Baker v. Reed.

• Decision Date: 07 May 1901
• Parties: BAKER v. REED et al.
• Court: Missouri Supreme Court

62 S.W. 1001

162 Mo. 341

BAKER v. REED et al.

Supreme Court of Missouri, Division No. 2.

May 7, 1901.

DEED OF TRUST—NOTE—PAYMENT—SATISFACTION—EQUITABLE ASSIGNMENT—WITNESSES—TRANSACTION WITH DECEASED PERSON—EXTENT OF RULE.

1. The provision of Rev. St. 1889, § 8918, that, where one of the parties to a contract or cause of action is dead, the other party shall not be permitted to testify in his own favor, extends

to every occasion on which such contract or cause of action may be involved; and hence a party claiming land under a trust deed is incompetent to testify concerning conversations with the grantor therein, as against a claimant under another trust deed, who would be injured by the admission of such evidence.

2. Where the grantee in a trust deed given to secure a loan retained a part of the money to pay a note of the grantor which was secured by a prior trust deed of the same property, and paid the note when due, taking an assignment thereof from the agent, who held it for collection, such action operated as a payment of the debt and a satisfaction of such prior deed, and not an assignment of the note and equitable assignment of the trust deed; and hence defendant was not entitled to claim title to the land thereunder as against the grantee in a trust deed executed prior to the deed to him, but subsequent to the deed securing the note which he paid.

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

Ejectment by Maggie C. Baker against J. A. Reed and another. From a judgment in favor of defendants, plaintiff appeals. Reversed.

