Harwood v. Toms

32 S.W. 666, 130 Mo. 225, 1895 Mo. LEXIS 377

• Court: Supreme Court of Missouri
• Decided: November 5, 1895
• Status: Published

Opinions

Baeclav, J.

The present appeal deals with an issue in ejectment, upon which an equitable suit has been engrafted.

The record opens with a preliminary proceeding based on a petition (filed, September 17,1889) containing, first, a statutory count to quiet title to the land in dispute (R. S. 1889, sec. 2092), and, then, a count in equity to enjoin defendants from prosecuting certain actions for unlawful detainer and replevin until the determination of the title to the land.

Mr. Toms, the party in possession, was plaintiff in that petition, and Messrs. Orr, Harwood, Frederick and Oaks were defendants. In due course (upon proceedings not now questioned) a judgment in that cause was reached, commanding Mr. Harwood to bring an action, within a given time, to try the title to the land now in controversy, or be barred from thereafter asserting any claim thereto.

As to the other defendants in the first petition, similar orders were made. Messrs. Orr and Harwood were the only parties who moved in compliance with the order to bring suit. They instituted the action of ejectment which is now here by appeal.

Messrs. Frederick and Oaks became barred under the provisions of the statutory law touching the quieting of titles (R. S. 1879, sec. 3562, and R. S. 1889,. sec. 2092) in accordance with the judgment of the-court upon Mr. Toms’ petition, inasmuch as they took no steps to further pursue their claim of title to the land.

After Messrs. Orr and Harwood commenced this action (as required by the judgment to quiet title), the former, at an early stage, dropped out, and abandoned his claim, leaving Mr. Harwood as the sole plaintiff.

His petition, filed January 23, 1891, is in the ordinary form for an action of ejectment. The defendants therein named are Messrs. Toms, Aldrich, and Eloyd. The first is the real defendant; the others are in possession as his tenants.

The defendants answered, setting up a variety of facts, the substance of which will sufficiently appear in the course of the opinion. The defenses which are chiefly important are, first, that the indebtedness secured by the deed of trust (under which plaintiff claims) has been satisfied; and, secondly, that plaintiff is estopped, by the facts of the case, to assert the title on which he relies.

, We shall not find it necessary to go beyond the first of these defenses.

The cause was heard as one in equity, and the court directed a jury to report findings on ten interrogatories submitted to them at the close of the evidence.

The jury, however, disagreed as to all the interrogatories save one, though they reported their vote on each of them. They agreed on findings as to the-damages, rents and profits,- and were discharged.

The court then took the case, and ultimately found for the plaintiff for possession with damages and monthly rents. Judgment was entered to that effect; and from that judgment defendants appealed after the -usual steps.

We shall not attempt to give a full review of the '¡evidence; but only such a sketch of it as will make our rulings readily comprehensible.

Some interesting questions of law have been discussed in the briefs; but we believe that the result which the facts warrant can be reached without taking mp any of the mooted questions.

The nature of the action, as developed by the ■pleadings, is essentially equitable. The answer asks ■for a judgment canceling and discharging the deed of ".trust which forms the basis of plaintiff’s cause of ;action, and states a chain of facts leading to- that end. 'The chief stress of the answer is on the fact that there is no subsisting indebtedness to give the Rogers’ deed of trust (under which plaintiff claims) a standing as an incumbrance on the land. That is the leading issue. All parties have treated it in the trial court, and here, .•as belonging to the equity side of the court. We shall •assume the correctness of that view, without further comment.

As an equity case the facts are properly reviewable on appeal. We have, therefore, examined the whole record and shall endeavor to give, as shortly as possible, our conclusions therefrom.

Both parties claim title from Mr. Oaks; and both -claim through deeds of trust executed by him.

The plaintiff is a purchaser under the deed in which Mr. Rogers is named as trustee, which, for the sake of brevity, we shall call the Rogers mortgage.

Mr. Toms is the purchaser and in possession under the other deed of trust, which we shall call the Wilson mortgage.

The principal dates in the history of the titles are these:

Plaintiff’s title:

January 1, 1883. Eogers mortgage executed and acknowledged, by Mr. Oaks and wife, to secure a $2,500 note and interest.

June 29, 1883. Eogers mortgage recorded.

August 22, 1889. Trustee’s sale and deed under Eogers mortgage to Mr. Orr. Acknowledged same day. (Not recorded at time of trial.)

August 23, 1889. Deed by Mr. Orr to the plaintiff. (Not.recorded at time of trial.)

