Columbian National Life Insurance v. DubinskyColumbian National Life Insurance v. Dubinsky
Able lawyers differ on the construction of wills and other written instruments, as the case law of all jurisdictions abundantly discloses, and we should, we think, say that by this opinion we do not mean to imply that there was any conscious wrongdoing on the part of any one connected with the will construction suit. There is nothing in the record to suggest such. The long and honorable career of all counsel concerned belies such suggestion. However, as we see it, the challenged paragraph in the will construction suit, under the facts, wrongfully deprived a minor defendant, who is now the present plaintiff, of the possession of the property and the income therefrom as claimed by her in the present cause.
The judgment should be affirmed and the cause remanded to the circuit court so that court can make the necessary orders to make its judgment effective. It is so ordered. Hyde and Dalton, CC., concur.
PER CURIAM:----The foregoing opinion by BRADLEY, C., is adopted as the opinion of the court. All the judges concur.
Defendants have filed a motion to strike certain exhibits (being all the written documents offered in evidence by any of the parties) on the ground that they were not included in the bill of exceptions allowed and filed in the trial court and that the bill contained no “direction to the clerk to copy the same.” Defendants have filed a counter abstract showing these facts and plaintiff admits that this is true in his suggestions in opposition to the motion. These documents therefore cannot be considered because they were not in the bill when allowed and there was no compliance with the provisions of
Defendants have also filed a motion to affirm or dismiss for failure to preserve all the evidence (meaning the written documents stricken) and for other matters going to the merits. Defendants cite our Rule 13. However, it only requires setting out the substance of documentary
The existence and execution of the note sued on was admitted by the Dubinskys’ answer. It was also stated herein that this note was “secured by a parcel of property known and numbered 3309-21 Washington Boulevard, in the City of St. Louis.” It was admitted at the beginning of the trial that this note (dated June 1, 1932) was in renewal of the original deed of trust on this property, and the notes secured thereby, made May 31, 1929, given to secure payment of a total debt of $45,000; and that the property was conveyed by the Dubinskys to the Cohens by a deed dated June 17, 1929, subject to this first deed of trust, securing the sum of $45,000, which the Cohens assumed and agreed to pay. The renewal agreement was executed July 7, 1932, (renewal notes were dated back) and renewed $40,000 unpaid balance of the debt secured by the deed of trust, which provided for annual principal payments of $2500. The Cohens paid the $2500 principal note due May 31, 1930, and also the $2500 principal note due May 31, 1931, leaving the debt of $40,000 at the time of the 1932 renewal. The deed of trust was foreclosed on January 13, 1939, and plaintiff bid in the property for $30,000. The parties had conflicting evidence as to the value of the property at different times. Mr. Dubinsky was in the real estate business and had been for many years.
Plaintiff‘s evidence did show that the renewal agreement recited: “The said parties for themselves and for their respective heirs, administrators, executors, successors or assigns, hereby mutually agree that the time for the payment of the said principal sum still remaining unpaid, to-wit, forty thousand dollars, shall be paid in the amount and at the times as follows, to-wit:” and that the agreement then described “four one thousand dollar notes, each payable annually after June 1, 1932, and the fifth note for thirty-six thousand dollars, due June 31, 1937.” It was further shown that plaintiff continued to hold all of the original notes secured by the deed of trust, and that each of them had an endorsement made on the back referring to the terms of this extension agreement, dated July 7, 1932.
It was also shown that the renewal agreement contained the following further provisions:
“And first and second parties hereby covenant that they will pay the said notes, both principal and interest, in the amount and at the times hereinbefore specified, and that they will perform and preserve all of the covenants, agreements, stipulations and conditions on the part of the maker of said deed of trust, in all respects as if the said
notes in the amount and due at the time aforesaid, had been inserted in said deed of trust. It is expressly understood and agreed that simultaneously with the execution and delivery of the principal and interest notes called for under the terms of this agreement, there shall be endorsed on the notes now held by Third party a notation to the effect that same are held subject to all the terms and conditions of this agreement, and that upon the payment of the notes called for in this agreement, both principal and interest, the notes now held by the Third party, together with the deed of trust, are to be surrendered to First and Second parties.” (Our italics.)
Defendants’ answer alleged that “these defendants were not the owners of said real estate on June 1, 1932, and had not been the owners of said real estate (securing the note) for several years prior thereto;” that it “was executed as an accommodation for the benefit of the plaintiff herein and was so executed at the suggestion of said plaintiff for its accommodation;” and that “at the time of the execution of said note the said plaintiff agreed that at the maturity of said note that if the said note was not paid by the owners of the real estate aforementioned, that the said plaintiff could cancel said note in so far as it affected these defendants, and that the plaintiff would not at any time attempt to collect from, or hold these defendants liable on said note.” The conceded facts show that the renewal note sued on was given for the Dubinskys’ own debt for money loaned to them by plaintiff before they sold and conveyed the property to the Cohens. The only evidence of such a promise, as alleged in this answer, was Mr. Dubinsky‘s testimony (corroborated by his clerk) concerning a conversation with plaintiff‘s loan correspondent Mr. Farish. He had been negotiating with Mr. Farish to get a renewal with only the Cohens signing the extention agreement and notes. (He said he offered to release the Cohens from a $5150 second mortgage if that could be done, but there is no reference to this in his answer.) He said that on July 7, 1932, he first refused to sign the renewal papers, but that Mr. Farish “had a letter that he held in his hand and in it it said that the company, he said, had agreed to renew the loan;” that he said “the company wouldn‘t hold me liable or responsible at any time in the future in any way if I would give up this second deed of trust, and thereby relieve Mr. Cohen of the liability of $5,150, and that company so has informed him, and that for this matter of the surrendering of the note and not having to go out and appraise and redescribe this loan to the Insurance Department, that they would;” and that “I finally agreed to become an accommodation maker.”
