Scott v. Bailey

1. One William Bailey executed a deed of trust of certain real estate to secure the payment within twelve months of an indebtedness, recited therein to be due “ to Patrick H. Scott and Sarah B. Scott, in the sum of about two thousand dollars, being the amount of principal and interest due upon a promissory note drawn by the said Bailey and endorsed by the said Patrick H. and Sarah B. Scott, and now past due and held by Mrs. Elizabeth Ca-bell, of Winchester, Virginia.5’ In point of fact, it was intended by the parties to the deed of trust to secure the said P. H. Scott and S. B, Scott against liability upon a bond executed in favor of the said Mrs. C. Cabell^ by the said Scotts, jointly with, and as the sureties of the said Wm. Bailey. Held, that this mis-recital of the nature of the indebtedness was not such as to avoid the deed of trust. 2. Parol evidence is admissible to show that the relation of principal and surety exists between the co-obligors of a bond.

Error to St. Louis Land Court,. This was an action in tbe nature of a proceeding to foreclose ' a deed of trust or mortgage. Tbe petition stated that William Bailey, one of tbe defendants, on the 20th October, 1843, by bis deed of that date, duly recorded, conveyed to E. W. Bisque, one of tbe defendants, a tract of land in St. Louis county, described in said deed and in said petition, in trust to secure, among other things, “ tbe payment, in twelve months from date of the deed, of about $2000 to P. H. & S. B. Scott, [plaintiffs in this action,] being tbe amount of principal and interest due on a promissory note, made by Wm. Bailey, in favor of P. H. & S. B. Scott, and by them endorsed, and then held by Mrs. Elizabeth Cabell, of Virginia. ” That the instrument, the payment of which the said Wm. Bailey intended by said deed of trust to secure, is in tbe words and figures following : “ $1860. Lynchburg, Va., Nov’r. 8, 1840. Twelvemonths after the 4th of November next, we, or either of us, promise to pay to Mrs. Elizabeth Cabell, her heirs or assigns, the joint and full sum of $1860, to bear interest at the rate of six per cent, per annum from date, Nov’r 8, till paid, and for the payment of which sum we bind ourselves, our heirs, firmly by these presents ; sealed with' our seals and dated November 8, 1840. [Signed] Wm. Bailey, (seal). S. B. Scott, (seal). P. H. Scott, (seal).” That P. Hi Scott and S. B. Scott signed this instrument as sureties of Wm. Bailey, and that the said Wm. B. mistakenly described it as being a note whereof plaintiffs were endorsers ; the fact being that said instrument was, as set forth, a writing under seal, and that the plaintiffs were the sureties of Wm. Bailey therein, to pay Mrs. Elizabeth Cabell the sum of “ about $2000,” the precise sum really due on 20th October, 1843, being $2080 ; and said Bailey referred to said instrument by memory only, and. so misdescribed it in the foregoing unessential particulars. The petition stated that Risque was a non-resident; that Mrs. Cabell had obtained judgment on the said written instrument against the plaintiffs and said Bailey, and that the plaintiffs had paid the same, and they asked for judgment for the sale of the land conveyed to Risque to repay the money by them paid on the judgment. Armstrong was not a party to the suit originally. Upon his own motion, he was made defendant, and answered, denying that the deed of trust dated October 20, 1843, was in trust to secure the payment in twelve months after date, of about $2000 to P. H. & S. B. Scott, principal and interest, due upon a promissory note made by Wm. Bailey, in favor of plaintiffs, and by them endorsed to Mrs. E. Cabell, denying also that any money was secured by said deed to be paid to the plaintiffs ; averring that whatever debt, if any, was due from Bailey and plaintiffs to Mrs. Cabell, has been paid and satisfied before the commencement of this suit, and therefore can be no longer a lien on the land described in the petition; denying that plaintiffs have any right to cause said land to be sold for the nonpayment by Bailey of said promissory note; denying knowledge of Bailey’s intention to secure the bond mentioned in the petition, or whether such bond existed, and alleging that the deed of trust purported to secure a note, not a bond; and that if the money was due upon a bond and not a note, then the deed of trust was no security for it; that plaintiffs were not sureties for Bailey in said bond, but co-obligors, and that evidence to show that they are sureties is not admissible ; that the payment of said bond or of the judgment thereon, by the plaintiffs, is an extinguishment of the lien, and no assignment, legal or equitable, of the security, resulted to them from such payment ; that if such judgment was obtained as is stated, it fixed the character of plaintiffs as co-obligors, and estops them to say that they were sureties of Bailey; that a judgment was rendered apainst Bailey in 1845, under which Darby purchased all the interest of Bailey in this land and