Long v. Long

141 Mo. 352 | Mo. | 1897

Barclay, C. J.

— These appeals form the latest chapter (to date) of the litigation between the brothers Long. It will not be necessary to go over the entire history of their dispute. Its principal features are described in former opinions. Long v. Long (1883) 79 Mo. 644; Long v. Long (1888) 96 Mo. 180 (8 S. W. Rep. 766); Long v. Long (1892) 111 Mo. 12 (19 S. W. Rep. 537); Long v. Long (1894) 28 S. W. Rep. 69. The ease in hand came to the court in banc from the first division by transfer after the last mentioned opinion had been rendered, and a motion for rehearing had been made. The effect of the transfer to the court in banc was to .grant the rehearing, which was duly had before the entire court. The case is the same that was before the first division of the court in 1892, reported in the llltli Missouri Report. The cause was then remanded with these directions: “On the return of this cause to the lower court, the plaintiff will be allowed to proceed with his foreclosure, provided he include within its scope ,the whole indebtedness due from the defendant, and shall open the sale heretofore made by him under the second or ‘Howerton’ deed of trust, and shall be treated ih all respects as a mortgagee in possession.”

After the decision quoted, the plaintiff in the circuit court (June 16, 1893) filed his second amended petition, the general outlines of which are as follows: David Long is plaintiff. The defendants aró Joseph Long, Charles H. Bull, William B. Bull, Mary J. Rinehart, Frank E. Rinehart, Fanny B. McCulley, Thomas M. McCulley, her husband, Robert P." Johnson, Orville D. Jones, Samuel B. Davis and Henry T. Howerton. None of these defendants except Joseph Long was a party to the cause on the first appeal in this case. Plaintiff gives at length in the petition an account of the original loan secured by the deed of trust' (known to all the parties as the “Bull mortgage”). He then mentions the sale of the land under that deed at the instance of the insurance company (as holder of the secured notes), the purchase of the land by Mr. Goodman, the holding of that sale invalid by the Supreme Court (Long v. Long, 79 Mo. 644), and the purchase by plaintiff thereafter of the Goodman title and of the original unpaid notos of that loan. Then plaintiff adds his version of the transaction in which the • later incumbrance (known by the parties as'the “Howerton mortgage”) was given. Plaintiff asserts that it is a subsisting obligation, and alleges that he (plaintiff) has been in possession of the land since July 1,1885, as the holder of the notes secured by that mortgage. Then follows a statement of several later incumbrances (placed by Joseph Long on some of the lands described in the deeds which David claims under). These incumbrances are mentioned as a basis for the prayer that those incumbrances be decreed to be subsequent liens to the mortgages which plaintiff aims to enforce and foreclose. To obtain such a decree the above mentioned parties, the Rineharts, McCulley, Johnson, Jones and Davis are named by plaintiff as parties defendant. The Messrs. Bull and Howerton, who were trustees in the deeds of trust that form the basis of plaintiff’s suit, are joined as defendants on that account.

