177 Iowa 122 | Iowa | 1916
We think it is not very material whether the case was tried in equity or as a probate proceeding. Deceased died April 22, 1912. ITis will, executed July 2, 1907, was duly admitted to probate, and I. W. Clendenon was appointed executor. The first paragraph of the will creates a trust for the benefit of the wife of deceased, should she survive him, but in case of her prior death, the trust property was to go to the same persons as provided in paragraph 4 of his will. Paragraphs 3 and 4 are as follows:
‘ ‘ Third: I hereby will, devise and bequeath to my beloved son, Edmund A. Barnes, the undivided one fourth of all my farm, on which he is living at this time, in Section No. 28, Township 75 North, Range 17 West of 5th P. M., in Mahaska County, Iowa, to be his absolutely, in fee simple, in addition to what I shall hereinafter bequeath him; I also will, devise and bequeath to him the undivided one half of all the stock, machinery, and personal property on the farm at the time of my death to be his absolutely. All the bequests made by this third división of my will are not advancements in any event, and whatever claims or indebtedness of every kind and nature I may have or hold against my said son, Edmund A. Barnes, shall not be offset against the above bequests or any of them; but all of the above bequests are gifts absolutely to my said
‘ ‘ Fourth: I hereby will, devise and bequeath all the rest, residue and remainder of my estate, real, personal and mixed, to my beloved children: Edmund A. Barnes, Andrew T. Barnes, my sons; my daughters, Nell B. Clendenon and Franc B. Hull; my sons, Fred L. Barnes and John R. Barnes, and my daughter, Mamie B. Lackey (these being all my children), to be equally divided among them, sharing equally and share alike, except, however, any and all notes and other evidences of indebtedness, if any, that I may hold at the time of my death, against any or all of my said children, the same are to be treated as advancements and set off against the share of said child or children in and to the property bequeathed and devised by this fourth division of this, my will, in order that each and all of my said children may be treated equally and alike in the division of the property included in this fourth paragraph or division of this my will.”
The wife died first. June 10, 1905, B. D. Lackey, the then husband of objector, Mary B. Lackey, gave two notes in the following form:
“$1,500.00. Oskaloosa, Iowa, June 10, 1905.
“On or before six months after date we promise to pay to the order of Mahaska County State Bank, at its Banking House in Oskaloosa, Iowa, with six per cent interest from date, Fifteen Hundred Dollars, together with a reasonable attorney’s fee in ease suit is commenced for collection of this note. The holder of this note is hereby authorized to extend the time of payment of the same by reception of interest in advance or otherwise without impairing our joint or several liabilities. If the holder of this note is willing we consent that a justice of the peace shall have jurisdiction for collection of same. Interest when due to bear eight per cent per annum.
“B. D. Lackey.
“Due December 10, 1905. No. 25612.”
“"Without recourse on us pay to John R. Barnes or order. Mahaska County State Bank, by John R. Barnes, Cashier.
April 7, 1907, Paid on within note... .$100.00
April 4, 1908, Paid on within note.,.. 5.00
Dec. 1, 1908, Paid on within note.... 12.50
April 6, 1909, Paid on within note.... 12.50
May 1, 1910, Paid on within note.... 12.50”
“$1,142.00 Oskaloosa, Iowa, June 10, 1905.
“On or before six months after date we promise to pay to the order of Mahaska County State Bank, at its Banking House in Oskaloosa, Iowa, with six per cent interest from date, Eleven Hundred and Forty-two Dollars, together with a reasonable attorney’s fee in case suit is commenced for the collection of this note. The holder of this note is hereby authorized to extend the time of payment of the same by reception of interest in advance or otherwise without impairing our joint or several liabilities. If the holder of this note is willing, we consent that a justice of the peace shall have jurisdiction for collection of same. Interest when due to bear eight per cent per annum.
“B. D. Lackey.”
