Baker v. Farmers' Bank of Conway

• Decision Date: 08 January 1926
• Citation: 279 S.W. 428,220 Mo.App. 85
• Parties: JOHN W. BAKER AND STELLA BAKER, HIS WIFE, AND THE FEDERAL LAND BANK OF ST. LOUIS, A CORPORATION, RESPONDENTS, v. FARMERS' BANK OF CONWAY, APPELLANT.
• Court: Missouri Court of Appeals

279 S.W. 428

220 Mo.App. 85

JOHN W. BAKER AND STELLA BAKER, HIS WIFE, AND THE FEDERAL LAND BANK OF ST. LOUIS, A CORPORATION, RESPONDENTS, v. FARMERS' BANK OF CONWAY, APPELLANT.

Court of Appeals of Missouri, Springfield

January 8, 1926

Appeal from the Circuit Court of Phelps County.--Hon. W. E. Barton Judge.

AFFIRMED.

Judgment affirmed.

John S Haymes, of Buffalo, and Phil M. Donnelly, of Lebanon, for appellant.

(1) Before plaintiffs can recover a decree for the cancelation of the deed of trust, they must establish the contract beyond a reasonable doubt. Stevenson v. Adams, 50 Mo. 475. (2) But even if such a contract was made, it was an oral one and is within the Statute of Frauds. Sections 2168 and 2169. It seems quite clear that both Baker and the defendant had some interest in the land in question. Defendant was the beneficiary in a deed of trust given by Baker, the owner of the land. Whatever it may be, the mortgagees, and the beneficiary in a deed of trust, have interests in the land covered. Pease v. Iron Co., 49 Mo. 124; Jones v. Mack, 50 Mo. 151; 2 Beach on Trusts and Trustees, sec. 408. This rule as to the rights of the beneficiaries in a deed of trust applies to a case like this. Johnson v. Houston, 47 Mo. 227. By the contract alleged, Baker agreed to convey an interest in land by the mortgage he was to give, and the defendant agreed to surrender its interest in the land, including the right of possession. Hacket v. Watts, 138 Mo. 511. An agreement to give possession of land is within the statute of frauds. Boyd v. Paul, 125 Mo. 29; Longacre v. Longacre, 132 Mo.App. 192; Brown on Statute of Frauds (5 Ed.), sec. 31, citing 35 Mo. 218 and 16 Mass. 39; Davis Bros. v. Callahan, 66 Mo.App. 176. Land can neither be bought or sold without a writing. Culligan v. Wingerter, 57 Mo. 241; Windever v. Baker, 121 Mo. 297. The purchase of land is as much within the statute as the sale. Lucket v. Williamson, 37 Mo. 388; Schlanlanker v. Smith, 27 Mo.App. 516; Home Insurance Co. v. Bloomfield, 141 Mo.App. 417. Part Performance. There was no part performance taking this case out of the Statute of Frauds. Whatever was done by plaintiffs Bakers was only preparatory to the performance of the alleged contract with defendant. Williams v. Morris, 95 U.S. 457; Kimming v. Oldham, 27 W.Va. 265; Lydick v. Holland, 83 Mo. 703; Sursa v. Cash, 171 Mo.App. 396; Bernhardt v. Walls, 29 Mo.App. 206. (3) This action is one for the specific performance of a contract, and is governed by the rules applicable to such actions. Wendover v. Baker, 121 Mo. 273-89. In such cases the contract must be definite and certain, and the evidence to support it clear. Wendover v. Baker, 121 Mo. 290; Taylor v. Von Schraeder, 107 Mo. 225; 3 Reed on Statute of Frauds, sec. 1019; Gibbs v. Whitewell, 164 Mo. 391. The Contract Must be Fair and Just. "A contract must be fair, equal and just in its parts." Pomeroy, Specific Performance, p. 243. "Speaking of contracts which the law will enforce . . . every agreement of this kind ought to be certain, fair and just in all its parts. If any of these ingredients are wanting in the case, this court will not decree a specific performance." Fry's Specific Performance (5 Ed.) sec. 334, quoting from Lord Hardwick. (4) The contract must, of course, be supported by a consideration, and that is wanting here. The defendant under the alleged contract was, at most, to get only its own--the debt just due it. Tucker v. Bartle, 85 Mo. 114; Taylor v. Von Schraeder, 107 Mo. 206. (5) If the contract should stand, it means the weakening of the bank by the loss of the debt, and the injury of third parties having interests with it, and is against public policy for such reasons. Subrogation. There is no right of subrogation in this case. Bunn v. Lindsey, 95 Mo. 250; Price v. Courtney, 87 Mo. 395; Kleimann v. Gieselmann, 114 Mo. 443; Stevenson v. Haynes, 220 Mo. 212. A mere volunteer or intermeddler, who, having no interest to protect and without any legal or moral obligation, pays the debt of another is not entitled to subrogation without an agreement to that effect or an assignment of the debt, the payment in his case absolutely extinguishing the debt. 37 Cyc. 375-376. (We contend that there was no agreement or assignment of the debt in the case at bar.) There is no proof that the Federal Land Bank paid these mortgages in order to keep the lien alive or that an assignment of the debt was made to them or was ever contemplated by the parties at the time of such payment. Under this state of facts the debt due to the Fidelity Savings Trust Company was absolutely extinguished by its payment. Johnson v. Goldsby, 32 Mo.App. 560.

