Opinion
April 22, 1938.
APPEAL AND ERROR: Inconsistent Positions. A litigant who has voluntarily and with knowledge of all the material facts accepted the benefits of a judgment cannot afterwards take or prosecute an appeal or error proceeding to reverse it.
In an action on five promissory notes against a corporation and an individual, makers, two of which notes were past due and three were claimed payable because of interest unpaid, the individual defendant having signed only the principal notes, where a judgment was rendered for plaintiff against the individual defendant on the two notes past due which judgment was paid in full by the corporation defendant and accepted by the plaintiff, an appeal to the Supreme Court by the plaintiff was properly dismissed on the motion of the individual defendant.
Appeal from Circuit Court of City of St. Louis. — Hon. John A. Witthaus, Judge.
MOTION DISMISSED AND APPEAL SUSTAINED.
Bryan, Williams, Cave McPheeters for appellant.
(1) Defendant William Lewin did receive a consideration for the execution of each of the notes sued on in plaintiff's petition. R.S. 1929, secs. 2654, 2658; Chaonia State Bank v. Sollars, 190 Mo. App. 284, 176 S.W. 263; Nelson v. Diffenderffer, 178 Mo. App. 48, 163 S.W. 271; Montgomery v. Schwald, 177 Mo. App. 75, 166 S.W. 831; Bank v. Railroad Co., 172 Mo. App. 662, 155 S.W. 1111; Hanson v. Yeary, 159 Mo. App. 151, 140 S.W. 753; Boettger v. Roehling, 74 Mo. App. 257; Gardiner v. Holcomb, 82 Cal.App. 342, 255 P. 528; Perlmutter v. Holsberg, 282 Mass. 421, 185 N.E. 357. (a) Regardless of whether or not William Lewin received a consideration for the execution of the notes sued on, each of them was executed by him as comaker and contained the expressed provision that the makers thereof should continue liable as principals until each of said notes be fully paid, and the court erred in admitting testimony on the part of defendant William Lewin tending to show that he was liable only as an accommodation maker, guarantor, surety or endorser. McMillan v. Parkell, 64 Mo. 286; Stephenson v. Joplin State Bank, 160 Mo. App. 47, 141 S.W. 691; Myers v. Chesley, 190 Mo. App. 371, 177 S.W. 326; First Natl. Bank v. Wells, 98 Mo. App. 573, 73 S.W. 293; Beers v. Wolf,
116 Mo. 179, 22 S.W. 620. (2) The interest coupons which were attached to the principal notes described in the plaintiff's petition were not accepted by the plaintiff in payment of the interest to accrue on the said principal notes, and regardless of the acceptance by the plaintiff of said interest coupon notes defendant William Lewin is liable for interest prior to maturity on the principal notes sued on. Lindley v. Waterloo First Natl. Bank, 76 Iowa 629, 631, 41 N.W. 381, 2 L.R.A. 709, 14 Am. St. Rep. 254; Pennington v. Baehr, 48 Cal. 565; Thayer v. Montgomery County, 3 Dill. 389, affirmed. Johnson County v. Thayer, 94 U.S. 631, 24 L.Ed. 133; Phelps v. Lewiston, 15 Blatchf. 