The prayer of the petition is that plaintiff “be subrogated to all the rights of the said Phoenix Mutual Life Insurance Company in and to the said principal and coupon interest notes; and in and to the principal sum and interest thereof and thereon, and to all the rights of the.......insurance company in and to the deed of trust securing the same, and in and to the land therein described as aforesaid; and that he may have judgment for the balance of said principal and coupon interest notes, remaining unpaid with interest thereon, with compound” (interest) “per annum, andfor all the improvements made by plaintiff on the real estate described in the said deed of trust from defendant Joe Long to the said defendants, Charles H. and William B. Bull, and from said defendant, Joe Long, to said defendant Howerton, with interest thereon; and also for the taxes paid by plaintiff, or caused to be paid, by him upon said real estate, with interest thereon from payment, after allowing the defendant, Joe Long, credit for the rents thereof as aforesaid; and for judgment for the amount of the note and the interest due thereon at compound” (interest) “per annum, as aforesaid made and delivered by defendant, Joe Long, to said plaintiff, and to secure the payment of which defendant, Joe Long, made and delivered the deed of trust to the said Henry T. Howerton as aforesaid; and that the equity of redemption and interests of the defendant, Joe Long, Mary J. Rinehart, Frank E. Rinehart, Fannie B. McCulley, and Orville D. Jones, in and to the real estate, as aforesaid described in said deed of trust from said defendant, Joe Long, to said defendants, Charles H. and William B. Bull, and from said defendant, Joe Long, to the said defendant Henry T. Howerton, be forever foreclosed, and that the rights of all the defendants herein be ascertained and declared; and if the court shall find anything due upon the note, as aforesaid made by the defendant, Joe Long, to the said Stephen C. Rinehart, deceased, and upon the two notes as aforesaid made by defendant, Joe Long, to defendant, Orville D. Jones, then that the court shall declare and adjudge that the same be declared subsequent liens upon the real estate or any part thereof, as aforesaid described in the said Bull deed of trust, and in the said Howerton deed of trust, and that the payments thereof be postponed until the said principal notes and coupon interest notes, as aforesaid made and delivered by defendant, Joe Long, to the said L. & C. H. Bull, and the note, as aforesaid made and delivered by defendant, J oe Long, to plaintiff, be fully paid off and satisfied; and that the said real estate, as aforesaid described in the said two deeds of trust from defendant, Joe Long, to the defendant, Charles H. and William B. Bull, and from defendant, Joe Long, to defendant, Henry T. Howerton, be sold to pay off and satisfy the judgment and decree which shall be rendered herein in favor of plaintiff, and if there shall be any surplus arising from the sale of said real estate over and above the payment of the said judgment, which shall or may be rendered in favor of plaintiff, together with the costs of this suit, then that the same be paid over to the parties interested therein, according to the findings and decree of this court, and for general relief.”

The answer of the leading defendant, Joseph Long, contains a number of special defenses which will be mentioned along with the discussion of them. Several of the defendants, viz., Messrs. Bull, Davis and Jones, answered to the effect that they are not necessary or proper parties to the litigation. The heirs of Einehart and Mr. Howerton failed to answer, and default was taken against them. The plaintiff by reply met the answer, so that issues were raised for trial. The noteworthy features of the answers and reply will appear in the course of the opinion. Certain motions were made before trial which it will not be necessary to specially notice, in view of the rulings hereinafter announced. The cause came to trial, and defendant demanded a jury to try the issue of fact as to the Howerton deed of trust; but the demand was overruled. The leading facts were notin serious controversy at the trial, though there are some differences on minor issues.

The following dates of the principal events were shown, and it will be well to note them particularly:

1875, Dec. 18. Date of “Bull” deed of trust, securing loan of $4,000 and interest.

1877, July 5. Date of “Howerton” deed of trust, securing $2,033 and interest.

1877, Oct. 1. Default on interest of the Bull loan.

1877,Nov. 27. Sale under Bull deed of trust — purchased by Q-oodman.

1877, Nov. 30. Deed of quitclaim to plaintiff of Groodman’s title.

1878, April 2. First ejectment action begun, Long v. Long, 79 Mo. 644.

1879, April 12. Sale under Howerton deed of trust. Plaintiff became purchaser.

1881, March 20. Plaintiff went into possession under circuit judgment in the first ejectment case.

1884, April 18. Plaintiff surrendered possession under order of restitution, 79 Mo. 644.

1884, May 8. Second ejectment bqgun, Long v. Long, 96 Mo. 180, under the Howerton sale to plaintiff.

1884, May 15. Suit in equity begun—Long v. Long, afterward ended by dismissal “without prejudice,’7 'in Marion county circuit court, June 15, 1886.

1885, July 1. Plaintiff took possession under circuit judgment in second ejectment case, afterward affirmed by Supreme Court, 96 Mo. 180.

1887, Sept. 24. Present suit begun.

1893, June 16. Amended petition filed, after reversal, 111 Mo. 12.

• Bearing these dates in mind, the substance of the controversy may be readily described. The lesser phases of it can then be presented so as to prevent confusion of statement.

