Security Savings Bank v. Kellems

• Decision Date: 03 October 1928
• Docket Number: No. 26835.,26835.
• Citation: 9 S.W.2d 967
• Parties: SECURITY SAVINGS BANK, Appellant, v. MARY KELLEMS.
• Court: Missouri Supreme Court

9 S.W.2d 967

SECURITY SAVINGS BANK, Appellant, v. MARY KELLEMS.

No. 26835.

Supreme Court of Missouri. Division One.

October 3, 1928.

Appeal from Scott Circuit Court. — Hon. Frank Kelly, Judge.

AFFIRMED.

Ray B. Lucas for appellant.

(1) Fraud cannot be predicated upon misrepresentations as to matters of law, especially when the representations are made by the avowed agent of the adverse party. 12 R.C.L. 295; 26 C.J. 1141, par. 59; Easton-Taylor Trust Co. v. Loker, 205 S.W. 87; Champion Funding Co. v. Heskett, 125 Mo. App. 516; 13 C.J. 383. (2) It is not duress to institute or threaten to institute civil suit. 9 R.C.L. 722, pars. 11, 12; Chaflin v. McDonough, 33 Mo. 412; Dustin v. Farrelly, 81 Mo. App. 380; Reichle v. Bentele, 97 Mo. App. 52; Dausch v. Crane, 109 Mo. 323. (3) The statements alleged to be made by the attorney representing appellant are not such as will constitute an action for fraud and deceit; consequently they will not support a defense to a suit brought on the notes signed at the time the statements were made. Davit v. Ins. Co., 81 Mo. App. 264. (4) When a person is sued or threatened with a suit and signs a note to avoid the prosecution of the case actually pending or threatened, this does not amount to duress, and is no defense to an action on the note. Morgan v. Joy, 121 Mo. 683; Dausch v. Crane, 109 Mo. 332; Reichle v. Bentele, 97 Mo. App. 52. (5) A threatened lawsuit, civil in character, is not duress and will not avoid a contract entered into to avoid such suit. Schelp v. Nichols, 263 S.W. 1021; McCoy v. Construction Co., 216 S.W. 770; Wood v. Telephone Co., 223 Mo. 537; 9 Cyc. 448; 13 C.J. 396, 399; Chaflin v. McDonough, 33 Mo. 412; 9 R.C.L. 772, par. 11. (6) Since respondent wants the notes cancelled as to her, the appellate court should review the testimony; and since a demurrer was presented at the close of the evidence and overruled and exception saved, the ruling is before the appellate court for review, and the evidence should be reviewed to determine whether the demurrer had been properly refused. Wilson v. Envelope Co., 190 S.W. 980; Hanenkratt v. Brougham, 164 Mo. App. 108; Peoples Nat. Bank v. Central Trust Co., 179 Mo. 648.

R. F. Baynes for respondent.

(1) Appellant is presumed to have withdrawn its demurrer by filing a reply before the demurrer was passed upon, and the trial court was without authority to carry the demurrer with the case. Sweeney v. Willing, 6 Mo. 174; Dickey v. Malechie, 6 Mo. 177; Finney v. Randolph, 68 Mo. App. 557; State ex rel. v. Bright, 224 Mo. 514. (2) The evidence is amply sufficient to constitute fraud and duress, and the court properly refused appellant's declaration of law in the nature of a demurrer to the evidence; the finding and judgment was for the right party. Fout v. Giraldin, 64 Mo. App. 165; Wells v. Adams, 88 Mo. App. 215; Link v. Real Estate Co., 182 Mo. App. 531; Brown v. Worthington, 162 Mo. App. 508; Trust Co. v. Begley 252 S.W. 77. (3) A judgment of the trial chancellor will not be disturbed if it can be upheld on any reasonable theory, where no declarations of law are asked. None were asked in this case. Only demurrer to evidence. Burbach v. Musick, 256 S.W. 116. And on question of fact, heed should be given to views of the trial chancellor. Ryan v. Strop, 253 Mo. 1.

GENTRY, J.

This case comes to this court on a division of opinions by the Springfield Court of Appeals; the majority opinion by Judge BAILEY affirming the judgment of the circuit court, while the dissenting opinion by Judge BRADLEY holds that the cause should be reversed and that the majority opinion is in conflict with the rule laid down by this court.

The suit is by attachment on two promissory notes signed by the defendant and her husband G.B. Kellems, both dated October 21, 1922; the action is in two counts. A plea in abatement was filed by the defendant, Mary Kellems; also an answer by her in which she admitted the execution of both notes, but charged fraud and duress in procuring her signature thereto; then a prayer that the two notes be cancelled and declared null and void as to her. After the filing of such answer, plaintiff filed a demurrer, and then filed a reply in the nature of a general denial. A trial before the court resulted in judgment for defendant Mary Kellems, and judgment for plaintiff on both notes against the defendant G.B. Kellems. From this judgment, plaintiff appealed.