Five payments, amounting to $142.50, were indorsed on-the back of each note, the dates and amounts being the same. Both notes were also indorsed: “Without recourse on us, pay to John R. Barnes, or order. Mahaska County State Bank, by John R. Barnes, Cashier. ’ ’ Deceased was the cashier of the'bank at the time these notes were given. After deceased had taken up the two notes just referred to,- and on August 24, 1905, B. D. Lackey gave a new note, the payment of which was guaranteed by his wife, who is the same person as Mary B. Lackey, the objector. The note is in the following form:
“For value received on or before December 10, 1905, I promise to pay to the order of John B. Barnes, at the office of Mahaska County State Bank, in Oskaloosa, Iowa, the sum of Twenty-six Hundred and Seventy-five Dollars, with interest at six per cent from date hereof, together with a reasonable attorney fee in case suit is commenced for the collection of this note. The holder of this note is hereby authorized to extend the time of payment of the same by reception of interest in advance or otherwise without impairing the obligation of the maker or endorsers or guarantors of this note. All interest, if not paid when due, shall bear •interest at the rate of eight per cent per annum.
“This note is made to John B. Barnes for the purpose of securing him harmless by virtue of his having endorsed two notes for me (B. D. Lackey) in favor of the Mahaska County State Bank; one for the sum of $1,142, dated June 10, 1905, due December 10, 1905, being bank No. 25611, and one for $1,500, of date June 10, 1905, due December 10, 1905, bank No. 25612; both of said notes are payable to the Mahaska County State Bank and draw interest at the rate of six per cent per annum from date, and if interest is not paid when due the same to bear interest at eight per cent per annum. Both of said notes being endorsed ‘John B. Barnes.’ All payments made by me on said notes to said bank shall be the same as though made on this note, and the payment of said notes, with interest as therein provided, by me shall cancel this note. But all sums and interest of said notes or the renewals thereof, should they be renewed, and all extensions made on said notes with interest remaining unpaid, and all principal or interest on said notes p'aid by the said John B. Barnes or his legal representatives, is secured to him by this note, and that the renewal and extensions of said notes herein described shall in no wise affect my obligation on this note for any unpaid balance remaining on said two notes not paid by me, together with the interest thereon, and all costs and
“B. D. Lackey.
“Attest: — W. H. Keating.
“For value received, I hereby guarantee payment of the within note, waiving time, notice of non-payment and protest. Also, waiving demand, notice of non-payment and protest of the two notes described herein for which this note is given as a protection to the said John R. Barnes for his endorsement on said notes to said Mahaska County State Bank. I further waive any notice of extension or renewal, transfer or assignment of said two notes, or either of them, or their presentation to me for their payment, or either of them, or this note, and the failure to.present said two notes, or either of them, or this note to me for payment or the extension or renewal of said two notes and the assignment and transfer thereof shall in no wise in either of these events affect this, my guarantee thereof.
“Mrs. B. D. Lackey.”
“Philadelphia, Penn., December 15, 1911. Captain W. H. Keating, Oskaloosa, Iowa. Dear Captain: — I know you used to look after my father’s affairs and believing you are still doing so, I want to write you in reference to a matter. I remember signing an assignment of my interest, whatever it may be, in father’s estate, when I was home one time, about six years ago. You remember that you prepared the paper and had me sign it in your office. It was when father was very ill, the first stroke he had,. I believe. I made an assignment of my interest to' the extent of $3,000, which was the amount Mr. Lackey had borrowed in 1903 from the Mahaska County State Bank, of which father was the cashier at that time. Later on, when father resigned as cashier, my recollection is that the bank took father’s own personal note and endorsed over to father Mr. Lackey’s note which they held for me, $3,000. I would like very much to see this indebtedness fully discharged and to that end will you kindly let. me know just how much is due, interest and all, and let me have a copy of the note which the bank endorsed to father, and also a copy of the paper which I signed, assigning my interest in father’s estate to the extent of this debt. "Will you please let me have this information and copies as soon as you can, and oblige, Yours very truly, Mary Barnes Lackey.”
