22 S.W.2d 836 | Mo. Ct. App. | 1929
For some time prior to October 1, 1923, the Bank of Dearborn was a banking corporation operating at Dearborn, Missouri, but on said day said corporation was taken over by the State Finance Commissioner. Consequently this suit is brought by the State of Missouri at the relation of S.F. Cantley, Commissioner of Finance in charge of said bank, against the defendant.
The facts show that on June 20, 1922, Frank J. Akin, who was a farmer living in Buchanan County, executed his note to the Bank of Dearborn for $3,000, due fifteen days after date, and in this connection on said day gave a chattel mortgage on some of his farm property to secure same. This note and mortgage was taken as collateral security for another note for the same amount given by Frank J. Akin to the bank in December, 1921. However, the total *116 indebtedness of Akin to the bank was but $3,000. A copy of the mortgage was filed with the recorder of deeds upon the day after it was given. Frank J. Akin died on January 7, 1923, and on January 11, 1923, letters of administration were issued to the defendant, his wife, jointly with one W.B. Akin.
On March 15, 1923, the administratrix conducted a sale of the personal property of deceased pursuant to an order of the probate court. This sale took place upon the farm of the deceased where all the personal property then belonging to the estate was sold at public auction. However, prior to the sale W.B. Akin, one of the administrators, had an agreement with the vice-president and managing officer of the bank that the sale might include the property covered by the chattel mortgage in question. This was to permit the selling of all the personal property, which it was thought could be sold to a better advantage that way than by selling the unmortgaged property separately. However, the bank agreed to the sale of the mortgaged property under the understanding and agreement, made orally, that the proceeds of the sale of the mortgaged property should be paid to the bank. Immediately after the sale the net amount realized from all the property sold, to-wit, the sum of $3,113.92 was deposited in the Bank of Faucett to the credit of the administrators, $2100 of which the court found now to be in that bank and all of which defendant admits she now has.
On August 18, 1923, W.B. Akin resigned as co-administrator of the estate and since that time defendant has been and is the sole representative of the estate.
The evidence shows that of the amount deposited in the Bank of Faucett, $1652.98, was the proceeds from the sale of the property covered by the chattel mortgage. However, no part of this sum has ever been paid to the Bank of Dearborn or to the Commissioner of Finance.
There was evidence further tending to show that the estate is insolvent and the debt of the Bank of Dearborn remains unpaid.
Defendant complains that the agreement with the Bank of Dearborn that the mortgaged property might be sold together with the other property upon deceased's farm, constituted a waiver of the lien of the bank, and therefore, this suit cannot be maintained. There is no merit in this contention. [11 C.J. 625; Love v. Scott,
It is claimed that the court was without jurisdiction to render a judgment declaring a lien on the money of the estate in the hands of the Bank of Faucett, because that Bank was not a party to the suit. There is no merit in this contention. The money is subject to the control of the defendant as administratrix, consequently it is in her hands as it is subject to her check and is a part of the estate. No rights are asserted against the Bank of Faucett nor does the decree provide any rights against that Bank in favor of plaintiff. Under the circumstances we do not think that the Bank of Faucett was necessarily a party. The case of State ex rel. McElvain v. Riley, 276 S.W. 881, and like cases cited by defendant are clearly not in point. Aside from this there was no pleading on the part of the defendant of non-joinder of a party defendant. [Barnard v. Keathley,
It is claimed that the law requires a chattel mortgage to be in writing, signed, acknowledged and recorded and that the oral modification of the chattel mortgage in question cannot be enforced as plaintiffs are attempting to do in this case.
There was no objection to the testimony of the oral agreement upon the grounds now urged against it, but even if there had been there would be no merit in the contention. This is not a suit upon the mortgage but upon a cause of action created by equity growing out of the violation of the agreement for the sale of the mortgaged property. Equity will follow, if possible, the proceeds of such a sale and fix a lien upon them in lieu of the lien of the mortgage upon the property sold or, as some of the authorities put it, equity will transfer the lien of the mortgage to the proceeds of the sale.
