Court Opinion

ID: 8012046
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:59:20.682034+00
Date Added: 2024-06-11T16:35:51.327249
License: Public Domain

Gantt, J.
(dissenting). The action is ejectment. The defense set up. in the answer is that plaintiff’s claim to the lots in suit depends wholly upon a foreclosure of a deed of trust executed by himself and her husband George N. Boughton to E. M. Ladd as trustee to secure a note of her husband and J. W. McCollum, the plaintiff herein, Thomas J. Ulen, and E. J. Malone. That she, defendant, was not a party to the said note and received none of the consideration; that she was at most but a guarantor for the makers of said note including the plaintiff herein; that the note had been fullypaidoffby plaintiff andthatif not, all of the makers are solvent and there was no occasion to resort to a sale of her lots. That the sale was without authority of law and void.
I. ' So much of the answer as avers that defendant was not a party to the note secured by her deed of trust executed jointly with her husband and received none of the consideration for which the same was executed, constitutes no defense to this action. It has been repeatedly ruled in this state that a married woman may, jointly with her husband, execute a mortgage or deed of trust, conveying her land to secure his sole debt, and appoint a trustee to sell the same on default, and it would be operative even though her undertaking as to the note itself was void. Schneider v. Staihr, 20 Mo. 269; Hagerman v. Sutton, 91 Mo. 519; Meads v. Hutchinson, 111 Mo. 620; Comings v. Leedy, 114 Mo. 454.
II. What was the relation created by the several parties to the note executed by Boughton, McCollum, *627Ulen, and Malone and the deed of trust executed by Boughton and wife to secure the same note, on the same day? I still maintain that as these two instruments were executed at the same time, relative to the same subject-matter, to wit, the securing of Boughton’s note, they should be read and construed as one instrument — that when so read and considered, it should be held that in equity Mrs. Boughton occupied the relation of surety to her husband by reason of mortgaging her land for his sole debt — a rule well established in this state and generally by the courts of chancery both in England and the various states of the Union. Wilcox v. Todd, 64 Mo. 388; Hach v. Hill, 106 Mo. 18.
Without violating the rule of. evidence which excludes parol evidence to explain or vary a written instrument it was entirely competent to receive parol evidence of the. collateral contract between Boughton and the plaintiff McCollum, Ulen, and Malone that they were only sureties for Boughton, and not principals on said note, and that as the note and deed of trust were contemporaneous and formed parts of one and the same transaction and hence must be read together, that it should be held that Mrs. Boughton and these other sureties were as between themselves cosureties for the same debt, to wit, the debt of her husband who was the principal debtor therein both as to her and the other sureties, and not, as my brethren think, that she was merely a guarantor for them and that as to her they were all principals and could not be heard to say they were merely sureties.
My brethren hold that I am in error in my assumptions in two vital and radical particulars: First, that while it is true that Mrs. Boughton by virtue of her deed of trust became surety for her husband, it is not true that she was surety for him alone but for the other sureties as well. Their conclusion is reached by a *628strict technical construction of the deed of trust. The deed recites the conveyance of the lots in suit by George N. Boughton and Oallie G. Boughton to P. M. Ladd “in trust, however for the following purposes: whereas the said George N. Boughton and others did on the twenty-fourth day of August, 1888, make and deliver to C. D. Matthews a promissory note as follows, to wit:” (the note for $1,500 signed by George N. Boughton, Thos. J. Ulen, J. W. McCollum, and E. J. Malone). “Now if said promissory note shall be punctually paid at maturity then the property shall be released; but if said promissory note or any pai't thereof shall remain unpaid after maturity, then the trustee should sell the lots to pay the same.”