On December 31st, she wrote the executor, the following letter:
“Philadelphia, Penn., Dec. 31, 1912. Dear Cien: — I am enclosing a letter to you, from my attorney, Mr. A. PI. Powden, of Lancaster, Penn., who used to be a partner of Bert’s and knows him well, and if anyone can collect the money on these notes, I know he can, and I think after reading his letter to me, you will think he is treating me fair and square. He
“Lancaster, Pa.,"Dec. 30th, 1912. Mrs. Mary B. Lackey, Phila, Pa. Dear Mrs. Lackey: Have carefully read the portion of the letter addressed to Mrs. Powden intended for me, and in view of the fact that your former husband is back in Philadelphia, and in the jurisdiction of the courts of Pennsylvania, and the further fact that he is now engaged in raising capital for and organizing a new company to do business down in Texas, and must either have the money himself or is associated with others who have it and are putting it up, otherwise he could not be riding around in an automobile, and living at such swell apartments as the Delmar-Morris, and giving theatre parties and dinners, and his present wife loaded down with furs and diamonds, compels me to advise you that now is the time, if anything is to be recovered to act and to act quickly. This is what I want you to do. I do not want you to tell Mr. DeLong or anybody else that your interest in your father’s estate as written to you by your brother will be $7,000 instead of all being eaten up by Mr. Lackey’s notes, as you can depend all such information is carried back'to B. D. Lackey. Please do not discuss your
“P. S. In Pennsylvania, unless a debt is acknowledged or paid within six years, it is barred by the statute of limitations, or in plain words outlawed, and you cannot recover. By acknowledging it, I mean such as the payment of interest, and that would carry it six years from that time. In looking into the matter, I found the cheek given to your father by B. D. Lackey, Dec. 11th, 1908, for $25, this would be sufficient to carry it until 1914. I do not know whether he has paid any interest on it since then or not. I am enclosing check, which is very good proof. You may send it along with the letter for the inspection of Mr. Keating, and return it to me with the other papers when they forward them. Respectfully yours, ’ ’
So much of the testimony as appears to be material to the determination of the questions presented will be referred to. The executor testified that he sent to the objector, who lives in Philadelphia, a copy of his partial report, including the note and interest, which he claimed was against her share of the estate, and at the same time sent a check in the sum of $710.80, which was the difference between the amount of the note and the amount of the distribution made at the time; that she acknowledged the receipt of the papers and the cheek, and returned a receipt for the same. The check was indorsed and cashed by her. When final distribution was made, another check, dated April 28, 1914, in the sum of $692.30, was sent to her by the. executor, which was indorsed and cashed by her. These checks, together with certain corporation stock which was sent to her and retained by her, were the amount of her share in the estate, after the notes, or alleged indebtedness by her, were deducted from her share. The bank stock and the saddlery stock were sent to Mrs. Lackey at 'the same time as the last cheek, or at a time prior thereto. In making the deductions, the executor deducted the amount of the note,
The executor further testified that the original notes, before referred to, were in possession of the estate at the time he became executor; that he sent them to Mrs. Lackey either in December, 1914, or when he sent her the last check; that he never tried to collect the notes for the estate, but tried to collect them for her from her husband by her order; that Mrs. Lackey obtained a divorce from her husband before her father died. Mr. Keating testified that he represented John R. Barnes in his lifetime in relation to the two notes referred to in the new note; that he, John R. Barnes and Mrs. Lackey, were present when he drafted the new note. He states that the conversation at the time the note was given, was as follows:
“Mr. Barnes, the father, said to the daughter, ‘I hold two notes against you people; you are living too extravagant; you want to learn to save your .money; your husband is getting a large salary and those notes must be paid; I am probably on my death-bed, and I want my children to share as near equally in my property as possible, and if your husband don’t pay those notes, you and he together save up and pay those notes, then I must deduct the amount of them from your interest in my estate. I would like to fix this note or property in such shape as to as" far as possible compel your husband to be more careful in the use of money, and you ought to be more careful. You are both young and your husband is getting such a salary that instead of living at the height of extravagance, as you do, you could pay these notes in a year or two easily and take care of everything, and I insist that you shall do it. Now, I want Mr. Keating to draw a note, and I want your husband to sign it, and I am going to try and get every dollar of it from him, if I can, and I want you to guarantee the payment of that note, and you must understand that it is to be taken from your share in my estate, and I will not say anything to Mr. Lackey of our conversation, so as to encourage him as far as possible, or
