| Mo. | Apr 1, 1903
This action was begun by plaintiff filing his petition in four counts upon four coupon notes of the aggregate amount of five hundred and sixty dollars, for which sum with interest thereon he asked judgment. To plaintiff’s petition defendant filed the following answer:
“Come the defendants and make now their appearance to. this cause of action, and answering say:
“1. In answer to the first and third counts of said petition, these defendants admit that.they executed the •coupons, or interest notes, or instruments of writing, as set out in said first and third counts of said petition and attached as exhibits thereto; and admit that they are indebted to the plaintiff, by reason of the execution of said instruments, in the sum of $280; that is, by reason of the said coupons or instruments of writing declared on in the4first count of said petition in the sum of $200, and by reason of the coupon or instrument of writing declared on in the third count of said petition in the sum of $80; but defendants deny that they are indebted' to said plaintiffs by reason of any interest on said instruments of writing, or either of them, or for any further or other sums on the instruments declared on in the first and third counts of said petition than in the aggregate sum of $280, and which said sum of $280 the defendants here tender in open court to the plaintiff and ask to be discharged from the action declared on in said •counts, with their costs.
“2. Defendants .admit that they executed the instruments declared on in the second and fourth counts of said petition, copies of which instrument are attached thereto; but defendants say that they are not indebted to the plaintiff by reason of the execution of said instruments, and were not at the time of the institution of this suit; that said coupons, or interest notes, declared*154 on in said second and fourth counts of said petition, copies of which are attached to said petition, were at the time of the institution of this suit duly paid off and discharged. Wherefore defendants pray to be discharged with their costs.
“3. Defendants, for another and further defense to said cause of action, set out in all the counts of said petition, say that prior to the 1st day of October, 1897, the said Sampson Bass, one of the defendants herein, was in litigation with the said Brinkerhoff-Faris Trust and Savings Company (hereinafter designated Savings company), an organization duly incorporated under the laws of the State of Missouri, and located and having its place of business in the city of Clinton, in the State of 'Missouri. That at that time an adjustment and agreement of all matters in litigation was reached between said parties — the defendant, Sampson Bass, and the said Savings company — whereby the said Sampson Bass admitted an indebtedness of $7,000 to said Savings company, but not then being able to pay said amount, and having no property out of which to pay said debt than' the real estate hereinafter mentioned, defendants agreed that they would execute, to said Savings company their certain promissory notes for the said sum of $7,000, provided they should be permitted to pay said notes from proceeds of sale of real estate from time to time as said real estate should be sold; and in pursuance of said agreement, and for the consideration aforesaid, defendants, on October 1, 1897, made, executed and delivered to the said Savings company their two certain promissory notes in words and figures as follows:
“ No. 3573A . $2,000
“ ‘United States of America.
“ ‘State of Missouri. Real Estate Bond.
“ ‘Know all men by these presents, that we, Sampson Bass and Eliza Bass, of Greene county, in the State of Missouri, for value received, are justly indebted to*155 the Brinkerhoff-Faris Trust and Savings Company of Clinton, Missouri, in the sum of two thousand dollars, which sum of money in New York exchange we hereby promise to pay to the said Brinkerhoff-Faris Trust and Savings Company, or order, on the first day of October, A. D. nineteen hundred and two at the office of the said Brinkerhoff-Faris Trust and Savings Company,' at Clinton, Missouri, with interest at the rate of eight per cent per annum from this date until due or default be made, and if not paid when due, or if a default occur in the payment of any of the interest coupons hereto attached, then' this bond to bear interest at the rate of eight per cent per annum thereafter, said interest until the maturity of this bond being payable semi-annually on the first day of April and October in each year according to the terms of ten coupons of even date herewith attached to the bond and numbered from one to ten inclusive. This bond is secured by a deed of trust of even date herewith being the only lien upon certain real estate situated in Greene county and State of Missouri, which deed of trust is duly recorded, and is payable according to the conditions in said deed of trust expressed. Dated at Clinton, in the county of .Henry and State of Missouri, on the first day of October, 1897.
“ ‘Sampson Bass,
“ ‘Eliza Bass.’
“That the instruments sued on as set out in the second and fourth counts of said petition are two of the ten coupons mentioned ifi. the note just above described, and are numbers 4 and 5 of said coupons.
“ ‘No. 3573B $5,000.
“ ‘Unifed States of America.
‘ ‘ ‘ State of Missouri. Real Estate Bond.
