Palmer v. Chandler

• Decision Date: 01 December 1930
• Docket Number: 28980
• Citation: 158 Miss. 604,131 So. 104
• Court: Mississippi Supreme Court
• Parties: PALMER et al. v. CHANDLER et al

131 So. 104

158 Miss. 604

PALMER et al. v. CHANDLER et al

No. 28980

Supreme Court of Mississippi

December 1, 1930

Division B

1 CONTRACTS. P.'s failure to pay C.'s debt to F. by given date, as agreed with C., held breach of contract.

Where P. agreed with C. to pay debt of C. to F. by a given date and P. does not pay said debt by said date, a contract is breached, although the debt of C. was not due to F. at that date.

2 DAMAGES. Agreement that failure to pay debt to third person would terminate contract and money paid thereon would be forfeited as liquidated damages held valid.

Where parties stipulate in a contract for the payment of a debt due by one of the parties to a third person in consideration of which agreement notes were agreed to be sold at a large discount, and the contract provided that in case of failure to make the payment as agreed the contract would be at an end and the money paid thereon would be forfeited as liquidated damages, such agreement is valid, and the payment will be treated as liquidated damages, and the contract as having no further effect.

3 MORTGAGES. Beneficiary may foreclose deed of trust on default, if assignment to third person of secured notes has been avoided and notes redelivered to original holder.

Where notes are secured by a deed of trust with provision for sale in case of default, and default is made, the beneficiary may proceed with foreclosure although there has been an agreement between the maker of the note and the original holder for assignment of the note to a third person, if, at the time of such foreclosure, the assignment has been avoided and the notes redelivered to the original holder.

HON. J. L. WILLIAMS, Chancellor.

APPEAL from chancery court of Sunflower county, HON. J.L. WILLIAMS, Chancellor.

Suit by Richard Palmer and another against W. H. Chandler and others. From an order sustaining motion to dissolve an injunction and granting an appeal to settle the principles of the case, plaintiffs appeal. Affirmed and remanded.

Judgment affirmed, and cause remanded.

Frank Everett, of Indianola, for appellants.

The assignee of a note assigned as collateral security for an indebtedness is a holder for value and a holder in due course.

Sections 2784 and 2806, Hemingway's Code of 1927; First National Bank v. McGrath, 72 So. 701.

Assignor was estopped from denying the right of assignee to extend the time of payment of these notes under his contract with Palmer because they had been transferred, assigned and delivered to assignee to be dealt with by her as holder in due course of negotiable paper and when she being such a holder extended the time of payment assignor was bound thereby.

Gidden Motor Co. et al. v. Johnson, 124 So. 367.

Oscar B. Townsend, of Indianola, for appellants.

If a party means to rescind a contract because of failure to perform it, he must give clear notice of his intention to do so, unless the contract dispenses with such notice, or unless notice becomes unnecessary by reason of conduct of parties.

Conway v. White, 9 Fed. (2 Ser.) 863.

When a serious or irreparable injury would be done to the complainant by a dissolution of the injunction, while that to the defendant by its retention would be slight and easily recompensed, the injunction should be retained until final hearing.

Jones v. Brandon, 60 Miss. 556.

There was a very sharp and close conflict in the testimony, and no question of law arose which authorized the chancellor to dissolve the injunction before final hearing on the motion to dissolve, alone, where the proof was close and conflicting on the question of notice, which was the most important question in the case.

Kitzinger v. Cheairs, 112 So. 883; Jennings v. Shapira, 131 Miss. 596, 95 So. 305.

Moody & Johnson, of Indianola, for appellees.

The pledgee of the notes is a holder for value to the extent of her lien. No shadow is cast on her rights as a pledgee of the notes. As such she could use reasonable and ordinary diligence for their collection, and when collected, reimburse herself to the extent of her lien upon them, and pay over the surplus to the pledgor.

Boswell v. Thigpen, 75 Miss. 308; Section 2781, Hemingway's Code of 1927; Eckert v. Searcy et al., 114 Miss. 150, 74 So. 818.

A promise to perform on or before a day named is a promise to perform on the day named; the promisor having the whole of such day, but also having an option to perform before such time. A contract to complete a work by or before a particular time, as for example, by or before the month of November, means that it shall be done before that time.

13 C. J., page 584; Wilson v. Bicknell, 49 N.E. 113; Wall v. Simpson, 22 Am. Dec. 72.

In equity as a rule time will not be regarded as of the essence of the contract unless it affirmatively appears that the parties regarded time as an essential element of their bargain. But, although time is not made of the essence of the contract by express stipulation, it may nevertheless be held to have been so intended from the nature of the contract.

13 C. J., page 686, section 783c.

If time is not of the essence of this contract, then it should have been performed within a reasonable time. What is a reasonable time for the performance of a contract depends on the nature of the contract and the particular circumstances.

13 C. J., page 685, section 782; Tyler v. McCardie, 9 S. & M. 230.

OPINION

Ethridge, P. J.

This is an appeal from an order sustaining motion to dissolve an injunction and granting an appeal to settle the principles of the case.

Richard Palmer and Leonidas De Laine filed a bill against W. H Chandler, Mrs. Kate Fernandez, and Gordon L. Lyon, trustee in a deed of trust given by De Laine to W. H. Chandler and wife to secure the purchase money for certain lands described in the bill. It was alleged that on or about the 20th day of March, 1929, W. H. Chandler and wife, Maria G. Chandler, by warranty deed conveyed to De Laine the said lands for a consideration of three hundred dollars cash and the execution of certain notes described in the bill (two of which were for five hundred twenty-five dollars each), and the assumption by De Laine of certain indebtedness to a building and loan association. One of the two notes for five hundred twenty-five dollars each involved in this litigation was payable November 1, 1929, and the other November 1, 1930, and the building and loan installments were payable monthly. Mrs. Maria Chandler sold to W. H. Chandler her interest in the notes of five hundred twenty-five dollars each. Some time after this transaction, W. H. Chandler, being in need of funds, applied to Mrs. Fernandez for a loan of six hundred sixty-five dollars, which was obtained, and the two notes for five hundred twenty-five dollars each were assigned as collateral security to secure the said note of W. H. Chandler to Mrs. Fernandez. After giving these notes to Mrs. Fernandez, W. H. Chandler entered into a contract with Richard Palmer, by which it was contracted and agreed that Palmer would pay Chandler's indebtedness to Mrs. Fernandez on or before the 9th day of July, 1929, and as a consideration for which agreement Chandler assigned to Palmer, or agreed to transfer when the said debt was paid, the two notes for five hundred...