Steele v. Johnson

• Decision Date: 06 August 1902
• Citation: 69 S.W. 1065,96 Mo. App. 147
• Court: Missouri Court of Appeals
• Parties: STEELE et al. v. JOHNSON.<SMALL><SUP>1</SUP></SMALL>

69 S.W. 1065

96 Mo. App. 147

STEELE et al. v. JOHNSON.¹

Court of Appeals at St. Louis, Missouri.

August 6, 1902.

MORTGAGE — EXTENSION — RELEASE OF SURETY — ASSUMPTION OF MORTGAGE — CONSIDERATION — APPEAL — ESTOPPEL — SPECIAL FINDINGS.

1. In a suit against the maker of a note secured by mortgage on land, it appeared that the land had been transferred later by deed wherein the grantee assumed said debt, and that the holder of the note had made a contract with the grantee extending the time of the loan for a fixed period without consent of the original debtor. Held, that the latter was discharged of liability on the note. Pratt v. Conway, 49 S. W. 1028, 148 Mo. 291, 71 Am. St. Rep. 602, followed.

2. A surety is not discharged upon mere indulgence to the debtor by the creditor, or even by a barren promise of the latter to extend time; but where the creditor accepts new interest notes, for fixed periods, on a mutual agreement to extend the loan accordingly, an obligation arises which will release a nonassenting surety.

3. Where one purchases land and assumes a mortgage thereon, the equity of redemption is a consideration for the contract to pay the mortgage debt.

4. A promise is a valuable consideration for another promise.

5. Parties are bound on appeal by the positions they voluntarily take in the trial court, and no matter of exception can be successfully urged on appeal unless expressly raised in the trial court.

6. When a party requests special findings under section 695, Rev. St. 1899, he concedes that the case is a proper one for such findings, and where no exception is taken to any finding the sufficiency of the evidence to support it cannot properly be questioned on appeal.

7. The conclusions of law of the trial court are open for review without any exception. If the facts found by the court do not warrant the judgment, the latter should be reversed.

(Syllabus by the Court.)

Appeal from St. Louis circuit court; S. P. Spencer, Judge.

Action by Cornelia J. Steele and others against James B. Johnson. Judgment for defendant, and plaintiffs appeal. Affirmed.

Myron Westover, for appellants. O. J. Mudd, for respondent.

BARCLAY, J.

