Bank of Brumley v. Ballenger

• Decision Date: 01 May 1939
• Docket Number: No. 6028.,6028.
• Parties: BANK OF BRUMLEY v. BALLENGER et al.
• Court: Missouri Court of Appeals

128 S.W.2d 647

BANK OF BRUMLEY v. BALLENGER et al.

No. 6028.

Springfield Court of Appeals. Missouri.

May 1, 1939.

Rehearing Denied June 1, 1939.

Appeal from Circuit Court, Camden County; C. H. Skinker, Judge.

"Not to be published in State Reports."

Suit by the Bank of Brumley against Harry Ballenger and another to foreclose a trust deed and to obtain a deficiency judgment, wherein the defendants sought to have the note and trust deed canceled and a judgment for money expended by them less reasonable rental value of the realty, on ground that they had accepted a warranty deed, which purported to convey a fee-simple title to the realty in question, through certain fraudulent representations, and that the deed did not convey fee-simple title. From a judgment in favor of the defendants, the plaintiff appeals.

Judgment affirmed.

Irwin, Bushman & Buchanan, of Jefferson City, for appellant.

Harry H. Kay, of Eldon, for respondents.

FULBRIGHT, Judge.

This suit was instituted in the Circuit Court of Camden County to foreclose a deed of trust and to obtain a deficiency judgment. Judgment for defendants and plaintiff appeals.

There is no controversy over the pleadings. The petition is in conventional form. The answer admitted the execution of the note and deed of trust, but alleged that they were given for the balance due on the real estate which the defendants had contracted to buy from plaintiff, and that defendants were induced to accept the warranty deed which purported to convey a fee simple title to the real estate through certain fraudulent representations, and that the deed did not convey a fee simple title but only the life estate of Martha J. Windes who was still living. They further alleged that they had no adequate remedy at law, tendered into court a quit claim deed in favor of plaintiff, itemized certain sums that they had expended on the real estate and in connection therewith, and asked the court to cancel the note and deed of trust and give judgment for the sums of money expended by them less the reasonable rental value of the lands that defendants had had in their possession.

Plaintiff's reply denied any misrepresentations of title, and alleged that defendants knew the condition of the title at the time of purchase, knew that John Windes was in possession of approximately fifteen acres of the land, and that defendants went into possession of the remainder of the land described in the deed, and had treated it as their own thereby waiving any misrepresentation. They further pled the statute of limitation as a bar to defendants' action.

The undisputed facts show that the lands described in plaintiff's petition were conveyed to Martha J. Windes "and the heirs to her body" by her parents as shown by a warranty deed of record. Martha J. Windes, who is now past seventy years of age, had four sons, Harry, Fred, Elza and John. She made a warranty deed to her son Harry, after which she and Harry made a deed of trust to the Bank of Brumley. This deed of trust was foreclosed and the bank bought the land at the foreclosure sale. In the meantime, Fred had died without issue and Elza had conveyed by quit claim deed a one-third interest to John. Also before the deed of trust was foreclosed, Harry had died leaving four children. The Bank of Brumley obtained a decree to quiet the title as to John Windes, and sold the lands to Harry Ballenger and wife, conveying by general warranty deed.

We have pieced together as best we can from the direct and cross examinations and the many re-direct and re-cross examinations of the witnesses the evidence in this case, portions of which will be set out in further detail in the course of the opinion.

We learn from the testimony of Harry Ballenger, one of the defendants, that he entered into a contract with the bank to buy the lands in controversy in the spring of 1930. The purchase price was $2500, $500 in cash and a note and deed of trust for $2000 to secure the unpaid balance. Mr. Ballenger stated that title to the lands was discussed when the contract and deed were signed, and that on the latter occasion he asked Mr. Thompson, the president of the bank, if they had clear title, stating that he did not want to buy a law suit, and that Mr. Thompson replied, "There is nothing to the contrary that I know anything about." He further related that Ted Hawkins, the assistant cashier, read from what he said was a decision by the Supreme Court "giving the Bank of Brumley a clear title, barring each and everybody from all claims," and that when this was read to him, and he was told that the bank was behind the title, and that there was nothing for him to worry about, he put confidence in the officers of the bank, and relied upon their representations as he had no way of disputing them. He stated that his wife's father was a stockholder and vice president of the bank; that he had known the other officers of the bank practically all his life, and had for many years done business with the bank. He stated that he knew the Windes children and was raised within three or four miles of the lands in controversy.

