Squier v. Evans

• Citation: 30 S.W. 143,127 Mo. 514
• Parties: Squier, Appellant, v. Evans et al
• Decision Date: 18 March 1895
• Court: United States State Supreme Court of Missouri

30 S.W. 143

127 Mo. 514

Squier, Appellant, v. Evans et al

Supreme Court of Missouri, Second Division

March 18, 1895

Appeal from Jackson Circuit Court. -- Hon. J. H. Slover, Judge.

Reversed and remanded.

Pratt Ferry & Hagerman for appellant.

The evidence that Squier refused to bind himself in writing, but verbally agreed with defendants, before the execution of the written guaranty, to stand his proportion of the loss, was inadmissible, and the plaintiff is entitled here to the judgment which he should have been given below. The rule that parol evidence can not vary the terms of a written contract is well settled, and has recently been considered at large and enforced by this court. State ex rel. v. Hoshaw, 98 Mo. 358; Morgan v. Porter, 103 Mo. 135; Tracy v. Iron Works, 104 Mo. 193; Boyd v. Paul, 28 S.W. 171; see, also, Wislizenus v. O'Fallon, 91 Mo. 184; Borden v. Peary, 20 Ark. 293; Brown v Wiley, 20 How. (U.S.) 442; Joyner v. Turner, 19 Ark. 690; Eaton v. Emerson, 14 Me. 335; Barry v Morse, 3 N.H. 132.

Gage, Ladd & Small for respondent.

Parol evidence was competent to show the whole or the true consideration upon which the defendants signed the agreement of guaranty or surety sued on. It is an elementary principle of law that the consideration expressed in a deed or other instrument may be explained or contradicted by parol testimony, and the true consideration shown, and that the consideration clause in any such deed or agreement occupies no higher plane than an ordinary receipt for money. Aull Savings Bank v. Aull, 80 Mo. 201; Baile v. Ins. Co., 73 Mo. 386, 387; Hollocher v. Hollocher, 62 Mo. 267; McConnell v. Brayner, 63 Mo. 464, 465; Fontaine v. Sav. Inst., 57 Mo. 561; Altringer v. Capeheart, 68 Mo. 441; Brandt on Suretyship and Guaranty [1 Ed.], sec. 352.

OPINION

Burgess, J.

On March 8, 1891, the Kansas City Agricultural and Horticultural Fair Association, a corporation, was indebted in various amounts aggregating about the sum of $ 53,000. The company issued $ 75,000 of bonds, and executed a mortgage on all of its property to secure their payment. On March 8, 1891, plaintiff loaned the company the sum of $ 53,000 and took its note therefor, and to secure its payment the company pledged to plaintiff $ 60,000 in its bonds, which it had theretofore issued, and, with the money borrowed, paid all the debts of the corporation, including some of its notes for $ 20,000, upon which plaintiff and some of the other directors of the company were indorsers. Plaintiff was a stockholder and director for several years, but resigned as director some time after the indorsement by him of the notes given by the company for said $ 20,000. Defendants McClintock, Stewart and Evans, were not on any of the paper of the corporation.

At the time plaintiff loaned the $ 53,000 to the company, in addition to the $ 60,000 in bonds as collateral, the defendants executed to him the following guaranty:

"Whereas, at our request, J. J. Squier, of Kansas City, Missouri, has loaned the Kansas City Agricultural and Horticultural Fair Association the sum of $ 53,000, for which he has taken the note of said association, due June 8, 1891, bearing interest from its date, to wit, March 8, 1891, at the rate of eight per cent. per annum, and which said note is secured by a pledge of $ 60,000 of the bonds of said association heretofore issued, and which said bonds are secured by a deed of trust on all the property of said association; and, whereas, according to the agreement under which said bonds are pledged with said Squier, he has power, under certain circumstances, to either sell said bonds or foreclose, or sell out under the deed of trust securing the same, in order to raise the money to pay his said note of $ 53,000 and interest, in case default is made in payment of the same when due.

"Now, therefore, know all men, that we, the undersigned, in consideration of the premises, and in pursuance of the promises made by us heretofore to said Squier, in order to induce him to make said loan, hereby bind ourselves, jointly and severally, unto the said J. J. Squier and his assigns, as follows:

"That if said note of $ 53,000 is not paid when due, and if the same or any part thereof is renewed and the same or any part thereof so renewed shall not be paid when thereafter due pursuant to such renewal, and said Squier (or his assigns) sells or causes to be sold said bonds, under said pledge, to pay said note and interest, and at such sale said bonds do not sell for enough to pay said note and interest in full, that they, the undersigned, will pay the said Squier, or his assigns, the balance that may be due on said note, after the application of the proceeds of such sale toward the payment of the same. Or, if said Squier (or his assigns) sells out or forecloses under said deed of trust, and at such sale or foreclosure, the property of the corporation covered by said deed of trust does not bring enough net proceeds to pay off said note and interest, in full, they, the undersigned, will pay the said Squier, or his assigns, the balance that may be due on said note, after the application of the proceeds of such sale or foreclosure toward the payment of the same.

"In witness whereof, we have hereunto set our hands and seals this eleventh day of March, 1891.

"J. C. Evans,

[Seal]

"Geo. Sheidley,

[Seal]

"Ed. H. Webster,

[Seal]

"Geo. Holmes,

[Seal]

"Patterson Stewart,

[Seal]

"W. H. Town,

[Seal]

"James H. Oglebay,

[Seal]

"Robt. McClintock,

[Seal]

"Milton Welsh,

[Seal]

"Bernard Corrigan,

[Seal]

"Fred. S. Doggett.

[Seal]"

The note to plaintiff was not paid at maturity, and the $ 60,000 in bonds, held by him as collateral, were sold and from said sale there was realized, after paying costs, $ 12,938, which was credited on said note. Plaintiff then brought this suit against defendants on the guaranty above set forth to recover the difference between what the bonds sold for and the amount of his note, against the fair association.

The defendants set up in their answer that they are ready and willing to pay eleven twelfths (11-12) of this balance, but that they are unwilling to pay the other one-twelfth (1-12), for the reason that the plaintiff was equally liable with defendants for a portion of the indebtedness, and at the time the guaranty was made and the money loaned, agreed to bear his share, one twelfth of any deficiency that might remain after the sale of the bonds of the corporation, and that it was in pursuance of this agreement and upon this consideration that they executed the guaranty sued on.

At a trial had, judgment was rendered in favor of plaintiff for eleven twelfths of the amount remaining due on the note, from which judgment plaintiff appealed.

During the trial, defendants were permitted to prove, over the objection and exception of plaintiff, that prior to the execution of the contract, and during the negotiations plaintiff refused to sign any writing, but verbally agreed with the defendants that, if there was any deficiency on the note after applying...