‘ ‘ ‘ Know all men by these presents, that we, Sampson Bass and Eliza Bass, of Greene county, in the State of Missouri, for value received are justly indebted to the BrinkerhoffiFaris Trust and Savings Company of Clinton, Missouri, in the sum of five thousand dollars,*156 which sum of money in New York exchange we hereby promise to pay to said Brinkerhoff-Fáris Trust and Savings Company, or order, on the first day of October, A. D. nineteen hundred and two at the office of the said Brinkerhoff-Fa ris Trust and Savings Company, at Clinton, Missouri, with interest at the rate of eight per cent per annum from this date until due or default be made, and if not paid when due, or if a default occur in the payment of any of the interest coupons hereto attached, then this bond to. bear interest at the rate of eight per cent per annum thereafter, said interest until the maturity of this bond being' payable semi-annually on the first day of April and October of each year, according to the terms of ten coupons of even date herewith attached to the bond and numbered from one to ten inclusive. This bond is secured by a deed of trust .of even date herewith being the only lien upon certain real estate situated inr Greene county and State of Missouri, which deed' of trust is duly recorded, and is payable according to the conditions of said deed of trust expressed. Dated at Clinton in the county of Henry and State of Missouri, the first day of October, 1897.
■ “ ‘Sampson Bass,
“ ‘Eliza Bass.’
“That the instrument sued on and set out in the first and third counts of said petition are two of the coupons mentioned in the second note just above described as numbers 4 and 5 of said coupons. That for the purpose of securing the payment of both said notes herein set out, and all the coupons thereto to each note attached, defendants on October 1, 1897, made, executed and delivered to John H. Lucas and Herman P. Faris, as trustees, their certain deed of trust conveying to said trustees the real estate therein described, and in which is set out the terms and conditions upon which said notes might be paid, which said deed of trust is in words and figures as follows: . . . > '
First. “It being expressly agreed that first parties may sell any portion of the above described property at its fair and reasonable value and have the same released from the lien of this incumbrance by paying the full purchase price and value thereof on the indebtedness hereby secured, and all interest on such sums so paid shall cease and determine from the next semiannual interest payment thereafter, but no such sale shall be completed or this agreement be binding unless the third party is first consulted and the purchase price of such proposed sale is satisfactory to it. ’ ’
Second. “ Or if said first party shall give notice of intention to make payment before due, as hereinbefore provided, and payment in accordance with said notice is not made, then it is hereby specifically agreed that the whole debt shall, at the option of the legal holder of said bond and unpaid coupons, become due and payable and this deed shall remain in force. ’ ’
“That by the terms and conditions of said deed of trust, it was expressly agreed that the payees of said notes, the first parties in said deed of trust and the defendants in this suit, might sell any portion of the above-described property mentioned in said deed of trust at its fair and reasonable value and have said real estate so, sold released from this incumbrance by paying the full purchase price and value received therefor on the indebtedness secured by said deed of trust; and it is further provided that said notes hereinbefore mentioned and set out in said petition might be paid or partially paid from the sale of said mortgaged property, or any portion thereof, as in said deed of trust set out, and that such payment of said notes, or partial payments thereon, might be made at any interest-paying
“4. And defendants now, as a counterclaim against said indebtedness of defendants to plaintiff, as in the third defense of this answer set out, and adopting all of the allegations of said third defense of tMs answer as part of their statement of counterclaim further say, that about August 1, 1899, defendants notified said Faris, one of the trustees in said deed of trust and the secretary and treasurer of said Savings company, that they, the said defendants, desired to pay off all of said notes and all interest due thereon up .to the first day of October, 1899. That thereupon the said Faris informed the plaintiff, who had at that time become and was the owner and holder of said notes, that application was made by the defendants herein to pay same and said notes were sent by the said plaintiff, who was then and now is a non-resident of this State (his exact place of residence is not known to these defend
I. To defendants’ answer plaintiff replied, denying the allegations thereof, and upon the issues thus joined the case was heard and determined by the trial court, resulting in a decree in substantial compliance with the prayer of defendants’ answer. At the trial there was but little controversy over the facts, and so far as concerns this appeal they may be said to be conceded.
The defendants without consulting plaintiff, procured $8,500 from third parties,. by the placing of a
The judgment of the trial court was that defendants were indebted to plaintiff in the sum of $7,280 on account of the notes in question, and the interest thereon to October 1, 1899, and that defendants were entitled to recover of plaintiff on their counterclaim in the sum of $728. It was then ordered and adjudged that upon the payment by defendant of the sum of $6,552 to the clerk of the court for the benefit of plaintiff, said clerk being appointed receiver to take and hold said sum for payment to plaintiff if he will receive same and if not then to be subject to-the further order of the court; that the deed of trust made by defendants to secure said notes and held by plaintiff be ordered and decreed satisfied, and the real estate described therein be discharged and released from the lien incumbrance of said deed of trust, and that defendant pay cost of suit.