Plaintiff’s ease,'as he makes it, is one of a mortgagee in possession seeking to foreclose the two deeds of trust in the nature of mortgages above mentioned. His possession is derived from a judgment in ejectment, based on a purchase of the land by him at trustee’s sale under the second (Howerton) incumbrance. He has acquired the title of the purchaser under the “Bull”» (or first) deed of trust, as also the notes secured by that instrument. In accordance with the option given him by the opinion of the first division on the former appeal (111 Mo. 12) the plaintiff brought both demands secured by the deeds of trust into this foreclosure suit, and asked an adjustment of his brother Joseph’s debt, as described in those deeds. Upon an accounting the court found in plaintiff’s favor for the sum of $11,668.45, and rendered an elaborate decree of foreclosure, and for payment of that sum by defendant, Joseph. It was adjudged that Joseph Long’s equity of redemption be foreclosed in event the debt so ascertained should not be paid within six months. The facts on which the decree was founded were recited, and the parties (who were joined as defendants, because lienholders, after the aforesaid deeds of trust) were adjudged to hold ‘their titles in subordination to those deeds, and to the said debts secured thereby. Both the Longs, plaintiff and defendant, appealed after the necessary preliminaries.

The defenses to the plaintiff’s case may be conveniently'treated separately, and the facts bearing upon each will be stated along with the discussion thereof.

1. But before we take up those defenses, it may be well to consider the exact status of plaintiff in the present action. He wants to be subrogated to the standing of the original parties of the third part in the Bull deed of trust, to enforce the debt which it secured, and to foreclose Joseph Long’s equity of redemption under that deed. The plaintiff was already in possession under the second (Howerton) deed of trust. Division One of the Supreme Court (111 Mo. 12) held that- plaintiff was not entitled to be subrogated to the place of the original beneficiary in the Bull deed of trust without also letting in Joseph Long to redeem under the second (Howerton) incumbrance. The plaintiff conformed to that ruling in the trial court and amended his petition accordingly. Neither the plaintiff nor any of the defendants, at any time in any way in the circuit court proceedings, claimed or asserted that Joseph Long had lost his right of redemption by reason of plaintiff’s purchase under the second (Howerton) deed of trust. Plaintiff has throughout the case insisted that the equity of redemption of Joseph Long under the first incumbrance was alive, and hence has asked to have it foreclosed. Since the former appeal in this suit he has likewise made the same claim as to the Howerton deed. Defendant Long has, it is true, argued that plaintiff had an adequate remedy at law as owner of the Bull loan notes and incumbrances, and hence that plaintiff had no right in equity to a decree for subrogation to the place of the creditor in the Bull deed. But at no time has Joseph Long disclaimed his right' to the equity of redemption, conceded by the plaintiff’s pleadings as to both these incumbrances. On the contrary, the whole theory of Joseph Long’s defense is to prevent the enforcement by David of the Bull debt, and to cut down the amount of David’s claim as to both incumbrances.

The creditor under the first deed of trust had the undoubted right to assert against the debtor (and against the"land).the claim which that deed secured. That right has passed to the plaintiff (as will appear further on) and if plaintiff demands its recognition and enforcement by the court, it is not for the latter to refuse it because plaintiff might have a standing to ask something different. If plaintiff had the choice of either resting upon his legal title or of yielding to defendant an equity of redemption as to both incumbrances, in order to obtain a decree for the unpaid Bull debt, we do not see how the courts could properly deprive plaintiff of his right to elect which course he would choose. A mortgagee in possession may undoubtedly bring a bill to foreclose, and certainly no court of equity should compel a mortgagee to waive any of the concurrent remedies to which he may be' entitled. Thornton v. Pigg (1857) 24 Mo. 249.

It should furthermore be remembered that under the ruling in Schanewerk v. Hoberecht (1893) 117 Mo. 22 (22 S. W. Rep. 949), plaintiff acquired the legal title to the land by reason of his purchase from Goodman, even though the sale to Goodman under the Bull incumbrance may have been so irregular as not to extinguish the mortgagor’s equity of redemption. As the holder of the legal title, plaintiff could not proceed in equity to enforce the debt secured by the Bull deed of trust, and at the same time claim that the entire equity of redemption of Joseph was extinguished by plaintiff’s purchase under the Howerton deed. And so Division One declared in the learned opinion of Judge Shebwood when this cause was here before (111 Mo. 12). We certainly should follow that ruling. It is clearly just.

