Kennedy v. Security Bldg. & Sav. Ass'n

• Decision Date: 13 January 1900
• Citation: 57 S.W. 388
• Parties: KENNEDY v. SECURITY BLDG. & SAV. ASS'N et al.
• Court: Tennessee Supreme Court

Page 388

57 S.W. 388

KENNEDY v. SECURITY BLDG. & SAV. ASS'N et al.

Court of Chancery Appeals of Tennessee.

January 13, 1900.

Appeal from chancery court, Davidson county; H. H. Cook, Chancellor.

Action by Harriett Kennedy against the Security Building & Loan Association and others to set aside a sale in mortgage foreclosure. From a judgment in favor of plaintiff, defendants appeal. Reversed.

E. J. Wickware, for appellants. J. H. Zaricor and W. R. Chambers, for appellee.

WILSON, J.

The original bill in this case was filed May 13, 1898, by the complainant against the defendants to set aside a deed of trust executed to the Mechanics' Savings Bank & Trust Company for the benefit of the Security Building & Savings Association, purporting to have been signed and properly acknowledged by her and her husband, and registered in Davidson county, and to remove the same as a cloud upon her title to the property described in it. The instrument conveys property on Hendershott street in Nashville, deeded to complainant as her general estate by R. W. Turner and wife, May 10, 1888. It is dated January 29, 1891, and is signed by Henry Kennedy, her husband, and by her by her mark, and her signature to it is attested by John E. Minton and P. G. Dismukes, the latter being the notary public before whom it was acknowledged and her privy examination taken. She asked to bring the suit in her own name, alleging that her husband had abandoned and deserted her. The instrument purports to secure $1,000 advanced to complainant on five shares of stock by the building association. It is assailed on the ground that she never signed nor acknowledged it, nor authorized any one to sign her name to it; that she never acknowledged its execution before Dismukes, notary public, nor anybody else, and that she never received any money on it from the association, or any one, nor heard or knew of it, until a short time before she filed her bill. In short, her case, as made by the bill, is that the instrument is a bald forgery so far as she is concerned. She alleges that she has been in the continuous possession of the property since its conveyance to her by Turner and wife, collecting its rents, etc., until in December, 1898, when defendant Hesse, without her knowledge or consent, commanded her tenants occupying it not to pay her any more rent, and that since then she has received no rents. A preliminary injunction issued under the prayer of the bill enjoining defendant from disposing of or incumbering the property and from interfering with her collection of rents from it. The Mechanics' Savings Bank & Trust Company failed to answer, and the bill was taken for confessed as to it. The building association and Hesse filed a joint and separate answer as a cross bill. Hesse, in his answer, alleges that he has no interest in the subject-matter of controversy, and that his connection with the property has been and was in his capacity as secretary and agent of the association. They admit that complainant was once the owner of the property described, but deny that she has been in continuous, undisputed, and adverse possession of it since the date of the deed of Turner and wife to her. They admit that she is the wife of Henry Kennedy, but say that they do not know as to the abandonment of her by him. They admit that the association, since January 25, 1898, through its secretary, Hesse, has been collecting and trying to collect the rents from the tenants occupying the property, and claim that the association had the right to do so under the facts to be stated in the answer and cross bill. They aver that complainant and her husband applied for an advance of $1,000 on five shares of stock in the respondent association, and to secure the repayment of the money advanced she and husband executed a deed of trust to said property to the Mechanics' Savings Bank & Trust Company as trustee. They file the original trust deed as Exhibit A to their answer and cross bill, and aver that it was properly acknowledged by complainant and her husband, and that it was acknowledged with the privy examination of complainant before P. G. Dismukes, a notary public, who was competent and qualified to take the same. They allege that this trust deed was signed in the presence of witnesses, one of them being John E. Minton, who was wholly disinterested. They say it was acknowledged on February 7, 1891, and was received for registration on the same day in Davidson county. Attention is called to the fact disclosed by an inspection of this trust deed that the complainant is thereby made a member and shareholder in the association. It is averred that she and her husband having fallen in arrears in the monthly payment of dues, etc., called for by the contract, the property was sold by the trustee under the terms of the trust deed, May 30, 1892, to A. W. McClure, who, June 2, 1892, received