The Western Manufacturing Company v. Woodson
| Decision Date | 09 July 1895 |
| Citation | 31 S.W. 1037,130 Mo. 119 |
| Parties | The Western Manufacturing Company et al., Appellants, v. Woodson et al |
| Court | Missouri Supreme Court |
Appeal from Buchanan Circuit Court. -- Hon. Henry M. Ramey, Judge.
This is a suit in equity, brought by creditors of George L. Jewett & Company, to have a deed made by that firm, February 8, 1893 declared to be a voluntary deed of assignment for the benefit of all their creditors, instead of for the benefit of the Saxton National Bank which claims to be alone secured thereby.
A few days before that date, the firm of Jewett & Company became insolvent, their paper having gone to protest. On that day they made the deed in question, and under it delivered to defendant, Woodson, all the property owned by them and described in the instrument.
The deed states the consideration as the "debts and trust hereinafter mentioned and created, and the sum of one dollar." The words of conveyance are "grant bargain, sell, assign, transfer, convey and confirm."
After describing the property as all the stock, etc., it states that it is intended to include all the property belonging to the first parties in or around the buildings or premises of the firm, and also all notes and accounts belonging to said firm.
The purposes of the deed are stated to be that, whereas the first parties have executed their three promissory notes, amounting to over $ 18,000 in all (which are set out), and that "all said notes are now hereby agreed to be due for the purpose of payment, and all moneys realized under this instrument of writing after paying costs and expenses of this trust as hereinafter provided for, shall be applied and paid on said notes in the order and manner they are above set out."
The second party is then empowered to hire and pay necessary agents to aid him, and to pay the expenses of executing the trust. The deed then proceeds:
Then follows a clause substituting the sheriff in case of the death, etc., of the second party, and providing that the proceeds of the sale shall be applied first to pay "the costs and expenses of executing this trust, including legal compensation for the trustee's services, and next shall apply the proceeds remaining over to the payment of said debt and interest, or so much thereof as remains unpaid, and the remainder, if any, shall be paid to the party of the first part, or their legal representatives." Then follows the statement that the second party covenants to perform and fulfill the trust, and the ordinary concluding clause with signatures and seals of the first parties.
February 10, 1893, the firm executed another instrument to defendant Woodson, purporting to convey the same property described in the first, and declaring that it was given to secure the same notes as set out in the former. This second deed contains this provision: "For the purpose of this trust it is agreed that all said notes shall be considered and treated as due," and also the following clause:
"This instrument is made and executed for the purpose of reforming a certain other mortgage between the same parties, dated February 8, 1893, and for the purpose of more fully and perfectly expressing the intention of said parties to mortgage the property herein, and in said mortgage described, for the purpose of securing the debts mentioned and described therein."
The answer admitted the execution of the first deed, alleged that it was intended as a deed of trust to secure the bank debt, and was being so treated by defendant, Woodson, pleaded the second deed, and closed with the following prayer:
"Wherefore, defendants pray the court that if said first mentioned deed is so written as in law or equity to give it the force and effect of a general assignment for the benefit of all the creditors of said Jewett & Company, and that said second instrument is not operative to correct and reform the first mentioned instrument so as to give it effect as a deed of trust according to the intentions of the parties thereto, that this court, by its decree, shall correct and reform the same so as to make it conform to the intention of the parties and give it effect as a deed of trust in the nature of a mortgage to secure the debts of defendant bank therein described, and for all other proper relief."
The court decreed that the first deed should be reformed as prayed, and, in substance, that it should operate as a security for the Saxton Bank.
The other material facts appear in the opinion of the division.
Affirmed.
Dowe, Johnson & Rusk for appellants.
(1) Upon its face and under the evidence, the deed of February 8 must be construed as a general deed of assignment. Burrill on Assignments, sec. 6; Cobbey on Chattel Mortgages, sec. 98; 1 Hill on Mortgages, 3, 4; Crow v. Beardsley, 68 Mo. 435; 1 Am. and Eng. Encyclopedia of Law, p. 845; State to use v. Benoist, 37 Mo. 500; Bartlett v. Teah, 1 F. 768; Douglas v. Cissna, 17 Mo.App. 44; Implement Co. v. Thurman, 29 Mo.App. 186; Hargadine v. Henderson, 97 Mo. 375. (2) And being a deed of assignment, the construction put upon it by the court was a variance of its terms and inconsistent with its provisions; and the admission by the court of oral evidence to support such construction was erroneous. Hickman v. Hickman, 55 Mo.App. 303; Koehring v. Muemminghoff, 61 Mo. 403; County of Johnson v. Wood, 84 Mo. 489; James v. Clough, 25 Mo.App. 147; Jennings v. Brizeadine, 44 Mo. 332. (3) Where the language of an instrument has a settled legal construction, parol evidence is inadmissible to vary such construction. 1 Greenleaf on Evi., sec. 298; 2 Parsons on Contracts, 551; Wald's Pollock on Contracts (1885), p. 474. (4) The deed of February 8, by s terms, conveyed a different interest or estate in the property described from what it conveyed as interpreted by the court. Bartlett v. Teah, 1 F. 768. Parol evidence is not admissible to affect the operation of a deed in respect to the interest or estate purporting to be conveyed. Henderson v. Henderson, 13 Mo. 151. (5) While a deed absolute in form, may, as between the parties to it, be shown by parol evidence to be a mortgage, this will not be allowed when the interests of third parties would be affected thereby. State to use v. Koch, 40 Mo.App. 635.
B. J. Woodson, T. J. Porter and B. R. Vineyard for respondents.
(1) The instrument of February 8, 1893, in controversy, was evidently given as a security and must be held to be a deed of trust. Hargadine v. Henderson, 97 Mo. 375; Warner v Littlefield, 89 Mich. 329; Gage v. Chesebro, 49 Wis. 486; Bank v. Chapelle, 40 Mich. 447; Baker v. Hall, 13 N.H. 298. This deed of trust was duly acknowledged, though the acknowledgment is omitted from the abstract. Plaintiffs charge in their petition that it was duly acknowledged. (2) A defeasance clause in a mortgage or deed of trust is not essential to its validity as such. "If from the nature of the instrument, either standing alone or read in the light of the surrounding circumstances, it appears to have been given as a security it must be considered as a mortgage." Hargadine v. Henderson, 97 Mo. 375; In re Assignment of Zwang, 39 Mo.App. 356. (3) As, under the evidence, a court of equity would have reformed the first deed of trust, the parties thereto had a right themselves to reform it so as to conform to the intention of the parties. Martin v. Nixon, 92 Mo. 35; Price v. Reed, 38 Mo.App. 503; Young v. Coleman, 43 Mo. 179; Young v. Cason, 48 Mo. 259; Bruse v. Nelson, 35 Iowa 157; Geib v. Reynolds, 35 Minn. 331; Banes v. Mott, 64 N.Y. 397; Stimpson v. Pease, 53 Iowa 572; Wooden v. Haviland, 18 Conn. 101. The case last cited involved the right to correct a mortgage, when the defeasance clause was omitted by mistake of the scrivener. (4) The mistake here was one of fact, to correct which a court of equity would grant relief. The law goes further than is necessary to sustain us, for "if an instrument, as it is reduced to writing,...
To continue reading
Request your trial