Fox v. Brosius

ROBERTSON", P. J. This action is based on a promissory note for tbe principal sum of $408, dated August 20, 1912, due ninety days after date, payable to tbe plaintiff, providing for tbe interest to be compounded if not paid annually, and that in case tbe note should be placed in the bands of an attorney for collection ten per cent additional is to be added. It also reads that “This note is given and governed by a certain contract hereto attached, entered into by tbe parties hereto and subject to tbe conditions and equities therein set out. ’ ’ Tbe contract referred to, signed by plaintiff, defendants and F. 0. Ceideburg, therein mentioned, is as follows: “This to witness that F. O. Ceideburg is indebted to E. Fox, of Anthony, Kansas in tbe amount of $408 being tbe balance due on a promissory note executed April 15, 1912, and due June 15, 1912; that said note -is secured by chattel mortgage on a mare, Eva Direct, and other personal property; “That said property is about to be taken to enforce tbe payment of tbe above amount due on said note; . “That J. B. Brosius and Henry Tangner desire to assist the said Ceideburg in meeting tbe said note and avoiding tbe taking of said property; “That tbe above amount due on said note covers two notes held by C. A. Grwinn, of Newkirk, Oklahoma, in tbe principal sum of $100 each and on which tbe said B. Fox has signed as security for tbe said Ceideburg, tbe balance of tbe $408 being due to E. Fox, personally; “Now therefor, it is agreed that in consideration of tbe said E. Fox refraining from proceeding to collect tbe amount due on said note to him by taking tbe property described in said chattel mortgage, tbe said [479] J. B. Brosius and Henry Tangner agree to and do hereby execute to the said Ei. Fox, their promissory note in the amount of $408, due on or before ninety days after date with interest from date at eight per cent per annum; “That said note together with this agreement shall be placed in escrow in the Carthage National Bank, of Carthage, Missouri; “That Ceideburg shall pay to said bank for B. H. Esterly, attorney for E. Fox, the money received by him, from the races at Knell’s Fair or so much thereof as shall be necessary to take up said note; “That the said bank shall pay to B. H. Esterly so much of the. said money as is due to Ei. Fox personally, as above described, • and shall hold the balance until the said two notes due to C. A. Gwinn be produced and shall then apply the balance upon the payment of said notes; at the end of the ninety days from the' date hereof if the full amount of said note executed by Brosius and Tangner has not been paid in full by Ceideburg, they agree to pay said balance and upon doing so, E. Fox shall assign to them his said note dated April 15th, and executed by Ceideburg, and the chattel mortgage securing same. ’ ’ The note mentioned in the first paragraph of the contract as bearing the date of April 15, 1912, and due June 15, 1912, was originally $1000. Thé defendants undertake to avoid liability in this case because they say $603.50, of it was without any valid consideration passing from plaintiff to Ceideburg; that said sum was placed therein and the mortgage given solely for the purpose of aiding Ceideburg to .defraud his creditors. The defendants won in the trial court, where a jury trial was waived, and plaintiff has appealed. There may be some testimony in the record in this case, discernible by one familiar with the real facts, tending to show that the plaintiff combined with Ceideburg to defraud the latter’s creditors but we have [480] failed to find any that convinced us of that fact. At the time the $1000 note, was given Ceideburg, who it appears has now joined with the defendants to defeat plaintiff’s claim, testified at the time he gave the $1000 note he was indebted to the amount of nearly $4000 and that $400 or $500 of this amount was due to “ creditors other than E. Fox.” This shows that he was indebted to Fox in some way for much more than the $1000. It appears that at the time the note was given plaintiff was surety on Ceideburg’s note to one Lambert and as we gather from the record Lambert was secured by chattel mortgage on Ceideburg’s property, possibly being some of the property described in the chattel mortgage to the plaintiff. This property it seems was sold under the mortgage, the proceeds discharged the note, then, or within a short time thereafter, and five days after the $1000 note was given, $603.50 was credited thereon. At the time the $1000 note was given and the chattel mortgage executed, covering three other horses besides the one referred to in the contract above quoted, Ceideburg