The evidence discloses that a creek runs through the farm cutting off a corner containing about fifteen acres, and this corner was in the possession of John Windes who claimed to have traded for it with the bank. The Ballengers went into possession of all the other lands described, and, according to Ballenger, demanded possession of the corner that Windes had. The bank and Ballenger agreed that Ballenger should bring an ejectment suit, hire Irwin and Bushman as attorneys, and that the bank would pay the cost. This was accordingly done, the suit being filed in June, 1931, transferred to Miller County; tried in May, 1932, resulting in a directed verdict for plaintiff. An appeal was taken to the Supreme Court (Ballenger v. Windes, 338 Mo. 1039, 93 S.W.2d 882) which transferred the appeal to the Kansas City Court of Appeals (99 S.W.2d 158) where the judgment was reversed and the cause remanded. The foreclosure suit was instituted April 12, 1937. The ejectment suit was ordered dismissed by Ballenger in a letter to the Circuit Clerk of Miller County on April 19, 1937, which dismissal was entered of record at the September term, 1937.

Mr. Ballenger received a letter from the bank, dated February 25, 1937, as follows:

"The Board of Directors met in meeting February 25, 1937 and have come to the following decision in the matter of your note which you owe us.

"You have a lawsuit pending in the Miller County Circuit Court against John Winds and if you will proceed with the case the bank will stand with you as we agreed in the beginning, but we want to know now that you are going to proceed.

"We can secure release from Winds of all claim to the land in question and if, and when we do that your title is exactly as we warranted it by the deed given you. You would then be in the position for which you and we have striven by the lawsuit. If then you are not prepared to settle your note according to its terms there is nothing left for us to do but to proceed by foreclosing; and that the board decided to do.

"We therefore say that unless we have your definite decision either to proceed with the lawsuit as stated or to settle your note as stated above within ten (10) days we will have to take action by foreclosing."

Mr. Ballenger testified that at the time he received this letter he did not know the true condition of the title, and that he had discovered the condition of the title recently "in a way," in the last month or six weeks; that he employed Roy Williams who investigated a little and found out that he represented the other side; that he then employed Mr. Kay who looked up the records and found the decision of the court and informed him that he had only a life estate. Mr. Ballenger stated that the day the deed was signed he relied upon what they told him about the title; that at different times from the time he took the warranty deed down to the time this foreclosure suit was filed he had discussions with the officers of the bank about the title. They always assured him, he said, that the bank had good title; that they would deliver a good title to it; and that he had nothing to worry about.

Mr. Ballenger stated that since he had been in possession of the land he had paid $172.85 in taxes, $259.50 in permanent improvements, $358.75 in interest, and that a bill for $118.15 had been sent him for cost in the ejectment suit. A credit of $64.75 had been made on the interest as rental of the pasture, that the farm was rented by Ballenger in 1928 and 1929 for $100 annual rental and that the corner John Windes possessed was worth around $600 to $700.

The testimony of the bank as given by its president and cashier is to the effect that Harry Ballenger made an offer of $2500 for the lands, at which time he said to the officers of the bank, "I come in to buy that Harry Windes farm. I guess I am buying a lawsuit when I am buying it, but I am going to make you an offer on it and if you want to take it, I am going to buy it myself. My wife doesn't want me to buy it." The offer was accepted by Mr. Thompson, who said, "Well, you have just bought you a farm." Mr. Hawkins stated that he was not sure whether there was anything further said when the deed was made; that perhaps Mr. Ballenger asked about the title; that he did not have a copy of the decision of the Supreme Court, and did not remember reading from the circuit court decree, although he may have; that he "knew full well" what was set out in the decision of the Supreme Court, and for that reason he may have quoted from it "believing we had fee simple title," The officers of the bank claimed that Mr. Ballenger had never made complaint to them concerning any defect in the title other than the fact that Windes had part of the land and was not surrendering it to him; that he may have raised the question of John Windes claiming there was a...