McKenzie v. Donnell

• Decision Date: 23 May 1899
• Docket Number: No. 8,322.,8,322.
• Parties: McKENZIE et al. v. DONNELL et al.
• Court: Missouri Supreme Court

52 S.W. 222

151 Mo. 461

McKENZIE et al. v. DONNELL et al.

No. 8,322.

Supreme Court of Missouri, Division No. 1.

May 23, 1899.

INSANE PERSONS — CANCELLATION OF DEED — RETURN OF CONSIDERATION.

1. The deed of an insane person not in ward may be canceled only on a return or tender of the consideration paid.

2. The deed of an insane person may be canceled without restoring to an innocent third person the amount of a loan made to the grantee on the faith of his apparent title.

Appeal from circuit court, Jackson county; John W. Henry, Judge.

Action by Ella McKenzie and others against Catherine E. Donnell and others. Judgment for plaintiffs, and defendants appeal. Affirmed.

William C. Forsee, for appellants. Wash Adams and N. F. Heitman, for respondents.

MARSHALL, J.

The facts and proceedings in this case are sufficiently set out in the opinion in case No. 8,314 (52 S. W. 214), wherein these respondents were the plaintiffs in error, and these appellants were the defendants in error. The defendants (appellants here) contend that notwithstanding Jedediah E. McKenzie may have been insane when he executed the deed of trust to Stewart, on the 1st of April, 1875, still Stewart acted in good faith, and was guilty of no fraud upon Jedediah, and therefore the plaintiffs cannot be allowed to recover the land without refunding the benefits received by Jedediah from that contract, and without restoring the status quo of the parties, which they claim requires that the Donnells shall be reimbursed what they paid for the land at the sale under the Stewart deed of trust, and what they have since paid for taxes, repairs, and legal expenses in protecting and preserving the property, with interest on these sums, less the value of rents and profits, but also that the Mason deed of trust for $15,000, now held by the bank, shall be also paid before the plaintiffs shall be allowed to recover. They contend that under the doctrine of Blount v. Spratt, 113 Mo. 48, 20 S. W. 967, Wells v. Association, 126 Mo. 637, 29 S. W. 609, and Rhoades v. Fuller, 139 Mo. 179, 40 S. W. 760, this is the true equity principle applicable to the case, if plaintiffs can be allowed to redeem at all; but they also assert that the Donnells are innocent purchasers, under the Stewart deed of trust, for value, and without notice of McKenzie's infirmity, and hence they are entitled to retain their bargain. It has been fully pointed out in the opinion in case No. 8,314, wherein these appellants were defendants in error, that the contract of an insane person not in ward is voidable only, and will only be avoided, in any case, upon the insane person or his representatives restoring the benefits received by him from the contract (that is, upon condition that the status quo of the parties be restored), but that it will not be avoided at all if this cannot be done, or if, in avoiding it, injustice would be done to the other party. The application of these principles of law to the facts presented by this record determines this case.

Stewart's connection with this transaction was fair, manly, and beyond adverse criticism. He knew Jedediah had been adjudged insane in 1869, and had also been adjudged sane in 1870. The deed of trust to secure Stewart for indorsing Jedediah's note was made in 1875. It was not hastily done. It was made a matter of consideration and discussion in the McKenzie family, and with their friends, for quite a while before it was done. Stewart derived no benefit from it. McKenzie got the money from the bank (as to which no knowledge of McKenzie's condition is shown), and he invested it in business, which was carried on for four months, when, upon information of his partner, McKenzie was again adjudged insane. Stewart had to pay the note ($3,000) to the bank. The sale was not made under the deed of trust until February 20, 1877. The Donnells purchased the property at that sale for $2,105, and held it, paying taxes and carrying charges, until July 26, 1886, when they borrowed $15,000 on the property from Mason, and secured it by a deed of trust, which is now held by the Citizens' National Bank, both of whom acted in good faith, and without notice of McKenzie's condition. There is a vast volume of testimony preserved in the record in this case as to McKenzie's mental capacity to contract when he made the Stewart deed of trust. It is not necessary to consider any of the questions arising upon the trial, or the rulings of the court upon them, as appellants do not urge them here now. We are concerned only with two questions: (1) Are the plaintiffs, under the facts here shown, entitled to redeem at all? And (2) if the plaintiffs can redeem, upon what terms should it be allowed in a court of equity?

Conceding that the Donnells are innocent purchasers for value and without notice, it does not follow that McKenzie must lose his property. Complete equity can be done by putting them in the same position as if they had never purchased the property. By repaying them the purchase price they paid, with the taxes, cost of protecting it, and interest on their outlay, and charging them with...