255 Mo. 698 | Mo. | 1914
OPINION.
I.
(after stating the facts as above).— The position taken by counsel for appellants both in oral argument and in their briefs is, first, that the patents issued to Louis Houck were void or voidable, and
Summarizing these points. (1) Were the Houck patents invalid, and can that question be determined in this action? (2) Did Houck retain the equitable title to the lands after the deed to his daughter? (3) Were the lands left out of the quitclaim to appellants’ grantor in which the daughter joined by mutual mistake on her part and on the part of the grantee? It will clarify the case to discuss the last two propositions first. Taking these in order.
II.
III.'
No dispute can exist as to the elements and true nature of the contract between Houck and the county court upon which its patents to him were based. The essence of the proposition was the purchase of the land for a nominally fixed sum by erecting an embankment on the side of a ditch running east and west through the county, and causing a railroad company to operate its trains on the tracks laid on this embankment, and
The testimony, however, was undisputed that the excavation work done by ITouck and Franklin was not in any sense, either as to direction or capacity, capable of affording a drainage system adequate to carry off the periodical overflows to which the land in question was subject, but that it was only a succession of holes in the ground, made by throwing up earth to construct an embankment upon which the railroad track was laid; that it was entirely worthless for drainage purposes or the reclamation of the land. Under these facts the patents to Houck rested on no consideration, and the conveyance thereby, was a mere gift of the land in disregard of the duty of the county court to dispose of them for the purpose pointed out by the acts of the Legislature, which had vested the title to them in the county of Pemiscot. That- the county court had no statutory right to do this is too clear for discussion. [R. S. 1909, secs. 7997, 8028; Simpson v. Stoddard County, 173 Mo. l. c. 452; Railroad v. Hatton, 102 Mo. l. c. 55; Bayless v. Gibbs, 251 Mo. 492, and cases, cited.]
IV.
It is not claimed by appellants that the efficacy of this patent was destroyed as a conveyance, by mere legal conclusion arising from its face; but they claim that its illegality appeared upon inspection of other records of the county court, which were pointed out by the following language contained in the patents: “Louis Houck has made full payment according to the terms of the said sale made by the court by its proper order entered of record on the 2nd of September, 1891, for the land” (describing same). This language referred explicitly to the order of the county court of Pemiscot county which contained the terms and stipulations of the offer made by Houck to buy the land and its acceptance by the county court, and also referred implicitly, to the order of the county court setting out its contract with Houck for the canal work and the procurement of a railroad to be operated on its side. Giving these two orders the widest scope and the fullest significance, it will be seen, that no legal intendment can be drawn from them which of itself annulled the patent.
In substance, the relevant entries of the county court are, first, the offer of purchase of the lands and its acceptance; second, the contract between Houck and the county court for the reclamation work. These two agreements taken together merely disclose a sale of the
We accordingly rule that the position taken by appellant that the patents in question were void on their face or by reference to other writings, cannot be sustained. In this ruling we are considering the word “void” in the primary and correct sense of that term, which denotes an act which has no more legal effect than if it had never been performed, and which is therefore incapable of ratification or confirmation and is exposed to every form of attack, collateral as well as direct; and we have not used it to describe an act voidable only (such as the issuance of the patents to Houck) or one that is legally binding until set aside or annulled in the manner prescribed by law, and at the instance of competent parties, and which previous to avoidance, may be ratified or confirmed, and is not open to any collateral attack, but can be vacated only by a direct attack.
While it is true that the words “void” and “voidable” are sometimes interchangeably employed, this misuse has resulted from imperfection of language or lack of precision, distinction, and clearness of expression. [See cases cited in 40 Cyc. 215, note 61.] The essential difference between the meanings of the two terms has not been obliterated, and the true signifi
The obvious corollary of what has been ruled, is that the county of Pemiscot was entitled, by suit in equity, to annul the patents to Houck, not as being intrinsically void on its face or reference, but as having been wrongfully procured and unsupported by any consideration, and that it had the same remedy against any volunteer or other grantee from him who had notice of the infirmity of his title. This right accrued to the county by reason of the act of the county court in granting title without receiving the lawful consideration. This body being the mere agent of the- county to make title to its land, and having violated that trust, the county became thereby empowered to annul the grant and recover the title to the land which its conveying agent had attempted to give away.
Y.