One of the notes in question was executed by the defendant and her husband in favor of plaintiff bank for $455.74, and the other note was executed by them in favor of one W.H. Adams for $338.81 and assigned by Adams to plaintiff. Each note bore eight per cent interest, and had a provision for ten per cent attorney's fee in the event the note was not paid when due.

Plaintiff's evidence tended to show that plaintiff was a banking corporation located at Chaffee, Missouri, and that it held two notes that were signed by the defendant G.B. Kellems prior to the date that the two notes in question were executed. Plaintiff employed an attorney, one Lilles, to attend to the collection of the two notes signed by G.D. Kellems. Lilles went to Cairo, Illinois, and secured from defendant and her husband the two notes here sued on, and also a deed of trust to secure the same on certain vacant property owned by them and known as the "Weiner lots," located in Chaffee, Scott County, Missouri. Afterwards the deed of trust on the Weiner lots was foreclosed, and a credit was indorsed on the back of the first note of $45.74 and on the back of the second note of $41.

The defendant's evidence tended to show that the plaintiff's attorney had written letters to her at Cairo, where she and her husband were temporarily living, threatening to attach her home place, which is located in Chaffee, Missouri, to force the payment of the two notes signed by her husband. The Enterprise Mill Company of Chaffee did bring such an attachment suit and the same was pending at the time of the execution of the two notes here sued on. On the afternoon that Lilles visited Cairo, Mrs. Kellems met him on the street, and told him that she had just started to get a lawyer to defend her; when Lilles said, "I want to go to the house and talk to you." Accordingly, the two turned and went back to the home of Mrs. Kellems and had a talk regarding the two notes due by her husband. In that conversation Lilles said, "I am over here to attach your property in Chaffee;" whereupon she began to cry. She said, "It looks like it's worrisome enough to be bothered with a drunk man, let alone all the lawyers in the country; if you will leave me alone — Mr. Kellems don't own this property, it's mine — I will give you my interest in them two lots if you will leave me alone." Lilles replied that that would be all right and she gave him the deed to the vacant lots, known as the Weiner lots. Lilles took the deed in order to get the description of the property and the next morning between seven and eight o'clock he came to Mrs. Kellems' bedroom with a deed of trust on the Weiner lots, given to secure the payment of two notes, the notes in question. At that time Mrs. Kellems said, "Look here, Mr. Lilles, I want you to understand I will not sign nothing in any way that will touch my home, for I have a crippled child, and that home is all I have got and I won't sign nothing you can touch my home on." Lilles said, "Absolutely not, this is just on the Weiner lots. You read it over and see." Mrs. Kellems did read over the description in the deed of trust, and saw that the Weiner lots were all the property described. When Lilles handed her the notes she said, "No, they have been trying to get me on a note to renew this note for a year and I won't sign it." Whereupon, Lilles said, "They can't touch your home with these notes; all the lawyers between you and hell can't touch your home. Them notes is just to make this deed a trust deed; without them the deed of trust is no good." Mrs. Kellems again told him that she would sign nothing that would touch her home; that she was not under any obligation to pay her husband's debts. Lilles again assured her that by signing the notes she would not be liable, only to the extent of her interest in the Weiner lots, and that they absolutely could not touch her home with these notes. Mrs. Kellems again told him she would not be responsible for the notes; and Lilles assured her that it would not put her under any obligation whatever, any responsibility; that the notes would not bother her home. Thereupon, Mrs. Lilles signed the two notes. Later on she sent her husband down to see Lilles before he took the boat back to Missouri and to ask what was included in this matter, and Lilles assured him that nothing but the Weiner lots were included.

In rebuttal, Mr. Lilles testified for plaintiff — appellant — that he lived in Chaffee, Missouri, had been a practicing lawyer for thirty years, knew the defendant G.B. Kellems and saw him shortly before October 21, 1922, in Cairo, Illinois. The occasion for his going there was to collect two notes belonging to plaintiff and signed by defendant G.B. Kellems. He called at Kellems' place of business and Kellems suggested the giving of a deed of trust on the Weiner lots. Accordingly, Lilles telephoned the cashier of appellant and he said that that would be satisfactory. In the conversation on that day Kellems told Lilles that his wife would not sign a deed of trust on her home place, so Lilles came back to Scott County, where he filed two attachment suits in the circuit court, one in the name of W.H. Adams and the other in the name of appellant, the defendant in both cases being G.B. Kellems and a man by the name of Stubbs. Lilles testified that he took the summons to Cairo to see personally that it was served promptly, and that was the occasion for his going there the second time, on October 21, 1922, though he did not have the summons served and never went to see the...