Smithers v. Bircher

• Decision Date: 19 June 1876
• Parties: JOHN A. SMITHERS, Respondent, v. RUDOLPH BIRCHER, Appellant.
• Court: Missouri Court of Appeals

2 Mo.App. 499

JOHN A. SMITHERS, Respondent,

v.RUDOLPH BIRCHER, Appellant.

St. Louis Court of Appeals, Missouri.

Jun. 19, 1876.

1. Where a representation is made of a material fact, which was understood at the time and accepted as a warranty, this is sufficient to hold the vendor, though in good faith and innocently mistaken.

2. Where a petition sets out a representation and affirmation of certain facts, on the faith of which plaintiff received certain notes, this is sufficient to hold defendant as warrantor. No particular phraseology need be set out or proved; nor need the pleader charge in terms that defendant warranted the truth of his statements.

3. Where defendant sold certain real estate notes, indorsing them without recourse, and saying they were well secured and first liens on real estate, and the notes were accepted by plaintiff on the faith of these representations, held, that defendant was liable as warrantor.

APPEAL from St. Louis Circuit Court.

Affirmed.

Krum & Madill, for appellant, cited: David v. Park, 103 Mass. 501; Baumeister v. Alderman, 111 Mass. 261; Fisher v. Mullen, 103 Mass.; Bennett v. Judson, 21 N. Y. 238; Wakeman v. Dalley, 51 N. Y. 27; Langdon v. Green, 49 Mo. 363; Wannell v. Kim, 57 Mo. 478; Lindsay v. Davis, 30 Mo. 406; Collyer on Suretyship, 1, 2; Hammond v. Espy, 1 Wilson (Ind.), 536; Joliffe v. Collins, 21 Mo. 338; Peers v. Davis, 29 Mo. 184; McFarland v. Carver, 34 Mo. 195; Owens v. Rector, 44 Mo. 389; Langdon v. Green, 49 Mo. 363; Hazard v. Irwin, 18 Pick. 95; Wakeley v. Dalley, 51 N. Y. 27.

Glover & Shepley, for respondent, cited: Wannell v. Kim, 57 Mo. 478; Rawlins v. Wickham, L. J. 28; N. Y. Eq. 188; N. B. & Canal Co. v. Maggendie, 1 Drew. & Sm. 363; Carter et al. v. Black, 46 Mo. 384; Baker v. Scudder, 56 Mo. 272; Edwards v. Marcy, 2 Allen, 490; Cabot v. Christic, 42 Vt. 121; Frenzel v. Miller, 37 Ind. 9; Warner v. Daniels, 1 Woodb. & M. 90; McFarran v. Taylor, 3 Cranch, 281; Hamman v. Espy et al., 1 Wilson, 536; Bennett v. Judson, 21 N. Y. 238; Edw. on Bail. 201, 225, 251; Story on Bail., sec. 287.

BAKEWELL, J., delivered the opinion of the court.

The plaintiff claims in his petition that, on February 20, 1871, he owned a lot of ground in St. Louis, which defendant then proposed to buy for $90,000. The payment was to be made by assuming an indebtedness of $35,000 to become due, and then a lien upon the property sold; the remaining purchase money was to be paid partly in cash, and partly in good real estate notes held by appellant, which notes were to be equivalent to cash, and secured by deeds of trust, constituting the first liens on the real estate securing these notes. A portion of the debt due on the premises sold, and assumed by the purchaser, was payable, as to principal and interest, in gold. Upon the payment of the consideration in this manner, plaintiff was to execute a deed and pay appellant the difference between gold and currency, as each payment of the interest and principal of the debt payable in gold was made by appellant.