Mr. Dubinsky took the renewal agreement and notes home and had his wife sign them and brought them back the next day. Mr. Dubinsky also admitted that he signed another renewal agreement for extension of this same debt in 1937. However, when plaintiff‘s
Plaintiff had evidence of its officer (Mr. Mullen) in charge of mortgage loans, that no letter was ever written containing any statement such as Mr. Dubinsky said Mr. Farish told him was contained in a letter from the company at the time he signed the renewal agreement. Plaintiff offered in evidence its entire file of correspondence between it and Mr. Farish concerning the 1932 renewal, but this was excluded upon objection that they were self serving. (Certainly they must not have shown anything favorable to the Dubinskys’ theory.) Plaintiff was not even permitted to show the amount due upon the original mortgage debt. Testimony concerning the original notes was excluded on the objection that only the $36,000 (1932) note was sued on and that nothing else was involved. Plaintiff did have testimony that $9,298.83 of the foreclosure bid was credited upon other obligations of the makers of the notes but did not show what these were.
The court‘s decree made findings of ownership of the mortgaged property by the Cohens and of the execution of the $36,000 note sued on by them and the Dubinskys. The court made further findings therein, as follows:
“The Court doth further find that at the time of the execution of the said note in the sum of $36,000.00, that the defendants, Jack Dubinsky and Ethel Dubinsky, executed said note without any consideration passing to either of them or both, and was executed by them as an accommodation for the benefit of the plaintiff herein, and was so executed at the suggestion of said plaintiff for its accommodation;
“The Court doth further find that at the time of the execution of said note, that the plaintiff agreed that at the maturity of said note, that if said note was not paid by the defendants, Ray Cohen and Hyman Cohen, as the owners of said real estate aforedescribed, that the plaintiff would cancel said note in so far as it affected the defendants, Jack Dubinsky and Ethel Dubinsky, and that the plaintiff would not attempt to collect from or hold these defendants, Jack Dubinsky and Ethel Dubinsky liable on said note.”
The decree also found that the Cohens were entitled to credit for the full amount of the foreclosure bid. The order of the decree was that the note sued on be cancelled and that plaintiff be permanently enjoined from transferring it and that the Dubinskys be discharged. It also entered judgment against the Cohens for only $6000.
The quoted findings are without any support in the evidence. The decree is clearly wrong: In the first place, there was no evidence
The second reason why the decree is clearly wrong is that no one can be an accommodation maker of a note given for his own debt. The Negotiable Instruments Law (
It is also true, as contended by the Dubinskys, that when the Cohens purchased the mortgaged property and assumed and agreed to pay the mortgage, then the Cohens became the principal debtors and the Dubinskys’ relation changed to that of sureties, so that plaintiff after knowing of such relation, would release the Dubinskys if it ex-
Furthermore, it appears from the recitals of the extension agreement read in evidence that the extension notes were to be in effect collateral security for the original notes, secured by the trust deed which was not released, and that these were not to be surrendered until the extension notes were paid. A notation was put on these original notes that they were held subject to the terms of the extension agreement. Thus it is clear that the extension notes were not in payment of the original notes but that payments on them were only to be credited on the original notes when made. [See 10 C. J. S. 770, sec. 279; 8 Am. Jur. 446, sec. 792; 52 A. L. R. 1417, annotation, in which many Missouri cases are cited.] Thus the action of the trial court in refusing to receive evidence as to the amount due on the original notes was clearly wrong, and made it impossible for plaintiff to prove the amount for which suit was brought. When the Dubinskys filed an answer containing an equitable cross claim seeking affirmative equitable relief, it converted the action to one in equity. [Wendover v. Baker, supra.] This answer alleged that there was no consideration for the extension note upon which suit was brought. This opened up the whole matter and made evidence admissible as to the entire transaction. Although plaintiff did not properly include all offered documents in the bill of exceptions, enough appears to show the facts essential to decide the issue of liability. Since this case is in equity, we may consider all evidence properly preserved in the record, regardless of the trial court‘s rulings, determine what judgment should be rendered and direct the trial court to enter it. [Rice v. Shipley, 159 Mo. 399, 60 S. W. 740; Graham v. Karr, 331 Mo. 1157, 55 S. W. (2d) 995; Aden v. Dalton, 341 Mo. 454, 107 S. W. (2d) 1070.] If all essential documents had been properly preserved, it might have been possible to determine even the amount due. [Central States Life Ins. Co. v. Bloom, 345 Mo. 982, 137 S. W. (2d) 517.] However, since the Dubinskys’ evidence failed to show any ground upon which they could have been released from their original debt or escape liability therefor, we hold that they are liable. (The Cohens admit liability.) Therefore, the only issue for determination is the amount due.
PER CURIAM:—The foregoing opinion by HYDE, C., is adopted as as the opinion of the court. All the judges concur.
Paul P. Hoegen for Thomas R. Madden, Public Administrator, and Detjen & Detjen for Leopoldine Zahrada Schwarzbauer, Mrs. Anna Pohl and Maria Zahrada.