C. S. Hale, of St. Louis, T. H. Douglas, and Herman Pufahl, both of Bolivar, for respondents.

(1) We have no fault to find with the abstract propositions of law as stated by appellant in Points 1, 2, 3 and 4 of its brief but we insist that the law as there stated does not apply to the case at bar. The trial court did not cancel defendant's deed of trust, neither did it decree specific performance of the alleged contract between Baker and the defendant bank, but all that the trial court did was to determine the priority of the liens and to decree that the defendant's deed of trust was subject to the indebtedness against Baker's land at the time that the plaintiff Federal Land Bank made its loan; and while in effect the decree subrogates the Federal Land Bank to the rights of the Fidelity Savings Trust Company and the Miller Loan Company, yet the decree held that neither one of these notes, mortgages or deeds of trust were paid off and held that the assignment appearing on the notes together with the delivery of them and the mortgages to the Federal Land Bank transferred those notes and deeds of trust to the Federal Land Bank and held that they were existing and outstanding obligations and liens. (2) The suit was properly brought in Laclede county, where the defendant resided. It is not a suit affecting the title to real estate, but is merely to determine the priority of liens and for subrogation. The validity of the deed of trust was not in question. Hannibal & St. Joseph Railroad v. Mahoney, 42 Mo. 467; State ex rel. v. Dearing, 180 Mo. 53; Crommer v. Dickman, 180 Mo. 148; Newite v. Price, 204 Mo. 31; State ex rel. v. Guinn, 243 Mo. 667; Hydraulic Pressed Brick Co. v. Lane et al., 205 S.W. 801; Speer v. Home Bank et al., 206 S.W. 405; State v. Hull, 220 S.W. 851; State ex rel. v. Huck, 240 S.W. 236. The Supreme Court refuses to accept jurisdiction in an action to determine priority of liens on personal and real property. Speer v. Home Bank et al., 199 S.W. 139; Corbett v. Brown, 263 S.W. 233. (3) The Federal Land Bank of St. Louis having furnished the money, through its branch, the Conway National Farm Loan Association, to take up the loan of the Fidelity Savings Trust Company and the Miller Loan Company, and the Conway National Farm Loan Association for the Federal Land Bank having received the notes and deeds of trust from the Fidelity Savings Trust Company assigned in blank and having received the notes and deed of trust of the Miller Loan Company assigned to John W. Baker (who was Secretary-Treasurer of the Conway National Farm Loan Association), thereby became the owner of those notes and deeds of trust, and neither the Fidelity Savings Trust Company nor the Miller Loan Company having marked the notes paid, but having assigned them, they remain valid outstanding obligations and were the property of the Federal Land Bank, and it thereby became subrogated to the right, priorities and liens of the Fidelity Savings Trust Company and the Miller Loan Company. 37 Cyc. pages 473-474; Wilkins v. Gibson, 113 Ga. 31, 38 S.E. 374, 84 Am. St. Rep. 204; Moore v. Lindsey, 52 Mo.App. 474; Sears v. Patterson, 54 Mo.App. 278; Holland Banking Co. v. See, 146 Mo.App. 269; Davenport v. Timmons, 157 Mo.App. 360; Wolf v. Walter, 56 Mo. 292; Allen v. Dermott, 80 Mo. 56; Orrick v. Durham, 79 Mo. 174; Reyburn v. Mitchell, 106 Mo. 380; Long v. Long, 111 Mo. 12. The Federal Land Bank having furnished the money for the new loan upon the representation of Baker that the Farmers Bank of Conway would take a deed of trust subject to its deed of trust, and that its deed of trust should be a first lien, it was subrogated to the rights of the Fidelity Savings Trust Company and the Miller Loan Company upon the refusal of the Farmers Bank of Conway to take the second deed of trust. At no time was it ever stated, suggested or understood that the Farmers Bank of Conway should have a first mortgage or deed of trust on Baker's land. State Savings Trust Co. v. Spencer, 201 S.W. 967; Holland Banking Co. v. Spencer, 201 S.W. 971. Under the decree as rendered by the trial court the defendant, Farmers Bank of Conway, is in no worse position than it was before the loan of the Federal Land Bank was closed. It still has a second mortgage subject only to the Fidelity State Savings Trust Company's one for $ 7,000 and one for $ 350, the other for $ 175, which were against the land when it took its deed of trust to secure its note of $ 3,850 dated June 1, 1921, and which deed of trust was acknowledged June 6, 1921, and was recorded on June 10, 1921. Whereas, if the contention of appellant were to be upheld it would have a first lien on the 209 acres, a situation which was never contemplated. State Savings Trust Co. v. Spencer, 201 S.W. 969. (4) The Federal Land Bank was not a mere volunteer. It paid the money to the Fidelity Savings Trust Company and the Miller Loan Company at the request and instance of Baker, the original maker of the notes and deed of trust and with the definite understanding with the mortgagor that it was to have a first lien on the land, and Baker's application for the...