Tucker v. Dolan

84 S.W. 1126, 109 Mo. App. 442, 1905 Mo. App. LEXIS 4

• Court: Missouri Court of Appeals
• Decided: January 24, 1905
• Status: Published

Opinion

GOODE, J.

The petition in this ease declares on three separate canses of action, each being a promissory note. The first count, or paragraph, is founded on a note for $1,480, dated February 1, 1896, due three ■years after date and drawing seven per cent interest. This note and another of the same date for $1,500, drawing the same rate of interest, were executed by Dolan to Tucker for the purchase-money of eighty-five acres of land in Knox county. The note for $1,500 is not in suit as it had been cancelled and surrendered before the suit was instituted. This land was bought by Tucker from Virginia Fickel September 25, 1896, for $3,300, and was conveyed by Tucker to Dolan and his wife, Marf C. Dolan, September 28, 1900. It was sold to-Dolan by a verbal contract not later than December 2,1896, and Dolan put into possession, the deed being executed nearly four years afterwards. Why the note for $1,500 was surrendered will appear below. Originally there was a separate action on the note for $1,480, the petition praying not only a judgment for the amount of the note, but the enforcement of a vendor’s lien against the land. The demand for the lien was withdrawn and that action was consolidated with one on the two notes which are the subjects of the second and third counts of the petition. Before stating the facts in regard to the latter notes it will be convenient to go more fully into the land transactions out of which the note declared on in the first count grew. The plaintiff swore he bought that land for Dolan at a price he (plaintiff) deemed excessive, on an understanding that Dolan was to take it off his hands at the same price, and pursuant to that agreement Dolan executed the two notes for $1,500 and $1,480. The amount of these notes was $2,980, and what was done about the difference between that sum and the $3,300 Tucker said Dolan was to pay, was not explained. Another fact which is obscure, is why the two notes were dated February 1, 1896, nearly eight months before Tucker' had purchased the land from Mrs. Fickel and that long, or longer, before he put Dolan into possession of it. Tucker’s explanation is that the notes were thus dated because Dolan expected to have some money in February, 1897, and could then pay the interest. But he admitted Dolan would only owe interest from September, 1896, and so no intelligible reason for dating the notes back was given. The defendant testified that Tucker, on his own motion, bought the land from Mrs. Fickel, but sold it to him (defendant) for $2,980 about December, 1896; that he executed the two notes for the purchase price not knowing they bore the date of February 1st, which was wrong. It should be stated that Tucker is a man ninety years old; that both he and Dolan are very illiterate and the latter is hard of hearing. The evidence discloses that they conducted their business in a careless manner and without a clear understanding of the effect of their acts. As stated, Dolan went into possession of the land in the latter part of the autumn or the beginning of the winter of 1896. He made valuable improvements on it from time to time and paid sums on the notes; .but how much he paid before Tucker conveyed the land to him and his wife in September, 1900, is in dispute. The defendant testified that he had made payments at different times to the amount of $895.50, which is about sixty dollars more than the interest on the notes for the four years. The plaintiff swore only about $240 had been paid, or nearly six hundred dollars less than the interest. The defendant said that in September, 1900, both the notes given for the purchase-money of the land were discharged pursuant to an agreement then entered into between him and the plaintiff; that plaintiff at that time proposed that if defendant would pay $2,200 more than had been alreadypaid on the notes, that sum would be received as full payment, the notes surrendered and the land conveyed; that the proposition was accepted, $2,000 raised by giving a deed of trust on tbe land to a loan company and the money turned over to tbe plaintiff, who agreed to wait for tbe remaining $200; that tbe note for $1,500 was then surrendered. It is certain that on September 29, 1900, plaintiff conveyed tbe land to Dolan and bis wife and surrendered tbe note for $1,500, and it is certain too, that be retained tbe one for $1,480, which is now in suit. At the same time, as both parties say, it was agreed that delinquent interest to tbe amount of $138 was owing on tbe two notes; so tbe note for $138, which constitutes tbe cause of action stated in tbe third count of tbe petition, was drawn up and signed by Dolan; but no credit was entered on tbe two principal notes for tbe amount of this interest note. Tbe note last mentioned was dated February 6, 1900, though it was agreed by both parties that it was not given until tbe time of tbe execution of tbe deed in September, 1900; and this is another unaccountable discrepancy between tbe acts of tbe parties and their testimony. Tbe defense to tbe note for $138 is twofold: that it was discharged by tbe performance of tbe new agreement made in September, 1900, by which Tucker accepted $2,200 in full payment of all tbe indebtedness then owing for tbe land, of which indebtedness this note for $138 represented a part. It was also pleaded that as there was no credit entered on tbe principal notes, there would be a double recovery for tbe same liability if tbe plaintiff obtained judgment on tbe note for $1,480 and on tbe smaller one too.