He testifies further that his recollection is that the two notes were assigned afterwards by the bank to deceased; that the conversation and transaction in regard to the new note and guaranty signed by B. D. Lackey and Mrs. Lackey was at the home of deceased while he was lying in bed at the time he had his first stroke; that, though deceased was weak, he was able to sit up, but had not left, the house; that he was feeble because he was advanced in years; that witness did not take charge of his business for a year or more after the execution of this new note; that deceased went back to the bank and was in the bank several months after his first stroke, when he was stricken a second time, and witness commenced to do business for him after his second stroke; that the two notes were handed to witness by executor and mailed to Mrs. Lackey some time in July, 1914, at her own request. 'Witness says further:
“I never represented to Mrs. Lackey that her father had endorsed the notes. I wrote the new note. Q. And you stated in there that Mr. Barnes had endorsed that note? A. Well, that was their talk to me at the time. Q. Didn’t you have the notes before you at that time? A. No, I don’t think so. Mrs. Lackey had the notes when she attempted to make a settlement with her husband; they were sent to her. These two notes were returned to the estate probably two or more months after the death of John R. Barnes. They were returned to me by Mr. Powden, who had attempted to collect these notes for Mrs. Lackey; that is the first recollection of the notes in the estate, and I had charge of Mr. Barnes’
No evidence was offered on behalf of the objector, except that, as a part of the cross-examination of Mr. Keating, she offered a part of the supplemental final report of the executor, showing the note of B. D. Lackey, dated August 24, 1905, and the guaranty of Mrs. Lackey. This report contained copies of the note, which have heretofore been set out. Mr. Keating had testified that he prepared the supplemental final report.
“That said executor in said report has charged to her a note executed by B. D. Lackey and amounting at the time of the said report to the sum of $3,714.20. This objector states that said, note should not be charged to her, for the reason that she did not execute the same, and that it was not a note or other evidence of indebtedness that the said decedent held at the time of his death against this said objector, but was the personal debt of B. D. Lackey, and that no part of the consideration passed to this, objector. That if said note be uneollectable, the loss should fall equally upon all of the residuary legatees and not upon her alone. She denies that she was surety on the note of B. D. Lackey, and states that, when said note was executed by the said B. D. Lackey, it was executed by him alone, and not by his objector in any manner. ’ ’
The executor’s so-called equitable answer to these objections is quite lengthy, and recites substantially all the facts which we have set out, and some other matters. One part of the answer is the claim that, at the time of the execution of the guaranty by Mrs. Lackey, she agreed to- and accepted said indebtedness as her own, and consented and agreed that, if her husband did not pay the same, it should be deducted from her interest in her father’s estate; that the contract of guaranty was made in part for the benefit of Mrs. Lackey in assisting her in compelling her husband to pay the note; that the debt was, in fact, her debt, and held against her interest in the estate of her father; and that, therefore, the execution of said guaranty, and her promise to pay the debt, in the manner before stated, was not the promise to pay the debt of Lackey, but her own debt, which her father recognized as due from her to his estate in order to equalize the shares of his-children; that, because of these matters, she is barred and
They also plead that the original notes were used to assist objector in her divorce proceedings against her husband, in an effort to compel him to make payment to her of sufficient money to pay the note, or turn over property to her for that purpose. It is also pleaded that, subsequent to the making of said note and after it became due, deceased made his will, in which he provided for the payment or the deducting of all evidence of indebtedness, and that such indebtedness should be considered as advancements; that, immediately after the death of said -John R. Barnes, Mrs. Lackey requested the executor to send the original notes to her attorney, Powden, for the purpose of collecting the same from her husband; that the notes were sent, together with $50 from the estate as a retainer fee; that an attempt was made to collect the notes for her from her husband to save her interest in her father’s estate, to all of which Mrs. Lackey