112 Mo. 502 | Mo. | 1892
The suit is ejectment, commenced in Morgan county, to recovér two hundred and forty-two and one-half acres of land situate in said
On the trial both parties claimed title under defendant, B. ■ F. Doran, plaintiff under the sale by the trustee under deed of trust before mentioned, and defendant under a deed directly from Doran to James-,, as trustee for Mrs. Doran, dated January 6, 1887, and recorded January 8, 1887, for an express consideration of $3,500.
After the introduction of these deeds defendant offered evidence showing that on the twenty-second day of December, 1885, B. F. Doran made two deeds of trust to secure the note of $20,000, payable to Bartle, one on the land in dispute, situate in Morgan county, and under which plaintiff claims, and the other on about six hundred acres of land in Cooper county.
The evidence tended to prove that these deeds were both withheld from record at the request of
The court at the request of plaintiff declared as a matter of law that upon the pleadings and undisputed evidence plaintiff should recover.
-The court refused to declare the law to be, as asked by defendants, that if Doran was indebted to Mrs. Doran, and the deed to James, trustee, was accepted by her in part payment and satisfaction of her debt, then she was a purchaser for value of the lands in controversy; that if, when they bought the land, the only notice they had of the existence of the deed of trust was from the statements of Bartle and seeing him have the deed of trust, and that Bartle stated that said deed of trust would never be filed for record, but would be surrendered, and that no lien was claimed on said land by virtue of said unrecorded deed of trust, then there was no such notice that said deed of trust was an existing and valid lien upon said land, as to make defendants, James and Mrs. Doran, purchasers with notice of, and subject to, said deed of trust.
The court entered judgment for the plaintiff for the possession of the land and for rents and profits. Defendants appealed. , ■
I. Whether the satisfaction of a pre-existing debt is a consideration sufficient to protect a purchaser of real estate against a prior unrecorded deed, of which he has no notice, has never been definitely and directly passed upon by this court, so far as we are advised. A
A strict legal construction has not generally been placed upon such statutes. While it is held that the instrument itself may be invalid until recorded, it is also held that the purchaser acquires, by his purchase, an equitable right in the land, which will not be defeated except by a purchaser for value without notice.
The chancellor in Dickerson v. Tillinghast, 4 Paige Ch. 215, gives the construction placed upon the English statute, which he approves thus: “The English registry acts made the unregistered deed or incumbrance at law wholly inoperative and void, as against a subsequent grantee or incumbrancer. But the court of chancery, in accordance with the manifest spirit and intention of the statute, at an early'day adopted the principle of considering the prior deed, or incumbrance, as an equitable title or lien. It, therefore, applied to such cases the equitable principles which had previously been adopted by that court, in relation to other contests between the holder of an equitable title or lien and a subsequent grantee or mortgagee of the legal title.”
This construction is equitable and just, and has
To entitle one then to the protection of the statute against an unrecorded deed, he must have been a purchaser for value. The question recurs whether one who takes a conveyance of land in consideration of the release and discharge of a precedent debt from the grantor is a purchaser for value. It is necessary that he should be such, in order to secure the protection of the statute. The courts of the states are not in harmony on the question, though it is believed that a majority of them hold that such a consideration alone is insufficient, though they seem generally to agree that, if a definite forbearance of an antecedent debt is given, or if the creditor gives up any security, divests himself of any rights, or does any act to his own prejudice on the faith of the title before he has notice of the prior deed, he will be regarded as a purchaser for value. 2 Pomeroy on Equity Jurisprudence, sec. 749; Devlin on Deeds, sec. 632, and authorities cited by each.
As has been said,-the precise question has not been decided by this court, though expressions bearing out both sides of the proposition or expressing doubt are found. In Hoyt v. Oliver, 59 Mo. 189, it is.said: “The existing indebtedness of the grantor was a valuable and sufficient consideration for making the deed to secure such indebtedness.” The rights of subsequent purchasers was not involved. In Martin v. Jones, 72 Mo. 25, the court, by Judge Napton, says: “Another point made in this case is that there was no proof of notice
It was held in Aubuchon v. Bender, 44 Mo. 565, that, to entitle one to the protection of the statute, he must have parted with something of value; otherwise he is not injured. A deed of gift was, therefore, held not to have been for value. See also Davis v. Ownsby and McCamant v. Patterson, supra; Fox v. Hall, 74 Mo. 317. In the last case the court says: “This protection is only afforded to an innocent purchaser for value.” It is also held that one purchasing from the heir of the grantor of an unrecorded deed will be protected. Youngblood v. Vastine, 46 Mo. 240. Also, a purchaser by quitclaim of the “right, title and interest of the grantor,” if for value and without notice, will prevail over such prior deed. Willingham v. Hardin, 75 Mo. 429; Fox v. Hall, supra.
