Bishop v. Morrow

PULLEN, P. J.

Plaintiffs executed and delivered to Nate J. Matthews their promissory note for $30,000, due one year after date secured by a deed of trust upon certain real property. The note and deed of trust was assigned by Matthews to Harry C. Morrow, and by various assignments came into the possession of appellants herein, Arnold V. Morrow and Mignon J. Ittner, two children of Morrow. The note was not paid at maturity, and appellants were proceeding to cause the security to be sold when plaintiffs brought an action to cancel the note and deed of trust, alleging that there was no consideration therefor, and later filed an amended complaint, and from the judgment based thereon, this appeal is based,

[722]

alleging in addition to a lack of consideration, fraud and as a separate cause of action, .set up an action to quiet title to the property involved.

Judgment was rendered in favor of plaintiffs, and the findings, in brief, disclose that Rufus P. Bishop and Ethel W. Bishop, father and daughter, had resided on the property in question as their home continuously for over fifty years. At the time the note here in question was executed Rufus E. Bishop was over the age of ninety years, and his daughter a woman entirely unfamiliar with business affairs. Por many years the business of plaintiff had been cared for by his son, who died in 1924, and thereafter while plaintiffs were attempting to handle their affairs they met Nate J. Matthews, who represented to them he had their best interests at heart and induced them to invest large sums in certain vending machines. During this time Harry C. Morrow, a money lender, was acquainted with Matthews and knew of his various promotion activities. Plaintiffs in their dealings with Matthews, delivered to him many secured and unsecured notes, and in 1926, executed as co-makers with Matthews two notes for $3,000 and $4,000, payable to Morrow. Plaintiffs received no consideration whatsoever for these notes. When these notes became due, plaintiffs executed to Morrow a note for $7,000 secured by a deed of trust upon the home, in which trust deed Matthews was named as trustee. No consideration was received by plaintiffs for this note and Morrow knew it was given to renew the two prior notes.

In 1927 plaintiffs being obligated on a number of promissory notes to persons other than Morrow or Matthews, desired to raise money to meet the same. Thereupon Matthews represented to plaintiffs he could raise $30,000 upon the home place, obtaining the same from Morrow. In that way the $7,000 deed of trust held by Morrow could then be released and Bishop would have $23,000 to pay off the other outstanding notes. Thereupon plaintiffs having trust and confidence in Matthews, executed to him their note for $30,000, secured by a deed of trust. At that time, however, Matthews knew he would not receive $30,000 or any sum in excess of approximately $8,700 for the note, which amount Morrow subsequently paid to Matthews. Plaintiffs received nothing. Thereafter and before maturity, Morrow assigned the note and deed of trust to Liberty Bank of America, and the bank