sold the same to Armstrong by a warranty deed, for full value, in July, 1845. Bailey answered, confessing the petition. An order of publication was taken against Risque, and a formal judgment by default was entered against him. The cause was tried by the court sitting as a jury, and the court found the facts in controversy as follows : “ That on the 8th November, 1840, Wm. Bailey, Patrick H. Scott and Sarah B. Scott made their joint and several bond, under their several seals, whereby they bound themselves to pay to Elizabeth Ca-bell and her heirs $1860 within one year from the 4th November, 1841; that on the 20th October, 1848, said Wm. Bailey conveyed to E. W. Risque the land described in plaintiffs’ petition, in trust to secure the payment in twelve months after date thereof of about $2000 to P. II. & S. B. Scott (the plaintiffs), being the amount of principal and interest due upon a promissory note, made by Wm. Bailey in favor of P. H. & S. B. Scott, and by them endorsed to and then held by Mrs. Elizabeth Cabell, of Yirginia ; that on the 5th March, 1845, a judgment was rendered in the St. Louis Circuit Court for $1205, in favor of John W. Nelson, plaintiff, against Wm. Bailey, defendant; that an execution issued thereon, and that the sheriff of St. Louis county did, by virtue of said execution, levy upon and sell all the right, title and interest of Bailey in the land to JohnF. Darby, who was the highest bidder therefor, for the sum of $895 ; that the sheriff made a regular deed therefor to said Darby on the 23d April, 1845; that on the 16th July, 1845, John F. Darby, by regular deed of grant, bargain and sale, conveyed ssid land to D. H. Armstrong for the consideration of $1200; that said sum was then a fair price for said land; that Armstrong had no actual notice of the deed of trust from Bailey to Risque above mentioned ; that Mrs. Cabell recovered judgment against the plaintiffs in 1847, upon their aforesaid bond ; that plaintiffs paid said judgment to Mrs. Ca-bell in 1847; that Wm. Bailey paid no part of said judgment; that plaintiffs were the sureties of Wm. Bailey in said bond in fact, hut co-obligors on the face of the bond; that Wm. Bailey designed to secure the payment of that bond by the deed of trust to F. W. Risque, and that he misdescribed the instrument intended to be secured by mistake and carelessness. “Upon the foregoing facts, the court declares the law to be that D. H. Armstrong, being an innocent purchaser for a fair price of the real estate in question, it is not competent for the plaintiffs in this action to subject the said real estate in the hands of Armstrong to the payment to the plaintiffs of the amount which they had paid to Mrs. Cabell as securities for Bailey on said bond for $1860 ; that the instrument purporting, to be secured by the deed of trust being entirely different from the instrument set up by the plaintiffs in their petition as the foundation of the indebtedness, it is not competent for the plaintiffs to establish, by parol evidence, that the description in the deed of trust was made by mistake, so as to authorize plaintiffs to charge the land with the payment of the said bond, the property being in the hands of an innocent purchaser.” I. Armstrong had constructive notice of the deed of tfust, it being alleged in the petition, and not denied in the answer, that it was recorded in St. Louis; besides, it was proved on the trial that it was duly recorded in October, 1843. Having notice of the deed of trust, he had notice that P. H. and S. B. Scott were sureties for Wm. Bailey for the payment of about $2000, principal and interest, to Mrs. E. Cabell, and that the object of the deed of trust was to secure them against their liability as his securities. The record showed that the land was encumbered in favor of the Scotts in the sum of about $2000. It is in nowise material that the instrument, by which their liability to Mrs. Cabell was shown, was misdescribed in the deed of trust. The purchaser, Armstrong, having notice by the record of the liability of the Scotts to Mrs. Cabell, could not have been injured by a misrecital in the deed of trust of the nature of that liability. II. There is no weight to be attached to the objection that it appeared by the deed of trust that nothing had been paid at the date of the deed by P. H. and S. B. Scott for Wm. Bailey, and that there was no debt due from him to them which could be secured. (See Duvall v. Raisin et al., 7 Mo. 449.) III. The extinguishment of the debt due Mrs. Cabell did not defeat the security created in favor of the Scotts by the deed of trust. IY. Parol evidence was admissible to show that P. H. and S. B. Scott, although co-obligors on the face of the bond, were, in point of fact, sureties of Wm. Bailey. (Garrett v. Eurguson’s adm’r, 9 Mo. 125.) Y. Under the registry acts of other states, it has been held that though there be a mistake in the record of a deed of mortgage, so that the record does not show an encumbrance corresponding to the fact, but does show an encumbrance altogether different; then, if the encumbrance be as great as or greater than the actual encumbrance, the encumbrancer shall be protected. If the encumbrance shown by the record be less clearly than the actual encumbrance, then the encumbrancer shall be protected to the extent of the encumbrance shown by the record, but no further. (See Beekman v. Frost, 18 Johns. 