162 Mo. 341 | Mo. | 1901
This is ejectment for the possession of a city lot in the city of Springfield. Both parties claim title under one G. D. Maggie.
The petition is in the usual form.
The answer alleges that plaintiff claims title under one Stephen Damrill, now deceased, who in his lifetime purchased said premises of one G. D. Maggie and wife, Josephine, who before said sale to Damrill, mortgaged said premises to one Frances McCormack (one P. H. Martin being the trustee in said mortgage or deed, of trust, to whom said lands were conveyed in trust to secure the sum of money mentioned in said deed of trust or mortgage, with interest, to-wit, one hundred and fifty dollars). That long before plaintiff commenced this suit, defendant Mills, for value, purchased said mortgage and the note mentioned therein, from the legal holder and owner thereof, and the said mortgage having become due and unpaid and forfeited, the defendant Mills entered into possession thereof because of such forfeiture, and rented the same to defendant Eeed, who is alone in actual possession thereof,' as tenant of defendant Mills. That defendant Mills is still the owner and holder of said mortgage and note aforesaid, which
“Defendants for further answer say that after said Dam-rill purchased said premises of said Maggie, the said Damrill and wife mortgaged the same to T. J. Delaney, trustee therein, wherein he (Damrill) conveyed to said trustee said premises, to secure payment of the sum of five hundred dollars, loaned said Damrill by defendant Mills, due in one year from date, and dated the twenty-third day of April, 1892. That soon afterward said Damrill made a second deed of trust, to secure the Exchange Bank in the sum of five hundred dollars, on these premises and a large amount of other property, upon which said last-mentioned mortgage was a first lien. This is dated July 21, 1892, and is the mortgage under the foreclosure of which plaintiff claims title to the premises sued for.
“That after the execution of said mortgage by Damrill to defendant, trustee for defendant Mills aforesaid, and after the making of the second mortgage to the Exchange Bank under which plaintiff claims, as aforesaid, to-wit, on the twenty-first of September, 1892, said Damrill, wishing to sell the said premises sued for, and having found a purchaser, to-wit, one Hughes, contracted the same to him, but the said Hughes being unwilling to assume the payment of the said mortgage, to defendant Mills, which had then less than one year to run, the trade was about to fail of consummation, but Hughes being willing to make the purchase if defendant Mills would extend the time of payment to three years instead of one year, as provided in the mortgage, whereupon defendant Mills did agree to such extension and Damrill executed to defendant Mills another mortgage for the same amount for the original money loaned as first aforesaid, and no other, and neither defendant Mills nor said Damrill had any intention to, or did they, or either of them, intend thereby to abandon defendant*347 Mills’s prior lien, nor make the said last-mentioned mortgage second to said mortgage to the bank as aforesaid, under -which plaintiff claims. That no other or further or different ‘consideration was paid on the last-mentioned mortgage than that already paid six months before, when said first-named mortgage was made as aforesaid. That said mortgage under which plaintiff claims was and is on its face made subject to the said mortgage to plaintiff first aforesaid executed prior thereto as aforesaid. That no part of said mortgage had ever been paid, nor has there ever been anything paid on the said other mortgage, extending it as aforesaid, but the whole of said debt remains due and unpaid, and defendant Mills still holds and owns the same and likewise holds possession through his co-defendant, who is in actual possession as defendant Mills’s tenant, as aforesaid.
“And defendants say that plaintiff, and her grantors, and those under whom they claim, are not innocent purchasers, in the regular course of trade; that they had knowledge and notice of defendant’s equities herein, bought said premises at a grossly inadequate price, and accepted and gave only quitclaim deeds, and for no ordinary cash consideration. That when defendant Mills agreed to and did extend the payment of said mortgage from one to three years as aforesaid, through inadvertence and mistake the said original mortgage was marked on the record satisfied, yet it was not in fact satisfied, nor was it intended by any party that- it should be, but the whole transaction was only intended to be an extension of payment as aforesaid, and was not intended to postpone defendant Mills to the said bank mortgage, all of which plaintiff well knew and had notice of at and before her purchase of said premises. That plaintiff’s said purchase of said premises of her grantor, was made after she had full notice of defendant Mills’s equities herein, and her contract- of purchase is still executory, in that- she has not*348 fully paid for the same, that her grantee had notice of all the matters and things herein charged and himself gave a grossly inadequate price for said property, accepting a quitclaim deed and giving to plaintiff a like deed for a like grossly inadequate consideration in trade and traffic, which has not yet been paid.
“Wherefore defendants pray that if upon a hearing hereof it should be equitable and necessary to the securing of defendants’ rights herein, that the said mortgage under which plaintiff claims be postponed to that of defendant Mills, or that defendant Mills should be required to make plaintiff whole in their said dealing, concerning said premises, defendants pray for such order and decree and they pray for all other equitable relief.