131; Blair v. Cuming County, 111 U.S. 368, 4 Sup. Ct. 449, 28 L.Ed. 457; Jones on Corporate Bonds (4 Ed.), sec. 715; City of Kenosha v. Lamson, 9 Wall. 477, 19 L.Ed. 725; Howard v. Bates County, 43 F. 276; McCoy v. Washington County, 3 Wall. 281; Paridge v. Lake Placid Co., 271 N.Y.S. 714, 151 Misc. 542; Bailey v. County of Buchanan, 115 N.Y. 297, 22 N.E. 155; Goodjon v. United Bond Bldg. Corp., 234 N.Y.S. 522, 226 A.D. 137; Mississippi P. L. Co. v. Kusterer Co., 156 Miss. 22, 125 So. 429; Townsend v. Alewell, 202 S.W. 447; 8 C.J. 1094; 50 C.J. 74; 28 C.J. 966, 967. (3) The legal effect of the agreement, dated August 10, 1932, between plaintiff and Aaron Ferer Sons, Inc., was not to extend the interest notes described in plaintiff's petition and to postpone plaintiff's right to demand payment thereof, but was only that of a covenant not to sue thereon, and did not have the effect to waive the right of acceleration of any of the principal notes sued on on account of the failure to pay interest until August 1, 1937, and plaintiff's cause of action, therefore, on Counts 3, 4 and 5 is not, by reason thereof, premature and can be maintained against defendant William Lewin. 50 C.J. 143; Kaufman v. Penn. Mut. Life Ins. Co., 64 F.2d 160; Casner v. Heaton, 237 S.W. 1042; 8 C.J. 429; 43 L.R.A. 472; Atwood v. Lewis, 6 Mo. 392; Bircher v. Payne, 7 Mo. 462; Bridge v. Tierman, 36 Mo. 439; Bank v. Martin, 171 Mo. App. 194, 156 S.W. 488; Rucker v. Robinson, 38 Mo. 154; Hosea v. Rowley, 57 Mo. 357; Stillwell v. Aaron, 69 Mo. 539; Boatmen's Savings Bank v. Johnson, 24 Mo. App. 316; Bank v. Rogers, 123 Mo. App. 569, 100 S.W. 534; Bank v. Bunch, 212 Mo. App. 249, 251 S.W. 742; 23 R.C.L. 376; Roberts v. Strang, 38 Ala. 566, 82 Am. Dec. 729; Mendenhall v. Lenwell, 5 Blackf. 125, 33 Am. Dec. 458; Dow v. Tuttle, 4 Mass. 414, 5 Am. Dec. 226; 36 Am. St. Rep. 147; St. Louis v. Wright Contracting Co., 202 Mo. 451, 101 S.W. 6; 6 R.C.L. 887; Pennsylvania Steel Co. v. New York City Ry. Co., 198 F. 721; 21 R.C.L. 1031; Washburn v. Williams, 10 Colo. App. 153, 50 P. 223. (4) The net rents collected by City Block Two Hundred and Ninety, Inc., and paid to plaintiff did not inure to defendant William Lewin's benefit in equity and should not be applied toward the payment of interest so as to prevent rather than cause an acceleration of the principal notes sued on in Counts 3, 4 and 5 of plaintiff's petition. 48 C.J. 647; 21 R.C.L. 90; Thorn, etc., Lime Co. v. Citizens Bank, 158 Mo. 272, 59 S.W. 109; Beck v. Haas, 111 Mo. 264, 20 S.W. 19; McCune v. Bell, 45 Mo. 174; 48 C.J. 654; State ex rel. Dunklin County v. Blakemore, 275 Mo. 695, 205 S.W. 626; Cox v. Sloan, 158 Mo. 411, 57 S.W. 1052; Case Threshing Machine Co. v. Matthews, 188 Mo. App. 429, 174 S.W. 198; Miller v. Miller, 169 Mo. App. 432, 155 S.W. 76; State v. Globe Indemnity Co., 222 Mo. App. 153, 2 S.W.2d 815; Fagan v. Brock Motor Car Co., 282 S.W. 135; Haynes v. Waite, 14 Cal. 446; Starrett v. Barber, 20 Me. 457; Bobe's Heirs v. Stickney, 36 Ala. 482; Mayor of Alexandria v. Patten, 4 Cranch. 317, 2 L.Ed. 633; Michigan Commercial Ins. Co. v. Rodger, 191 S.W. 1066; Henry v. Safford, 211 Mo. App. 308, 241 S.W. 951; Goetz v. Piel, 26 Mo. App. 634; Poulson v. Collier, 18 Mo. App. 583; Price v. Merritt, 55 Mo. App. 640; McMillan v. Grayston, 83 Mo. App. 425; Lyons v. Carter, 84 Mo. App. 483; 48 C.J. 659.
Burnett, Stern Liberman for William Lewin.
