Hayden v. Brock

• Decision Date: 12 June 1900
• Citation: 57 S.W. 721,157 Mo. 88
• Parties: HAYDEN v. BROCK et al.
• Court: Missouri Supreme Court

57 S.W. 721

157 Mo. 88

HAYDEN v. BROCK et al.

Supreme Court of Missouri, Division No. 1.

June 12, 1900.

MERGER — APPEAL — TRUST DEED — VALIDITY.

1. A trust deed to secure notes held by a bank antedated a judgment against the grantor in favor of a third party. After the docketing of the judgment a controversy arose between the debtor and the bank, which was submitted to arbitrators, who determined that the bank should receive the land covered by the trust deed in satisfaction of the debt, with the right to foreclose the deed if it chose to do so. Instead of foreclosing it, the bank took a quitclaim of the land, and went into possession, but the quitclaim was not recorded; the bank regarding the trust deed as its record title. The arbitrators gave the notes to the debtor without the bank's knowledge, and, while notice of execution sale to satisfy the judgment was pending, he marked them, "Paid in full," and exhibited them to an agent of defendant, the purchaser at the execution sale. The bank then sold the land to plaintiff, who caused the trust deed to be foreclosed, and received a deed from the trustee after a sale of the land to the receiver of the bank. Held, that there was no merger of the trust deed in the quitclaim deed, because it would have destroyed the bank's interest without giving it anything for its debt, which was not intended, and because of the bar of the intervening judgment under which defendant claimed.

2. The appellate court will not decide a question not presented by the pleadings.

3. A deed of trust to the sheriff of a certain county, authorizing him to advertise and sell the property in case of default, is valid as a mortgage between the parties.

4. The uniting of the legal and equitable titles in one person, though usually resulting in a merger of the lesser into the greater, does not always have that effect. The intervening of another incumbrance or title that would prejudice the interest of the holder of the older equitable title will prevent the merger.

Appeal from circuit court, Greene county; James T. Neville, Judge.

Ejectment by J. C. Hayden against Alice Brock and another. From a judgment for defendants, plaintiff appeals. Reversed.

Massey & Tatlow, for appellant. Wm. O. Mead and T. T. Loy, for respondents.

VALLIANT, J.

Ejectment for a town lot in Ashgrove. The real issues on which the case turns are tendered in the affirmative answer of defendant Brock, in the nature of an equitable cross action. The other defendant is the tenant of Brock. The answer states, substantially, that one Dunnaway was the owner in fee of the property, and that on the 29th of March, 1893, he executed a deed of trust, which was duly recorded, conveying the same to a trustee to secure certain notes that he owed to the Swinney Banking Company; that thereafter Dunnaway paid the notes, and the bank returned them to him, and thereafter defendant Brock became the purchaser of the premises at a sheriff's sale under a judgment against Dunnaway, received the sheriff's deed to the same, and thereby became the owner of the land in fee simple; that afterwards the Swinney Bank became involved, and its affairs passed into the hands of receivers, and after that one Swinney, who was the chief stockholder in the bank, conspired with Dunnaway and the plaintiff to defraud the defendant, and in furtherance of that purpose caused the premises to be sold under the power contained in the deed of trust, which had not been released of record; that the receivers became the purchasers at the sale, and conveyed the same to plaintiff; that both the receivers and plaintiff purchased with knowledge of the facts above stated, and paid no consideration for their purchase. The charge in the cross bill is that the transaction complained of was a fraud, and conferred no valid title on plaintiff, but that his deed clouds the defendant's title; and the prayer is that it and the deed of trust and the trustee's deed be canceled. The reply admits that Dunnaway was the owner, and that he executed the deed of trust, and denies the other allegations. The evidence shows the facts to be as follows: The deed of trust dated March 29, 1893, was to secure four notes, dated January, 1893, aggregating something over $500. The bank also had a chattel mortgage on some horses to cover the same debt. In June, 1893, a controversy arose between the bank and Dunnaway in regard to their affairs, involving, among other questions, the amounts of credits he was entitled to on the notes, and they agreed to leave the whole business to arbitration. Each selected one arbitrator, and those two, being unable to agree, called in a third, and an award was agreed upon, which was, in effect, that the bank should have the lot and one or two of the horses in full satisfaction of the notes and expenses incurred. Dunnaway was to have the rest of the horses (three or five), and the bank was to be given time (probably 30 days) in which to decide whether it would foreclose the deed of trust, or take a quitclaim deed from Dunnaway. In either case the bank was to have the property for the debt and expenses incurred, and Dunnaway was to have the notes in exchange for the property. If the bank should foreclose, and a sum sufficient to pay the notes should not be realized, still the notes were to be returned to Dunnaway, and the bank was to pay the cost of the foreclosure. The bank was also to pay the cost of the arbitration, and pay the livery bill for taking care of the horses. The award was in writing, but was not delivered to either of the parties, and was lost. It was never returned into court, and no judicial action was taken on it. The horses awarded to Dunnaway were delivered to him, and he executed a quitclaim deed to the lot to Swinney, for the bank, dated June 26, 1893. Swinney took possession, added some improvements to the house and premises, and then sold the property to the plaintiff, and gave him possession. The quitclaim deed was not recorded, and the deed of trust was not released on the record. After the arbitration was over, — just how long after is not shown; probably a month, — one of the arbitrators, without the bank's knowledge, gave the notes to Dunnaway. In June, 1897, Dunnaway returned the notes to the plaintiff, and therefore he caused the deed of trust to be foreclosed by the trustee, at which sale the receivers of the bank became the purchasers, and made a deed conveying it to the plaintiff. That is the plaintiff's title. On June 2, 1893, a judgment was rendered against Dunnaway in a justice's court of Greene county for $82.75, a transcript of which was filed in the circuit clerk's office on June 6, 1893. In September, 1895, execution issued on the judgment, under which the sheriff, in due course, sold this property on October 12, 1895, to defendant Brock, and made her a deed to the same, and she, through her tenant and co-defendant, is now in possession under that sheriff's deed, and that is her title....