Schmelz v. Rix

• Decision Date: 20 January 1898
• Citation: 95 Va. 509,28 S.E. 890
• Court: Virginia Supreme Court
• Parties: SCHMELZ et al. v. RIX et al.

28 S.E. 890

95 Va. 509

SCHMELZ et al.

v.RIX et al.

Supreme Court of Appeals of Virginia.

Jan. 20, 1898.

Alteration op Instruments—Effect—Deed of Trust—Construction —Appeal —Jurisdictional Amount.

1. The makers of notes are not relieved of liability by an alteration made by an indorsee with their consent.

2. The makers of notes, payable to and indorsed by J., delivered them to a bank, to take up a prior note, and executed to W. a deed, "in trust to secure the payment of two promissory negotiable notes, " describing such notes. The deed required the trustee, in case of sale, to sell "for cash as to so much of the proceeds" as might be necessary to pay the expenses of the trust, "and to discharge the amount of money then payable upon said notes, " and provided that, if no default Was made, a release should be executed. Held, that the deed was a security for the debt, and not a mere indemnity to the indorser, though it stated that the sale should be made when J. should so require, and in the covenant for payment of taxes and other charges on the property it declared that such duties were imposed for the "further protection of either J. or his assigns."

3. A bill sought to enjoin the execution of a deed of trust securing notes amounting to $500, Held, that an appeal from the decree could not be dismissed on the ground that less than $500 was involved.

Appeal from circuit court of Newport News.

Bill by Rix & Bentley against Schmelz Bros, and one Wilcox, trustee, for an injunction. From a decree for complainants, Schmelz Bros, appeal. Reversed.

Thos. Tabb and Francis L. Causey, for appellants.

W. J. Nelms, Bickford & Stuart, and G. N. Wise, for appellees.

KEITH, P. This controversy originated in a bill of injunction filed by Rix & Bentley in the circuit court for the city of Newport News, to which bill Schmelz Bros, and Wilcox, trustee, were made parties defendant. The pleadings and proof show the following case:

Schmelz Bros, discounted a negotiable note for Rix & Bentley for the sum of $500, payable at their banking house in Newport News, Va., on the 1st day of November, 1893. This note was indorsed by E. W. Johnson and W. Scott Boyenton, and was duly protested for nonpayment. Rix, the managing partner of Rix & Bentley, applied for a renewal of this note, which was agreed to, and on the 13th of November he came to the banking house of Schmelz Bros, with two notes, each bearing date on that day, and indorsed by Johnson and Boyenton, one for $300, payable three months after date, and the other for $200, payable six months after date. The sole purpose of the execution of the last note was to take up the protested note of $500, upon which appeared the names of all those upon the new notes. When the notes were offered to Schmelz Bros., the teller of the bank discovered that they bore date on the 13th instead of the 1st day of November, the date of maturity of the $500 note; and after some hesitation upon the part of George A. Schmelz, who conducted the negotiation upon the part of the bank, the date of the two notes was changed from the 13th to the 1st day of November. This change, the evidence sufficiently shows, was made with the knowledge and acquiescence of Rix. To secure these notes a deed of trust was given by Rix & Bentley conveying certain personal property to Wilcox, trustee, "in trust to secure the payment of two promissory negotiable notes made by Rix & Bentley, payable to the order of E. W. Johnson at the banking house of Schmelz Bros., Newport News, Va.,...