Court Opinion

ID: 8015010
Source: CourtListenerOpinion
Date Created: 2022-09-09 02:03:21.045749+00
Date Added: 2024-06-11T16:36:16.672897
License: Public Domain

MARSHALL, J.
This is a proceeding in equity to cancel a deed of trust made by the plaintiff and her husband, Emmet C. Higgins, on February 14, 1899, to W. T. Hull, as trustee for the defendant company, whereby the plaintiff pledged her property, to-wit, lot 3 and the south half of lot 4 of Russell’s .addition to Warrensburg, as surety for the payment of four promissory notes, executed by her said husband to said company, for his then past due indebtedness to the company. The particular ground for relief relied on is that after the contract of suretyship was entered into the company caused John C. Higgins, her husband’s father, to sign the notes as further security, whereby the contract was changed without the plaintiff’s knowl*306edge or consent, and in consequence of which her property became released.
The trial developed the facts to be as follows:
Originally the property belonged to Emmet O. Higgins, the plaintiff’s husband. On January 7, 1898, he concluded to transfer the property to his wife. The plaintiff’s testimony shows that she had furnished a part, at least, of the purchase price of the land, and for this reason he wanted to transfer the property to her. The defendant’s testimony shows that there was no consideration for the transfer. But it is immaterial in this case which was the fact, for it nowhere appears from this record that the defendant was a creditor of the husband at that time, nor does it appear that any fraud was intended by the transfer, nor is this an action attacking the transfer for fraud, but on the contrary the defendant claims under the title of the wife and not adversely to it.
To carry out his intention the husband caused two deeds to be prepared on January 7,1898, one from himself and his wife to his father, John O. Higgins, and the other from his father, John O. Higgins, to his wife Minnie E'. Higgins, the plaintiff. For some reason neither of these deeds was executed at that time.' The first deed, from Emmet C. Pliggins and wife to John C. Higgins, was acknowledged on August 1, 1898, and recorded on September 12, 1898. The second, deed, from John C. Higgins, was not acknowledged or recorded until February 14, 1899. But, as will hereinafter be pointed out, it is wholly immaterial in this case when those deeds were executed, recorded or delivered, for the defendant claims under the plaintiff, by virtue of her deed of trust, and if she has no title the defendant has none.
At some time, not disclosed by the record, the husband, Emmet C. Higgins, became indebted to the defendant, and on December 15, 1898, he executed to the defendant a note therefor in the sum. of $651, and hrs *307father, John C. Higgins, and his brother, Hedrick C. Higgins, indorsed the same. The defendant did not seem to be satisfied with its security, so on February 13th it sent its two agents, "W. T. Hull arid J. E. Hart, to see John O. Higgins, the father, who lived some ten miles from Warrensburg, about the matter. They tried to get him to give a mortgage on his property to securé the debt, but he refused. There is much conflict in the testimony as to whether or not John C. Higgins told them that he held the title to the land in controversy and would deed it to the plaintiff, and she and her husband, the debtor, could give them a mortgage on it, but it is wholly immaterial whether he told them so or not, for in fact he did so deed it to the plaintiff and the plaintiff did give the defendant a mortgage on it, and the validity or release of that mortgage, and not the plaintiff’s title to the land, is the question involved in this ease.
On February 14, 1899, John O. Higgins and wife went to Warrensburg and executed the deed that had been prepared on January 7, 1898, to the plaintiff, and it was put on record at 3:25 o ’clock p. m. Thereafter on the same day the plaintiff and her husband executed the deed of trust, in controversy here, to the defendant, and it was placed on record at 5:05 o ’clock p. m. The plaintiff signed the notes as well as the deed of trust, and the deed of trust recited that it was given as security for the notes. Thereafter, the evidence is conflicting as to how long after the plaintiff signed the notes and executed the deed of trust, but the time is immaterial, as it was after such signing and execution, the defendant prevailed upon John C. Higgins to sign the notes as further security. _ This was done without the knowledge or consent of the plaintiff. The defendant pleads that she afterwards ratified it, but the evidence does not support the contention.
Upon this showing, the trial court entered a decree *308for the plaintiff and ordered the deed of trust cancelled, and the defendants appealed.
The plaintiff claims title under the deeds from her. husband and herself to his father, John O. Higgins, and from John C. Higgins to her. The defendant claims under the deed of trust from the plaintiff. The issue joined in this case is whether that deed of trust was released by the act of the defendant procuring J ohn C. Higgins to indorse the notes after the execution of the deed of trust. Under such issue and circumstances the defendant can not be heard to attack the plaintiff’s title. Therefore, it can not be heard to say that the deed from plaintiff and her husband to J ohn C. Higgins was never delivered, and hence that the title to the land is still in Emmet C. Higgins. For the same reason it can not be heard to say that it did not know that the plaintiff signed the notes and' executed the deed of trust as surety for her husband. The defendant knew that the debt secured was the debt of the husband and not of the wife, and that the wife’s land received no benefit from the money evidenced by the notes.
This being true, the wife and her property stood merely as surety for the husband’s debt, and any act that would release any individual surety, would release her land. The law applicable to such cases has so lately been reviewed and settled by this court, so far as this State is concerned, in the cases of Johnson v. Franklin Bank, 173 Mo. l. c. 179, and “White v. Smith, 171 Mo. l. c. 203, that it is unnecessary to do more in this case than to refer to what was said in those cases.
