MCMORELLA V. BUCKNER STATE -BA:NIC 307 • 'MCMOR ELLA V. BUCKN ' ER''STATi HASTK. '• 4-3908 . , • Opinion delivered June 17; 1935. • 1. CONTRACTS CONSMERATION.-A consideraiion is ,a . benefit accruing to him Mak. ing the protimise ` .Or a losS or disathiantage undergone by him to whom it qs .. made: '
308 MCMORELLA T. BUCKNER STATE BANK. [191 2. PRINCIPAL AND SURETY—CONSIDERATION.—Advancement of money to a contractor to meet his pay rolls held a sufficient consideration for a surety's indorsement of the-contractor's note though the surety did not get the use of the money. 3. Bums AND NOTES—RENEWAL NOTE—CON SIDERATION.—Extension of the time for payment of certain notes held a sufficient consideration for renewal note and mortgage securing it. 4. MORTGAGES-T PAROL EVIDENCE RULE.—In a suit to foreclose a mortgage securing a note given to a bank for benefit of a contractor, the fact that the bank's cashier procured the signature of an in-dorser on an unfulfilled promise that the Highway Department • would pay the contractor, and that the money received therefrom would be credited on the note held unavailing as a defense in view of the parol evidence rule. 5. MORTGAMS—DEFLNSES—BURDEN OF PROOF.—In a suit to foreclose a mortgage securing a note, the burden was on the defendant to establish the defenses of fraud and lack of consideration. , Appeal from Columbia Chancery Court ; J. E. Haw-kins, Special Chancellor ; affirmed. .Ezra Garner, for appellant. Joe:L. Davis, for appelleeS. - BAKER, J. Miss Elizabeth MeMorella appealed from a decree a the chancery court, foreclosing a mortgage on certain real property given to secure balance due upon a note in the sum of $2,800 with interest. The note sued upon was for $3,000, credited with $200. This note was for the aggregate amOunt of three former notes. The first of the three notes was for $1,070 . for money borrowed from the bank for F. 0. Hamm, the two others were later executed for the same purpose. As we understand it, the following facts are disclosed : F. 0. Hamm had a contract to build . a highway from. Waldo to Rosston. He arranged to get money from the Buckner State Bank in order to meet his payrolls as they came due from time to time. The* details of the agreement made between him and the bank are immaterial, but William Owen, cashier of the bank, was made trustee, so that money borrowed from the bank was credited to his account as trustee, and he wrote checks on said account to pay Hamm's labor bills. Miss Mc-Morella either became surety for or borrowed directly from the bank for the benefit of this fund. When this last note was made, time of payment was extended, and
ARK.] MCMORELLA V. BUCKNER STATE BANK. 309 the mortgage Or deed of trust was given as .security. The former notes fell due from time to time. They were not paid but renewed. It appears that Hamm borrowed other money from the bank, not secured however by. the signature or indorsement of Miss McMorella. Hamm was sued on the unsecured notes. Judgment was had. His teanis and other property were sold, and proceeds were applied to payment of debts other than instruments here involved. To the complaint filed by the appellees, Miss Mc-Morella pleads (1) the lack of consideration or the failure thereof, and the conseqUent invalidity of the note and mortgage ; (2)- that her signature or indorsement on the' note sued , on, and the prior notes for which this waS given as a renewal wa8 induced by fraud of William Owen,' the trustee and caShier, of the bank. She alleged, upon a plea,df lack of consideration, that no part of the proceeds of the former notes was ever given to her or credited to her account, 'and that she received ne benefit theréfrorn; and, further, that the debt was in existence at the time she executed the mortgage or , deed of trust, and that there was no new Consideration to uphold or support the said Mortgage or deed of trust. :Upon the allegation of fraud, she alleges that Owen was the cashier of the bank, and -that she signed' the original notes upon his assurance and advice to her that the HighWay • Department would pay Hamm, and, when Hamm received the money, it would be held by him as trustee, and would be credited , on Hamm's note, relieving her of responsibility therefor ; that no part of the payments made by the Highway Department to . Hamm on his contract was credited upon her notes, and that she was not advised of this fact for a. considerable length of time after the completion . of the contract by Hamm, and she had, up to a date near the time of the filing of this suit, believed that the notes had been paid according to the plan or scheme as had been explained by Mr. Owen as an inducement to her to execute the notes, the renewals thereof, and the giving of the security therefor.
310 MCMORELLA v. BUCKNER STATE BANK. [191 It is unnecessary that we set forth with any degree of detail the evidence offered upon trial. Let it be sufficient to say that the appellant asserts that the original notes for which the note sued on is but a renewal were without consideration. If that statement were correct, it would follow, as she contends, that the renewal note is likewise unsupported by a consideration. The first notes, however, were given to procure money for Hamm so that he might perform the contract, and the bank supplied the money for which the notes were executed. . It may be. true that she did not get . the use of the money, but the money was, nevertheless,.. obtained from the bank, was the consideration for which the notes were given., "A consideration has been defined to be 'a benefit accruing to him- making the promise, or a loss or disadvantage undergone by him to whom it is made.' Ex parte Hodges, 24 • Ark. 197 ; .Bell v. Greenwdod, 21 Ark. 249 ; ' Johnson v. Walker, 25 Ark. 196 ; Brinkley Car Works & Mf Y.: Co. v. Farrell, 72 Ark: 354,90 S. W. 1174." The aboVe was quoted from-the case of Phoenix Cernent Sidewalk Co. v. Russelb5ille W. & L. Co., 101 Ark. 22, 28, 140 S. W. 996. • Hays v. McGuirt, 186 Ark. 702, 706, 55 S. W. (2d) 7-6. It is further alleged that the mortgage given as security for payment of -the note was withOut any consideration to support it. This renewal note extended the time of payment of the obligations it now repreSents. The consent of the bank to extend the time of payment of. the obligation was a sufficient consideration to support the mortgage or deed of trust. The a-bove citations support this rifle. It seems to be universal. The appellant, on the second proposition, that-of the - alleged fraud and promises on the part of Owen must fail for several reasons. One is, if proof of this kind were. admissible, it does not prove a fraud. Whatever promises Owen may have made to her as set forth in.this record, even if her stateMents be true, cannot avail her now as a defense. It is unnecessary to discuss with any greater particularity the appellant's evidence offered as a defense.
This court decided practically every issue raised by the appellant in an opinion recently delivered. By changing dates, names of partieS, amounts, and localities, the opinion in the case of Richardson v. Merchants' Bala & Trust Co., 188 Ark. 1104, 69 S. W. (2d) 396, might well become the opinion in this matter. An examination of the case above cited must disclose that a large part of appellant's proof was , incompetent, and her defense must fail. The appellant pleaded the affirmative defenses of fraud and lack of consideration. The burden of proving these defenses devolved upon her. She failed to meet this burden. The decree of, the chancellor is amply supported b.y the evidence. Affirmed.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.