Thomassen v. Davis
| Decision Date | 11 July 1939 |
| Parties | WILBER J. A. THOMASSEN, EXECUTOR OF THE ESTATE OF ADOLPH THOMASSEN, DECEASED, AND JULIUS A. MUELLER, RESPONDENTS, v. JOHN W. DAVIS AND FRANCES E. DAVIS, APPELLANTS |
| Court | Missouri Court of Appeals |
Appeal from Circuit Court of St. Louis County.--Hon. John A Witthaus, Judge.
REVERSED AND REMANDED (with instructions).
Judgment reversed and case remanded.
A. C Britt and R. Shad Bennett for respondents.
(1) One who endorses or signs his name on a note, after maturity, of which he is neither maker, payee, nor endorsee, becomes a guarantor or comaker, and the instrument becomes a demand obligation. Ginter v. Commerce Tr. Co., 222 Mo.App 1156, 14 S.W.2d 41; First National Bank v. Guardian Tr. Co., 187 Mo. 494, 70 L.R.A. 79; Thompson & Thompson v. Brown, 121 Mo.App. 524; Farm & Home Savings and Loan Association v. Theiss et al., 111 S.W.2d 189. (2) Where one receives a consideration for the extension of time of payment of a note, and endorses the note in consideration of the extension, both the extension and the endorsement are binding. Williams v. Jenson, 75 Mo. 681, and cases there cited. (3) The endorsement in the case at issue is an anomalous and qualified endorsement. Ginter v. Commerce Tr. Co., 14 S.W.2d 41. However, the qualification of the endorsement was an enlargement, rather than a contraction, of the liability that would have resulted from a blank endorsement. The qualifying clause and phrase would have deprived the endorsers of the defense of maturity or of ignorance as to the surrounding conditions, or of almost any other defense that might have been raised to a blank endorsement, and, as the result of executing various interest notes (as well as of having taken a deed requiring assumption), and obtaining various extensions of time in the payment of the notes and of placing their signatures on the notes, they became liable thereon, which liability is supported by a long line of uninterrupted decisions of the courts of this State and of other States. The cases of Powell v. Thomas, 7 Mo. 440, and of Hooper v. Pritchard, 7 Mo. 492, have been followed through the courts of this State down to and through the recent case in 111 S.W.2d 189.
Frances R. Stout for appellants.
(1) The memorandum signed by defendants John W. Davis and Frances E. Davis on each of the principal notes in the sum of $ 2000, to-wit:
does not constitute an endorsement and does not make them personally liable on said notes. Ginter v. Commerce Tr. Co., 222 Mo.App. 1156, 14 S.W.2d 41; General Contract Purchase Corp. v. Alcorn, 226 Mo.App. 1026, 47 S.W.2d 162; Stephens v. Bowles, 202 Mo.App. 599, 206 S.W. 589; Hyland's Estate v. Foote's Estate, 106 Vt. 1, 168 A. 925; 10 C. J. Secundum, p. 466, sec. 38, note 74. (2d) The appellants are entitled to have a judgment entered declaring that they are not liable on either of the two principal notes, which are each for $ 2000; that they are only liable on the balance of the two interest notes, each for $ 60.00, after there has been deducted therefrom the pro rata proportion of the net proceeds of the sale of the real estate. Laws of Missouri 1935, 218 et seq., sections 1 to 15, inclusive; and Authorities cited under Point 1.
This suit was begun in the Circuit Court of St. Louis County on December 14, 1937. The condensed allegations of the petition are as follows:
That each plaintiff holds separate and distinct interests, growing out of the same contract and transaction hereinafter stated; that Wilber J. A. Thomassen, duly appointed and acting executor of the estate of Adolph Thomassen, deceased, is duly authorized to sue and that the notes and property referred to as belonging to said executor are a portion of the properties and assets of said estate; that on or about March 5, 1925, Alvin T. Dickens and Grace C. Dickens, his wife, executed a deed of trust to Theodore T. Bayer, as trustee, on the following property, to-wit:
Lots 2 and 3 in Block 2 of Vernon Place, a subdivision in St. Louis County, Missouri, as per plat thereof recorded in Plat Book 7, page 49, St. Louis County Records. . . .
