Dorman v. McFarlan , 124 Miss. 811 ( 1921 )

Ethridge, J.,

delivered the opinion of the court.

The appellee filed a bill to enjoin the appellant as trustee from foreclosing a deed of trust given by one Klump to secure a certain indebtedness given by Klump to Kapland, which indebtedness was secured by a note and deed of trust, which was recorded in the county where the land lay. The note provided for attorney’s fees 'in case the notes were placed in the hands of an attorney for collection. On the same day that Klump gave the deed of trust to Kapland he sold the lands embraced in the deed of trust to McFarlan, with agreement and understanding embraced in the deed that McFarlan would, assume and pay off the debt secured by the deed of trust. The notes secured by the deed of trust matured on December 1, 1918, and December 1, 1919, and were for five thousand eight hundred dollars each. The agreement in the deed assuming this indebtedness by McFarlan reads as follows:

“In consideration of the sum of five thousand one hundred and twenty-five dollars cash in hand paid me, the receipt of which is hereby acknowledged, and the assumption by the hereinafter named grantee of my indebtedness to Max Kapland as evidenced by two notes of even date herewith) each for the sum of five thousand eight hundred dollars and each of said notes bearing interest at the rate of six per cent, per annum from date until paid, Avith interest thereon being due and payable on December 1, 1918, and annually thereafter, said notes being due and payable December 1, 1918 and 1919, respectively; said notes being-secured by a deed of trust of record in Sunflower county, Mississippi; and for the further consideration of the making and delivery to me by the hereinafter named grantee of his three promissory notes of CA'en date hereAvith each for the sum of five thousand eight hundred dollars,” etc.

The said land Avas conveyed by the said deed to McFarlan. When the first note became due to Kapland McFarlan did not pay the note, but merely paid the interest thereon, and had some understanding with Kapland to defer the payment of the principal. But Klump Avas not released by. said agreement betAveen Kapland and McFarlan.

When the second note was about to become due, Kapland notified Klump that the notes AArere due and unpaid, and demanded payment. When this notice was received Klump made a demand of McFarland to pay off said notes, which. McParlan was finable to do. But McFarlan arranged with another person to buy the notes and deed of trust from Kapland and hold for McParlan, but not releasing Klump and not releasing the first lien in favor of Klump’s second lien. Thereupon Klump demanded that said notes be paid off so that his notes would become a first lien upon the land in question. As it was not agreeable with the purchaser to take this course, Klump arranged with the holder of the notes and deed of trust to buy them and take an assignment, which was done. Thereupon Klump demanded of McParlan the payment of the notes, which McParlan stated he was unable to do. On the day this demand was made McFarland and the party he had arranged with to buy the notes made a trip together to Clarksdale, Miss., from Drew, Miss., and on this trip an agreement was reached between McParlan and Mr. Manning, with whom he had arranged as above stated to buy and hold the notes, that Manning would furnish McParlan the money with which to pay off the notes given to Kapland and permit Klump’s deed of trust to become a first lien, and that Manning would take a second deed of trust to secure the money so advanced. After they returned to Drew on the afternoon of the same day, as Mc-Parlan got off the train Klump got on the train, taking passage for Greenwood for the purpose of having the trustee collect the notes, and, if not paid, foreclose the Kapland deed of trust, in which deed of trust the appellant, who was an attorney, was trustee. McParlan came to where Klump was on thé train, and according to his version of the matter stated to Klump that he was ready to pay off the deeds of trust, and if he would disembark from the train and go over to the bank that he would get his money on the following day. Klump’s version was that McParlan merely stated to him that he was then ready to talk business with him if he would go over to the bank, and that he could pay him on the following morning, and that he stated that he had been fooled often enough and declined to go. McParlan testified that he did not have the money with which to pay the deeds of trust and notes, but that he had arranged with Manning to get the money and that Manning had the money in the bank. The evidence shows that this money was never placed to the credit of McFarlan, and was not paid into court until the final decree.

Klump proceeded to Greenwood, and turned the notes over to the appellant as. an attorney for collection, with the instruction that if they were not paid to foreclose. The attorney sent a demand to McFarlan for the principal and interest, plus an attorney’s fee of ten per cent. On receipt of this notice Manning sent a personal check or draft for the principal and interest, but declined to send the attorney’s fee, claiming that he was due no attorney’s fee.

On the evening that Klump turned the notes over to the attorney, and prior to the time of turning the notes over, McFarlan rang up the attorney, who ivas also trustee,, and stated over the phone that he was ready to pay the notes. A second notice was sent, returning the drafts sent in the first letter by McFarlan, which had indorsed on them “Refuse to accept,” and insisting upon an attorney’s fee and threatened foreclosure if the amount was not paid promptly. When this letter was received McFarland’s attorney sent another draft for the principal and interest, but without attorney’s fees, urging the acceptance of the money, but stating that if it were not accepted they- would enjoin. This draft was returned with letter refusing to accept it in full, and also declining- it specifically upon the ground that it was not money. Thereupon the trustee, the appellant, proceeded to advertise the land embraced in the deed of trust for sale, and thereupon the appellee, McFarlan, sued out an injunction enjoining the sale. A motion was filed by the appellant to dissolve the injunction and claimed attorney’s fees for collecting the note and attorney’s fees for defending the injunction suit as damages, as well as the principal and interest to the date of the decree. The chancellor refused, to dissolve the injunction and made the same perpetual, and directed the principal and interest to the 11th day of February, the date on which Mr. McFarlan stated to Mr. Klump that he was ready to pay the notes, etc., to be paid into court.

' Two questions are presented by this record for decision: First, was the offer of McFarlan to pay under the circumstances stated a legal tender; and, second, was the appellant entitled to attorney’s fees in addition to the principal and interest under the facts of this case.

It will be seen from the above statment that the plaintiff did not actually tender money on the train on the day in question, nor did.he state that he was then and there ready to pay the amount. The proof shows on the contrary that he could not have immediately paid the money had Klump been willing then to' receive it. The money had not been actually turned over to McFarlan, and there was no money to his credit at the bank with which to make the payment. H?is ability to make the payment depended upon Manning’s giving him a check on the bank and the bank’s honoring the check so given. McFarlan had stated on the very morning that he was unable to pay it, and Klump had made several trips to induce him to pay it without avail. We do not think that the proposition made on the train, accepting McFarlan’s version of it, warranted the chancellor in holding that' it was a legal tender of the money, and it was error to so hold.

On the second, proposition we do not think under the facts disclosed by this record that the appellant was entitled to collect an attorney’s fee. The agreement of Mc-Farlan was to pay the indebtedness to Kapland, or the assignee of Kapland, for immediate payment, neither had they placed the note in the hands of an attorney for collection. On the contrary, they were willing to extend to McFarlan additional time without waiver of their rights. Klump had not paid out any attorney’s fee when he repurchased the paper which was his own paper. McFarlan had not signed the paper nor become a party to the paper any further than to assume it in the language of the deed above quoted. The proof .shows that Mr. Klump could have collected the principal and interest by remaining over, and, while he was under no duty to remain over and return to the bank, he still could have collected the principal and interest had he made demand for that alone. He made demand for attorney’s fees and in the foreclosure attempted would have claimed attorney’s fees. Under these facts we do not think that the allowance of attorney’s fees to Klump was necessary. We think the chancellor erred in the amount decreed for the complainant to pay in satis-' faction of the deed of trust, and for this error the judgment will be reversed, and the cause remanded.

Reversed and remanded.