' But two questions are presented on this appeal, the first being whether under the provisions of the deed of trust above quoted and upon the conceded facts shown, the defendants had the right to pay off their notes before the maturity thereof, as expressed upon their face, when the money tendered to pay same had not been obtained from an absolute sale of the real estate named
No question is made by appellant that the recitations in the deed of trust in relation to the manner and time of payment o'f the notes in suit, are not properly considered, as incorporated into and as forming a part thereof, for the purpose of determining when a payment may be made thereof at a time other than at their face maturity; but his contention is, that the face of the notes must determine, the time of their maturity for payment unless it is shown that defendants have complied strictly with all the requirements of the terms of the deed of trust maturing the notes at an earlier or different period; and that as defendants have shown, by their own testimony, that they did not ask to have these notes paid off by money arising from the sale of a part or all 'of the land named in the deed of trust securing them at the time the tender was made to him, but that in fact they asked to pay off said notes with money obtained by placing upon said land a second deed of trust to other parties, they could not then mature their notes for the reception of the money tendered, and that the right of respondents to pay the notes in question before their maturity, as expressed upon their face depended strictly upon the fact that the money tendered must have been derived from the sale of the mortgaged property and not otherwise. Plaintiff’s contention in this regard is based upon his construction of the meaning of this paragraph of the deed of trust in question:
“It being expressly agreed that first parties may sell any portion of the above described property at its fair and reasonable value and have the same released*164 from the lien of this incumbrance by paying the full purchase price and value thereof on the indebtedness hereby secured, and all interest on such sums so paid shall cease and determine from the next semiannual interest payment thereafter, but no such sale shall be completed or this agreement be binding unless the third party is first consulted and the purchase.price of such proposed sale is satisfactory to it. ’ ’
As applied to the question of when and under what circumstances the notes secured by that instrument may become payable, what means the paragraph of the deed of trust above quoted? As said, appellant contends that by its terms he is not bound to accept ány money on the principal notes held by him until their maturity as expressed on their face, except such sums as defendants might obtain and offer to apply on the notes from an absolute sale of a part or all of the real estate named therein; while upon the other hand, respondents insist that the question from what source came the money to make a payment, partial or in full, on plaintiff’s notes at any interest payment date, is a matter of concern to him only in so far and to the extent that if obtained from the sale of the real estate included in his deed of trust he might know that he should receive on his notes the full value of the land sold, which he would be required to release from the operation of his deed of trust, when a sale was made of the land in part or in whole with appellant’s consent and approval; that in so far as concerned plaintiff, the second mortgage placed upon the land by defendants to raise the money to pay off their obligation to plaintiff is in effect a sale of the land.
If we cast aside the undisputed testimony of defendants as to what was said and talked between the parties to the deed of trust at the time it was being made, as to the manner of and the^time when the notes secured thereby might and were expected to be paid, it would still be difficult to read the paragraph of the deed of trust above quoted and fail to be' impressed with the
It is not always correct in determining one’s rights under a contract to say that, because there is provided in one part thereof a particular way in which a designated right may- be exercised or a particular act may be done, all other ways of doing that act or exercising that right are excluded. Thus it is not necessarily true, as appellant seems to .assume in this case, that because defendants were given the right, by the provisions of the paragraph above quoted from the deed of trust, to sell any part of "the mortgaged real estate on plaintiffs being satisfied with the price to be received therefor, and by applying "the money so received on plaintiff’s secured indebtedness, ' and stopping all interest on the amount so paid, •said indebtedness could not be paid off by defendants, with money received in any other way or derived from any other source. The provision for defendants’ paying off the secured indebtedness before its face -maturity, if possible, was unmistakably contemplated by the.parties to the deed of trust, and as a means to ac■complish that end defendants were given the right to sell the mortgaged real estate upon the terms and conditions prescribed in the paragraph in question.. ,!Ye, think, as did the trial court to whom this case was first presented, that the question from whatever source came
The right to pay off the notes at any semiannual interest-paying period was one of the privileges given to defendants by the provisions of the deed of trust in question. The right to sell a part or the whole of the mortgaged real estate to assist in the accomplishment of that act was another. The qualification and restriction in said paragraph of the deed of thust containing that privilege to. defendants apply naturally, necessarily and logically to the exercise by defendants of the latter right, but not to the former. If the right to sell all or any part of the mortgaged real estate was to be exercised by defendants, every notion of business propriety would at once suggest that the mortgagee holder of the secured notes should have some authority in determining its fair value, else his security might be frittered away by an unwise or fraudulent sale on part of the mortgagors; and after the right of sale had been exercised and the land was released from the operation of the deed of trust securing plaintiff’s notes, nothing is more reasonable, natural or necessary than that a condition should be found inserted, as there was in the paragraph in question, to the effect that there should be an application of the funds realized from the sale of the mortgaged real estate to the payment of the mortgagor’s indebtedness. Defendants’ right to sell the mortgaged real estate very properly may be said to be affected by these conditions of the paragraph in question; but not so of their right to pay off their indebtedness at any semiannual interest-payment period provided. "When this latter right has been exercised by defendants, plaintiff could have no further interest in or concern with any
Though we do not. agree with appellant, that defendants ’ right to pay off in part or in whole the notes before the maturity thereof as expressed upon their face is conditioned by the terms of the deed of trust upon the fact that the money used in such payment must have arisen from a sale of the mortgaged property, yet if the right of payment by defendants at any semiannual interest-payment period contemplated by the deed of trust, was thus clearly conditioned, we would still be disposed to hold that the money tendered by the defendants to plaintiff under the facts of this case came under that requirement. ' And though the second deed of trust placed on the property by defendants to procure the money with which to pay off plaintiff’s notes was not a sale of the property in the sense that defendants ’ entire right and interest therein was passed absolutely to the grantee in that second deed of trust, as appellant defines a sale of property to be, yet there is by the very terms employed in that instrument a grant, bargain, sale and conveyance of the property named for the purpose specified in said instrument, and so far as concerned the plaintiff or any or all outside parties it is a disposition of the property named therein. The right of redemption in defendants and the condition upon which the conveyance to the grantee may be defeated, are matters in which the plaintiff, as the satisfied holder of the first set of secured notes, had no interest. We therefore hold that the judgment of the trial court upon the first count of defendants’ answer was correct, and that the effect of the tender by defendants to plaintiff was to discharge the real estate of plaintiff’s lien.