“The defendants for further answer deny each and every allegation of plaintiff’s petition not herein specifically admitted to be true.”
Plaintiff, by replication, denied all the allegations in defendants’ answer, except that the defendant Reed was in the possession of the property as the tenant of E. T. Mills, that Damrill executed a deed of trust to secure a note of $530 to the Exchange Bank, and that said Mills satisfied the deed of trust from Damrill to Delaney.
The replication then alleges that plaintiff purchased the property for a full, fair and adequate consideration, without any knowledge of any prior claims by said Mills or any other person, and that he (said Mills) did not purchase said note of ' Frances McCormack, as alleged in his answer, but that said note was paid by Damrill with his money, the aforesaid Mills simply acting as agent for Damrill.
The facts briefly stated are that on the twenty-first day of December, 1891, Maggie executed a deed of trust on the lot in question to P. H. Martin, as trustee for Frances McCormack, to secure a note of $150 due in three years from the date of the
At the time that the Damrill deed of trust was executed, Mills did not have sufficient money on hand to pay Damrill in full; he paid him part at that time and the balance at different times. The last payment was made about September 21,1892. At this time, Damrill was about to sell this lot to a man named Hughes. Hughes, however, would not buy unless he could get Mills to extend the loan to three years instead of one year. Damrill and Hughes came to Delaney’s office and there met Mills for the purpose of getting this extension. Delaney was Mills’s attorney at the time. There was a gentleman in Delaney’s office at that time by the name of Barry who was a notary public and attended to some business for Delaney. Mills agreed to exteiid the note for three years, and for this purpose had Damrill to execute a new note for the same debt due in three years instead of one year, and execute another deed of trust .to secure the last note.
Barry went to examine the record and see if the Exchange Bank deed of trust was released. Hughes agreed to have this done. There were several releases on the Exchange Bank deed of trust. Barry reported to Mills that the Exchange Bank deed of trust was released. Mills then satisfied the first deed of trust and cancelled the first note, and took the second, dated September 21, 1892 (the date of the cancellation of the first
Damrill did not pay off the deed of trust, and Mills afterward paid Martin the amount due on the note and had it assigned to himself.
A. E. Butts, the attorney for Mrs. Baker in this case, was the attorney for the Middleton Grocer Company, and through his advice that company purchased the Exchange Bank note secured by the deed of trust, after the release by Mills of his first deed of trust. The grocer company released part of the property and then foreclosed as to the balance, including this lot 36. At this foreclosure, one N. E. Beber purchased, and after receiving the trustee’s deed, he transferred lot 36 to Butts. Just what consideration, if anything, Butts paid for the lot, does not appear.
Butts testified that he examined the record of Mills’s deed of trust and relied upon the release as it appears on the record. He did not look any further than to see that the Mills deed was released, though on the same day that Mills released his deed of trust he filed in the office of recorder of deeds for Greene county a deed of trust executed by the same parties and to secure the same amount, to-wit, $500, and on the same property.
The release shows on its face that it was shortly after the execution of the note, and some seven months before the note was due.
After Butts got the deed from Beber, he transferred the lot to Mrs. Baker for an alleged consideration of $700, two hundred and forty of which was for rent that he owed her, and a $150 note signed by the plaintiff, and her husband, James Baker, which Butts testified that he sold to Judge Vaughan.
It is conceded and not denied, that Mills loaned Damrill the $500 upon the express agreement that he was to have a first lien on the lot in controversy. He satisfied his deed of trust
He afterwards paid the one hundred and fifty dollar deed of trust executed on this lot by Maggie, which antedated any of the other deeds of trust. This deed of trust was of record and unsatisfied at the time the Exchange Bank took its deed of trust — at the time Reber purchased under the foreclosure thereof — and when Butts purchased from Reber— and at the time Mrs. Baker purchased from Butts.
Mrs. Damrill, widow of Stephen Damrill, testified that Mills paid her husband all of the $500, which did not include the $158.50 that was paid for the Maggie note.
The ease was tried by the court sitting as a jury, who, after hearing the evidence, made, as part of the judgment, a finding of facts which is as follows: “That the common source of title to the land in controversy, lot 36 in block 3, Hobart’s second addition to the city of North Springfield, now Springfield, was in G. D. Maggie. That Maggie conveyed the lot to P. H. Martin, trustee for Prances McCormack to secure a note for $150, on the twenty-first day of September, 1891. That Maggie conveyed said lot to Stephen Damrill, February I, 1892, by warranty deed, subject to said deed of trust to P. H. Martin for the $150, which said Damrill assumed and agreed to pay by a clause inserted to that effect in said deed. That on the — day of —, 1892, Damrill borrowed $500 of defendant Mills, giving a note for said $500 secured by a deed of trust on the aforesaid lot. That at the time Mills loaned this money he knew that the note for $150 had not been paid and that Damrill had assumed and agreed to pay same. That this $500 was paid to Damrill in small payments as he needed it till September I, 1892, when the last amount was paid. That Mills retained, out of the $500 loaned, enough money to pay the note of $150
Judgment was then rendered for defendants, from which plaintiff appeals.