Tbe note for $460 declared on in tbe second count of tbe petition, grew out of a transaction in cattle tbe facts of which are in dispute. It will be observed that tbe petition allows credit for a payment of $320 on that note and asks judgment for the balance due. The answer admits tbe payment of $320 as correct in amount but not as to time, and pleads payments aggregating $448.48. But tbe main defense to this note rests on tbe transaction ont of which it grew. The transaction is stated in this agreement:

“knox County, mo

June 27, 1899 this contract entered into this 27 day of June, 1899 between John Tucker and James dolen both of knox county wheas I John Tucker do place in the hands of sade dolen 20 cows which he agrees to take good car of same as if tha war his own' until the above note becomes due on the 27 day of June in the year 19 hundred and one 1 and when said note and interest ar paid of I John Tucker give up all my write title and clam to those cows to said James dolen as his own property.

John Tucker

James Dolan.”

That instrument, when translated, reads as follows :

“Knox County, Mo., June 27, 1899.

This contract entered into this 27th day of June, 1899, between John Tucker and James Dolan, both of Knox county, whereas, I, John Tucker, do place in the hands of said Dolan 20 cows which he agrees to take good care of same as if they were his own, until the above note becomes due on the 27th day of June, in the year 1901, and when said note and interest are paid off, I, John Tucker, give up all my right, title and claim to those 20 cows to said James Dolan as his own property.

“John Tucker,

“James Dolan.”

It is agreed that the note for $460 represented the purchase price of the cattle mentioned in the foregoing memorandum. Both the contract and the note were written by Tucker and kept by him. The cows were put on defendant’s land and remained there until disposed of and the proceeds turned over to the plaintiff.' The controversy is in regard to who owned the cattle. Plaintiff swore he bought them for Dolan at the latter’s request, taking a note for their price; whereas, the defendant swore Tucker asked permission “to buy up” some cattle and put them on Dolan’s farm to be cared for at fifty cents a month per head; that the cows were always owned by the plaintiff, who got uneasy about them during the drought of the summer of 1901 and insisted on Dolan’s mortgaging them to the Bank of Edina, and turning the money over to the plaintiff; which was done, Dolan acting as Tucker’s agent in the matter. The money' realized by the mortgage was $281.90 and was paid by the bank to the plaintiff in person. The defendant testified also that Tucker got the proceeds of the calves the cows dropped, amounting to $125.

The statute of frauds was pleaded in the replication against the defense based on the alleged verbal contract by which the plaintiff agreed to accept $2,200 in satisfaction of the debt owed him for the land. Other matters of defense pleaded in the answer, in accordance with the above statement, were put in issue by the replication.

The jury returned a verdict for the defendant and the plaintiff appealed.

It will be seen that the evidence left a great uncertainty concerning the true facts of this controversy. It presented discrepancies for the jury to consider. Our task is to examine the rulings of the court on questions of law, and principally on the propositions raised by the instructions tendered.