This action is upon a promissory note executed by defendant June 27, 1893, to George L. Edwards or order, for $4,000, payable three years after its date, with interest at 8 per cent. per annum after maturity. The petition, after describing the note, charges that the payee indorsed the note in blank, without recourse, to Edward Bredell. The latter afterwards died. His executors assigned the note to plaintiffs for a valuable consideration. Plaintiffs admit having received interest upon the note to May 4, 1901, and $628.21 on account of the principal, leaving the balance claimed the sum of $3,371.79, for which judgment is asked. Defendant admits the execution of the note and plaintiffs' title thereto, but sets up as a defense the facts that the note was secured on real estate by a deed of trust executed by defendant and his wife; that he afterwards sold the real estate to Mr. Merritt, who assumed the payment of the note as a part of the purchase price of the property; that thereafter Mr. Merritt sold and conveyed the property to Mr. Ellis, subject to the deed of trust; and that a valid agreement was then made between plaintiffs and Mr. Ellis and Mr. Merritt for an extension of time of the payment of the note without the consent of defendant, thus releasing him from liability. Other defenses are outlined in the answer, but it will not be necessary to allude to them further. The plaintiffs, by reply, denied the new matter in the answer. The cause came on for trial in the circuit court, and a jury was duly impanelel. The trial court held that the defendant bore the burden of proof. After defendant's counsel had made an opening statement, it was agreed to dispense with the jury, and the following agreement was made by the parties, with a view to shortening the proceedings: "It is agreed that all the principal issues are practically questions of law; and it is agreed further that the jury be waived, and the case submitted to the court. [The jury at this point was dismissed by the court, and the case proceeded to trial before the court.] It is agreed that Mr. Johnson was the owner of the property at the time when he signed and made the note. It is agreed that Mr. Johnson, subsequent to the making of the note and securing it by a deed of trust, conveyed the property to Merritt. It is agreed that in said deed Mr. Merritt agreed to pay the note which Mr. Johnson had made, or to assume the mortgage indebtedness. It is agreed, as a matter of law, that by said fact Mr. Johnson became a surety, and not the principal debtor. It is agreed that thereafter Mr. Merritt conveyed the said property to Mr. Ellis, subject to the Johnson deed of trust, and subject to the deed of trust which Mr. Merritt had put upon said property. It is agreed that while Mr. Bredell was the owner of the note in question, and while Merritt was the owner of the property, a part of the property mentioned in the deed of trust securing the note was released by the consent of Mr. Bredell, the holder of the note and the trustee in the deed of trust, and Mr. Merritt, the owner of the fee. It is agreed that one of the questions in the case is as to whether said Johnson consented to the said release. It is agreed that another question in the case is as to whether by said partial release the surety was discharged." The evidence in the cause was then heard. The plaintiffs filed a formal request to the court to "state its conclusions of fact separately from its conclusions of law in the said cause." In due course the circuit court found in favor of defendant, having first made a number of specific findings of fact, upon which judgment was entered. No exception was taken to any of the findings of fact. The entire history of the case is fully stated in the findings as follows: "The facts in this case, as I find them to be, are as follows: The defendant, James Brooks Johnson, on June 27, 1893, gave his deed of trust, in which his wife joined, conveying property which may be termed the `Glades' property, to secure the payment of a principal note for $4,000, due three years after June 27, 1893, and semiannual interest notes. These notes, together with the deed of trust securing them, almost immediately passed into the hands of Edward Bredell. On January 13, 1894, James Brooks Johnson and his wife conveyed the said property to Thomas J. Merritt, subject to the said deed of trust and the notes secured thereby, the payment of which was specifically assumed by Merritt, who thereafter paid the interest notes to Bredell until the maturity of the loan. On the 18th of September, 1894, Bredell released to Thomas J. Merritt certain parts of the property known as the `Glades,' and in such release referred specifically to the deed from James Brooks Johnson to Thomas J. Merritt, and, as a matter of fact, was aware of the deed from Johnson to Merritt, and of the condition therein contained, and knew that Merritt had assumed the payment of the Johnson debt. It was from Merritt that Bredell received the interest on the debt subsequent to January 13, 1894. After the maturity of the note, Merritt sold the property known as the `Glades' to Ellis. On this sale, it was a condition that the $4,000 note should be extended for a period of three years. This extension was equally for the benefit of Merritt as for the benefit of Ellis, because without it the sale from Merritt to Ellis would not have taken place. Somewhere about the 1st of October, 1896, the plaintiff in this case purchased the note of $4,000 from Bredell, after its maturity, and the negotiation for the extension of the loan for three years from the time of its maturity, viz., July 27, 1896, was conducted with the plaintiff in this case through her agent, Delos R. Haynes, who was in all things authorized to represent her, and whose actions are for the purpose of this suit to be regarded as the action of the plaintiff. In furtherance of this extension for three years, Ellis gave his interest notes to the plaintiff, which were accepted by plaintiff, and were collected by plaintiff from Ellis from time to time as they became due, and the extension was indorsed on the back of the principal note. At the end of three years, viz., on June 27, 1899, while the plaintiff was still the holder of the note, and while Ellis was still the owner of the property, a further extension of three years was made by the plaintiff to Ellis. At the time of the release by Edward Bredell and the trustee on September 18, 1894, the property remaining as security for the principal note was ample to cover it, and the release was made with the knowledge of Mr. Johnson. On May 14, 1891, the property was sold out under the deed of trust, and did not bring sufficient to pay the principal note and the accrued interest. For this difference the plaintiff is now suing James Brooks Johnson. It is...