That said deed was for the purpose of securing $ 5000 in principal notes together with eighteen interest notes representing interest at six per cent on said principal notes after the date of their maturity, all of which notes were payable to the order of C. A. Oliver; that said deed of trust was duly recorded on March 6, 1925; that each of the plaintiffs own and represent one of said principal notes in the sum of $ 2000, each of which notes were executed on March 5, 1925, and each of which shows on its face that it is due on March 5, 1928, and each of which shows on the back thereof four separate extensions of the due date thereof, and that each of said notes were endorsed without recourse respectively and separately to the plaintiffs by said C. A. Oliver, payee therein;
That on January 12, 1935, at the request of defendants, John W. Davis and Frances E. Davis, who had prior to said date acquired the legal title to the real estate hereinbefore described covered by said deed of trust, plaintiffs granted them an extension of the due date of said notes for a period of three years from said extended due date, making the same mature on March 5, 1937, and that in consideration of said extension the said defendants endorsed each of said principal notes for $ 2000 each and in conjunction therewith executed separate sets of interest notes bearing date as of March 5, 1934, and maturing March 5, 1937, in the sum of $ 60 each and payable to the order of Amelia Schirmer, which said interest notes were duly endorsed without recourse by the said Schirmer to the separate plaintiffs herein or Adolph Thomassen, deceased, and that each and all of said four separate notes, together with the several endorsements and extensions thereof are attached to and made a part of the petition, being plaintiffs' Exhibits 1 and 1a, and Exhibits 2 and 2a; that said notes and each of them are long past due and that by their terms plaintiffs are entitled to the sum of said principal and interest notes together with interest on and after March 5, 1937, at 8 per cent per annum, all of which remain unpaid after request made of defendants; that all of the original interest notes and $ 1000 of the original principal notes mentioned in said deed of trust have been paid and cancelled of record and that the two separate principal notes in the sum of $ 2000 each and the interest notes hereinabove mentioned represent all of the unpaid notes secured by deed of trust;
That the real estate herein described is not of sufficient value to pay the sums due the plaintiffs and each of them and that the defendants Davis and wife are in possession of said properties and enjoying the use and income therefrom; that Theodore T. Bayer, trustee in said deed of trust, has long since been deceased and no successor trustee has even been appointed and that there is no acting trustee empowered to sell the property herein described to pay the indebtedness or to apply the proceeds on the said indebtedness described in said deed of trust; that, wherefore plaintiffs pray that the court appoint a receiver to take charge of the property and collect the rents and to apply all rents or incomes derived from said property towards the payment of the indebtedness represented by the notes herein described and that the court take an accounting and determine the amount due plaintiffs and each of them and that the court order and direct said property to be sold and the proceeds, after paying costs of sale, be applied on the judgment and the remainder, if any, be paid to the defendants and each of them as they may be entitled thereto and in the event the sale of said property is insufficient to satisfy the judgment and costs that the plaintiffs and each of them have a deficiency judgment decree of such sum as they, or each of them may be entitled to, and that the court order a levy upon the properties of the defendants named in said judgment and to cause same to be sold and the proceeds used to satisfy the remainder due plaintiffs on their judgment and costs.
This petition was verified by affidavit.
The answer of the defendants John W. Davis and Frances E. Davis his wife, contained an admission of the appointment of Wilber J. A. Thomassen to be acting executor of the estate of Adolph Thomassen and his right to sue on the notes in controversy as being a part of the estate of said decedent; an admission that Alvin T. Dickens and Grace C. Dickens, his wife, executed the deed of trust on the property described, for the purpose of securing the notes and that such deed of trust was duly recorded; an admission that on January 12, 1935, at the request of defendants Davis and wife plaintiffs granted an extension of the due date of the principal note described in said deed of trust for a period of time making same mature on March 5, 1937, and that at said time the principal note secured by said deed of trust consisted of two notes each in the sum of $ 2000, being plaintiffs' Exhibits 1 and 2; that they deny that they or either of them endorsed either of said principal notes; that they admit that they executed the two separate sets of interest notes bearing date of March 5, 1934, and maturing March 5, 1937, in the sum of $ 60, each payable to the order of Amelia Schirmer, which said interest notes are endorsed without recourse by the payee to the plaintiffs herein;...
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