(1) The scope of the appeal is limited to a review by this court of the determination by the circuit court that the action on counts three, four and five was premature. The circuit court did not adjudge the merits on these counts. Abeles v. Pillman, 261 Mo. 359; Kansas City ex rel. Barrett Co. v. Spitcaufsky, 239 S.W. 808; Dillinger v. Kelley, 84 Mo. 561; Barnett v. Smart, 158 Mo. 167. (2) The respondent Lewin is not liable for interest on the principal notes prior to maturity. The unmatured principal notes therefore could not be accelerated for failure to pay interest. Ogden on Negotiable Instruments (3 Ed.), p. 422, sec. 279; Roswell Drainage Dist. v. Parker, 53 F.2d 793; Sears v. Greater New York Dev. Co., 19 F.2d 651, Id. 51 F.2d 46; Hamilton v. Wheeling Pub. Serv. Co., 88 W. Va. 573, 107 S.E. 401, 21 A.L.R. 433; Edwards v. Bates County, 163 U.S. 269, 41 L.Ed. 155, 16 Sup. Ct. 967; Johns v. Rice, 145 N.W. 290; Koehring v. Muemminghoff, 61 Mo. 402; Wilson v. Reed, 270 Mo. 400, 193 S.W. 819; Frye v. Sheppard, 173 Mo. App. 200; Canton Trust Co. v. Durrett, 320 Mo. 1208, 9 S.W.2d 925; Graves v. Davidson, 334 Mo. 882, 58 S.W.2d 711; R.S. 1929, sec. 2748; McDonald v. Goddard Grocery Co., 184 Mo. App. 432, 171 S.W. 650. (3) The payments were sufficient to prevent an acceleration of the unmatured notes on which Lewin was guarantor. 48 C.J., pp. 642, 653, secs. 84, 104; Shortridge v. Parde, 2 Mo. App. 363; Reinhard v. Fluckiger, 119 Mo. App. 465; Salinger v. Lincoln Natl. Life Ins. Co., 52 F.2d 1080; Savings Bank v. Asbury, 117 Cal. 96, 48 P. 1081; Doyle v. Di Medio, 99 N.J. Eq. 23; Rathbone v. Forsythe, 156 N.Y.S. 888. (4) Lewin was a guarantor or surety of the principal notes signed by him. As guarantor of part of the debt he has the absolute right to have the payments made applied in his favor. R.S. 1929, sec. 2686; Long v. Mason, 273 Mo. 266, 200 S.W. 1062; Tressler v. Whitsett, 12 S.W.2d 723; Mutual Life Ins. Co. v. McKinnis, 15 S.W.2d 935, 47 S.W.2d 564; Schelp v. Nicholls, 263 S.W. 1017; Eddy Co. v. Sturgeon, 15 Mo. 199; Washington Credit Corp. v. Miller, 157 So. 343; Pulling v. Schreiber, 215 N.W. 381. (5) The court will not permit an acceleration where the default arises out of inequitable conduct on the part of the creditor or where an acceleration would have inequitable results. Pomeroy, Eq. Jr., sec. 439; Parker v. Mazur, 14 S.W.2d 174; Rathbone v. Forsythe, 156 N.Y.S. 888; French v. Row, 28 N.Y.S. 849; Kreiss Potassium Phosphate Co. v. Knight, 124 So. 751; Schwed v. Budlecki, 158 A. 418; Smith v. Cholstein, 164 S.E. 217. (6) The plaintiff's attempt to accelerate notes three, four and five is unauthorized by the notes and deed of trust. It was an attempt to accelerate a part only of the loan remaining unpaid, whereas the right granted was to accelerate all of the debt remaining unpaid. Canton Trust Co. v. Durrett, 320 Mo. 1208, 9 S.W.2d 925; Wilson v. Reed, 270 Mo. 400, 193 S.W. 819; Reitz v. Pontiac Realty Co., 316 Mo. 1257, 293 S.W. 382; Peoples' Bank of Ava v. Rankin, 282 S.W. 92; Slyman v. Simon, 48 S.W.2d 140; Grosmore v. Page, 73 Cal. 213; Seligman et ux. v. Burg, 251 N.Y.S. 689; Seidel v. Holcomb, 249 Ill. App. 10; Diversified Fruit Farms, Inc., v. Johnson, 58 S.W.2d 732; Pennsylvania Co. for Ins. on Lives, etc., v. Broadway Stevens Co., 148 A. 575; McFadden v. May's Landing, etc., Co., 22 A. 932; American Press v. St. Louis, 314 Mo. 288, 284 S.W. 482.
