133 Mo. App. 163 | Mo. Ct. App. | 1908
This is a suit by the holder of a note against the grantee in a deed on a stipulation in the deed by which the defendant covenanted to assume and pay the note mentioned which was secured by a mortgage on the land conveyed by the deed. The plaintiff recovered and defendant appeals.
The facts out of which the controversy arose are somewhat complicated and will be stated in extenso. The plaintiff, Curry, and the defendant, LaFon, had formerly been partners in the real estate business. This partnership was dissolved, however, recently before their association in the present instance. Having decided to purchase some lands jointly in the state of Arkansas, they visited one Louis Sachs' who was engaged in the real estate business, and together examined and agreed to purchase 2,080 acres of land in Arkansas owned by Sachs. This was in July. They entered into a written contract with Sachs whereby they agreed to purchase the 2,080 acres of Arkansas land at the stipulated price of $17,000, to be paid as folloAvs: Curry and LaFon were to assume the payment of a $2,500 mortgage on the land, they were to pay Sachs $3,000 in cash, deed him certain property in Missouri owned by them jointly at the agreed price of $4,000, and to execute their joint promissory notes, payable to Sachs for the sum of $7,500, which notes were to be secured by a second mortgage on the lands acquired from Sachs. Sachs; agreed to furnish good and sufficient title to the Arkansas lands and execute a warranty deed therefor, subject only to the $2,500 mortgage thereon heretofore mentioned. The
As stated above, the evidence tended, to prove that Curry made a collateral deal with Sachs whereby he exchanged the Green City equity for the note in suit and others; that this collateral arrang-ament wasi carefully concealed from LaFon until the purchase of the Arkansas land was actually consummated and the notes executed; and further, that Curry made a secret profit by the exchange. That is to say, Curry seized upon the opportunity to be relieved from the entire contract for the purchase of the Arkansas lands because of the failure of title to a portion thereof, and thereby procured an agreement from Sachs to accept his Green City equity at an inflated value for the notes mentioned, and thus realize a secret profit to himself of probably $2,000. An argument is predicated on this evidence to the effect that Curry and LaFon having associated themselves together in a joint undertaking for the purchase of the Arkansas land, the highest degree of good faith was due from each to the other and that therefore the contract which Curry made with Sachs violative of this confidence and whereby a secret profit accrued to Curry, even though indirectly, as by the exchange of the equity for the notes, rendered the notes absolutely void as against public policy and therefore acquits* LaFon of the duty to respond to Curry in this action. The peremptory direction of a verdict for the plaintiff by the trial court, of course, eliminated this element of the defense. The defendant complains of this action and insists the matter should have been referred to the jury for an ascertainment of fact as to AVhether or not Curry and Sachs had in fact conspired to conceal this collateral arrangement from him, and that it resulted in a secret profit to Curry. It is no doubt true that the taking of a secret profit by one of two co-adventurers in the manner and under the circumstances
As stated before, the suit proceeds upon the covenant in the deed by which the defendant assumed the payment of the note to Curry. It is well settled that a covenant contained in a deed of the nature mentioned, creates an obligation on which a mortgagee may sue the grantee covenantor for the indebtedness assumed. [Fitzgerald v. Barker, 4 Mo. App. 105, 70 Mo. 681, 85 Mo. 13, 13 Mo. App. 192; Keifer v. Shacklett, 85 Mo. App. 449; Jones on Mortgages (6 Ed.), sec. 740 et seq.] And it is the universal rule that the purchaser in such circumstances is not allowed to defend against a mortgage debt he has assumed to pay on the ground that it is without consideration. [Terry v. Durand Land Co., 112 Mich. 665; Crawford v. Edwards, 33 Mich. 354.] Nor will he be heard to set up the invalidity of the mortgage. [Parkinson v. Sherman, 74 N. Y. 88.] The purchaser is not permitted to show the mortgage deed was invalid as against the mortgagor. [Crawford v. Edwards, 33 Mich. 354; Comstock v. Smith, 26 Mich. 306; Gowans v. Pierce, 57 Kan. 180; Alt v. Branhozer, 36 Minn. 57.] Nor will he be permitted to say the mortgage debt as
Now in the case at bar, while Curry and LaPon held the equity of redemption, the lands were encumbered by what is commonly known ás a mortgage deed of trust By the provisions of this instrument, the legal title was vested in Louis Sachs with power of sale upon default in the payment of the notes mentioned. Sachs therefore occupied the position of trustee in whom the legal title to the lands at all times resided and thus intervened to prevent a merger of estates in Curry by virtue of his holding the notes while he was cotenant in the equity of redemption. Aside from all of this, LaFon’s acceptance of the covenant assuming to pay the indebtedness mentioned as parcel of the consideration for the lands, operates to estop him from making the defense of merger. [Fitzgerald v. Barker, 85 Mo. 13, and cases supra.]
It is argued that as Curry and LaFon were joint and several makers of the notes, the fact that Curry purchased the same from Sachs and received an assignment thereof, operates at law as payment and entirely extinguishes the indebtedness therein evidenced and that therefore there is no indebtedness evidenced by the note upon which the covenant in the deed could attach and operate. Although the purchase of the note by Curry, one of the original makers, operated the extinguishment of its original obligation, so as to prevent him from maintaining an action thereon against LaFon other than for contribution or for money paid to the use of his coobligor (Williams v. Gerber, 75 Mo. App. 18; Dillenbeck v. Dygert, 97 N. Y. 303; Reynolds v. Schade, 131 Mo. App. 1; 109 S. W. 629-632; Stevens v. Hannan, 86 Mich.
As to the proposition that even though the note was void in the first instance, it was competent for LaFon to reissue the same as a valid obligation against himself for a new consideration. It may be said that if it was
The judgment will be affirmed.