There is some conflict in the evidence as to whether John C. Higgins signed the notes at the same time that the plaintiff signed them and executed the deed of trust, and also as to whether the plaintiff knew that he did so or was to do so. The trial court found that he signed them after the plaintiff had done so and after she had executed the deed of trust and that she did not know he had done so and never consented thereto. The weight *309of the evidence and the circumstances of the case which are admitted, support the finding of the court. The defendant had a note made by Emmet and indorsed by Hedrick C. and John C. Higgins. It was not satisfied with it and wanted real' estate security. It tried to get John C. Higgins to give a mortgage on his land, but he refused, and then it was agreed that John O. Higgins and his wife should come to town the next day, and he should convey the land to the plaintiff and she should give a mortgage on it to secure the debt, and the old note should be surrendered and the new note, secured by the mortgage, should be substituted. This was done. The deed thus made by John C. Higgins to the plaintiff was placed upon record, and afterwards the deed of trust in question was executed. Thus the defendant had both actual and constructive notice that the plaintiff’s land stood only as surety for her husband’s debt.
This only leaves for adjudication the question whether the act of the defendant in procuring John C. Higgins to sign the notes after they had been signed and the deed of trust had been executed by the plaintiff, had the effect in law to release the plaintiff’s land.
The general rule is that any alteration in the contract by the principals thereto, releases the surety, unless the surety consents to it. And the rule is so strict that the courts will not stop to inquire whether the alteration was injurious or beneficial to the surety. The reason is that contracts of suretyship are strictly construed in favor of the surety, and he has a right to stand upon the exact contract he made, and no one, not even a court, can change it in any respect. [Bank v. Dunn, 62 Mo. 79; Moore v. Hutchinson, 69 Mo. 429; Bank v. Fricke, 75 Mo. 178; Morrison v. Garth, 78 Mo. l. c. 437; Hord v. Taubman, 79 Mo. l. c. 102; Evans v. Foreman, 60 Mo. 449; Kelly v. Thuey, 143 Mo. l. c. 434.]
The addition of the name of another party to a note, by a party in interest, after it has been executed, *310will release the other partes to the note, and this is especially true as to a surety on the note. [Haskell v. Champion, 30 Mo. 136; Bank v. Fricke, 75 Mo. l. c. 180; Hord v. Taubman, 79 Mo. l. c. 102; Lunt v. Silver, 5 Mo. App. 186; Bank v. Myers, 50 Mo. App. 157; Allen v. Dornan, 57 Mo. App. 288; State v. Paxton, 90 N. W. 983; Owens v. Tague, 29 N. E. 784; s. c., 3 Ind. App. 245; Berryman v. Manker, 56 Ia. 150.]
The defendant, however, contends that while the addition of the name of John C. Higgins to the note might have the effect of releasing the plaintiff from liability as surety on the note, it did hot have the effect of releasing the land from the lien of the deed of trust, for the reason that the deed of trust “is a security for the debt wholly separate and distinct from the note.” And defendant argues that this is so because the deed of trust might be enforced even though the note is barred by limitation.
It is true that as between the debtor and the creditor, prior to the act of 1891 (Laws 1891, p. 184, now sec. 4276, R. S. 1899), a mortgage could be enforced even though the note was barred. This was upon the ground that they both evidenced and secured a debt, and that although the debt evidenced by the note could not be enforced because it was barred by limitation, nevertheless the debt was secured by the mortgage and the mortgage was not barred. But even this has been changed by the act of 1891, and both are now barred by the same period of limitation.
But such considerations do not determine this case. Construed strictly, the obligation of the deed of trust was to secure the notes and not the debt. Hence if the notes became void as to the surety, the obligation to pay then ceased. But in a broader sense the doctrine contended for by the defendant is inapplicable to a surety. The mortgage secured the payment of certain notes. Any act of the principal which changed the character of the notes secured, released the surety, unless *311she consented to the change, for the reason that thereafter there was nothing left which the mortgage could apply to, and therefore it could not he enforced.
And the effect upon the mortgage is the same whether the time expressed in the note is extended or a new party is added to the note — thereafter there is no contract existent as to the surety.
In 2 Ency. Law and Proc., p. 224, it is pointed out that the rule on this subject is not the same in all the States, but that in some, the rule is, that a change in the note affects the note alone and does not affect the mortgage, while in others the change destroys both the note and the mortgage. But it is manifest that as to a surety, whether he is bound by the same paper that evidences the debt of the principal or by any kind of an instrument, if the contract of suretyship is changed the surety is discharged, and the surety’s land given to secure his indemnity is also discharged. [1 Brandt on Suretyship (2 Ed.), secs. 34 and 35; 1 Pingrey on Mort., sec. 357; Metz v. Todd, 36 Mich. 473; Bank v. Burns, 46 N. Y. App. 170; Calvo v. Davies, 73 N. Y. 211; Christner v. Brown, 16 Iowa 130.] What is here said in no wise conflicts with Owings v. McKenzie, 133 Mo. 323, when that case is properly understood.
It will do no good to discuss the alleged technical character of the plaintiff’s position, for the wisdom of the ages has proved that the liability of a surety is purely technical, and therefore those who deal with them and seek-to charge them must be strictly technical in all their dealings with them, for, as they are only bound technically, they have a right to rely upon being technically released.
It follows that the judgment of the circuit court is right and must bp affirmed.
All concur.