Action against Wm. Lewin on five promissory notes in the total principal sum of $45,000, and the interest coupon notes attached to said notes. They were dated August 1, 1932, and matured on August 1, 1933, August 1, 1934, August 1, 1935, August 1, 1936 and August 1, 1937. The City Block Two Hundred and Ninety, Inc., borrowed the money from the plaintiff and signed both the principal notes and the interest coupon notes. Lewin signed only the principal notes. The first two notes had matured at the time suit was filed. The last three notes had not matured. They did not mature until after the entry of judgment. Plaintiff claimed the right to accelerate the maturity of the last three notes because of default in the payment of interest. The City Block Two Hundred and Ninety, Inc., interpleaded as a defendant in the cause.
The court found for plaintiff and against defendant Lewin on counts one and two in the principal amount of the notes, with interest after maturity and attorneys' fees in the total sum of $12,312.58. The court further found that the action on counts three, four and five was premature and dismissed the same without prejudice to the right of plaintiff to file any other suit or suits on said notes. Judgment was accordingly entered and plaintiff appealed.
After judgment the defendant City Block Two Hundred and Ninety, Inc., paid to plaintiff $12,312.58, the full amount of the judgment against defendant Lewin, and plaintiff acknowledged satisfaction, which was duly filed in open court and the judgment satisfied of record.
In this situation defendant Lewin moves for a dismissal of the appeal. He contends that the satisfaction of the judgment in whole or in part prevents plaintiff from prosecuting the appeal. The rule is stated as follows:
"The general rule . . . is that a litigant who has voluntarily and with knowledge of all the material facts accepted the benefits of an order, decree or judgment of a court, cannot afterwards take or prosecute an appeal or error proceeding to reverse it. . . . The reason for this rule is that a party cannot proceed to enforce and have the benefit of such portions of a judgment as are in his favor and appeal from those against it — in other words, that the right to proceed on a judgment and enjoy its fruits and the right to appeal therefrom are totally inconsistent positions, and the election to pursue one course must be deemed an abandonment of the other." [2 American Jurisprudence, p. 975.]
The above statement is the well-settled rule in this jurisdiction. [Johnson v. Johnson Motor Co., 98 S.W.2d 146; Cassell et al. v. Fagin et al., 11 Mo. 207, 47 Am. Dec. 151; RoBards v. Lamb, 76 Mo. 192, 194, 195; Aull v. St. Louis Trust Co., 149 Mo. 1, 15, 50 S.W. 289; Wolfert v. Reilly, 133 Mo. 463, 34 S.W. 847; Cape Girardeau T.B.T. Railroad v. Bridge Co., 215 Mo. 286, 297, 114 S.W. 1084; In re Sachleben, 106 Mo. App. 307, 80 S.W. 737; Houck v. Swartz, 25 Mo. App. 17, 20; Winsor v. Schaefer, 224 Mo. App. 1220, 34 S.W.2d 989; 3 C.J., p. 681.]
Plaintiff admits the rule and that there can be but one final judgment. Even so, it contends that under the facts the prosecution of the appeal is permissible under the exception to the rule, which is stated as follows:
"However, there is a well recognized exception to this rule, that is, one who accepts payment after judgment of items which were never in contest, is not debarred from appealing." [Johnson v. Johnson Motor Co., 98 S.W.2d l.c. 148.]
The judgment was rendered against Lewin on the first two notes. The question of whether said notes were "in contest" must be determined from the record.
Defendant Lewin tendered a number of defenses, including the contentions that he was not liable for interest before maturity because he had not signed the interest coupons; that he was a surety and entitled to subrogation with respect to the mortgage security held by plaintiff; that he was entitled to a marshaling of the security and an accounting, and that his rights were jeopardized by a contract executed by plaintiff and others without his knowledge and consent, in which plaintiff, on condition, bound itself, notwithstanding default, not to foreclose the deed of trust given to secure the notes, and bound itself not to institute an action upon any of the notes prior to August 1, 1937.
In other words, defendant Lewin did not admit liability on either of the notes. On the contrary the issues presented by the above stated defenses against all the notes were contested in the trial of the case. The court found in favor of Lewin on the defense that he was liable only for interest after maturity. Plaintiff was not satisfied with that ruling and was not satisfied with the ruling dismissing counts three, four and five of the petition. It appealed from the judgment. It follows that the first two notes on which judgment was rendered against defendant Lewin were "in contest."
The motion to dismiss the appeal should be sustained. It is so ordered. All concur, except Hays, J., absent.