While an action to avoid the Houck patent for reason already stated inhered in Pemiscot county because it was a statutory trustee at the date of its patents, no such right could be acquired by a subsequent pur
The section of the statute referable to the effect of a fraudulent conveyance upon subsequent purchasers is, to wit:
“No such conveyance or charge shall be deemed void, in favor of a subsequent purchaser, if the deed or conveyance shall have been, duly acknowledged or proved and recorded, or the purchaser have actual notice thereof at the time of the payment of the purchase money, unless it shall appear that the grantee in such conveyance, or person to be benefited by such charge, was party or privy to the fraud intended.” [R. S. 1909, see. 2882.] It is clear from this language that a second purchaser from a grantor, who has made a prior fraudulent conveyance, is debarred from any attack on the former deed if it is on record when he bought and paid for the land or if he then knew of its existence, unless he can prove that the original deed was made to defraud him. It will not be sufficient for him to show that it was voluntary or prejudicial to the rights of other persons. This is the explicit doctrine contained in the foregoing decisions. Applying the statute as thus construed to the facts in this record, it will be seen that Franklin could not have instituted in his own behalf the present action to declare void the patent to Houck. In the first place he knew that those patents had been made and recorded in the fall of 1904; for on the face of them he then purchased the undivided half interest and became a joint beneficiary of the conveyance made to Houck. Again, he was only*724 jointly interested in the financing and constructing of the railroad, and was aware of the failure of Iiouclc and himself to construct the canal or drainage ditch, and with knowledge of these facts, when he and Houck were jointly sued by the county, he sought and obtained a new conveyance to himself from the county, and with full knowledge of the whole transaction evidenced by the patents issued to Houck. In the second place it cannot be conceived that the patent was granted by the county to Houck with the intention on their part to defraud Franklin, for at that time he seems not to have been known to either of them, and he subsequently became by monetary assistance and joint work a joint beneficiary of the title conveyed in said patent. In this state of the record it would be absurd to say that Franklin was intended to be defrauded by that instrument. Nor does the fact that a .trust was imposed upon the county, as to the disposition of the proceeds of the sale of its overflowed lands, alter the statutory preclusion of a subsequent purchaser from it, which would subsist in the case of an ordinary or private person. The county was possessed of the right to convey the entire title, legal and equitable, to the laud in dispute, it had the same power in that respect which it had in other lands owned by it. [R. S. 1909, sec. 8028.] The only restriction imposed upon it being that the price should not be less than $1.25 per acre. [R. S. 1909, sec. 7997.] As to the application of such proceeds of the sale a trust was confided in the county by the general laws of the State, but no trust was imposed upon the purchasers to see to the disposition of the purchase money. [Simpson v. Stoddard County, 173 Mo. l. c. 452.] It is evident that these circumstances did not prevent the conveyances made by the county being fully subject to the statutory rule announced in the section quoted above, and that they afforded no ground for redress to a subsequent purchaser to the county, which could not be had by a*725 second purchaser from any other vendor. This section of the statute is so complete a bar to the maintenance of this action by appellants in right of their grantor Franklin, that it may not be amiss to refer to the cases wherein it has been applied. In the case of Bonney v. Taylor, 90 Mo. 63, the above statute was held to justify an action of ejectment, brought by a voluntary grantee of land, which was subsequently conveyed by his grantor to the defendant who was purchaser for value, the point in the decision being that the statute above quoted permits a mere donee of land whose deed was on record at the time of the second sale, to recover the land from the subsequent purchaser for value to whom it had been delivered at the time of the sale. The court held that it was wholly immaterial that the conveyance to the plaintiff was voluntary and fraudulent as to other persons, since the record failed to show that it was fraudulently made against the subsequent purchaser for value. In enforcing the statute in that case, the court called attention to the seeming hardship of the case to permit the prior donee of the land to recover it against the subsequent purchaser for value, but held that the statute validating such a conveyance, when duly recorded, as against any subsequent purchaser not specifically designed to be defrauded by the parties, was controlling and necessitated the affirmance of the judgment, adding on that point: “But considerations like these cannot prevail against the mandates of the law, and we only mention them to show the reluctance with which we affirm the judgment.” This case was affirmed in Evans v. David, 98 Mo. 405, where the plaintiff, who was the fraudulent grantee, brought an action of ejectment against a subsequent purchaser, and had judgment from which defendant appealed. In affirming that judgment this court said: “He is a subsequent purchaser . . . and in order that the plea may avail the defendant anything under the statute of fraudulent conveyances in*726 this case, it must be shown that such deed was made to defraud purchasers, and that Evans was a party or privy to that fraud.” [African Baptist Church v. Transfer Co., 98 Mo. 412.]
The statute in question was next considered in this court in Reynolds v. Faust, 179 Mo. l. c. 26. In that case the court quoted from and affirmed the two preceding cases and decided a subsequent purchaser for value could not set aside a fraudulent deed previously executed by his grantor on the same land since it was duly recorded at the time of his purchase, and there was no proof of any intention thereby to defraud him. The action was one to set aside the deed of trust and cancel it as a cloud on the title of the plaintiff (a similar action to the one at bar). A demurrer was sustained and affirmed on appeal after an extensive review of all the cases.