was living at Anthony, Kansas, the home of plaintiff, and Ceideburg says that the transaction relative to said mortgage was for the purpose of enabling him to get the property out of Kansas and to Carthage, this State, without his creditors interfering, but the chattel mortgage was not recorded or placed on file in Kansas and was not filed in Jasper county until June 1, 1912. It is not made clear when Ceideburg left the State of Kansas but evidently some time before the date of the filing of the mortgage in this State. As before stated we do not believe that there is sufficient testimony disclosed in the record in this case to justify a finding that plaintiff is guilty of any wrongdoing whatever in his transactions with Ceideburg, but we shall not place our decision on that point. The defendants insist that since the note upon which the balance was due and for which they exe [481] cuted the note in suit here was tainted with fraud, so that the plaintiff could not enforce it by an. action without disclosing his turpitude,, that therefore the note sued on here is without consideration and void. They also cite authorities to the effect that where a note is tainted with fraud that it is void in toto. We may concede that the defendants are correct in their statement of law was an abstract proposition (Parke, Davis & Co. v. Mullett, 245 Mo. 168, 173; 149 S. W. 461), and we may further concede that if the transaction between plaintiff and Ceideburg were fraudulent that no subsequent conduct or ratification on the part of Ceideburg could validate the $1000 note as between him and the plaintiff (points which are not necessary to and which we do not decide), yet defendants are not entitled to be relieved from the payment of their note to plaintiff. The plaintiff contends that even if the fraud existed, as alleged by defendants, that yet the contract between plaintiff and Ceideburg was enforceable as between them, and hence formed a valid consideration for the note here involved, citing numerous cases which hold that where a party has conveyed property seeking to defraud his creditors that the grantor cannot avoid the conveyance. These cases are not decisive of the issues in this case. The defendant’s entire attack on the note in suit is based on the idea that the note here involved is without consideration, and such is the theory of their answer filed in this case. They say that since plaintiff could not have enforced his note and mortgage against Ceideburg, could not have taken the property therein described from Ceideburg, that, therefore, the defendants cannot enforce them if they get them under the contract above quoted. It matters not whether plaintiff could have enforced the note and mortgage as against Ceideburg, for it is sufficient to the rights of [482] the defendants to determine whether or not they can do so when they pay the note involved in the suit and secure the note and mortgage given by Oeideburg to plaintiff. The amount which the defendants agree to pay the plaintiff by reason of the contract entered into at the time the note involved here was executed was justly due the plaintiff and was in no manner connected, as far as the defendants are concerned, with any fraud. Oeideburg, by signing this contract, has recognized his obligation to the defendants for an amount which is justly due the plaintiff and bound himself to pay it. The plaintiff, in his endeavor to collect this obligation of the defendants, is in no manner driven to the necessity of disclosing the original transaction with Oeideburg. This note involved a special and distinct transaction and it cannot be defeated by what precedes it because there is no part of the illegality charged in the first transaction that entered into and formed any basis for the contract involved here. The note is binding on defendants. [Curry v. LaFon, 133 Mo. App. 163, 113 S. W. 246; Roselle v. Beckemir, 134 Mo. 380, 35 S. W. 1132; Gwinn v. Simes, 61 Mo. 335.] The plaintiff, shortly after defendants gave this note, paid the Gwinn notes referred to in the contract. No part of the note sued on has been paid and we perceive of no reason, legal, moral or equitable, why the defendants should not pay it and we, therefore, reverse the judgment and remand the cause with directions to the trial court to enter judgment for the plaintiff for the full amount of the note, together with interest and attorney’s fees according to the tenor thereof, upon the plaintiff endorsing to the defendants the $1000 note and delivering the same, together with the chattel mortgage to the clerk of the circuit court for the said defendants. Sturgis, J., concurs; Farrington, J., concurs in result.