Defendant’s title:

December 1, 1883. Wilson mortgage by Mr. Oaks and wife to secure a $2,000 note and interest; acknowledged December 20, 1883.,

December 25, 1883. Wilson mortgage recorded.

July 13, 1887. Trustee’s deed to Mr. Toms under Wilson mortgage; acknowledged same day.

August 3, 1887. Last named deed recorded.

The Wilson- mortgage, as all parties concede, was given by Mr. Oaks to secure a valid loan of money, as stated in that instrument.

It contained statutory covenants of general warranty, as well as express covenants against all other incumbrances. It gave no hint of any prior charge or incumbrance. Nor is it claimed that the lender, whose loan was secured by that mortgage, had any intimation or notice whatsoever of the Eogers mortgage, other than the constructive notice imparted by the record of that instrument.

The loan secured by the Wilson mortgage was made by the firm of Wilson & Company, of St. Louis, through negotiations conducted by Mr. Glazier, of Maysville, De Kalb county. The plaintiff and Messrs, Oaks, Frederick, and Orr lived in that vicinity.

Upon the delivery to Mr. Glazier of the secured note (signed by Mr. Oaks) and the Wilson mortgage, Mr. Glazier paid over the net proceeds of the loan (after deducting commissions) in a check payable to the order of Mr. Oaks. The check was delivered to Mr. Frederick, who, upon Mr. Oaks’ indorsement, collected the proceeds of the check, and applied them as mentioned later. The relations of these parties were close. Mr. Frederick carried on with Mr. Glazier the principal part of the negotiations on behalf of Mr. Oaks for the Wilson loan. The plaintiff, an attorney and counselor at law, was cooperating with Mr. Frederick to the same end. Both plaintiff and Mr. Frederick explain this course on., the theory that Mr. Oaks was indebted to them, and that they were trying to aid him in perfecting the loan in order to obtain, in that event, repayment of what was due to them. Neither of them, during the negotiations for the Wilson loan, let fall to Mr. Glazier any suggestion of a claim upon the note secured by the Rogers mortgage. That note, signed by Mr. Oaks, was dated January 1, 1883, payable to the order of “A. W. Frederick, J. T. House, and J. F. Harwood” for the sum of $2,500, with ten per cent interest to be compounded, payable twelve months after date.

The sale under the Rogers mortgage was made for the ostensible consideration of $250, as recited in the trustee’s deed. But Mr. Rogers, the trustee, testified that the purchaser (Orr) did not pay the purchase price to him; but that he (the trustee) left the deed to Mr. Orr with the plaintiff, at the request of the latter. The plaintiff made an indorsement on the note to the effect that $200.50 were received upon it, by proceeds of the sale, August 22, 1889. But there is no proof that Mr. Orr actually paid $250, or any other sum, for the interest conveyed by the trustee, other than in the form of that credit.

Eeeurring to the origin of the note on which the Eogers mortgage was based., it is not claimed by plaintiff that the note was given for money then loaned to Mr. Oaks by anyone. It is admitted by plaintiff that the note was not valid for its full face figures. But plaintiff insists that it was founded upon certain valuable considerations, of which some account is given.

The statement of these considerations has been furnished on several occasions in the various actions which have arisen between the parties interested in this property, including the case at bar.

Upon a close and careful scrutiny of the evidence we are satisfied that plaintiff and Mr. Frederick, the other payee, must have confused or confounded the disposition of the proceeds of the "Wilson loan with the origin of the other mortgage, which was probably drawn with a view to be used to obtain a like loan to that actually made by Wilson & Compány.

Thus, plaintiff testified in 1888, in the case of Toms v. Oaks, that part of the fund he advanced for the benefit of Oaks (in consideration of the Eogers mortgage) was paid to a creditor of Oaks in Shelby county, who held what is called the Shelbina mortgage; whereas the books of the bank at Cameron show that a check for the amount of that claim was paid by that bank from the proceeds of the Wilson loan, deposited at Cameron by Mr. Frederick. This is the largest single item (entering into the Eogers mortgage) of which any specific account is attempted. It amounted to about $600, as plaintiff remembers; or $639.06, according to the check drawn shortly after the Wilson loan reached Mr. Frederick.

Then the latter testified, in the Toms-Oaks case, that part of the consideration of the Eogers mortgage was a payment to Dr. Clagget to relieve the land of a lien or claim the doctor held or represented. But the doctor, in the suit at bar, testified that he received his payment from Mr. Frederick after the Wilson loan was effected and from its proceeds.

The jury, that was called to aid the court, agreed on this point, and found the fact to be as stated by the doctor.