In the case of Davidson v. Dockery, 179 Mo. 687, in disposing of a similar attempt of a subsequent purchaser to set aside a deed as a cloud on his title, the court said, when dealing with that particular point: “It is well settled that a subsequent purchaser cannot attack a prior conveyance on the ground that it was made with the intent to hinder, delay and defraud creditors, but that ‘a subsequent purchaser can only defeat a deed for fraud by showing that the fraudulent design was entertained towards him.’ ”
The same statute was considered in the recent case of Seilert v. McAnally, 223 Mo. 505. In that case the above statute was quoted, and also a section of the statute requiring instruments, affecting real estate to be recorded. The court in vigorous terms enforced the mandate of the two statutes, and held that a subsequent purchaser could not, as such, obtain any relief against a prior deed duly recorded which might be voidable as to a creditor or other person, but which there was no evidence to show was intended by the par
It is clear that the authorities touching the application of the statute in question have hinged the right of a subsequent purchaser to recover property previously conveyed by his grantor for fraudulent purposes when such deed was on record, or such purchaser had notice thereof when he paid the money, solely upon the fact of proof being made that the prior deed was intended to defraud the subsequent purchaser and not other persons or creditors. Under the facts in this record the appellants’ grantor does not fall within the exception of the statute, he is therefore without any remedy against the patents to Houck and could not transmit any remedy to the appellants who acquired only his title.
VI.
As the conclusion thus reached presents an insurmountable legal obstacle to the recovery of the appellants in this action, it is unnecessary to discuss the theory of the learned circuit judge, that plaintiff’s ancestor by the obtention of his patent from the county court of Pemiscot county acquired only a nontransmissible action for fraud.
[Weissenfels v. Cable, 208 Mo. 515.]
Appellants also cite the case Wheeler v. Reynolds Land Co., 193 Mo. 279. In that case, which was an action to quiet title, the patent upon which the plaintiff relied was held to afford no right of action against the earlier grant inasmuch as the proof offered by defendant (while the plaintiff was introducing his evidence) disclosed that it rested on no consideration, and that the senior patent had been duly recorded before the later one was issued. The court held that it was unnecessary to discuss the first patent since the plaintiff had shown no right to recover under the second. That ruling was not incorrect, but it was put upon an untenable ground. The plaintiff being a subsequent purchaser and the evidence having’ brought him within the purview of the statute above quoted, the ruling should have been rested on the statute. The case cites no authority for some of its observations which were unnecessary to the decision of the point in judgment. The formulation of its logical basis is a petitio principii, for the learned opinion speaks of a subsequent purchaser as the holder of a “valid title,” and thus assumed the very point to be decided, and which could only be correctly determined by a consideration of
The opinion also referred to an action to quiet title as being a form of direct attack, whereas, in another opinion handed down on the same day and concurred in by the writer of the former, it was announced that where a patent was not void on its face or void by references therein to other instruments, it could only be set aside upon a direct attack, and that an action to quiet title did not perform that office. [Frank v. Goddin, 193 Mo. 390.]
The conclusion reached above disposes of the material points presented in the brief and argument of the learned counsel for appellant, and necessitates the affirmance of the judgment of the trial court. It may be noted, however, that appellants were not without remedy, for it is frankly stated by them that they held under a warranty deed from a solvent grantor and that the reason they brought the present action was that they desired to recover the lands in specie because of their enhanced value. Neither is their grantor Franklin in a position to lose his overpayment, for the record shows that defendant Houck offered to repay him any sum which had been overpaid by him in the purchase of the land. It is therefore apparent that the application of the law to this case has not worked any hardship or damage which Franklin could not have avoided if he had exercised ordinary business prudence in examining the quitclaim deed made to him by defendant Irma Juden.
The judgment of the circuit court is correct and is affirmed.
I neither concur nor dissent to the opinion of my learned associate, written in this case, for the reason that I am firmly and unalterably of the opinion that the conveyance of the great body of land mentioned in the evidence, by the county of Pemiscot, to the owners and constructors of the railroad, for building their own road, was a gigantic fraud, both in law and fact, upon the public schools of that county; and I am not going to lend my concurrence to any opinion which may directly or remotely confirm that fraud.
However, this court has repeatedly approached that offensive question, because of innocent purchasers, under the erroneous ruling in the Simpson case, which is proper, with felt slippers and bated breath; but in the case at bar, if I correctly understand the record, this is a scramble between the joint malfeasors, or their-grantees with notice, who, by said conveyances, defrauded the county and the schools thereof out of this valuable donation made thereto by the United States, by the Act of Congress mentioned.