132 Mo. App. 279 | Mo. Ct. App. | 1908
This action was brought by plaintiff to recover from defendant twelve hundred and sixty-five dollars alleged to have been paid to it by the mistake of plaintiff induced by false representations of defendant. There was a change of venue from Lawrence to Jasper county where plaintiff had judgment. It appears that G. A. Paul borrowed $1,200 from O. J. Wilson, giving his note therefor. And that to secure payment of the note he executed, on same day, a chattel mortgage on a livery stock and a deed of trust on real estate. The realty was owned by his wife, Ella Paul, who joined in the execution of the deed of trust.
Plaintiff charges in his petition that afterwards defendant foreclosed the chattel mortgage by advertising and selling the personal property therein described for $1,400, more than enough to pay the note and interest and that defendant thereby received said sum, which was fall payment of the note. He further charges in his petition that defendant came to him and represented that Paul had been declared and adjudged a bankrupt and that the proceeds of the sale under the chattel mortgage had been taken from defendant by the trustee in bankruptcy under an order of the referee. That defendant then demanded of him that he pay the note he had assumed, threatening that if he did not it would proceed to sell his property under the deed of trust. That believing defendant’s statements he paid the note, and he therefore asks judgment against defendant for the amount paid in such circumstances. The evidence shows that defendant sold a part of the personal property under the terms of the chattel mortgage, for which it received the net sum of $690; and that it sold the balance of the property at private sale.
When plaintiff accepted his deed from the Pauls which contained the clause wherein he assumed the payment of the note, he became bound as a principal to pay it to defendant and G. A. Paul, the maker, became his surety. [Nelson v. Brown, 140 Mo. 580; Pratt v. Conway, 148 Mo. 291; Wayman v. Jones, 58 Mo. App. 313; Fender v. Hazeltine, 106 Mo. App. 28; Wonderly v. Geissler, 118 Mo. App. 708.] The note repre
But, while all that is true, it is apparent, on the mere suggestion, that when defendant sought to hold him to such obligation there must then have been in existence, as a subsisting claim, the indebtedness said to have been assumed. So, therefore if when defendant demanded payment of plaintiff, the note had been paid by the foreclosure of the chattel mortgage or a conversion of the property, defendant was left without any basis for its demand. And to that effect was a ruling of the circuit court in passing on an objection to evidence during the trial. The court remarked that “Of course, if the original debt was covered by chattel mortgage and also by mortgage on the real estate and by process of foreclosure (of the chattel mortgage) the debt was wiped out, there wouldn’t be anything to assume.” It is no answer to this to say that plaintiff obligated himself to pay the note and that if he does not pay it he rids himself of the obligation to pay for the land. For'' that would be no concern of defendant’s; if the .note has been paid to it, it has no excuse to meddle with the rights of others. The party concerned would be Mrs. Paul. Doubtless she could force plaintiff to pay to her direct what he had agreed to pay for her and did not. She could go to plaintiff and say to him “You agreed to pay a debt of mine as part payment for the land I sold to you. That debt has been paid from another source and therefore you owe me the amount of such debt; otherwise you will be rid of paying for the land.” In such manner would be avoided the inequitable state of affairs suggested by defendant of plaintiff getting the land without paying the purchase price.
But when it comes to the amount received by defendant from its private sales of other parts of the mortgaged property, we have to consider a different question. When a mortgagee appropriates the mortgaged property to his own use, or as might be said, when he converts it to his own use, it has sometimes been said to discharge the entire debt, but the better rule is that it is a discharge of the debt up to its value. [Hazard v. Robinson, 15 R. I. 226; Babcock v. Wells, 25 R. I. 23; Bank v. McKenny, 78 Me. 442; 4 Kent, sec. 182.] And that rule was in effect recognized and applied by our Supreme Court in Cohn v. Souders, 175 Mo. 455.
In thus concluding that the defendant had no right to demand of plaintiff the amount of the value of the mortgage, property appropriated, we have not overlooked what we regard as an untenable defense of defendant’s action in regard to such appropriation. That defense is this: That the mortgagor Paul got that part of the mortgaged property, thus appropriated, from one Hawkins, by false and fraudulent representations made to Hawkins, which had the effect of avoiding the sale by Hawkins to him and that no title passed, by reason of the fraud. It is perhaps enough to say of this that we know of no authority in defendant to become guardian for Hawkins and to administer upon his affairs. Whatever fraud may have been practiced upon Hawkins in the sale of the property by him to Paul, the sale was not void; it was only voidable at the election of Hawkins (Parker v. Marquis, 64 Mo. 38; Cahn v. Reid, 18 Mo. App. 115, 122, 126); and as long as he does not complain, it is no concern of defendant’s.
The judgment will be reversed and the cause remanded, with directions to enter judgment for the plaintiff for six hundred dollars and interest.