If thére is any force or -value in the rule of appellate practice (so often declared and enforced in this court) that parties should be held bound on appeal by the positions they have taken in the trial court, these parties should now be dealt with according to the case they have made and tried on the circuit. Walsh v. Warren (1853) 18 Mo. 157; Bensieck v. Cook (1892) 110 Mo. 173 (19 S. W. Rep. 642); Queen City, etc., Co. v. Crawford (1895) 127 Mo. 356 (30 S. W. Rep. 163); Evans v. Kunze (1895) 128 Mo. 670 (31 S. W. Rep. 123; Meyer v. Chair Co. (1895) 130 Mo. 188 (32 S. W. Rep. 300).

In my opinion it would be manifestly inequitable for the Supreme Court to adjudge, on this record, that Joseph’s equity of redemption was extinguished by the Howerton sale, contrary to Joseph’s protest, as well as contrary to the claim of the plaintiff in all his pleadings in the case. The court certainly would not now allow the plaintiff to take that position for himself. And surely the court ought not, of its own motion, to push him into such a position. No! the case should, in my opinion, be treated in accordance with the positions taken, and the demands made, by the parties in the circuit court, unless some rule of public policy (enforcible by the court without regard to their wish) prevents such treatment; and no such rule that we know of is applicable to the facts of'this litigation. We proceed therefore to consider the defenses presented to the trial court.

2. It is contended for defendant that the suit is barfed by limitation as to any claim based on the Bull deed of trust. Even were the debt barred, the deed o,f trust might still be available to the creditor by a foreclosure suit, as has been held in several judgments of this court. Lewis v. Schwenn (1887) 93 Mo. 26 (2 S. W. Rep. 391); Combs v. Goldsworthy (1892) 109 Mo. 151 (18 S. W. Rep. 1130); Chouteau v. Riddle (1892) 110 Mo. 366 (19 S. W. Rep. 814). But this suit was begun within ten years after the first default in the payment of interest, which was in October, 1877, so that the statute of limitation does not bar this suit to enforce the debt secured by that deed, unless the amendment of the petition into its present form (in 1893) permits that statute to apply. But the amendment did not substantially change the plaintiff’s demand against Joseph Long as to the Bull debt. It merely brought the second deed of trust into view for a foreclosure, and thereby conceded Joseph Long’s right to redeem as to both claims of plaintiff, in accordance with the ruling of the Supreme Court requiring that course to be taken. The amendment did not make the statute of limitations available in this case (even if it would have been available as to a new suit then begun). Lilly v. Tobbein (1891) 103 Mo. 477 (15 S. W. Rep. 618).

It is not claimed that the debt secured by the Howerton incumbrance is barred by limitation against plaintiff as mortgagee in possession. The answer limits the pleas of limitation to the demands founded on the first incumbrance.

3. As plaintiff is the holder of the original notes (indorsed in blank by the payees) mentioned in the Bull deed of trust, and is the purchaser of such legal title as Goodman acquired at the first trustees’ sale, it is wholly immaterial whether or not the insurance company (which is said to have been the holder of the notes at the time of that sale) was an incorporated concern, or merely a business firm dealing by that name. The indorsement in blank by the payees (the Bulls) and the possession of the notes by plaintiff being shown, made a. prima facie case of plaintiff’s title to the notes, which nothing presented adversely rebutted.

The bringing on of the sale, however, to meet the requirements of the first mortgage, must be held an election to bring the notes secured thereby to maturity for the purposes of a sale at that time. The creditor had the privilege of exercising such election according to the terms of the notes themselves, as well as of the first deed of trust. The creditor by that election made the principal notes due, for the purposes of payment by the proceeds of the sale. The proceeds were sufficient in amount to discharge the debt. But the sale was held ineffective to pass the debtor’s title or to cut out the equity of redemption (Long v. Long (1883) 79 Mo. 644); and plaintiff (having meanwhile acquired the rights of the secured creditor) is entitled to all the remedies available to enforce those rights. He had an equitable interest in the estate by reason of his position as beneficiary in the second (Howerton) deed of trust, and hence was no mere volunteer in taking up the Bull notes and acquiring the legal title as security for them.