It is next contended that plaintiffs' cause of action is barred by limitations. In this connection defendant relies upon Section 2259, Revised Statutes 1919, which provides that after the expiration of five years after the original or copy of the mortgage shall have been filed with the recorder, the mortgage shall cease to be valid against the mortgagor, etc., and that the recorder is authorized to destroy all such mortgages on file after the expiration of such a period. The evidence shows that the mortgage in controversy was recorded on June 21, 1922; that this suit was brought on December *118 22, 1927, and the mortgage was destroyed by the recorder on September 1, 1927.
If this were a suit depending upon the validity of the mortgage as of the date of the trial there might be some merit in this contention. However, the parties to it, the deceased by his administrator, had in 1923, entered into an agreement for the discharge of the mortgage which at that time was perfectly good. Under this agreement the property mortgaged was sold to one who obtained a perfect title to it. The administrator failed to comply with his agreement and the lien of the mortgage could not be enforced against the specific property the mortgage covered. The purpose of the statute in question is to force a foreclosure of an unpaid mortgage, as to the property covered by it, within five years after the mortgage is filed with the recorder. How could there have been a foreclosure of the mortgage in question after the property covered by it had been sold? It was perfectly lawful for the bank to enter into the agreement with the administrator looking toward a discharge of the mortgage. The administrator then proceeded under said agreement to destroy the lien of the mortgage so that it could not be enforced upon the specific property covered and then refused to comply with his part of the agreement. The estate now claims that the bank, when it attempts to enforce the agreement as near as it can be enforced, is barred because of the act of the administrator making it impossible for the bank to meet the requirements of the statute. We are firmly of the opinion that the estate cannot maintain its position and the point is ruled against the defendant. [37 C.J., pp. 725, 726.]
It is claimed that the probate court has exclusive jurisdiction in all matters pertaining to the property of deceased persons and that that court:
"Has exclusive original jurisdiction in the matter of liens on property under its control, and under all the authorities it has the right and it is its duty to apply equitable principles in the distribution of the same."
There is no merit in this contention. While the probate court may apply equitable principles in matters coming within its jurisdiction, it is well settled that the probate court has no original equity jurisdiction and cannot try issues which are purely equitable in their nature and where the relief demanded is equitable. [State Bank v. Lillibridge,
It is well established that courts of equity have jurisdiction to declare trusts and establish equitable liens of the kind and character in controversy in this suit. [Greil Bros. Co. v. City of Montgomery,
The statutes in reference to proving demands against estates contemplate judgments in favor of creditors only, and creditors can *119
fasten their debts only on those funds which are applicable to the payment of debts. [Stokes v. Burlington Co. Trust Co. (N.J.), 108 A. 863; Vandever's v. Freeman,
We need not say whether the probate court could grant any kind of adequate relief in plaintiffs' predicament. However, we have not been cited to any authorities holding that the probate court has such authority and we are not cognizant of any case where such has been attempted. We believe that plaintiffs should not be put to such a doubtful remedy especially in view of the ancient established right in courts of equity to assume jurisdiction to establish and enforce equitable liens. We therefore hold that plaintiff was not required to resort to the probate court. [Barnard v. Keathley, supra; 24 C.J. 747.] Even were this a suit at law the circuit court would have concurrent jurisdiction with the probate court. [Sec. 188, R.S. 1919; Richardson v. Palmer,
It is claimed that the administrator could not make the agreement with the bank with reference to the sale of the mortgaged property without an order from the probate court. There is no merit in this contention. This agreement could not involve the estate in any detrimental way. The probate court made an order for the sale of the personal property of the deceased and the administrator's agreement with the bank to facilitate that sale was a mere incident to the sale.
However, it is claimed that as there were two administrators, one alone, could not bind the estate. There is no merit in this contention. As before stated, nothing detrimental to the estate could arise as a result of the agreement in question, and we think that it was of a kind that one administrator was authorized to make without consulting the other. [24 C.J. 1184.] We find the case of Armor v. Frey,
We think, however, that the decree of the court was erroneous in ordering that execution issue. [Sections 188 and 1629, R.S. 1919; Brown v. Woody,
