Woodard v. Householder

• Decision Date: 15 November 1926
• Docket Number: No. 25049.,25049.
• Citation: 289 S.W. 571
• Parties: WOODARD v. HOUSEHOLDER et al.
• Court: Missouri Supreme Court

289 S.W. 571

WOODARD v. HOUSEHOLDER et al.

No. 25049.

Supreme Court of Missouri, Division No. 1.

November 15, 1926.

Motion for Rehearing Overruled December 31, 1926.

Appeal from Circuit Court, Audrain County ; Ernest S. Gantt, Judge.

Suit by A. F. Woodard against Harry Householder and others. From a judgment for defendants, plaintiff appeals. Affirmed.

Clarence A. Barnes, of Mexico, Mo., for appellant.

Fry & Fry, of Mexico, Mo., for respondent Carpenter.

Rodgers & Buffington, of Mexico, Mo., for respondents Householder.

RAGLAND, P. J.

This is a suit in equity. The nature of the relief sought can best be described after the facts upon which the right to the relief is predicated have been outlined.

On the 8th tray of July, 1919, defendants Harry Householder and Mabel E. Householder, husband and wife, were the owners in fee simple of 640 acres of land, the north half of section 26 and the north half of section 27, all in township 52 of range 10 west, in Audrain county, Mo. On that date Harry Householder entered into a written contract with one Duncan whereby he agreed to sell and convey the land to Duncan for a consideration of $64,000, to be paid in the following manner: $2,000 in cash at the time of signing the contract; $17,000 on or before March 1, 1920; a note for $5,000 due March 1, 1920, bearing 6 per cent. per annum interest after due; and a note for $40,000 to be dated March. 1, 1920, due March 1, 1925, bearing interest at the rate of 5 per cent. per annum from date, and to be secured by a deed of trust on the land. On July 12, 1919, Duncan agreed in writing to sell and convey the land to plaintiff, Woodard, for the sum of $70,400. On August 4, 1919, Woodard entered into a contract with Felgar, Siver, Langer, and Walker, wherein he agreed to sell and convey the land to them for *80,000. And on the 2d day of September, 1919, Felgar, Siver, Langer, and. Walker, under the cloak of Woodard's name, contracted in writing to sell the land to I. I. Yount for the sum of $86,400. The contract on its face appeared to be between Woodard and Yount. All of the contracts above referred to were negotiated by one Jennings, a real estate agent at Centralia, Mo.; all of them were drawn by him, the same form of printed blank being used in each instance; each of them provided that it should be consummated on the 1st day of March, 1920, at Jennings' office; and each contained a provision that $40,000 of the purchase price might be carried on the land for a period of five years. On the 1st day of March, 1920, all the parties above named appeared at Jennings' office for the purpose of closing their several deals. The evidence does net disclose the details of the settlement or settlements had. It appears, however, that by mutual agreement Householder and his wife conveyed by warranty deed directly to Yount, the last purchaser; that Yount executed a note to Householder for $40,000 due five years thereafter, and hearing 5 per cent. annual interest from date, together with a deed of trust on the land to secure it; and that Yount also executed three notes, each for $5,000, to Woodard and Felgar, and gave a deed of trust on the land to secure them. This latter deed of trust recited that it was subject to the one given Householder. Yount's wife joined him in executing both deeds of trust, and she signed one of the $5,000 notes. The warranty deed from Householder and wife to Yount was dated March 1, 1920, and was acknowledged on that day. Both deeds of trust were dated February 26, 1920, and were acknowledged as of that date. All three of the deeds, however, were delivered on March 1, 1920, and constituted parts of one transaction, as just stated.

The warranty deed from the Householders to Yount was filed for record February 8, 1921, the deed of trust from Yount to Householder, March 2, 1920, and the deed of trust from Yount to Woodard and Felgar, October 20, 1021. Woodard acquired Felgar's interest in the three $5,000 notes shortly after they were executed. On March 1, 1921, Yount and his wife signed and delivered to Woodard. a single note for $15,000, together with a deed of trust on the same land to secure it, in renewal of the three $5,000 notes. It was the understanding, however, between Yount and Woodard that the former would pay in cash the interest which had accrued on the $5,000 notes up to the date of the renewal note, and the latter note was accepted by Woodard upon that express condition. The condition was never complied with, and as a consequence the $5,000 notes remained subsisting obligations. Plaintiff in his bill tenders the $15,000 note for cancellation. As it has no bearing on the real issues in the case it will not be further noticed. In all of the deeds above mentioned there was a misdescription of the land. It was described as being in range 11, whereas it was in range 10.

Yount and his wife, defendant Edith M., were residents of Henry county, Iowa. On the 21th day of April, 1921, they executed to the Farmers' State Bank of Wayland, Iowa (hereinafter called the Bank), a note for $7,000, together with a mortgage on the land in controversy to secure its payment. In the Mortgage deed, which was filed for record April 21, 1921, the land was correctly described as in range 10. The $7,000 note was given in renewal of an old note of Yount's to the Bank for a like amount, and was payable March 1, 1922. In addition to the mortgage, the Younts pledge to the Bank as further security a $5,000 policy of insurance issued on his life by the Des Moines Life & Annuity Company in which Mrs. Yount was the beneficiary, and also five shares of stock of the Bank of the par value of $100 each and two shares of stock in an elevator company of like par value. These shares of stock were the property of Yount. At the time of this transaction, according to the testimony of Mr. Hileman, the cashier of the Bank:

"Mr. Yount stated that in case of his death that he would want us (the Bank) to exhaust the other security before applying the life insurance."

In further explanation of this incident Hileman testified:

"We had no written agreement, nothing more than simply au oral request on his part to do that, and we simply consented that we would be willing to do that if we would be able to collect on the other security."

On the 8th or 9th of June, 1921, Yount died, and on or about the 1st of July following the insurance company paid to the Bank the face of the policy of insurance which had been pledged to the Bank, less some small deductions for past-due premiums. The sum so collected the Bank converted into a certificate payable to its cashier, "with the citation thereon that it was held as collateral security for the payment of the note of I. I. Yount." Following the collection of the policy by the Bank, Mrs. Yount made a demand on the Bank that it exhaust the other security given it before applying any of the insurance money to the payment of the $7,000 note.

On January 16, 1922, the Bank entered into a written contract with the defendant A. Carpenter wherein the Bank agreed,. in consideration of the payment of $5,000 "to be made to it by Carpenter, to assign to Carpenter its $7,000 note and mortgage. The contract recited, among other things:

"The consideration mentioned above shall be taken care of in the following manner, to wit: "Three thousand dollars shall be paid to first party in cash, when the court has approved the new papers which shall be executed to clear up the title to said land or when the necessary legal procedure is completed to clear the title to the extent that said real estate shall have the following incumbrances only: $40,000 mortgage to Harry Householder, $7,000 mortgage to Farmers' State Bank, Wayland, Iowa. * * *

"This contract shall be in full force and effect when the said Harry Householder shall have entered into an agreement with the second party hereto binding himself to continue to carry for a period of three years from March 1, 1922, the $40,000 mortgage against said property when the "title is cleared up as hereinbefore mentioned.

"It is specifically agreed and understood that said bank is not by this contract bound or holden as to the clearing up of the title so far as same shall be effected by a third mortgage, the intention being to bind said bank to assign its rights only accruing unto it by virtue of said $7,000 mortgage."

The officers of the Bank testified that at the time the $7,000 mortgage was given by Yount they were advised of the $40,000 deed of trust held by Householder but had no...