Payne v. King

• Citation: 38 Mo. 502
• Court: United States State Supreme Court of Missouri
• Decision Date: 31 October 1866
• Parties: BENJAMIN H. PAYNE, Appellant, v. ANDERW KING, GARNISHEE, &c., Respondent.

38 Mo. 502

BENJAMIN H. PAYNE, Appellant,

v.ANDERW KING, GARNISHEE, &c., Respondent.

Supreme Court of Missouri.

October Term, 1866.

Appeal from St. Charles Circuit Court.

Payne, having a judgment (by confession) against Gray, had an execution issued thereon, and garnished the respondent, King, who was trustee in a deed of trust, executed by said Gray, to secure the payment of two notes to Mrs. Julia A. Eaton, guardian of James W. Eaton and David H. Eaton; both of said notes were of the same date, were for the same amount, and due at the same time--one payable to Julia A. Eaton, guardian of James W. Eaton, and the other to Julia A. Eaton, guardian of David H. Eaton. The following is a copy of one of the notes:

“$1876.52. One year after date, I promise to pay to the order of Julia A. Eaton, guardian of James W. Eaton, minor heir of William P. Eaton, deceased, the sum of eighteen hundred and seventy-six dollars and fifty-two cents, bearing ten per cent. interest per annum from date, negotiable and payable without defalcation for value received. Witness my hand this 27th day of November, 1856. James S. M. Gray.”

King, as trustee, sold the lands on the 3d day of June, 1865, for the sum of $8,655.

The two notes, at the date of the sale, June 3, 1865, including expenses of foreclosing the deed of trust and calculating the interest without rents, or at simple interest, amounted to $7,109.34, which amount deducted from amount of sale of the land, $8,665, left $1,555.66 in the hands of the trustee. Calculating the interest on the notes at compound interest, it made $1,151.22 more than at simple interest; and the interest compounded on said notes, left in the trustee's hands after paying the notes $44.44, which amount the garnishee in his answer admitted, and for which judgment was rendered by the court below.

The defence set up in the answer was that the notes being payable to a guardian, in law they drew compound interest, and Gray knew it and promised to pay it; and that it was not necessary for it to be stated in the notes, that the interest, if not annually paid, would become a part of the principal and draw like interest as the note.

Appellant took issue on the answer.

On the trial, respondent offered James W. Eaton as a witness, to whose introduction appellant objected, because this suit was defended for his immediate benefit, he being one of the beneficiaries in said deed of trust and owner of one of the notes. The court admitted the witness, who testified and stated that on his arriving at age, he had received and taken from his mother the note payable to her as his guardian, and since then said note belonged to him and was his property; and that after he owned said note he had a conversation with Gray in 1861, and another in the spring of 1865, and in both he admitted that the notes were drawing compound interest.

James W. Eaton was 21 years old on the 26th day of September, 1860, and David H. Eaton was 21 years old on the 12th of January, 1863.

Respondent here closed; and plaintiff introduced J. S. M. Gray, the maker of said notes, who stated that he never contracted to pay compound interest; that compound interest never was mentioned to him by the Eatons until the spring of 1865, just before James W. Eaton went to Nebraska; and again, about the time of the sale, the respondent King read to him from the statutes and said the law allowed compound interest to the Eatons, but neither he nor any of the Eatons ever pretended to claim it of him as a matter of agreement.

The court rendered judgment against respondent for $44.44, which was the amount due at day of sale, after paying the two notes, calculating compound interest thereou.

Calculating the notes at simple interest, the amount in the trustees hands after paying the notes was $1.555.66

Wm. A. Alexan, for appellant.

If James W. Eaton was a competent witness, the whole of his evidence was incompetent, because, 1st, it consisted of statements of Gray, who was a competent witness; 2d, his statements changed and altered the written agreement as embodied in the notes. The notes cannot be varied by parol evidence of contemporaneous or subsequent oral agreement; in other words, parol evidence is not admissible to contradict, enlarge, vary, or add to, a written agreement-- Woodward v. Thornton, 8 Mo. 161; Jones v. Jeffries, 17 Mo. 577; 29 Mo. 187; Smith, Adm'r, v. Thomas, 29 Mo. 309.

Sec. 30, R. C. 1855, p. 827, is directory. It authorizes the guardian to loan out the money of his ward at the highest rate of interest that can be obtained, and take notes binding the obligors to pay the interest annually; and if not paid at the end of the year, the interest to bear interest also. If the guardian chooses to retain his ward's money in his own hands, the interest may be calculated on him with annual rests. If he does not choose to retain it, and cannot loan it out on interest, in that case he cannot be charged any interest. If he puts out the money without any contract as to the rate of interest, it will draw simple interest at six per cent. In cases of failure of duty, mismanagement, or fraud, courts are authorized to require compound interest of the guardian but in no case can a guardian require his debtor to pay compound interest except by such debtor's own agreement or contract in writing.

If these notes drew compound interest, it was because the money they call for was the property of minors. James W. Eaton was 21 years old on the 26th day of September, 1860, and David H. Eaton was 21 on the 12th day of January, 1863. The notes, if they drew compound interest at all, did not draw it after the minors arrived at majority, when the relation of guardian and ward ceased--Clay v. Clay, 3 Metc. (Ky.) 548; Armstrong v. Walkup, 12 Grat. (Va.) 608.

The title to the notes and the money they called for was vested in Julia Eaton. The word guardian in said notes did not change their legal effect; the notes would be the same in law without as with the word “guardian” therein. The word “guardian” is merely descriptio personæ. These notes, in fact and in law, were and are the same as if the words “guardian of James W. and David H. Eaton” had not appeared in them; and compound interest can no more be collected on them than it could if the words “guardian of James W. and David H. Eaton” had been omitted and not inserted therein. They were Mrs. Julia Eaton's property; she could sell or transfer them. The same interest would be collectable thereon as if the notes had been payable to Mrs. Julia Eaton without the descriptive words “guardian,” &c.--Jeffries v. McLean's Exec'r, 12 Mo. 538; Thornton v. Rankin, 19 Mo. 193, and cases cited.

E. A. Lewis, for respondent.

James W. Eaton was a competent witness for respondent.--Bowman v. Stiles, 34 Mo. 141, 146; McCullough v. McCullough, 31 Mo. 226; Perry v. Maguire, 31 Mo. 287.

The court correctly declared the law arising upon the facts of the case--R. C. 1855, p. 827, § 30. The obvious intent of the statute is that the debt shall bear compound interest, and this without reference to the security taken, whether by note or otherwise, or any stipulations therein contained. That this...