from said association $1,000, and secured the repayment of the same by a trust deed on the same property. It is further alleged in the answer and cross bill that July 3, 1893, complainant, with her husband, filed a bill against said A. W. McClure and others; that afterwards, on February 1, 1894, complainant and her husband filed an amended bill in the said cause. These bills are made exhibits to the answer and cross bill. It is further alleged that respondent answered said bill; that proof was taken, and that the case was tried by the chancellor, and said bill dismissed; that the complainants prayed an appeal; that the cause was heard in the supreme court at Nashville in March, 1897, and a decree passed by said court, a copy of which is exhibited with the answer and cross bill; that this decree was modified by a subsequent decree entered in the supreme court, and a copy of this decree is made a part of the answer and cross bill; that subsequently a final decree was rendered by the supreme court in said cause in January, 1898, a copy of which is exhibited; that in pursuance of this final decree the clerk of the supreme court sold the property, and on February 8, 1898, executed and delivered to the association a deed to the property in question; that the association then took possession of the property, and has been since collecting and claiming the rents from the same, with the full knowledge of the complainant, and without any objection or protest from her until a few days prior to the filing of this bill. A copy of the deed from the clerk of the supreme court is exhibited with the answer and cross bill. They allege that complainant was one of the complainants in the suit of Henry Kennedy and wife against A. W. McClure and others, and that respondent association was one of the defendants in said suit, and that the matter involved in this cause was adjudicated in that case in favor of respondent; and respondent association thereupon pleads and relies on the proceeding, and particularly on the final decree in the supreme court in that case, as a bar to the claim of complainant in the present suit, and notice is given that defendants will produce and read the record in said cause on the hearing of this case. It is denied that the trust deed assailed in this case is or was a forgery, so far as complainant is concerned, and they allege that, if it had been, complainant is now estopped from setting up such defense. It is also denied that complainant was ignorant of the existence of said deed of trust, and, on the contrary, it is affirmed that she was familiar with A. W. McClure's claim of title to the property when she and her husband filed their bill against him and others. It is also alleged that she and her husband made a contract with their attorneys to prosecute that suit, which contract was reduced to writing, and signed by complainant, and which contract recognized in express terms the trust deed or mortgage. It is alleged that complainant has undertaken without right to collect rent from the tenants in the occupancy of said property, and that she has been threatening to oust the tenants unless they agree to pay rents to her. It is averred that these tenants, who are ignorant people, have been harassed to such an extent that they are afraid to pay any one, and that, if complainant persists in her course, it will be impossible for respondents to keep tenants in the houses on the property, and, as complainant is wholly insolvent, respondents will be without any remedy for the damage done. An injunction is asked under the prayer of the cross bill to restrain complainant from going on said premises, and from demanding rents from the tenants thereon.

A preliminary injunction issued under this cross bill. June 6, 1898, the chancellor, upon motion in this case, dissolved the preliminary injunction granted to complainant enjoining the association from collecting rents from the property in question; the chancellor, however, reserving the right at any time thereafter to reinstate the injunction in favor of complainant upon her motion supported by satisfactory proofs. At the same time, June 6, 1898, the complainant filed what is called a "plea of non est factum," in which she avers that she did not sign and execute the deed of trust made an exhibit to the answer and cross bill of the defendant, nor authorize any one to bind her in the premises. This plea is verified by her as required by law. At the same time she answered the cross bill, in which she again avers in very positive language that she never executed the trust deed assailed in her original bill, and further again avers that she never acknowledged the same before the notary public. She further insists that Dismukes, the notary public, was incompetent to take her acknowledgment, because he was, at the time he purports to have taken her privy examination, one of the officials of the association, and its secretary. She denies that she signed it in the presence of John E. Minton. In other words, she denies having any connection with the deed of trust....