Winter v. Kansas City Cable Railway Company

• Decision Date: 12 February 1901
• Citation: 61 S.W. 606,160 Mo. 159
• Parties: WINTER, by SMITH, Curator, v. KANSAS CITY CABLE RAILWAY COMPANY, Appellant
• Court: Missouri Supreme Court

61 S.W. 606

160 Mo. 159

WINTER, by SMITH, Curator, v. KANSAS CITY CABLE RAILWAY COMPANY, Appellant

Supreme Court of Missouri, Second Division

February 12, 1901 ^[*]

Transferred from Kansas City Court of Appeals.

Affirmed.

Frank Hagerman and Karnes, Holmes & Krauthoff for appellant.

(1) The consideration for the release was not, on the conceded facts open to question in this case but was conclusively presumed. (a) This is true, first, because the release was under seal. Undoubtedly the general rule is that a contract for the release of any obligation in consideration of the payment of a portion of what is owing is nudum pactum and unenforcible either at law or in equity; the obligation is un-affected by said contract except to the extent of the payment, which instead of extinguishing it, only reduces it by the amount thereof, it being applied like any other credit on the debt. This was the settled rule at common law, but to this general rule there was at common law the well-recognized exception that, where the contract, instead of being for a release, was one of release and under seal, it was deemed executed instead of executory, and irrevocable, the seal conclusively importing consideration, so that no court at law or in equity would inquire into the question of consideration. Braden v. Ward, 42 N. J. L. 518; Faughman v. Elizabeth, 33 At. Rep. 212; 2 Freeman on Judg. (4 Ed.), sec. 463; 2 Black on Judg., sec. 989. (b) The surrender of a written obligation as paid in consideration of the payment of a portion of the amount due thereon is an executed release thereof and is irrevocable. It has often been held that a formal release under seal is not the only way in which the holder of an obligation can bind himself, in consideration of the payment as a part due thereon, by a release of the balance thereof. In all such agreements the great thing is, first, to use some form that is equivalent to the formal solemnity of sealing a release at common law, so that the courts can see that the transaction was done with due thought and deliberation, and next to complete the transaction so that the obligee can say that the debt was discharged, rather than that there was an agreement to discharge it. Now, when the debt is evidenced by writing in any from, the surrender of the same, cancelled and satisfied is the most complete and perfect proof of the deliberate purpose on the part of the obligee to surrender the same. And, besides, in such a case, the discharge of the obligation is absolutely performed and executed. Ellsworth v. Fogg, 35 Vt. 355; Silvers v. Reynolds (N. J.), 2 Harr. 275. (c) The settlement was in pursuance of an order of the probate court and, therefore, no consideration was essential to support it. The statutes authorize curators to compromise and settle all demands due to their wards upon such terms as the probate court may direct. R. S. 1889, sec. 5298. (d) The satisfaction was entered of record in the mode prescribed by the statutes of the State, and forever discharged and released the judgment. And this without regard to the question of any actual consideration. R. S. 1889, secs. 6027, 6028, 6030, 6031, 6032. (2) This action can not be maintained for the additional reason that the $ 4,500 paid by defendant for the settlement and release is still retained by plaintiff and has never been refunded or tendered back to the defendant. It is too well settled for extended discussion that a court of equity will not entertain a bill to rescind a contract under which a valuable consideration has passed to the plaintiff from the defendant unless that consideration is refunded or tendered back before the proceeding to rescind is commenced. A different rule has sometimes been held to prevail in a law action, but only there under special circumstances, where the contract to be rescinded had been set up by way of defense. But the rule in equity cases is uniform. Before the plaintiff can have equity he must do equity. He can not be permitted by the chancellor to hold on to the avails of a contract and at the same time invoke the aid of a court of equity to set it aside. Och v. Railroad, 130 Mo. 27; Alexander v. Railroad, 54 Mo.App. 66; 2 Beach, Mod. Eq. Jur., sec. 552.

Thompson & Wilcox, B. J. Woodson and Thos. J. Porter for respondent.