4. As plaintiff established title to the original principal notes, the right to enforce the security which the Bull deed of trust afforded for their payment belonged to plaintiff in the circumstances. The fact that he asked to be subrogated to the position of the original creditor would not shorten the statutory limitation otherwise applicable to the enforcement of that deed of trust. The request for subrogation is merely incidental to the larger objects sought by plaintiff, and stated in his petition. So we hold that the limitation of five years has no application to plaintiff’s case, and still less has the limitation in one year.

5. The limitation of one year is pleaded with reference to the earlier suit which ended in Marion county. It is argued by defendant that as that earlier suit was of the same general nature as the pending one, a renewal of it on the same grounds should have been begun, under section 6784 (R. S. 1889) within one year after the former ended. But the short term of limitation, prescribed by the last cited section, obviously was not intended to curtail, but to extend, the time allowed by other sections of the limitation law for the bringing of suits. The fact that a suit has been brought, and has been terminated as described in section 6784, within the period limited for suits of its class, does not prevent the institution of another, suit within the period allowed to an original suit of the same class. The privilege conferred by section 6784 of bringing another suit within one year is available when the time of limitation (otherwise prescribed for suits of the kind) has expired.

6. It may be convenient just now to dispose of another point referring to the suit which terminated in Marion county. Defendant insists that the judgment there was a final adjudication of the subject now in litigation. Conceding that the former suit was for the same objects as this one, the result there (upon a motion for judgment on the pleadings) was “that plaintiff’s bill be dismissed without prejudice, and that defendant have and recover of plaintiff, David Long, his costs,” etc. If that judgment was' erroneous, in the then state of the record (which, however, we do not decide) defendant’s remedy was by a resort to some process to review it. The judgment was not void. It is not subject to a successful attack collaterally upon a mere showing that it should have omitted the words “without prejudice.” We must deal now with the judgment just as it stands. In its present form it is not a conclusive adjudication of the matters then in controversy, precluding a later suit for the same cause of action.

7. Nor did the trial court err in excluding oral testimony offered by defendant with a view to give a broader effect to the Marion county judgment than its terms reach. The record could not be varied in a collateral suit by testimony of that sort. There are, no douBt, occasions when extrinsic testimony is available to elucidate some obscurity in the meaning of a judgment; but to contradict such a judgment is quite a different matter, and that would be the effect of the. testimony tendered on that subject in the case at bar. It was not admissible in the circumstances shown by this record.

8. The demand for a jury was not well founded under the rulings of the Supreme Court for many years. The case is clearly one of equitable cognizance and was properly triable by the. court under our law on ' the subject. R. S. 1889, sec. 2132; Brim v. Fleming (1896) 135 Mo. 597 (37 S. W. Rep. 501).

9. The defendant further argues that the trial court was in error in permitting plaintiff to recover the interest adjudged to him by the decree. On the other hand, the leading cross-error assigned by plaintiff on his gppeal is that there was error against him is not allowing more interest on the Bull debt in the final result. The passage in the finding which indicates in a general way the principles applied by the learned trial judge to this branch of the controversy is as follows: “And the court further finds that plaintiff, by virtue of his said rights to subrogation as aforesaid, is entitled to recover and only recover the sums specified in said principal promissory notes, and six per cent thereon per annum from October 1, 1877, up to the date of their respective maturity, and intérest from the maturity of each of said notes at the rate of ten per cent per annum up to the date of this decree, no interest being compounded.” The principal notes referred to were three, of which two were for $1,500 each (payable at five and six years respectively) and the third was for $1,000, payable four years from the date which all of them bore, December 18,1875. The notes promised payment of interest before maturity, and also “after due until the said principal sum is fully paid,” at “the rate of ten per cent per annum;”.and they recited that “interest coupons for the payment of said interest” were annexed to the notes. These coupons matured at intervals of six months, beginning April 1, 1876, excepting the last, which was payable-at the maturity of the entire loan. Each interest coupon also contained a promise to pay ten per cent interest on the amount of the coupon, if not paid at matui’ity. The defendant insists that the aforesaid notes and coupons exhibit an agreement for usurious interest, and that plaintiff can hot enforce that part of the agreement. Defendant put in evidence certain statutes of Illinois, supposed to have some bearing on the rights of the parties. They are found in the revised statutes (1877) of that State (chapter 74, sections 4 to 9 inclusive) but were in force from a much earlier date, long before the facts now in litigation. The original transaction (out of which the Bull loan grew) took place at Edina, Missouri. There the notes, coupons and mortgage were executed. The payees of the notes resided at Quincy, Illinois. The notes and coupons were expressed as dated in the latter city and were made payable there, at the banking house of the payees, L. & O. H. Bull. The defendant insists that the'agreement as to interest is usurious according to the law of Illinois, the place where the notes and coupons were payable. He proved that law as a fact at the trial.