I concede that if a court of equity is powerless to inquire and ascertain who was in fact the principal in this note as between the signers thereof and Mrs. Boughton who made the contemporaneous deed of trust executed also to secure it, and delivered with it, then my brethren are right, as upon the face of the note itself all the makers are principals. But I have been under the impression for many years that it was no longer an open question in this state that when several persons executed a joint, or a joint and several note, or bond, and there was nothing on the face of the instrument to indicate that any of them were sureties, if some of them were in fact sureties, and received none of the consideration, they could,- both at law and in equity, establish that fact by parol testimony. As early as Garrett v. Ferguson’s, Adm’rs (1845) 9 Mo. 124, Judge Napton reviewed the English and American cases and reached the conclusion that, whatever doubts had once existed on the subject, “the law here is considered well settled in favor of the admissibility of such evidence.” Foster v. Wallace, 2 Mo. 231; Bank *629v. Wright, 53 Mo. 153; Coats v. Swindle, 55 Mo. 31; 1 Brandt on Suretyship & Guar., sec. 29.
The ground upon which it was opposed was that it contradicted or varied the terms of a written contract; but the answer is that such proof does not controvert the terms of the contract, but is simply proving a fact outside of and beyond such terms. Rose v. Williams, 5 Kan. 483. “It is a fact collateral to the contract, and no part of it.” Chief Justice Shaw in Carpenter v. King, 9 Metc. (Mass.) 511. “It is not to effect the terms of the contract, but to prove a collateral fact and rebut a presumption.” Chief Justice Shaw in Harris v. Brooks, 21 Pick. 195; Ward v. Stout, 32 Ill. 399; Bank v. Mumford, 6 Ga. 44.
But it is said that this evidence is inadmissible because Mrs. Boughton is a married woman, and her obligations can not be enlarged by oral evidence; that her liability must be measured by the terms of the ■instrument she executed.
Shroyer v. Nickell, 55 Mo. 264; Hagerman v. Sutton, 91 Mo. 519; Gwin v. Smurr, 101 Mo. 550; Meads v. Hutchinson, 111 Mo. 620, are all cited to sustain the view that this evidence is inadmissible.
If these cases throw any light on this particular question, I have not been able to discover it. They hold simply that a married woman can only bind or convey her legal estate to a third person in the manner prescribed by law, and that by joining her husband, as she has in this case, she may mortgage her real estate to secure the sole debt of her husband or other person. Nothing that I have said or shall say tends in the slightest degree, in my opinion, to change one word said in either of these cases. On the contrary, I rely upon them as controlling authority.
I do not propose to extend Mrs. Boughton’s liability by any contract outside of or dehors her obliga*630tion assumed by her mortgage. I am simply endeavoring to ascertain the true meaning of her undertaking upon equitable principles and to maintain that, as she is now invoking the equitable doctrine of exoneration from all liability for this note, it is entirely competent to show by parol evidence the relation of all the parties to that debt. I hold that the doctrine which regards the wife, who mortgages her property for the debt of another, shall be accorded the rights of a surety, is itself the outgrowth of equity jurisprudence. But certainly I am at a loss to see why it is not competent to show by parol evidence that McCollum, Ulen, and Malone were merely sureties, even if Mrs. Boughton is to be considered a surety for all of them. I think that evidence was competent whether she be held a cosurety, or merely a guarantor. Craythorne v. Swinburne, 14 Vesey, 160; Hunt v. Chambliss, 7 Smedes & Mar. 532; Rae v. Rae, 6 Irish Chy. (N. S.) 490; Brandt on Suretyship and Guaranty, sec. 261.
III. Granting then that Mrs. Boughton’s liability and rights must be determined by the deed of trust, which I cheerfully do, what are her equities as against McCollum, Ulen, and Malone, who are confessedly also merely sureties for her husband as between him and them? Are her equities to be determined solely by the sequence of signing the note, and the forfeiture clause in the deed of trust? Is not the right and duty of contribution founded upon the maxim that ‘ ‘equality is equity,” and not upon contract¶ I insist that in determining whether McCollum, Ulen, and Malone, who were only sureties for Boughton on the note, shall be treated as cosureties with Mrs. Boughton, who is entitled to be treated as a surety by virtue of mortgaging her lots,' equity will disregard the mere formal sequence of signing the note, and the circumstance that there are two instruments instead of one. It will *631look to the substance rather than the form of the engagements entered into by all' the parties to those instruments.