This is ejectment for the possession of a city lot in the city of Springfield. Both parties claim title under one G. D. Maggie. The petition is in the usual form. The answer alleges that: "Plaintiff claims title under one Stephen Damrill, now deceased, who in his lifetime purchased said premises of one G. D. Maggie and wife, Josephine, who, before said sale to Damrill, mortgaged said premises to one Frances McCormack; one P. H. Martin being the trustee in said mortgage or deed of trust, to whom said lands were conveyed in trust to secure the sum of money mentioned in said deed of trust or mortgage, with interest, to wit, one hundred and fifty dollars. That, long before plaintiff commenced this suit, defendant Mills, for value, purchased said mortgage and the note mentioned therein from the legal holder and owner thereof; and, the said mortgage having become due and unpaid and forfeited, the defendant Mills entered into possession thereof because of such forfeiture, and rented the same to defendant Reed, who is alone in actual possession thereof as tenant of defendant Mills. That defendant Mills is still the owner and holder of said mortgage and note aforesaid, which remains due and wholly unpaid, wherefore defendant prays judgment. Defendants, for further answer, say: That, after said Damrill purchased said premises of said Maggie, the said Damrill and wife mortgaged the same to T. J. Delaney, trustee therein, wherein he (Damrill) conveyed to said trustee said premises, to secure payment of the sum of five hundred dollars loaned said Damrill by defendant Mills, due in one year from date, and dated the 23d day of April, 1892. That soon afterwards said Damrill made a second deed of trust, to secure the Exchange Bank, in the sum of five hundred dollars, on these premises, and a large amount of other property, upon which said last-mentioned mortgage was a first lien. This is dated July 21, 1892, and is the mortgage under the foreclosure of which plaintiff claims title to the premises sued for. That after the execution of said mortgage by Damrill to defendant, trustee for defendant Mills aforesaid, and after the making of said second mortgage to the Exchange Bank, under which plaintiff claims as aforesaid, to wit, on the 21st of September, 1892, said Damrill, wishing to sell the said premises sued for, and having found a purchaser, to wit, one Hughes, contracted the same to him; but the said Hughes being unwilling to assume the payment of the said mortgage to defendant Mills, which had then less than one year to run, the trade was about to fail of consummation, but Hughes was willing to make the purchase if defendant Mills would extend the time of payment to three years, instead of one year, as provided in the mortgage, whereupon defendant Mills did agree to such extension, and Damrill executed to defendant Mills another mortgage for the same amount for the original money loaned as first aforesaid, and no other; and neither defendant Mills nor said Damrill had any intention to, nor did they, or either of them, intend thereby to, abandon defendant Mills' prior lien, nor make the said last-mentioned mortgage second to said mortgage to the bank as aforesaid, under which plaintiff claims. That no other or further or different consideration was paid on the last-mentioned mortgage than that already paid six months before, when said first-named mortgage was made as aforesaid. That said mortgage under which plaintiff claims was and is on its face made subject to the said mortgage to plaintiff first aforesaid, executed prior thereto, as aforesaid. That no part of said mortgage had ever been paid, nor has there ever been anything paid on the said other mortgage extending it as aforesaid, but the whole of said debt remains due and unpaid; and defendant Mills still holds and owns the same, and likewise holds possession through his co-defendant, who is in actual possession as defendant Mills' tenant as aforesaid. And defendants say: That plaintiff and her grantors, and those under whom they claim, are not innocent purchasers in the regular course of trade. That they had knowledge and notice of defendants' equities herein, bought said premises at a grossly inadequate price, and accepted and gave only quitclaim deeds, and for no ordinary cash considerations. That when defendant Mills agreed to and did extend the payment of said mortgage from one to three years as aforesaid, through inadvertence and mistake the said original mortgage was marked on the record `Satisfied'; yet it was not in fact satisfied, nor was it intended by any party that it should be, but the whole transaction was only intended to be an extension of payment as aforesaid, and was not intended to postpone defendant Mills to the said bank mortgage, all of which plaintiff well knew and had notice of at and before her purchase of said premises. That plaintiff's said purchase of said premises of her grantor was made after she had full notice of defendant Mills' equities herein, and her contract of purchase is still executory, in that she has not fully paid for the same. That her grantee had notice of all the matters and things herein charged, and himself gave a grossly inadequate price for said property, accepting a quitclaim deed, and giving to plaintiff a like deed, for a like grossly inadequate consideration, in trade and traffic, which has not yet been paid. Wherefore if, upon a hearing hereof, it should be equitable and necessary to the securing of defendants' rights herein that the said mortgage under which plaintiff claims be postponed to that of defendant Mills, or that defendant Mills should be required to make plaintiff whole in their said dealing concerning said premises, defendants pray for such order and decree, and they pray for all other equitable relief. The defendants, for further answer, deny each and every allegation of plaintiff's petition not herein specifically admitted to be true." Plaintiff, by replication, denied all the allegations in defendants' answer, except that the defendant Reed was in the possession of the property as the tenant of F. T. Mills, that Damrill executed a deed of trust to secure a note of $530 to the Exchange Bank, and that said Mills satisfied the deed of trust from Damrill to Delaney. The replication then alleges that plaintiff purchased the property for a full, fair, and adequate consideration, without any knowledge of any prior claims by said Mills or any other person, and that the said Mills did not purchase said note of Frances McCormack, as alleged in his answer, but that said note was paid by Damrill with his money; the aforesaid Mills simply acting as agent for Damrill.

The facts, briefly stated, are that the 21st day of December, 1891, Maggie executed a deed of trust on the lot in question to P. H. Martin, as trustee for Frances McCormack, to secure a note of $150, due in three years from the date of the deed of trust. Maggie afterwards, on the 4th of February, 1892, conveyed the property to Stephen Damrill. Damrill on the 21st of April, 1892, executed a deed of trust on this lot to Delaney, as trustee for Mills, to secure a note of $500, due in one year. Afterwards, in July, 1892, Damrill executed a second deed of trust on this lot and other property to W. B. Roberson, as trustee for the Exchange Bank. This deed of trust recited that it was "subject to a loan of $500.00 on said lot 36, block 3." At the time that the Damrill deed of trust was executed, Mills did not have sufficient money on hand to pay...