Becht v. Johnson

• Decision Date: 03 August 1933
• Docket Number: No. 30512.,30512.
• Citation: 62 S.W.2d 847
• Parties: J.H. BECHT, Appellant, v. W.H. JOHNSON and ROBERTA JOHNSON.
• Court: Missouri Supreme Court

62 S.W.2d 847

J.H. BECHT, Appellant, v. W.H. JOHNSON and ROBERTA JOHNSON.

No. 30512.

Supreme Court of Missouri, Division One.

August 3, 1933.

Appeal from Pemiscot Circuit Court. — Hon. John E. Duncan, Judge.

AFFIRMED.

Arthur J. Freund and Rush H. Limbaugh for appellant.

(1) Title acquired by respondents at the execution sale was taken subject to the lien of the Aladdin deed of trust of May 5, 1922. (a) The recording of that deed of trust in the recorder's office where the real estate lies served to impart notice of the lien to all the world. Sec. 3040, R.S. 1929; Luker v. Moffett, 38 S.W. (2d) 1037. (b) The execution sale at which respondents purchased did not remove or affect the lien created by the deed of trust, because the owner and holder of the note and deed of trust was not made a party to the suit and the suit, ripening into judgment followed by an execution sale, did not bind such owner who was never made a party to the proceeding. State ex rel. v. Davidson, 286 S.W. 355; Betts v. Gehrig, 266 S.W. 690. (2) Respondent's title acquired at the execution sale was extinguished by the foreclosure of the deed of trust of May 5, 1922. Sec. 3075, R.S. 1929. (3) Title acquired by appellant at the foreclosure sale of the deed of trust of May 5, 1922, is paramount and exclusive. (a) The deed of trust was a valid instrument given in the regular course of business to an institution authorized by law. Laws 1919, p. 225; Sec. 10263, R.S. 1919; State ex rel. v. Hughes, 252 S.W. 229; State ex rel. v. Lee, 233 S.W. 20; Ross v. Lincoln Savings & Loan Assn., 13 S.W. (2d) 600. (b) That instrument, with the note it secured, became a part of the assets of the Security Home and Savings Organization by the merger of the original owner and holder thereof with that organization. Sec. 10263, R.S. 1919; Articles of Agreement and By-laws, Aladdin Home Loan and Investment Company. (c) While the deed of trust was in effect and before any attempt was made to subject the property to any other lien, a legally authorized receivership of the Security Home and Savings Organization intervened. Secs. 998, 5520, R.S. 1929; State ex rel. v. Calhoun, 226 S.W. 329; State v. Ittner, 263 S.W. 158. (d) When the receiver was appointed on May 4, 1923, he was immediately vested with the right of possession of the assets, including the deed of trust and note of May 5, 1922. Sec. 998, R.S. 1929; 53 C.J. 93-95; State ex rel. v. Reynolds, 209 Mo. 161, 107 S.W. 487. (e) After the receiver's appointment no action affecting the assets of the Security Home and Savings Organization could be maintained except by joining the receiver; and the failure to make the receiver a party to the suits in Pemiscot County, out of which resulted an execution sale of the property, resulted in such sale having no effect whatever upon the lien created by the deed of trust. State ex rel. v. Davidson, 286 S.W. 355; Betts v. Gehrig, 266 S.W. 690; Ardmore National Bank v. Briggs Machinery & Supply Co., 20 Okla. 427, 94 Pac. 533, 23 L.R.A. (N.S.) 1074. (f) The receiver foreclosed the deed of trust in accordance with the law and the order of court, and appellant as purchaser at the foreclosure sale acquired good title free of all claims of respondents.

Ward & Reeves for respondents.