(1) If there was no consideration for the acceptance of $ 4,500 in satisfaction of the judgment for about $ 6,800, the plaintiff is entitled to recover the difference, notwithstanding there may have been no mistake or misrepresentations. Riley v. Kershaw, 52 Mo. 224; Deutman v. Kilpatrick, 46 Mo.App. 629; Peterson v. Wheeler, 45 Mo. 369; 1 Sutherland on Damages, pp. 426, 429. In this case the demand was liquidated and undisputed. Heintz v. Pratt, 54 Ill.App. 616; Morrell v. Baggart, 57 Ill.App. 530; Ryan v. Ward, 48 N.Y. 206; Luddington v. Bell, 77 N.Y. 143; Mack v. Schneider, 51 Mo.App. 101; Willis v. Cammell, 67 Mo. 730; Kley v. Healy, 127 N.Y. 593; Gould v. Bank, 86 N.Y. 81; Pierce v. Wood, 3 Fost. (N. H.) 519. (2) The contention of appellant that the entry of satisfaction of the judgment being under seal is conclusive as a technical release under seal, is without merit. The language is, "do hereby acknowledge satisfaction of this judgment." The effect of this language as a receipt is not altered by the seal, and the seal may be treated as mere surplusage. 2 Parsons on Contracts (6 Ed.), p. 721; Pruett v. Wainwright, 4 Gilman 414; White v. Cox, 29 Conn. 570.

BURGESS, J. Gantt, P. J., and Sherwood, J., concur. SMITH, J. GILL, J. Judge Ellison concurs in the views here expressed.

OPINION

Minority Opinion of the Court of Appeals.

SMITH J.

This is a suit in equity. For a proper understanding of the questions presented for decision, no better general statement of the case can be made than is to be found in the allegations of the petition which are as follows:

"Plaintiff says that Thomas R. Smith is the duly appointed and legally qualified curator of the estate of said Willie Winter, a minor under the age of fourteen years. Said Smith was appointed curator of said estate January 29, 1890, by the probate court of Buchanan county, in which county said minor then resided. Defendant is a corporation duly incorporated. That the estate of said minor then consisted of a judgment of the circuit court in and for Jackson county, Missouri sitting at Kansas City, for the sum of $ 5,000 against said defendant, rendered on due service and dated April 22, 1886, in favor of said Willie Winter, by his next friend, D. R. Stevens. That on the second day of January, A. D. 1890, said judgment was affirmed by the Supreme Court of the State of Missouri, and no other proceedings to reverse or modify, or in any way affect, the validity of said judgment have been commenced or prosecuted. The said Smith had no connection with, nor personal knowledge of, the litigation to procure said judgment or of the appeal to the Supreme Court to reverse the same, as said proceedings on behalf of said minor were conducted wholly by said next friend.

"On or about the seventeenth day of March, A. D. 1892, at St. Joseph, Missouri, said Thomas R. Smith was approached by defendant's agent whom said Smith at the time supposed and believed to be the attorney for said Willie Winter. That he was informed by said agent that said judgment was in litigation, of a tedious and complicated nature, and that defendant was willing to pay the sum of $ 4,500 in settlement of said judgment. Relying upon the representations so made as aforesaid, said Smith the same day made application at the February term, A. D. 1892, to the probate court of Buchanan county, for and procured an order authorizing said curator to accept said sum in satisfaction of said judgment. And on the next day, March 18, 1892, at Kansas City, Missouri, said Smith accepted from defendant said sum, and entered on the margin of the record of said judgment satisfaction in full thereof as curator of said estate. Said judgment, when so satisfied, principal and interest, amounted to the sum of six thousand, seven hundred and seventy dollars, exclusive of costs. Thereafter, at the same term of said court, on due notice to defendant, plaintiff made application to have said order of said probate court authorizing said settlement set aside, which order said court made during said term in the following words and figures, to-wit:

"'In the probate court within and for said county. At the February term, 1892, on this seventh day of May, 1892, during the session of said court, among other things had and done, was the following, to-wit:

"'In the matter of the estate of Willie Winter, minor. Now on this day the motion of Thomas R. Smith, public administrator of Buchanan county, Missouri, in charge of the estate of said minor, to set aside an order of this court heretofore made, ordering and directing a compromise of a judgment against the Kansas City Railway Company, coming on to be heard, and it being shown to the court that due notice of the hearing of said notice has been served on said company, the same is submitted to the court on the evidence offered, and it appearing to the court that the order of this court heretofore made at this term on the seventeenth day of March, 1892, directing the public administrator in charge of said estate to accept $ 4,500 in full settlement of a judgment against the Kansas City Cable Railway Company, was made on a mistake of facts as to the amount due on said judgment and as to litigation in relation thereto then pending, and in reliance by said administrator upon the representations of said railway company, which representations were not true, and it now appearing that said judgment was final, that the same with interest amounted to about $ 6,800, instead of $...