There is nothing in the case to suggest that there was any intent to evade any law of Missouri in so drawing the notes. On the contrary, the payees had a banking house at Quincy, and the fixing of the place of payment there seems to have been a very natural and reasonable arrangement. If it be conceded that the law of Illinois is applicable to determine the recoverable amount of interest, it is clear that the notes and interest coupons are entirely valid, according to the most recent expressions of opinion by the Supreme Court of that State. Benneson v. Savage, 130 Ill. 352; Drury v. Wolfe (1890) 134 Ill. 294; Bowman v. Neely, (1894) 151 Ill. 37.

We are further of the opinion that if the interest to be paid for the loan was valid and lawful according to the law of the place where the interest was, in good faith, agreed to be paid, that agreement as to interest should be held good in the courts of this State, in the circumstances shown in this case.

The law of Missouri (where the notes were signed) does not declare such instruments wholly invalid or void because of stipulations to pay greater interest than the statute of our State permits. Our home law in case of usury only purports to affect the right to recover interest. So we are not required to determine the question that would arise as to the validity of these notes had our law declared them wholly void in event of an infraction of the statute as’to usury. The agreement as to interest we regard as valid if sanctioned by the law of the place where the parties to the paper have agreed that the interest shall be paid. Miller v. Tiffany (1863) 1 Wall. 298; 27 Am. and Eng. Ency. of Law, 971.

10. But in relation to the subject of interest another'matter should be mentioned. The holder of the notes brought on a sale of the land to meet the demands-of the “Bull” deed'of trust in November, 1877. In so doing he elected to treat all the notes and coupons as due. In point of fact the land brought at the sale the full amount then due on these evidences of indebtedness. The holder had the right by the terms of the deed of trust to take that course; but that deed gave specific directions touching the application of the proceeds in that event. After the payment of expenses and -certain charges (such as taxes, liens, and insurance) the deed of trust declares that from the proceeds of sale there shall be paid — “ Third, to the party of the third part, or to the legal holder or holders of said notes, the principal sums :of money thereby payable, with the interest thereon computed to the day of sale, so far as the said principal and interest remain unpaid,” etc. From this provisipn it is evident that where a sale of the land occurs, so as to pass a title under the deed of trust, the beneficiary (who brought on the sale) can not equitably claim any interest on interest coupons beyond the date of the sale, even where the latter is imperfect, and therefore effects no extinguishment of the debtor’s equity to redeem. By the terms of the mortgage, as well as of the notes, however, the interest payable after, as well as before, maturity of the notes, is ten per cent per annum; . and therefore the interest payable to plaintiff, who has acquired said notes, should be decreed at that rate (without compounding) from the date of the sale in November, 1877.

11. With the above modification we regard the judgment of the circuit court as correct on the subject of interest. But from what has been said, it follows that we must reverse the judgment that said modification as to interest may be made, and the account concluded to this time. The cause is therefore remanded with directions to bring the account down to the date of final hearing in the circuit court in accordance with the equitable rules for accounting with a mortgagee in possession, and in harmony with the views above declared, and then to enter a final decree of foreclosure, without, however, retrying the case further-than to finally state the account of rents and profits, interest, etc., to the date of the decree. The costs of this appeal should be taxed equally against the two brothers, Long.

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

Case Details

Case Name: Long v. Long

Court Name: Supreme Court of Missouri

Date Published: Nov 16, 1897

Citation: 141 Mo. 352

Court Abbreviation: Mo.