(1) Our first point in this case is that under the evidence the trial court in this law case was warranted in finding that at the time of the institution of the Torin and Henley suits (July, 1923) and at the time of the judgments in those cases (December, 1923) the note and deed of trust given on the house and lot in controversy were in possession of and owned by the Hawkins Mortgage Company which was made a party to those suits and that the Security Savings Company neither possessed nor had title to these instruments at that time. There was certainly substantial evidence in the case to support the judgment of the trial court upon this theory and if we are right on this proposition the whole theory upon which appellant sought a recovery in the trial court and also in his brief in this court falls to the ground and the judgment of the trial court must be affirmed. Redlon v. Badger Lbr. Co., 194 Mo. App. 650, 189 S.W. 589; Stafford v. Fizer, 82 Mo. 393; Vance v. Corrigan, 78 Mo. 94; Hilton v. Smith, 134 Mo. 499; Harrison Machine Works v. Bowers, 200 Mo. 219; Langdon v. Kleeman, 278 Mo. 236; Coerver v. Crescent Lead & Zinc Corp., 315 Mo. 276; Meierhoffer v. Kennedy, 304 Mo. 261.

FRANK, P.J.

Action by plaintiff, appellant here, to determine title and to recover possession of certain real estate. The petition is in two counts, the first to determine title and the second in ejectment. The answer to the first count admits that defendants claim title and further alleges that defendants are and were the owners of and in possession of the property, and prays the court to determine and adjudicate the title. The answer to the second count was a general denial. The finding and judgment was against the plaintiff and in favor of defendants on both counts of the petition, and was in favor of defendants and against plaintiff on the affirmative relief prayed for in defendants' answer. Plaintiff appealed.

Mrs. M.L. Johnson acquired title to the property in question by warranty deed from defendants on March 15, 1920, at which time she gave a mortgage back to Roberta M. Johnson, one of the defendants, to secure the payment of $2,500, which represented the full purchase price of the land. On May 5, 1922, this deed of trust was released for the purpose of permitting the then owner, Mrs. M.L. Johnson, to borrow $2,000 from the Aladdin Home Loan and Investment Company and secure same by a first deed of trust on the property, all of which was done on said May 5, 1922. On the same day the owner, Mrs. M.L. Johnson, gave Roberta M. Johnson a second deed of trust on the property to secure the payment of two notes aggregating $1,174.02 which amount represented the balance due on the original purchase price of $2,500 with interest, less the $2,000 borrowed from the Aladdin Home Loan and Investment Company. On August 14, 1923, Mrs. M.L. Johnson, the owner, conveyed the property to Roberta M. Johnson for a stated consideration of $1,275, no mention being made of the two deeds of trust on the property.

Plaintiff's claim of title is based upon the deed of trust given by Mrs. M.L. Johnson to the Aladdin Home Loan and Investment Company on May 5, 1922, and the trustee's deed given to him as purchaser of said property at a foreclosure sale had under said deed of trust on November 6, 1928.

Defendants' claim of title is based on a sheriff's deed dated December 19, 1924, conveying said property to defendants as purchasers thereof at an execution sale under judgments in attachment suits brought by Rose Torin and Marietta Henly against Roberta M. Johnson, the trustees of the Aladdin Home Loan and Investment Company, the trustees of the Home and Savings Organization, Mrs. M.L. Johnson, the Hawkins Mortgage Company, Morton S. Hawkins and Clyde Farrow, trustee in the deed of trust. The attachment suits were brought prior to the time Mrs. M.L. Johnson conveyed the property to Roberta M. Johnson. The plaintiffs in the attachment suits sought to recover payments on stock bought by them from the Aladdin Home Loan and Investment Company on the ground that the sale of such stock was part of a scheme to defraud. Attachment writs were issued in aid of said suits. Roberta M. Johnson, the owner of the property was summoned as garnishee. She answered admitting that she owed $1,418.85 on the $2,000 note given to the Aladdin Home Loan and Investment Company and secured by a deed of trust on the property.

When the cause came on for hearing, it appearing that defendant, M.L. Johnson, the maker of the $2,000 note, had sold the property to Roberta M....