposed implied obligation of either Henry or Baird; this was before Mitchell had made or entered into any contract whatever in regard to any of the matters, when he was not in privity of either contract or estate with any of the other parties -- a stranger. This extension was procured by Hovey & Brown, Baird's agents, acting in his interest. He accepted the benefits, hence was not discharged thereby from any obligation or duty to any of the parties concerned. Brown is estopped because he (Hovey & Brown) procured the extension. All the authorities seem to require that the agreement for extension, in order to have effect, must be made with the principal debtor (Brown). 2 Daniel, Neg. Inst. [2 Ed.], sec. 1324, p. 306; Parsons on Bills and Notes, sec. 241; Tiedeman on Com. Paper, sec. 424, last clause, p. 706; West v. Brison, 99 Mo. 684; Bank v. Moorman, 38 Mo.App. 485; The Aultman & Taylor Co. v. Smith, 52 Mo.App. 351; Bank v. Klock, 58 Mo.App. 335.
This is an action upon three negotiable promissory notes, of the same date, executed by defendant Brown to Charles R. Lockridge, due one, two and three years after date, respectively, and to foreclose Brown's equity of redemption in certain city lots under a deed of trust in the nature of a mortgage made by Brown to one Victor B. Bell, trustee, to secure the payment of said notes, which were all indorsed in writing, and for a valuable consideration sold and delivered to plaintiff by said Lockridge before maturity in the usual course of business. The petition is in the usual form in such cases. Bell made default.
For defense Brown alleges in his answer that after the execution of said notes he sold and conveyed said lots to one John W. Henry, who in part consideration therefor assumed and agreed to pay said notes; that Henry sold and conveyed said lots to one Frank Baird, who also assumed and agreed to pay said notes; that said Baird sold and conveyed said lots to one Joseph A. Mitchell, who also assumed and agreed to pay said notes; that on the day of March, 1891, said Joseph A. Mitchell sold and conveyed said lots to one George J. Mitchell, who also assumed and promised to pay said notes. That by virtue of said conveyances aforesaid and assumptions therein contained, this defendant became a mere surety for the payment of said notes. And that by reason of the several successive transfers and assumptions, said Henry, Baird and Mitchell successively became principal debtors to the plaintiff on said notes, and that appellant by the same means became the surety of said several principal debtors, and that plaintiff for valuable consideration, at the request of said Baird and Mitchell extended the time of the payment of said notes without the knowledge or consent of appellant, by reason whereof he was discharged from liability on said notes.
Plaintiff filed reply to the answer in which he denied all new matter set up therein. The case was tried by the court, a jury being waived. The court at the instance of plaintiff made a finding of facts which is as follows: "On August 15, 1887, Charles R. Lockridge conveyed to Leon T. Brown, the defendant herein, lots 9 and 10, Mariner Place, an addition to Kansas City, Missouri, and on the same day the said Brown, to secure part of the purchase price of said lots, executed and delivered to said Lockridge a deed of trust covering the said property to secure three notes of $ 888.89 each, due respectively in one, two and three years after date, bearing interest at the rate of 8 per cent per annum, said interest being payable semiannually, that is, on the 15th day of February and August of each year. Thereafter, on September 6, 1887, the said Brown, the defendant herein, conveyed said property by warranty deed to John W. Henry. The said deed recited that the conveyance was made subject to the aforesaid deed of trust given by Brown to Lockridge, but Henry, the grantee, did not agree to assume or pay the debt therein mentioned. Afterward, on January 6, 1888, the said John W. Henry conveyed said property by warranty deed to Frank Baird, in which deed the said Baird assumed and agreed to pay the mortgage debt, heretofore mentioned in the deed of trust from Brown to Lockridge.
Thereafter on March 15, 1889, the said Frank Baird conveyed said property by warranty deed to Joseph A. Mitchell, and the said Mitchell also agreed to assume and pay said mortgage debt aforesaid. Shortly after the execution and delivery of the deed of trust from Brown to Lockridge, the said Lockridge sold and transferred the three notes therein mentioned to the plaintiff, George R. Nelson, for the consideration of the face value of said notes and interest thereon up to the day of sale thereof, which was before the first interest payment became due. The said Nelson became, and thereafter was the owner and holder of said notes, and received interest thereon on the 15th day of February, 1888, and the 15th day of August, 1888. On the 15th day of February, 1889, the said Joseph A. Mitchell entered into a contract with the said Baird for the purchase of the property aforesaid, and upon ascertaining that neither of the three notes mentioned in said deed of trust had been paid, and that the first of said notes was due, and had been due for about six months, and that the interest thereon had not been paid on February 20, 1889, called in company with the agent who was negotiating the sale to him, namely, Mr. Hovey, upon Mr. Nelson, the plaintiff herein, and stated to him that he, Mitchell, was about to purchase the property above mentioned, but that he did not desire to make such purchase unless the notes held by Nelson could be extended for some time; and also said to Mr. Nelson at the time that he expected to purchase the property, and assume the payment of these notes as part of the consideration of such purchase. Nelson replied that he would extend the notes if he, Mitchell, would pay the interest up to February 15, 1889, and thereupon it was agreed between Mitchell and Nelson that Nelson would extend the said three notes until March 15, 1892, and Nelson indorsed on said notes, and each of them, that the same was extended to March 15, 1892. At the time of said agreement, and also at the time of the payment of the interest by Mitchell to Nelson, the interest on all of said notes up to February 15, 1889, was due and payable. At the time of the extension of said notes, the property aforesaid was of sufficient value to have paid off said notes if it had then been sold. It is proper to state that the evidence shows that the defendant Brown, and the agent Hovey, who conducted the negotiations...
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