544; 1 Johns. Ch. 288.) It follows that the mere misdescription can not injure the claim of the encumbrancer, the material thing being the amount of his claim. Misdescription touching the account on which it accrues, can affect no one injuriously. YI. The deed of trust should stand good for the whole sum actually due at its date from Bailey to Mrs. Cabell. I. Armstrong is an innocent purchaser, and it is not competent for plaintiff to charge the land so held by Armstrong, except in strict accordance with the terms of the deed of trust. The deed of trust can not be reformed so as to alter or vary the rights of Armstrong. There does not appear to have been at the date of the deed of trust any indebtedness by Bailey to plaintiffs ; nor does it appear that plaintiffs had endorsed any promissory note to Mrs. Cabell. Plaintiffs are guilty of laches which bar them from asking the aid of a court of equity. II. Plaintiffs were joint co-makers of the bond to Mrs. Ca-bell, and can not prove by parol that they were only the sureties of Bailey. They are estopped from denying that they are joint co-makers of the bond. It is impossible then to reform the bond, and there is no prayer for it. This being clear, the plaintiffs can not insist that the bond, as it stood, was the instrument secured to be paid by the deed of trust. The plain language of the deed of trust clearly repels any such presumption. (Jackson v. Sackett, 7 Wend. 94.) Plaintiffs rely upon the evidence of Wm. Bailey to prove the mistake in the deed of trust and the interest he had in making the deed; and they at-, tempt to proye by him that the deed was executed for the purpose of securing a different debt from the one described in the deed. Bailey is not a competent witness to- prove such facts. The suit is prosecuted for his immediate benefit ;■ for if the land is charged with the debt, Bailey is discharged and his debt to plaintiffs is satisfied. (See art. 25, sec. 2 of practice act of 1849 ; Sess. Acts, 1849, p. 100.) /The instrument sought to be reformed for the alleged mistake is within the statute of frauds and perjuries, wbicb requires all sucb instruments no£ only to be in writing, but also duly acknowledged and recorded. There is no ambiguity on the face of the deed ; there is no pre-tence of fraud. It is clearly settled that parol evidence is not admissible to control or substantially vary a written instrument. (Porterichv. Poulet, 2 Atkyns, 38S; 3 Atkyns, 8.) This is the rule at law as well as in equity. (1 Phil. Ev. 448, 449, 551; 1 Greenl. Ev. § 275; Stackpole v. Arnold, 11 Mass. 30, 31; McClelland v. Cumberland Bank, 24 Maine, 566 ; Irnham v. Child, 1 Brown C. C. 92, 95; Kick v. Jackson, 4 Brown C. C. 514; 1 Phil. Ev. 547, 559 and 561; Postimore v. Morris, 2 Brown C. C. 218 ; Woolam v. Plearne, 7 Yesey, 311 ; Cummings v. Arnold, 3 Mete. 489 ; 1 Sugden on Vendors, 155 ; Chitty on Contracts, 97 ; Dwight v. Pome-roy, 17 Mass. 324 ; Bradbury v. White, 4 Greenl. 394; Stephens v. Cooper, 1 Johns. Ch. 429; Movan v. Hays, 1 id. 339 ; Steer v. Steer, 5 id. 1; Church v. Church, 4 Yeats, 280 ; Harrison v. Talbott, 2 Dana, 258 ; Timberlake v. Par-ishj 5 id. 350 ; Brown v. Haven, 3 Eairf. 179 ; Holmes v. Simons, 3 Desons, 149,152 ; Dupree v. McDonald, 4 id. 209 ; Tilton v. Tilton, 9 N. H. 392; Eveleth v. Wilson, 15 Maine, 109 ; Richardson v. Thompson, 1 Hump. 151 ; Chittwood v. Brittain, 1 Greenl. Ch. 439 ; Babcock v. Smith, 22 Piek. 61, 70 ; Leach v. Leach, 18 id. 68.) III. Defendant, Armstrong, is an innocent purchaser, and, although he may be said to have had constructive notice of the deed of trust, yet he could not, upon any principle, be held to be affected by the alleged mistake in the deed. He had no notice of any such mistake, and his equity is superior to that of the plaintiffs. (Story’s Eq. § 165 et seq. 1, 77, 8; Sugden on Vend. Ch. 3, p. 143, 159, 7th ed. ; Imenal v. Patterson, 10 Barr. 285 ; Hill on Trustees, 516, 517 ; Jerrard v. Saunders, 2 Yes. jr. 458.) The purchaser must have notice of the mistake, in order to be affected by any such mistake. (United States v. Monroe, 5 Mason, 572 ; Miles v. Bacon, 4 J. J. Marsh. 457, 465; Eerras v. Cherry, 2 Yernon, 383 ; Wall v. Arrington, 13 Greo. 88.) It is well settled that in a case like the present, the mistake must be particularly alleged, and the petition must pray for a reform of the deed. (5 Mason, 572.) IY. The plaintiffs have suffered too long a time to elapse before seeking to correct the mistake alleged ; there has been gross laches, and as the equities of the plaintiffs and Armstrong are equal, this court ought to refuse any relief upon that ground alone, if there were no other.