II. Upon the question of defendants’ right to recover upon their counterclaim, however, we think the trial court was in error. Defendants’ counterclaim was
Section 4358, Revised Statutes 1899, provides:
“If any mortgagee, cestui que trust or assignee, or any executor or administrator of the mortgagee, cestui que trust or assignee, receive full satisfaction of any mortgage or deed of trust, he shall, at the request and cost of the person making the same, acknowledge satisfaction of the mortgage or deed of trust on the margin of the record thereof, or deliver to such person a sufficient deed of release of the mortgage or deed of trust; but it shall not in any case be necessary for the trustee to join in such acknowledgment of satisfaction or in such deed of release; and provided further, that when any mortgage or deed of trust shall be satisfied by a deed of release, the recorder shall note on the margin of the record of such deed of trust the book and page where such deed of release is recorded. In case satisfaction be acknowledged by the payee or assignee, or in case a full deed of release is offered for record, the note or notes secured shall be produced and cancelled in the presence of the recorder, who shall enter that fact*169 on. the margin of the record and attest the same with his official signature; and no full deed of release shall be admitted to record unless the note or notes are so produced and cancelled, and that fact entered on the margin of the record and attested as above provided. If such note or notes are not presented for cancellation for the alleged reason that they have been lost or destroyed, the recorder, before allowing any entry of satisfaction to be made on the record, or any deed of release to be placed on file or record, shall require the cestui que trust named in the mortgage or deed of trust desired to be released or his legal representative, to make oath, in writing, stating that the notes or other evidences of debt named in the mortgage or deed of trust sought to be released have been paid and delivered to the maker thereof or his representative; and the recorder shall also require the maker of such note or notes, or his legal representative, to make affidavit, in writing, that the note or notes in question have been paid, and can not be produced because lost or destroyed, and that they are not then in the possession of any person having any lawful claim to the same; which said affidavit shall be attached to the record of the mortgage or d.eed of trust to be satisfied. ’ ’
By section 4363, supra, is provided the penalty the party receiving satisfaction on his mortgage demand must pay to the party aggrieved (the owner of the mortgaged premises) for failing to acknowledge satisfactiori thereof on the records of the county in which the land is situate, and which reads as follows: “If any such person, thus receiving satisfaction, do not, within thirty days after request and tender of cost, acknowledge satisfaction on the margin of the record, or deliver to the person making sátisfaction a sufficient deed of release, he shall forfeit to the party aggrieved ten per cent upon the amount of the mortgage or deed of trust money, absolutely, and any other damages he may be able to prove he has sustained, to be recovered in any court of compe
Appellant never received satisfaction on his mortgaged debt held against respondénts, but on the contrary refused absolutely to receive the money tendered him by respondents on the ground that the amount tendered was not sufficient to cover his claim with the interest he was entitled to thereon as expressed upon the face of said obligations, and because respondents had not complied with the provision of the deed of trust securing said obligation and authorizing their payment at an earlier or different date than that named on their face.
Statutes imposing penalties such as that provided in section 4363, supra, must be strictly construed, and when one proceeded against falls not within the letter of its terms, the penalty is not enforcible.
It follows, therefore, that the judgment of the trial court will be reversed in so far as it gives to defendants a judgment on their counterclaim for seven hundred and twenty-eight dollars, and that the cause should be remanded to the circuit court with directions that it modify its order and judgment in accordance herewith, and it is so ordered.