No objection is made by plaintiff to the finding of facts,
At the time of the trial Stephen Damrill was dead; and over the objection of plaintiff upon that ground defendant, E. T. Mills was permitted to testify as follows: “I am the Mills referred to in the deed of trust dated April 21, 1892, executed by Damrill. I am the beneficiary in that deed of trust. I think Mr. Delaney drew up that deed of trust. He was my attorney at the time. I did not pay all the $500 to Damrill at that time, but I paid him the $500. He came to me and told me about a matter that he was going to trade for, and he wanted some money. It would take $500 to pay him off. I told him I did not have that much, is my best recollection. I gave him the $500 in different payments. Damrill was to pay the $150 deed of trust that was then on the property that had been executed by Maggie. Some few months afterward he wanted to sell the property and said that he could not sell it unless my deed of trust was extended so as to be a three years’ loan. This was in Mr. Delaney’s office, and I paid him some of the $500 at that time. Mr. Barry was then in Delaney’s office as Mr. Delaney’s clerk, or any way, he was connected with Mr. Delaney and transacted business for him. Mr. Barry went out to have the Exchange Bank deed of trust released as to lot 36. The time that Mr. Barry went out to see about the release of the Exchange Bank deed of trust, must have been about the time the change was made in my deed of trust. Mr. Damrill was several times in the office, and I do not remember each date. I paid Mr. Damrill with checks on the Eirst National Bank. After that bank went out of business, I changed to the Holland Bank. I finished paying the $500 about the time that Barry went to see about the release of the Exchange Bank deed of trust. About the time the $150 deed of trust executed by
Damrill being dead, Mills was incompetent to testify to any conversation or transaction between them with respect to the loan of the $500, or its payment (section 8918, Eevised Statutes 1889; Chapman v. Dougherty, 87 Mo. 617; Meier v. Thieman, 90 Mo. 433), and the court should not have permitted him to do so. It- was held in Chapman’s case, supra, that the disability as a witness, of one of the original parties to a contract, or cause of action, in issue and on trial, where the, other party is dead, and the survivor is a party to the suit, is coextensive with every occasion where such instrument or ■cause of action may be called in question. Here, the arrangements between Damrill and Mills with respect to the loan by the latter to the former, and the repeated conversations and agreements thereafter with respect to it, were of importance, provided plaintiff had notice o.f the agreement by which the time for the payment of the $500 was extended for three years, to be secured by a new deed of trust upon the property, and Mills •clearly incompetent to testify thereto.
Plaintiff showed a regular chain of title to the property from Maggie, and was entitled to judgment for its possession, unless the note for $150, executed by Maggie to Frances McCormack on December 21, 1891, due three years after its date, •to secure whose payment the deed of trust executed by him to P. H. Martin, trustee, on the property in question, on the same
Upon these questions the court found that the plaintiff had no notice of the transaction between Mills and Damrill further than that given by the record, and that she bought in good faith for a valuable consideration; that Damrill borrowed $500 of defendant Mills, giving a note for said $500 secured by a deed of trust on the aforesaid lot; that at the time Mills loaned this money he knew that the note for $150 had not been paid and that Damrill had assumed and agreed to pay the same; that Mills retained out of the $500 loaned enough money to pay the note of $150, when the same became due; that Mills, when the $150 became due in 1893, paid the same and took an assignment thereof, with the intention of holding all the rights he could therein; that P. H. Martin, who had said note for collection, regarded the note as paid.
Under these facts the question is, was the payment by Mills of the Maggie note, and taking an assignment thereof by the agent in whose hands it was for collection, a payment of the debt, and as a result a satisfaction of the deed of trust given by Maggie to secure its payment, or was it an assignment of the note to him, and an equitable assignment of the deed of trust by which its payment was secured ?
The payment of a secured debt by one having an interest in the property by which it is secured, will not in all eases, extinguish the debt, or operate as a merger, and it will not be so held unless such was the intention of the party making the payment. But not then, if it was the duty of the party making the payment to extinguish the deed of trust for the benefit of another, for in such circumstances it will be held to operate as a discharge. Upon no principle of equity and justice should a payment made by a party upon a debt secured by a deed of
The payment of the note by Mills with the money retained by him for that purpose was a duty that he owed to Damrill as well as to Maggie, and also to plaintiff who holds under the latter, and he should not now be heard to say that he did not pay the note, but purchased it, and had it assigned to him. Moreover, Martin testified that he understood the money paid by Mills was in payment of the note, and the court so found.
Eor reasons indicated we reverse the judment and remand the cause.