agreed, and accepted the provisions and conditions made for her, and directed the attorney as to collecting the same; and that thereby she made the debt her own, and that she is estopped from denying such indebtedness as her own. It is also pleaded that, because the objector accepted the two checks heretofore referred to, and the corporation stock, knowing that the same had been deducted from her share of the estate, she made said indebtedness her own, and thereby recognized her agreement with her father, and that thereby she is barred and estopped from claiming that she is not the maker of said notes, and that the one guaranteed by her is not her debt. It is also pleaded that, by reason of all of the facts and the agreements before set out, the executor, relying upon her statements, conduct and contracts, had paid over the money to the several parties entitled to receive the same, upon the basis of the statements as set forth in his reports, copies of which were sent to her; that he has no funds in his hands with which to pay any excess, because he was led by objector, by the facts before recited, to pay out said money and make
1. Appellee’s principal contention in the court below was, and in this court is, that there was no consideration for the new note given August 24, 1905, by B. D. Lackey, and the guarantee thereof by his wife was without consideration, and the trial court made a finding that there was no consideration, and for that reason held that the amount of the note could not be deducted from the share of Mrs. Lackey as an advancement. Appellant’s principal argument is also upon this question and to meet the contention of appellee. Appellee’s contentions are that the provision of the Code that all contracts in writing signed by the party to be bound shall import a consideration has no application to a case where the consideration is expressed and fully stated in unmistakable language in the written instrument itself (citing cases); that, where the payment of a note is guaranteed subsequent to its delivery, there must be a distinct and separate consideration for such guarantee, and that, after the original consideration is exhausted, there must be a new and sufficient consideration (citing cases). And further, that, in the absence of evidence of a request to forbear, the act of forbearance itself would not indicate that it was in pursuance of a promise to forbear, and the guaranty would be invalid for want of consideration; and that, where the guaranty is solely of a pre-existing debt, it is without consideration and void. We should have stated, in stating the facts, that there was some evidence that deceased was willing to extend the time of the payment of the notes in order that the makers might pay in small installments.
Appellee also argues that the rights of the parties were fixed as of date August 24, 1905, and that on that date deceased had not indorsed any notes, and if any indorsement was to afford any consideration for the execution of the note of August 24th. it must have been on or before that date;
Appellant contends, substantially, that the note is not only an evidence of indebtedness, but an indebtedness of the said Mary B. Lackey; and that the amount unpaid was to be deducted from her share in her father’s estate, in accordance with the terms and provisions of his will, coupled with the relation and agreements of the parties; that the guaranty, as made by Mrs. Lackey, was an evidence of indebtedness, because she so understood it when she signed the instrument, as shown by the testimony in regard to what occurred at the time of its execution; and that time was extended, and for the consideration that she and her husband should pay $25 per month, or more, until paid; and that the note and guaranty were due before her father’s death and were an absolute debt against her, which, by reason of the understanding between her and her father, was not pressed and
It is not necessary to determine the rights of the bank, for, without any question of advancement, an attempt had been made to collect the original notes of B. D. Lackey; nor is it material to determine the rights of the parties if Mrs. Lackey were attempting to force payment of, the original notes as against her husband; but, aS stated, it is a question whether, under the will, which was made after the execution of all these notes, they or any of them should be treated as an advancement and be deducted from the share of Mrs. Lackey in her father’s estate. This is to be determined from all the
“Any and all notes and other evidences of indebtedness, if any, that I may hold at the time of my death against any or all my said children, the same are to be treated as advancements and set off against the share of said child or children in and to the property bequeathed and devised by this fourth division,” etc.
And this shall be done in order that his said children may be treated equally in the division of the property included in the fourth paragraph.
We are of opinion that the trial court erred in sustaining the objections and' refusing to deduct the indebtedness from Mrs. Lackey’s interest. The cause is, therefore, — Reversed and Remanded.