171 Mo. App. 580 | Mo. Ct. App. | 1913
(after stating the facts). — We are not concerned with, the question of the consideration for the notes involved in this suit. The trial court found that the notes were valid as between Welch, the maker thereof, and Reid, the bankrupt, and that they had not been paid; the court ordered the deed of trust foreclosed and the land sold, subject of course to the prior incumbrance of the school fund mortgage. However, the finding of the lower court was, in effect, that the trustee in bankruptcy of Reid should be estopped from asserting any claim upon these notes as against the defendants Elsberry and Goodman, and that the latter, out of the proceeds of the sale of the land, should be reimbursed for their expenditures in paying off liens and incumbrances thereon. This seems to be in accordance with the clear equities of the case.
That the trustee in bankruptcy stands in the shoes of the bankrupt, so far as the right to enforce the collection of these notes is concerned, must be conceded. The trustee is vested “by operation of law with the title of the bankrupt, as of the date he was adjudged a bankrupt.” [Bankruptcy Act, sec. 70a.] He takes the title that the bankrupt had at the date of adjudication, not as an innocent purchaser, but subject to all valid claims, liens and equities. [Loveland on Bankruptcy (1912), sec. 371.] The trustee’s rights in the premises rise no higher than those of the bankrupt, and if the bankrupt by reason of any conduct on his part should in equity be estopped from asserting any claim against defendants Elsberry and Goodman, such estoppel may be invoked against his trustee in bankruptcy in like manner as it might have been invoked against the bankrupt himself.
But it is earnestly insisted by counsel for the appellant that the conduct of Reid was not such as to work an estoppel, for the reason that there was no fraud intended on his part, and no false representation or fraudulent concealment of any material fact, with
The evidence is convincing that these defendants, in the absence of Welch, and knowing the relations that had existed between him and Reid, and for the reason also that the latter was a member of the county court, conferred with Reid in regard to protecting themselves from liability as sureties on the school fund mortgage in favor of the county; that Reid discussed the matter with them and undertook to sell the land in order to relieve them from responsibility, and failing in this, that he told these defendants, in substance, that the best thing for them to do was to buy the land for their own protection. During all of this time no mention whatever was made by Reid of these notes and the deed of trust securing the same, but on the contrary his acts and conduct in the matter were altogether inconsistent with the existence of any such lien or incum-brance on the land, and were such as may have well put these defendants off their guard, and caused them to refrain from an examination of the records or from availing themselves of other sources of information. Clearly, under the equitable doctrine of estoppel in pais, Reid should not now be heard to assert any claim upon these notes as against the defendants Elsberry and Goodman, or any lien upon the land to their prejudice; and his trustee in bankruptcy has no greater right than he would have had in the premises.
It is said that to constitute an estoppel in pais there must have been (1) a false representation or a concealment of material facts, (2) made with the knowledge of such facts, (3) to one who was ignorant of the truth of the matter, (4) with the intention that he should act upon it, and (5) that he was induced to do so. [Bigelow on Estoppel (1890), p. 570; Blodgett v. Perry, 97 Mo. 263, 10 S. W. 891; Shields v. McClain,
It is clear that there must be something equivalent to a representation; but under the authorities it is equally clear that silence or concealment, under circumstances where one ought to speak and to reveal the truth, is regarded as being in effect a representation. On this question Mr. Bigelow says: “A representation may arise not only by way of concealment of part of the truth in regard to a whole fact, as we have seen; more than that, from total but misleading silence with knowledge, or passive conduct joined with a duty to speak, an estoppel will arise. The case must be such that it would be fair to interpret the silence into a declaration of the party that he has, e. g., no interest in the subject of the transaction. Indeed, silence, when resulting in an estoppel, may not improperly be said to have left something like a representation on the mind; for the case is this: A negotiation is going on, and the mind receives the facts brought out, and receives those facts only. Hence, everything inconsistent with them, relating to the rights of others present as well as to those of the party with whom the negotiation is going on is excluded. The effect may be considered negative, but the mind sees and may actually regard that negative; indeed, that, in large part, is the meaning of calculating the advantages of the proposal.” [Bigelow on Estoppel (1890), pp. 583, 584.]