That plaintiff accepted defendant's proposition, and, before any conveyance was made to defendant by plaintiff, said defendant exhibited to plaintiff--as a part of said consideration, which he was to pay either in cash or notes of other parties so held by him, and the payment of which was to be secured by deeds of trust upon real estate, which deeds of trust were to be first liens or incumbrances upon the real estate securing the same--a note for $12,000, dated May 20, 1870, payable to the order of defendant five years after date, made by Stanford Graves, together with ten interest notes for $600 each, at intervals of six months from that date, and represented to plaintiff that all of said Graves' notes were secured by a first deed of trust, dated May 20, 1870, executed by said Graves upon a valuable tract of land in Jefferson county, Missouri, of greater value than the notes, which tracts of land are described as follows: (describing them) together with a steam-mill, barn, and dwelling, and other houses erected thereon, and exhibited a policy of insurance thereon, from loss or damage by fire, and, at the same time, represented that said notes so signed and secured by said deed of trust were as good as, and equivalent to, cash; that, relying upon the representations and statements of defendant, before mentioned--as to the character of the notes, and as to the notes being the first deed of trust and incumbrance on the real estate securing them, and that the real estate was of greater value than the notes, and that the insurance was an insurance upon the buildings upon the land mentioned in the deed of trust--plaintiff made no examination of the premises or of the title, but accepted the notes upon the faith of these statements and representations, and, in consideration of the transfer to him by defendant of said notes and policy of insurance as represented, accepted said notes of $12,000 as so much cash, and, in further consideration of the payment by defendant of $35,000.89 in cash, and the delivery by said defendant to plaintiff of notes of other parties, similarly secured, for the balance, said plaintiff made to defendant a deed of the Smithers' building and lot, and put him in possession, and entered into an agreement to pay the difference on the gold loan between gold and currency; that all the representations made by defendant were false; that said notes were not equal and equivalent to cash, nor was said deed of trust the first lien and incumbrance upon said real estate described therein, nor were the buildings purporting to be insured by said policy on the real estate in said deed described--but the notes at the time were worthless, and part of the interest notes have become due and remain wholly unpaid; that Graves had, prior to May 20, 1870, conveyed the real estate described in the afore-mentioned deed to Henry Dausman, trustee of John E. Ligget, to secure the payment of three principal notes--one for $1,380, at one year, one of $2,400, at two years, and one for $8,220, at three years after date--all of which remain wholly unpaid; that the real estate described in said deed of Graves to Dausman, as trustee, is worth no more than the amount of the notes secured thereby; that said notes of said Graves, payable to, and delivered by, defendant to plaintiff, are wholly unpaid; that, in August, 1872, Graves applied, in the United States District Court, at St. Louis, to be declared a bankrupt; that Graves is wholly insolvent; that said plaintiff would not have executed to defendant the deed had he known that said notes of Graves, so proposed to be given to him as part of said purchase price, were not secured by a first deed of trust upon the property in said deed described; that, before suit, he offered and tendered to defendant the note of said Graves, and deeds of trust so received from defendant, and demanded from him the amount of the consideration money for said purchase still remaining unpaid, being the sum of $12,000, and interest upon the same, at the rate of 10 per cent. per annum, from the date of said sale, which he refused, and plaintiff brings the said notes and deed of trust into court, ready to be delivered to said defendant, and asks judgment for the sum of $12,000, with interest at 10 per cent. from the day of the sale.

The answer of defendant denies every material allegation in the petition involving any statement, or agreement, or representation upon which an action by respondent could be based by reason of said Graves' deed of trust not being a first lien, or the notes secured by it not being as good as, or equivalent to, cash, or on account of the value of the premises, or any question of insurance. The answer also contains affirmative averments, by way of further defense, of which the following are the substance: That, at the time appellant agreed to purchase the respondent's premises, it was understood and agreed between them that the notes delivered respondent, in part payment of the purchase money, were to be, and in fact were, accepted by respondent, with appellant's indorsement, “without recourse,” to him thereon; and that said notes, including Graves' notes, were, in pursuance of said agreement, so indorsed by appellant; that it was also understood and agreed that, in no event, should appellant be liable on, or on account of, any of said notes, either to respondent or to any other person. The answer also further averred that the principal note and seven interest notes were not due when the suit began.

No reply was filed to this answer.

It appeared from the evidence in this case that E. G. Obear, a real estate agent, had for sale for the owner, Smithers, a lot in St. Louis, on which was erected “the Smithers' building.” About February 20, 1871, Obear effected a sale of this property to Bircher. The price demanded was $100,000; but it was, after one or two interviews between Obear and Bircher, sold for $90,000 cash. Bircher says that, at the time the terms were agreed upon, he told Obear that he should pay part in cash and part in real estate notes equivalent to cash; but Obear's recollection is that the proposition to take real estate notes was not made till after the terms had been agreed to. On March 1st the sale was consummated. Smithers says that he then first heard of the proposition to take real estate notes in part payment; but the proposition had been accepted by Obear about a week before that date. It was agreed between Obear and Bircher that the real estate notes to be taken were to be equivalent to cash. Amongst these notes was one of Stanford Graves for $12,000, with semi-annual interest notes at 10 per cent. Bircher stated to Obear that this note was a first lien on property in Jefferson county, for sufficient value to fully secure the loan, that he had seen the property, that there was a good house on it, and that the title was perfect. Several days before the consummation of the sale,...