Regan v. Williams

• Decision Date: 21 January 1905
• Citation: 84 S.W. 959,185 Mo. 620
• Parties: REGAN, Appellant, v. WILLIAMS
• Court: Missouri Supreme Court

84 S.W. 959

185 Mo. 620

REGAN, Appellant, v. WILLIAMS

Supreme Court of Missouri

January 21, 1905

Transferred from St. Louis Court of Appeals.

Affirmed.

McReynolds & Halliburton for appellant.

(1) (a) Where a mortgagor sells the mortgaged property, and the grantee assumes and agrees to pay the mortgage debt, the grantee becomes the principal debtor and the grantor becomes the surety with all the consequences flowing from the relationship of surety. Wayman v. Jones, 58 Mo.App 313; Bank v. Klock, 58 Mo.App. 335; Bank v Wood, 56 Mo.App. 214; Nelson v. Brown, 140 Mo 589; Pratt v. Conway, 148 Mo. 291. (b) And the mortgagee is bound, after he receives notice of grantee's assumption of the debt, to recognize the relation of principal and surety between grantor and grantee. Nelson v. Brown, 140 Mo. 589; Wayman v. Jones, 58 Mo.App. 313. This proposition is necessarily true, for the reason that if the mortgagee should release the grantee, or the property, or grant a valid extension of time of payment, without the mortgagor's consent, these acts or either of them would operate to discharge the mortgagor. Nelson v. Brown, 140 Mo. 589. And these same rules apply to subsequent grantees of the original grantee. Nelson v. Brown, 140 Mo. 580; Cockfield v. Farley, 21 La. Ann. 521; Blackburn University v. Weer, 21 Ill.App. 29; Levy v. Police Jury, 24 La. Ann. 292; Hollister v. York, 59 Vt. 1. (2) By the transactions in this case defendant Williams, his grantee, the Scott Investment Company, and its grantee, Carey, all became bound for the payment of the note sued on. And each and all could have been sued on said note and forced to pay the same. So a payment by either one of the three would interrupt the running of the statute of limitations as to the others. Craig v. Callaway, 12 Mo. 94; McClurg v. Howard, 45 Mo. 365; Block v. Dorman, 51 Mo. 31; Lawrence Co. v. Dunkel, 35 Mo. 295; Bennett v. McCause, 65 Mo. 194; Callaway Co. v. Craig, 9 Mo. 846; Zervis v. Unnerstall, 29 Mo.App. 475; Harris v. Odeal, 39 Mo.App. 270; Kemble v. Logan, 79 Mo.App. 253; Cockfield v. Farley, 21 La. Ann. 521; Burgur v. Durbin, 22 Barb. 68; Sutherlin v. Roberts, 4 Or. 378; Town of Huntington v. Chesmore, 60 Vt. 566; Blackburn University v. Weer, 21 Ill.App. 29; Hollister v. York, 59 Vt. 1; Collier v. His Creditors, 12 Rob. (La.) 398; Levy v. Police Jury, 24 La. Ann. 292; Wyatt v. Hodson, 8 Bing. 309; Hunt v. Bridgham, 2 Pick. 581 (13 Am. Dec. 458); Sigourney v. Drury, 14 Pick. 353; Zent v. Hart, 8 Pa. St. 337; Johnson v. Smith, 13 Vt. 353; Glick v. Crist, 37 Ohio St. 388; Schindel v. Gates, 24 Am. Rep. 526 (26 Md. 604); Woonsocket Sav. Ins. v. Ballou, 16 R. I. 351 (1 L. R. A. 555). (3) It was not necessary for Williams to make the payment himself. If made by any one having authority to pay or bound to pay, or out of the proceeds of property pledged as collateral, or mortgaged to secure the debt, with authority in the mortgagee or trustee to sell and apply on the debt, such payments, if made before the statute of limitations has run or while the debt is alive, will interrupt the running of the statute, or rather give it a new starting point, and such payments are binding on Williams, the original debtor. Bender v. Markle, 37 Mo.App. 234; Harris v. Odeal, 39 Mo.App. 270; Bank v. Rowland, 1 Col. App. 468; Cockfield v. Farley, 21 La. Ann. 521; Levy v. Police Jury, 24 La. Ann. 292; Hollister v. York, 59 Vt. 1; Town of Huntington v. Chesmore, 60 Vt. 566; Sutherlin v. Roberts, 4 Or. 378; Blackburn University v. Weer, 21 Ill.App. 29; Randolph, Commercial Paper, par. 1629, p. 727; Burleigh v. Scott, 8 B. & C. 36; Pease v. Hurst, 10 B. & C. 122; Bealy v. Greensdale, 2 Cromp & J. 61; Buffington v. Chase, 152 Mass. 534 (10 L. R. A. 123); Porter v. Blood, 5 Pick. 54; Whipple v. Blackington, 97 Mass. 476; Butters v. Price, 115 Mass. 578; Brown v. Tyler, 8 Gray 135; Hancock v. Ins. Co., 114 Mass. 155; Haven v. Hathaway, 20 Me. 345. (4) The payment of interest by the principal in a note will prevent the running of the statute of limitations as to a surety. A payment by one of two makers of a note is binding on the other, the payment by one partner after dissolution of the partnership prevents the running of the statute as to other partner and the payment by any one bound to pay interrupts the running of the statute as to all others bound to pay, provided such payments are made before the debt is barred by the statute. Authorities cited under points 2 and 3; Sutherlin v. Roberts, 4 Or. 378. (5) The conveyance of the land by Williams and the assumptions and agreements by the different grantees to assume and pay the note constituted them agents of Williams with authority and directions from him to make the payments. Burger v. Durbin, 22 Barb. 68; Town of Huntington v. Chesmore, 60 Vt. 566; Blackburn University v. Weer, 21 Ill.App. 29; Collier v. Creditors, 12 Rob. (La.) 398; Bank v. Rowland, 1 Colo.App. 468; Whipple v. Blackington, 97 Mass. 476; Bender v. Markle, 37 Mo.App. 234; Porter v. Blood, 5 Pick. 53; Taylor v. Foster, 132 Mass. 30; Somberger v. Lee, 14 Neb. 193; Haven v. Hathaway, 20 Me. 345; Levy v. Police Jury, 24 La. Ann. 292; Cockfield v. Farley, 21 La. Ann. 521; Hollister v. York, 59 Vt. 1. (6) (a) All the authorities agree that where a payment is made by the agent of the debtor, it is binding on him. All agree that where a debtor puts up collateral as a pledge with authority to sell and apply the proceeds, such payment is binding; or where he turns over a note as collateral with authority to collect and apply on the note, such payment is binding on the debtor; that any payment by the authority or direction of the debtor is binding on him and will interrupt the running of the statute of limitations. By the deed of trust in this case Williams specially authorized and directed Goffe, the trustee, to sell the land and pay the net proceeds on the note under certain conditions. Goffe in 1894 complied with the authority and directions of Williams, did what Williams specially directed him to do, and, as a result, paid over $ 1,900 on the note for Williams' benefit, the note at that time being a live and subsisting obligation against Williams, and that payment was a payment by Williams by his agent and interrupted the running of the statute of limitations. Bender v. Markle, 37 Mo.App. 234; Cockfield v. Farley, 21 La. Ann. 521; Burger v. Durbin, 22 Barb. 68; Town of Huntington v. Chesmore, 60 Vt. 566; Blackburn University v. Weer, 21 Ill.App. 29; Hollister v. York, 59 Vt. 1. (b) The trustee, Goffe, was Williams' agent for the purpose of selling the land and paying the proceeds on the note, and would have been liable to Williams if he had failed to make the payment on the note. Sherwood v. Saxton, 63 Mo. 78. (7) The payment of interest on a bond by the principal obligor interrupts the running of the statutes of limitations as to the surety thereon. Lawrence Co. v. Dunkle, 35 Mo. 395; Whittaker v. Rice, 9 Minn. 13; Ellicott v. Nichols (7 Gill 85), 48 Am. Dec. 546; Schindell v. Gates, 46 Md. 604; Hunt v. Bridgman, 19 Mass. 581; Sigourney v. Drury, 31 Mass. 387; Zent's Excrs. v. Hearst, 8 Pa. 337; Perkins v. Barstowe, 6 R. I. 505; Dickson v. Gourdin, 26 S.C. 391; Glasscock v. Hamilton, 62 Tex. 143.