In Guffey v. O’Reiley, supra, the court said: “Upon this evidence the point to be determined is
There is no doubt that Reid had knowledge of the fact of the existence of these notes and the deed of trust securing them. It is wholly immaterial whether he actually had them in mind or not at the time of his conversation with these defendants prior to their purchasing the land. . His knowledge of their existence will be presumed, and his failure, under the circumstances, to disclose the fact of their existence, even though it be through negligence on his part, is tantamount to an active concealment in that it-will raise an estoppel. [Guffey v. O’Riley, supra; Withers v. Railroad, supra; see also, Bigelow on Estoppel (1890), pp. 612-614.]
There can be no doubt that defendants Elsberry and Goodman were ignorant of the fact of the existence of the notes and the deed of trust, prior to their purchase of the land. And it may well be inferred from the evidence that they relied upon the conversations had with Reid and the impressions gained thereby, knowing the latter’s close business relationship with Welch, who held the legal title to the property and who had removed from the State, and assuming, as they evidently did, that Reid had complete knowledge of the condition of the title to the property and that it would be safe for them to act in the premises without availing themselves of other sources of information. They may well thereby have been put off their guard, and,
Although one’s title to real property is of record, nevertheless an estoppel will arise against him, if by representations he has misled another with respect thereto, whereby the latter has been induced to act to his injury. [Clark v. Edgar, 84 Mo. 106; Bailey v. Smock, 61 Mo. 213; Keifer v. Roger, 19 Minn. 32; David v. Park, 103 Mass. 501.] The principle is said to be that “a clear and positive representation of the facts may be acted upon, though the person'to whom -it was made had ample means of knowing the fact— indeed though he had legal notice thereof, as distinguished from knowledge, as e. g., by the due registration of an instrument.” [Bigelow on Estoppel (1890), p. 627.] There is, however, no distinction in principle between a case in which an actual representation has been made, and one where silence or culpable negligence of a party is, under the circumstances of the case, tantamount to an actual representation. And in such case the silent or guilty party will be likewise estopped, even though his title be a matter of record. [Olden v. Hendrick, 100 Mo. l. c. 538, 13 S. W. 821; Evans v. Forstall et al., 58 Miss. 31.] “Mere standing by in silence will not bar one from asserting a title to land, which has been spread upon the public records, so long as no act is done to mislead the other party. [Big. on Estoppel (5 Ed.), 594.] But the very statement of the rule shows that the fact that the title is of record is no justification for an act which does mislead the other party.” [Olden v. Hendrick, supra.]
In order to raise the estoppel, it is said that the representation must have been made with the intention, either actually or reasonably to be inferred by the person to whom it was made, that it should be acted upon. It has been held however that there need
It is clear that the defendants Elsberry and Goodman acted upon what we may call the representations of Reid with respect to the property. The latter had endeavored to sell the property at a price sufficient to pay the incumbrance against the same, other than the deed of trust. Failing in this, in course of conversation with them he advised that they purchase the land for their own protection. Relying upon what they believed to be the true state of facts, and induced by Reid’s conversations with them, they purchased the property. So that there can be no question but that these defendants were led to act as they did by Reid’s conduct in the premises.
It is unnecessary to discuss at length the other questions raised. It is insisted by appellant that by the language of the clause in question, in the deed from Welch to Elsberry and Goodman, the latter assumed all incumbrances on the land, and that this cannot be
The decree properly requires that the defendants Elsberry and Goodman be reimbursed for the moneys expended by them in paying the interest on the school fund mortgage, and the levee and other taxes. Their
Neither are we concerned with the failure of the lower court by its decree to reform the deed from Welch to Elsberry and Goodman. The latter are not here appealing from that decree, and in view, of the estoppel against plaintiff no reformation of the deed is necessary in order that complete equity may be done between the parties to this record.
It is also urged that the defendants Elsberry and Goodman had possession of the land in question for two or three years, and received some two hundred or two hundred and fifty dollars from crops grown thereon and cord wood cut therefrom, for which they should be made to account. The evidence however discloses that this was done under a lease from Welch to them, and that they had settled with Welch therefor long prior to the transaction here in question. Plaintiff, being estopped to assert any lien upon the land as against these defendants, is in no position to raise this question.
The decree of the lower court, so far as it goes, is manifestly correct. No personal judgment can be had against defendant Welch, as he was a nonresident of the State, and personal service was not had upon him in this State. The judgment of the lower court,
For the reasons given above the judgment of the circuit court should be affirmed, and the cause remanded with directions to that court to add thereto its further judgment in favor of the defendants Els-berry and Goodman upon plaintiff’s demand for a personal judgment against them; and the costs of this appeal should be taxed against the appellant. It is so ordered.