Now it must be admitted there is no evidence of any express agreement between Mrs. Boughton and the other sureties whereby she limited her liability to that of guarantor, for all the other parties; neither is there any evidence of such an agreement with her husband to that effect as in Harris v. Warner, 13 Wend. 400. Whatever claim she has to absolute exoneration must grow out of the implied contract on the part of the other sureties to reimburse her if her land should be sold, or to shield it from sale in ease of her husband’s default:
To the proposition that contribution between sureties is not founded upon contract, as the majority of my brethren seem to hold, but rests upon a principle of natural equity and justice, to wit, that “equality is equity,” among persons standing in the same relation, I cite Dering v. Earl of Winchelsea, 1 White and Tudor’s Leading Cases in Equity, pt. 1, pp. 120 and 134, and notes, and Campbell v. Mesier, 4 Johns. Ch. 334-338, .in which the doctrine is clearly stated which has since been uniformly declared and acted upon by the courts of chancery in this country.
Mrs. Boughton testified that it was her husband’s debt; that she did not read.the deed of trust. Knowing that it was her husband’s debt alone, she could not suppose that the other makers bore any other relation than sureties and having made no stipulation that she should only be liable as guarantor, or surety for all the signers, as I agree she might have done, I am still of the opinion that she should be held as a cosurety with the other signers. Warner v. Price, 3 Wend. 397.
When the fact was established, as it was by abundant evidence, that Boughton was principal and all the *632others, including Mrs. Boughton, were sureties, the presumption arose that they were cosureties. Baldwin v. Fleming, 90 Ind. 177; Oldham v. Broom, 28 Ohio St. 41.
That presumption was, of course, subject to rebuttal, and the trial court, upon the evidence, found against Mrs. Boughton, and I think correctly.
In the absence of any effort upon her part to compel the holder of the note to proceed first against the other sureties it seems clear to me that he could rightfully elect to have her land sold under the deed of trust and the trustee could convey a good legal title. Schanewerk v. Hoberecht, 117 Mo. 22.
The only question, then, remaining, is, “was the conveyance void because McCollum, one of the sureties, and against whom she had a right of contribution for his proportionate share of the debt, bought the land and took the deed!”
Freeman v. Moffitt, 119 Mo. 280, is cited as sustaining the proposition that when one had assumed the payment of a debt secured by mortgage, he could not default and permit a foreclosure and purchase the land, and in this way obtain title; but that such a transaction simply amounted to a payment of his own debt.
The principle of that case does not reach the proposition involved here. It must be remembered that the liability of all these sureties as between them and their principal, defendant’s husband, is secondary and contingent. It is not their debt as between him and them. If all the sureties are solvent, then plaintiff McCollum’s share of that debt would be only one fourth, and Mrs. Boughton’s one fourth. If plaintiff should be compelled to pay the whole debt, if we are correct in our premise that Mrs. Boughton is a cosurety, then she would be liable for one fourth over to him. But ¿t being apparent that the only fund to which plaintiff could resort to secure contribution was the mortgaged *633lots and they were liable to be sacrificed, what principle of law or equity forbade his buying in this lot, and thus protect himself against a contingent liability for which Mrs. Boughton was primarily liable, and he, as to her one fourth, only secondarily bound therefor! I do not think the conveyance to him was void, and not being void I think he may, as against the defenses asserted in this answer, maintain his ejectment.
This view will not prevent a suit for contribution to which all the sureties and the principal should be made parties, but it would result in an affirmance of the judgment. In other words, I understand that McCollum, by paying Mrs. Boughton’s, share of that debt in the purchase of her lots, was subrogated to all the rights of Matthews, the holder of the note; that Matthews could have purchased and taken a title and so could McCollum-as to all but his own share of the debt, and that the question of contribution can not be adjusted on these pleadings, because no such right is asserted in the answer and because contribution depends upon the solvency of the sureties who are not parties to this action. Of course a party may plead an equitable defense and obtain affirmative equitable relief on his answer, but I do not agree that every equitable defense converts an action at law into one in equity. R. S. 1889, sec. 2131; Wolff v. Schaeffer, 74 Mo. 154; Carter v. Prior, 78 Mo. 222; Kerstner v. Vorweg, 130 Mo. 196.
Bukgess, J., concurs in my views.