Analogous cases, growing out of commercial transactions, involving the question of what is necessary to constitute one a bona fide purchaser for value of negotiable securities are, we think, better settled. These eases were reviewed by Black, J., in Crawford v. Spencer, 92 Mo. 509. The conclusion, as applied to the case in hand, is thus expressed: “Where there is a new consideration at the time the collateral is given, such as the extension of the time of the payment of the principal debt, there can be no doubt but the transferee
The same conclusion was reached by Sherwood, J., in Fitzgerald v. Barker, 96 Mo. 664, and by the courts of appeals in the following cases: Redpath Bros. v. Lawrence, Manning & Cushing, 42 Mo. App. 101; Lawrence, Manning & Cushing v. Owens, 39 Mo. App. 318; Feder v. Abrahams, 28 Mo. App. 454; Hess v. Clark, 11 Mo. App. 492.
We think the rule deducible from these authorities is that a deed made in consideration of the absolute discharge of a pre-existing debt of the grantor, or by an adequate portion of it, will constitute the grantee a purchaser for value so as to protect him against a previous unrecorded deed of the same grantor. By the satisfaction of the debt the creditor divests himself of the right of an action, or of securing the original liability, and places himself in a worse condition than he-would have done by a definite forbearance of the debt.
II. Did the court rule correctly on the question of actual notice by Mrs. Doran or her trustee of the prior-mortgage? It is conceded that, as a general proposition, actual notice of the prior deed would defeat the subsequent one. The, equitable rule is also not disputed that positive information brought directly home to the party to be charged therewith is not required, but that knowledge of any fact which would put an
That both Mrs. Doran and her trustee, James, had notice of the outstanding deed of trust, cannot be disputed; indeed, both of them admitted that Bartle had it present with him at the time Doran executed the deed to his wife’s trustee, and she placed the credit upon the note. At the time these grantees received this notice, and the deed was exhibited to them, however, they were also informed by Bartle that it would not be recorded, but would be surrendered, and no lien would be claimed on the land under it. It is now claimedby defendants that, the notice and the representations being contemporaneous, the representations neutralized, as it were, the effect of the notice. We do not think such to have been the result. The notice, under the terms of the statute, imparted to the deed the same validity, force and effect as between these parties that filing for record would have given. What was before notice a mere equity becomes clothed with the legal title. The representations operated upon a deed otherwise valid. If plaintiff, as the assignee of the note and mortgage, is to be postponed to any rights acquired by defendants under their deed it must be upon some ground other than want of notice.
III. Defendants pleaded an equitable estoppel as a defense to the action. This plea was predicated upon the alleged statements and declarations of Bartle, at ' the time the deed was made to the trustee, to the effect that no lien would be claimed on this land under the deed of trust.
It is a well-settled principle of equity that one who makes representations upon which he expects another to act, and upon which such other relies and is induced
If plaintiff made such representations to defendant as are attributed to Bartle, intending or knowing that defendants would act upon them, and release a part of the debt the wife held against the husband, and. had stood by and seen the parties acting upon such representations without objection, then such words and conduct would clearly bring plaintiff within this equitable rule, and it would not be permitted to set up any title acquired under the deed of trust as against the deed defendants were induced to take.
IV. There is no doubt under the evidence before us that the note was assigned before maturity to the plaintiff, and, at the time the alleged representations by Bartle were made, he had no interest in the note, unless it should have been as an indorser, or power or control in his own right over the deed of trust. The deed of "trust was only incident to the debt, and the assignment of the note carried with it the right to its control, and it was out of the .power of Bartle, either as payee or indorser of the note, to release or discharge any portion of the mortgaged premises. Hagerman v. Sutton, 91 Mo. 531, and cases cited; Mayes v. Robinson, 93 Mo. 118.
V. The evidence tending to prove that the unrecorded deeds of trust were retained by Bartle; that when Bartle thought best to have them recorded he went at once to see and consult Mr. Parsons, president of the bank, about so doing; that the deed of trust on the Cooper county land was taken from St. Louis and placed upon record by a messenger under the directions
VI. There was also evidence tending to prove that, at the time the deed of trust was made, there wás •an understanding between Doran and Bartle that, in •order to avoid publicity and injury to the credit of Doran, it should not be placed upon record unless sanctioned by him. A similar understanding and agreement between the same parties and plaintiff bank, in regard to withholding from the record the deed of trust to the Cooper county land, was held to be fraudulent by this court in the recent case of Bank v. Doran, 109 Mo. 40. The court says: “The authorities cited by the plaintiff bank fully bear out the position that in circumstances similar to those related a court of equity will postpone, or set aside as fraudulent, an instrument whose recording has been clandestinely delayed.”
While there was no direct evidence in this case connecting the plaintiff bank with the alleged agreements, we think the circumstance's also tended to prove notice to it of such, an understanding and acquiescence therein.
The case was tried as one at law. The first instruction asked by defendants and refused by the court properly declared the law. -The declaration of
We think there should be a new trial, and the judgment is reversed and cause remanded for that purpose.