Mr. Frederick also deposed that part of the consideration was money borrowed by him of Dr. Hollington to advance to Oaks; and plaintiff declares that another part was several hundred dollars similarly borrowed by him of Mr. House. Both of these alleged lenders, however, seemed unable to recall those loans.

But it is not our idea to spread upon the record all the particular features of the testimony. It will be enough to give our general conclusions therefrom.

One noteworthy fact in the ease is that Mr. Frederick, one of the payees in the Rogers mortgage note, received -the full proceeds of the Wilson loan, and disbursed the greater part of them in payment of debts of Oaks, and then turned over to Oaks the balance, the exact amount of which is not made clear by the testimony.

Mr. Frederick had agreed with the agent, through whom the Wilson loan was negotiated, to pay off all existing liens with these proceeds. He had personally negotiated for the loan on behalf of Mr. Oaks, who was related to, or connected by marriage with, him.

During the efforts to effect the loan from Wilson & Company, a friendly suit for delinquent taxes was brought against Oaks and other-parties by the collector. At the close of the proceedings in that suit, Mr. Frederick became the purchaser of this land at the tax sale. Those proceedings were intended to clear off some old clouds on the title. Mr. Frederick bought with a view to perfect the title in Oaks. Prior to this tax suit, a skeleton abstract had been prepared by the agents of Wilson & Company. It was the basis of the steps to clear up the title. The plaintiff was on intimate terms with Mr. Frederick, and he was attorney for Mr. Oaks in the tax suit as appears by his letter to Wilson & Company’s agent, July 9,1883. In that letter plaintiff said that he wanted the agent to go on and get judgment against all the parties, so (to quote the exact language) “We can sell and clear up Oaks’ title,” adding, “and then we want to perfect the loan from you to Oaks.”

Plaintiff also made a suggestion in the letter toward correcting an alleged error in giving the name of Mr. Bissell (one of the outside defendants) in the tax suit.

These tax proceedings were ultimately discarded as worthless by all concerned (after Mr. Frederick had bought the land at the sale), because they had been taken before a justice of the peace. After learning of the ruling of the supreme court (State ex rel.v. Hopkins, 87 Mo. 519) as to the want of power in justices to try general tax eases, no attention seems to have been paid by any of the parties to the tax proceedings, or to the judgment or sale therein. They were treated as void.

But it is noticeable that the 'tax suit was begun, June 28, 1883, and the Rogers mortgage was recorded the next day, June 29, 1883 (though executed during the previous January). The plaintiff’s letter above quoted was written ten days later, July 9, 1883.

If any indebtedness really existed on account of the Rogers mortgage, at the time the proceeds of the Wilson loan were disbursed, it is extraordinary that Mr. Frederick should have turned over any balance of those proceeds to Oaks (whom plaintiff described in one passage of testimony as “a pauper”). By thus giving away the means of payment, Mr. Frederick would have left himself and the plaintiff unpaid.

The facts developed in the evidence lead us to believe that these parties, the plaintiff and Mr. Frederick, would not be likely to take such a course, had anything then been due on the note payable to them. Both plaintiff and Mr. Frederick well .knew that Wilson & Company were negotiating for the loan on the theory that it was to be secured by a first lien, according to the positive' representations of Oaks on that point in his written application for the loan.

We believe that when the sale under the Rogers mortgage took place, the note secured thereby did not represent any subsisting indebtedness, so that sale carried no title in equity to the plaintiff, who was fully advised on that subject. Upon this view of the facts, it is immaterial that the Rogers mortgage is prior in legal right (because prior in time) on the record of conveyances.

Mr. House, one of the original payees in the Rogers mortgage note, has disclaimed any and all rights under it. Mr. Frederick is barred of any claim by the earlier proceedings leading to the present action. And plaintiff, the only remaining payee, has not succeeded in giving such definite or satisfactory proof of any solid foundation for the indebtedness, on which his title depends, as to warrant our confirming the finding of the trial court.

On the contrary, after a full review of the evidence, we consider that the trial court as, a court of equity, should have found for the defendants and adjudged a cancellation of the Rogers mortgage and a divestiture of plaintiff’s title derived therefrom.

We have not gone into a full analysis of the testimony or given all the reasons that are furnished by the record for the conclusion reached. We have merely sought to outline in a general way the grounds of our decision.

The circuit judgment is reversed and the cause remanded with directions to enter a decree to the effect already indicated.

Brace, O. J., and Gantt, Macearlane, Sherwood, Burgess, and Robinson, JJ., concur.