It is said the statute of frauds is a barrier to the defense against the note for $1,480, as that defense rests on the alleged oral agreement that, for $2,200, Tucker would convey the land and release the notes previously given for the purchase price as fixed by the original agreement. The second agreement testified to by Dolan is oral and is asserted to have been for the sale of the land, in lien of the prior oral contract, and that it was not relieved from the force of the statute of frauds by Dolan’s possession and improvements, as the first contract was, because possession was taken and improvements were made in partial performance of the first contract and not the second one. The point at issue is not the enforcement of a verbal sale of land, but what was the consideration of a sale already consummated by a conveyance. We have to deal with an executed and not an executory contract — a contract which has been performed by both parties in every particular, unless some of the purchase money remains unpaid as the plaintiff contends; which question hangs on whether the price originally stipulated was changed by a later valid agreement. A warranty deed was delivered, vesting the title to the land in the defendant and his wife; and there being no contention of mistake or fraud, that instrument is the conclusive evidence of the contract between the parties, except as to the consideration for it. [Jones v. Shepley, 90 Mo. 307, 2 S. W. 400.] The true consideration can be shown by extrinsic evidence. [See v. Mallonee, 107 Mo. App. 721, 82 S. W. 557.], The deed recites a consideration of $2,200, the very sum Dolan said he was to pay in addition to what he had already paid. Now the defense to the note is that it was extinguished by the agreement to accept $2,200 in full payment of the notes, and the performance of that agreement. The issue raised by the defense relative to the consideration for the sale and conveyance of the land is not affected by the statute of frauds. The verbal sale was taken out of the statute by the conveyance to and the possession of the defendant and wife, and the sole question remaining is whether a balance on the purchase-price is due. If the contract of sale remained unexecuted, our conclusion might be different. [Rucker v. Harrington, 52 Mo. App. 481; Pratt v. Morrow, 45 Mo. 404; Grumley v. Webb, 48 Mo. 562; Russell v. Berkstretter, 77 Mo. 417; Trayer v. Reed, 45 Iowa 272.] See, also, Century Digest, vol. 23, sec. 295, where many cases are collected on the point that the effect of the statute of frauds on a, contract for the sale of land is obviated by the execution of a deed and delivery of possession.

Another proposition invoked in behalf of the plaintiff is that the agreement testified by Dolan to have been made in September, 1900, that the balance of more than $2,200 then due and owing on the two notes should be satisfied and discharged by the payment of said sum, is inoperative for want of a consideration, because a debt already due can not be discharged by paying less than the full amount of it. Unquestionably Dolan owed more than $2,200 for the land at the time the supposed agreement was made. According to his own statement he owed $2,900 or more, as he had paid but $60 above the interest on the notes during the four years. It is an ancient rule of law, often denounced but always followed, that though a creditor agrees to accept less than his matured debt in full payment, he may, nevertheless, collect the balance. Riley v. Kershan, 52 Mo. 224; Young v. Schofield, 132 Mo. 650, 34 S. W. 497; Winter v. Railroad, 160 Mo. 159, 61 S. W. 606; Jaffray v. Davis, 124 N. Y.164.] The reason for the rule is that the agreement to take less than what is owing is a compact without a consideration to support it, and, therefore, is not binding. This sort of an agreement, as much as any other accord and satisfaction, needs a consideration; and if one party merely agrees to do what he is already bound to do, there is no consideration. [3 Randolph. Com. Paper (2 Ed.), sec. 1835; 1 Beach, Contracts, sec. 424; Smith v. Bartholomew, 1 Metc. (Mass.) 276; Swope v. Bier, 10 Ind. App. 613; Curran v. Rummell, 118 Mass. 482; Wendover v. Baker, 121 Mo. 273, 25 S. W. 918.] The case last cited resembles this one closely and as it was decided by our Supreme Court is a controlling precedent. A deed of trust given by Baker to secure three promissory notes had been foreclosed by sale leaving a balance due on the notes, which balance was the subject-matter of' the action. Baker sought to interpose as a defense, an agreement by which the plaintiff prior to’ the sale had agreed to cancel and surrender the notes after the sale, whatever the property realized, if Baker would give possession of the property without delay, which he did. This defense was overruled, because, as the notes were past due when the agreement was made, there was no consideration for the plaintiff’s undertaking to accept less than her debt in discharge of it. The defendant’s counsel concedes the rule to be as stated, and has attempted to point us to several considerations sufficient to support the agreement. It is said that according to the original agreement for the sale of the land, it was to be deeded to the defendant alone; whereas, according to the substituted agreement, it was to be deeded to the defendant and his wife, plaintiff ’s daughter; and that this was the consideration for the plaintiff’s promise to accept less than was due. If there was proof of such an understanding, it would be a sufficient consideration, as the defendant would have consented to relinquish a right and an interest. But there was no evidence tending to prove the parties ever discussed the question of who should be named as grantees in the conveyance. The supposed agreement rests, as to its details, exclusively on the testimony of the defendant, though it is corroborated by Mr. Cottey’s testimony that the plaintiff told him he (plaintiff) would make the deed on payment of $2,000 and take Dolan and his wife for the remaining $200. This conversation occurred after the defendant had applied to Mr. Cottey, as representative of the loan company, for a loan on the property. Before making the loan Mr. Cottey sought information from the plaintiff in regard to the title and plaintiff made the statement we have recited. The witness had no knowledge of the consideration for the agreement, or, at least, does not undertake to state any; and really the effect of his testimony is that Tucker merely agreed to convey the land on payment of $2,000 free from all liens and claims of his, so that the title would be vested perfectly in the defendant and his wife. What Mr. Cottey was concerned to know was not the particulars of the agreement between plaintiff and defendant, but that he would be lending on a good title. In the defendant’s own testimony there is nothing from which an inference or conclusion can be drawn as to the consideration or motive which influenced the plaintiff to agree to take less than was owing The substance of defendant’s testimony on the point is contained in this excerpt from the record:

“Q. Go ahead and tell what it was and about when it was. A. Well, in 1900, Mr. Tucker, on the 6th day of October, made a deed to me for eighty-five acres of land.

‘ ‘ Q. Wait a minute — was there any talk or agreement about how it should be deeded, commence at the start of it? A. Well, he came out there and he wanted me to take the place, buy the place, and he offered the place to me at $2,200. Well, me and my wife had a talk over it, and she says I’ll go to town and see Mr. Cottey,' see if I could raise the money; so I went to town and saw Mr. Cottey and he said he would try and get the money, get me the money, so that we could get $2,200 on the place, so I sent Mr. Cottey down to Mr. Tucker to see if he was satisfied,to take $2,200 for the place.

“Q. Did you have any further talk with Mr. Tucker, did he say anything further to you about — upon what considerations he would make that deed to you? A. No, sir, he did not.”

There were many questions asked on the subject and a great deal said by the witness; but nothing to throw any more light on the question of consideration than appears in the above quotation. The defendant said the original understanding was that the land should be deeded to him; and he used the same expression in stating the second agreement. Bnt in testifying about either agreement the expression was not employed to convey the notion0 that defendant was to be the sole grantee to the exclusion of his wife. In fact, it is apparent that the reason why his wife was made a grantee was never in the witness ’ mind while, testifying, and why she was we know not; presumably because it was agreeable to all parties. Certainly there was no evidence that it was done as the consideration for plaintiff’s agreeing to take less than the original price.

It is said besides, that there was a dispute between the plaintiff and the defendant in September, 1900, as to how much was owing on the land and they agreed on $2,200 as the amount, in compromise or settlement, of the dispute; that the agreement, being in the nature of a compromise, was supported by a consideration. This position must yield; not because the legal proposition is unsound, but because there was no proof of a compromise. The plaintiff’s notes were long past due at the time and his demand was liquidated. There was a controversy at the trial as to how much had been paid on the notes prior to September, 1900, but there is no proof of a dispute on or prior to the latter date. On the contrary, we think the evidence is conclusive that there was no dispute. There is testimony that the note for :$138 for back interest was then given, and it happens that that sum was not far from the true interest from Eebruary to October, as the plaintiff states. But the •essential fact is that the defendant admitted he gave a note for delinquent interest on the two principal notes aggregating $2,980, thus confessing the amount due on ihe principal notes. Because a dispute occurred at the "trial as to what payments had been made previously, we can not conclude there was a dispute at the date of "the second agreement. In fact, if we take the defendant’s testimony at the trial as to what he had paid, he actually owed about $2,900 on the notes; whereas, if we take the plaintiff’s testimony, defendant owed nearly $3,500. So, on the defendant’s own testimony of what he had paid, he owed $700 more than he says the plaintiff agreed to accept in discharge of the entire indebtedness. No compromise of a disputed demand can be predicated on such facts.