Edward J. White for respondent.

That the partial payments by the defendant's grantees should toll the statute, as to him, is counter to both reason and authority. All the cases in this State hold that the legal status of such grantees, after assumption of the mortgage debt by them, was that of principal debtor, as to such debt. Nelson v. Brown, 140 Mo. 580; Pratt v Conway, 148 Mo. 291; Wayman v. Jones, 58 Mo.App. 313. It is elementary that the partial payment, to toll the statute, must be one that constitutes a "recognition of the debt and a willingness to pay it." 1 Wood, Lim., sec. 99, p. 278. When making part payments on their own debt, the defendant's grantees certainly could not, by the wildest judicial construction, be held to recognize the debt and signify a willingness on the defendant's part to pay it. They made payments on their own debt as such, and not on any debt of the defendant. A principal on a note, in making payment, could not be said to be paying the note for his surety or guarantor, but for himself and to hold that he was doing such act for another would be doing violence to his contract and the reasonable inference that would attach to one's actions in the ordinary affairs of life. The grantees had agreed to pay the debt, as their debt, because they owed it; Williams was only liable upon the contingency of their failure to pay, and being only secondarily liable, they were not paying his debt but their own, in making payments, and could not, without authority from him, even if the debt had been his primarily instead of theirs, bind him by any express or implied promise to pay the balance remaining after the application of the credits made by them. To imply an agency to make such payments, as against the defendants, on the part of his grantees, instead of to hold that they did what they were legally liable to do, would be not only creating an agency where none in fact existed, but affixing an unwarranted and unreasonable effect to an ordinary and reasonable transaction. The obligation of the grantees of the debt was separate and distinct from that of the defendant, and they made such payments upon their own obligation and not that of the defendant, which only matured, on their failure to meet theirs. Suppose, instead of only paying a part of the debt, they had satisfied it in full, would it be contended that they did so for the defendant? If they had continued doing as they commenced to do, there would have been no liability on defendant's part, as they were satisfying the debt as...