Courts are prone to uphold, when possible, an agreement by which a creditor accepted less than was ‘ due in satisfaction of a demand, instead of defeating the agreement for want of a consideration; and a very slight consideration will be held sufficient. [Jaffray v. Davis, supra.] Indeed, the law is that a slight benefit to the promisor or a slight detriment to the promisee is a sufficient consideration for any contract; and if a consideration answering that requirement can be shown in the present case, it will make valid the contract in question. [Marks v. Bank, 8 Mo. 316; Lancaster v. Elliot, 55 Mo. App. 249; Columbia Incandescent Lamp Co., v. Mfg. Co., 64 Mo. App. 115.] If the plaintiff had surrendered the note for $1,480 instead of retaining it, perhaps the agreement couldbe sustained as an executed one. [Larkin v. Hardenbrook, 90 N. Y. 333.] He did not, and the record is barren of evidence tending to prove any consideration, even the slightest. Moreover, the court gave an instruction on the subject which made the agreement valid and binding without reference to whether the jury found there was a consideration for it or not. Our conclusion is that error was committed on :this branch of the case. A finding is necessary that there was an understanding between the parties that the defendant should do something either benificial to the plaintiff or detrimental to the defendant, in consideration of the plaintiff’s agreement to accept less than was due.

The error assigned in relation to the note for $460 is that the court submitted the question to the jury of whether plaintiff owned the cattle, the price of which is represented by the note; whereas, it should have construed the written contract of the parties in reference to the cattle and have held, in accordance with the effect of the contract, that Dolan was the owner. Several instructions of that tenor were requested by the plaintiff and refused, and one was given at the instance of the defendant advising the jury that if they believed the cows were purchased for the plaintiff, to be his own property, the verdict should be for the defendant on said note. The contract given in connection with the note and referring to it, looks on its face to be one of conditional sale. It is not artificially drawn in the form either of a conditional sale or of a chattel mortgage, but resembles the former. Still, courts incline to construe such agreements as chattel mortgages when it can be done. In dealing with third parties both Tucker and Dolan treated the cattle as belonging to the latter; for he mortgaged them to the bank with Tucker’s consent and afterwards sold them in Kansas City. That is to say, Dolan disposed of the cattle as his own. Manifestly the written contract and the note created a security of some kind in favor of Tucker to secure payment of the note given by Dolan as purchaser of the cattle. His theory that he was taking care of the cattle for Tucker at fifty cents a head per month is wholly irreconcilable with the note and contract, which constitute the evidence of the understanding between the parties. Why would Dolan execute a note for $460 for the price of the cattle if he was to take care of them for the plaintiff for a stipulated sum per month? Why would they sign the instrument stating when his ownership should become complete and Tucker’s interest cease, if Tucker hired Dolan to pasture the cows ? The latter was a purchaser at either a conditional sale or an absolute one accompanied by a mortgage for the purchase-money. It is nof important in the present action whether the sale was of the one kind or the other; for in either case Dolan owes a balance on the note after giving him credit for what he has paid. He says that besides turning over to Tucker the amount obtained from tbe bank on tbe mortgage and tbe surplus proceeds of tbe sale of tbe cattle, be turned over tbe proceeds of tbe calves. Tbis last item is in dispute and tbe fact will bave to be found.

Tbe plaintiff swore tbe note for $138 represented accumulated interest on tbe two notes given for tbe price of tbe land — tbe interest from February, 1900, to October of'that year. He admitted be bad failed to credit tbe principal notes with tbe interest for which tbe new one was given. Perhaps be made inconsistent statements about tbe matter. According to Dolan’s version, tbe note was satisfied by tbe agreement made in September, 1900, which was to operate as a complete satisfaction of all indebtedness then owing for tbe land. Tbe note in question constituted part of that indebtedness and was discharged by said contract, if tbe contract was made on a valid consideration. If not thus made, Tucker is entitled to judgment on tbe note for $138, but should receive a corresponding deduction from tbe amount of tbe note for $1,480.

The judgment is reversed and the cause remanded.

All concur.