Board of Trustees of Westminster College v. Fry

• Decision Date: 22 December 1905
• Parties: BOARD OF TRUSTEES OF WESTMINSTER COLLEGE v. EDWARD J. FRY and P. G. WOODS, Appellants
• Court: Missouri Supreme Court

91 S.W. 472

191 Mo. 552

BOARD OF TRUSTEES OF WESTMINSTER COLLEGE v. EDWARD J. FRY and P. G. WOODS, Appellants

Supreme Court of Missouri, Division Two

December 22, 1905

Appeal from Morgan Circuit Court. -- Hon. Jas. E. Hazell, Judge.

Affirmed.

Wm Forman and Gibbs & Knipmeyer for appellants.

(1) At the time Randolph Fry executed the deed of trust under which defendant Woods claims, there was no suit pending that could affect his title. The writ of error subsequently issued was a new suit, and not a continuation of the foreclosure suit to reverse the judgment in which it was sued out. Macklin v Allenberg, 100 Mo. 337; Macklin v. Smidt, 104 Mo. 361; Pierce v. Stinde, 11 Mo.App. 364. (2) The writ of error was not lis pendens until the writ had been issued and notice thereof served on the adverse party. Pierce v. Stinde, supra; Taylor v. Boyd, 3 Ohio 338, 17 Am Dec. 603; 21 Am. and Eng. Ency. Law (2 Ed.), 611. (3) The only issue in the suit to foreclose plaintiff's deed of trust was its validity as to Randolph Fry. That issue was determined by the court in favor of Fry. "The decree was valid and binding on the parties to the suit. It fixed and settled the rights of the parties thereto. The litigation was at an end, and persons dealing with the property had a right to rely upon the validity of the decree, and they may invoke it to protect rights acquired whilst it remained in full force and not questioned by any pending litigation. Judicial sales made under judgments and decrees, afterwards reversed, to strangers are upheld, it is often said, to encourage bidders, and on grounds of public policy; but the true reason is, that such purchasers, as well as purchasers from parties to the suit, have a right to rely upon the validity of the judgment or decree, execution not having been stayed." Macklin v. Allenberg, 100 Mo. 345. (4) The fact that the circuit court failed, by its judgment in the foreclosure suit, to expressly annul plaintiff's deed of trust is of no consequence. It appears from the petition and Randolph Fry's answer in that cause that the validity of that deed of trust was the sole issue presented. The petition, answer and judgment constituted, to say the least, prima-facie evidence that the plaintiff's deed of trust was adjudged invalid as to Fry. Hull v. Lyon, 27 Mo. 570; Hickerson v. Mexico, 58 Mo. 65; 24 Am. and Eng. Ency. Law (2 Ed.), 833. Forman and Woods had a right to rely upon the correctness of the circuit court's adjudication of that issue, after the term had elapsed without an appeal and until a writ of error had been sued out. Macklin v. Allenberg, supra. (5) Forman's claim against Randolph Fry was due at the time he accepted the note, due two years after date and secured by the deed of trust, in settlement. He was, therefore, a purchaser for value. Martin v. Nixon, 92 Mo. 34, citing Cass County v. Oldham, 75 Mo. 50, and 1 Jones on Mort., sec. 459. (6) Forman's good faith not being questioned, and the property not being subject to any equities in his hands, his quitclaim deed passed the title to Woods. Craig v. Zimmerman, 87 Mo. 475. (7) Woods, as assignee of the Bank of Versailles deed of trust, having paid a valuable consideration therefor, is entitled to protection as a bona-fide purchaser for value. 23 Am. and Eng. Ency. Law (2 Ed.), 476. (8) The Bank of Versailles made a part of the loan to Randolph Fry in consideration of his promise to give a deed of trust upon the land in suit, upon the termination of the litigation of the foreclosure suit. (9) Plaintiff's remedy is against Randolph Fry. Macklin v. Kinealy, 141 Mo. 113. (10) Even though Forman was Fry's attorney at the time he took the deed of trust, plaintiff is in no position to set up that fact as against the security so taken. Leach v. Fowler, 22 Ark. 143.

A. L. Ross and W. M. Williams for respondent.

(1) The judgment rendered for defendants in the foreclosure suit which was subsequently reversed by this court, did not undertake to cancel, set aside, vacate, or in anywise interfere with the lien of the mortgage. It simply refused to enter a decree of foreclosure as prayed by the plaintiff. The lien of the mortgage was not affected by this judgment. It remained in full force and effect. The lien of the mortgage is independent of, and is not merged in, a judgment obtained in a proceeding under the statute to foreclose. The mortgage itself remained a lien upon the land at the time the deeds of trust were given under which defendant Woods claims title. Riley's Adm. v. McCord, 21 Mo. 285; Thornton v. Pigg, 24 Mo. 249; Boyd v. Ellis, 107 Mo. 394. (2) The deeds of trust, under which defendant Woods claims the land, were executed before the expiration of the time for filing the bill of exceptions, and hence while the suit was pending. "Souther purchased the land and received his deed before the time had expired for filing the bill of exceptions, and we think the suit must be regarded as pending until that time expired. He was, therefore, a purchaser pending the litigation, and took his deed subject to the result of the suit. It is true that suing out a writ of error is for some purposes considered the commencement of a new action." Macklin v. Allenberg, 100 Mo. 337; Bailey v. Winn, 113 Mo. 165. (3) The rule, which protects innocent purchasers for a valuable consideration, who buy property in reliance upon the judgment of a trial court, before a writ of error has been sued out to reverse such judgment, has no application to this case. The rights of innocent third parties are not involved here. (a) One of the deeds of trust was given to the attorney for a defendant in the foreclosure suit, and in large part for his fee in obtaining the erroneous judgment therein. The day before this deed of trust was executed, the bill of exceptions was filed, which the attorney had examined and approved. When the judgment, improperly entered by the circuit court, was reversed by this court, the plaintiff therein was entitled to be restored, so far as concerned the defendants in said suit, their agents, and attorneys, to the condition, in which it stood previous to said judgment. Neither the defendants nor their attorneys can claim any advantage or protection from such erroneous judgment. The attorney stands in the same position as the parties in this respect. Railroad v. Brown, 43 Mo. 297. A party to an erroneous judgment, which is subsequently reversed, cannot after the reversal claim any protection or receive any benefit from it. Neither can his attorney. It stands as to both of them as if it had never been rendered, and neither can rely upon it nor upon any rights growing out of it. Gott v. Powell, 41 Mo. 416; Shaw v. Padley, 63 Mo. 519; Harness v. Cravens, 126 Mo. 258; Pierce v. Stinde, 11 Mo.App. 371; Galpin v. Page, 85 U.S. 350. (b) The deed of trust to the Bank of Versailles was given as security for a pre-existing indebtedness. No new consideration passed at the time. The bank parted with nothing in reliance upon said deed of trust. It was taken merely as security for a debt then owing to said bank. The bank did not therefore become a purchaser for value. Loewen v. Forsee, 137 Mo. 29; Napa Valley Wine Co. v. Rinehart, 42 Mo.App. 171; Dry Goods Co. v. Bank, 81 Mo.App. 280; Bank v. Bates, 120 U.S. 556. (c) Defendant Woods had full notice at the time of his purchase under the deeds of trust of all the facts, and hence stood in no better position than the beneficiaries in said trust deeds. (4) "The claim of being an innocent purchaser is, in an answer, an affirmative defense" and must be pleaded and proved by the party setting it up. Young v. Schofield, 132 Mo. 650.

GANTT, J. Burgess, P. J., and Fox, J., concur.

OPINION

GANTT, J.

This is an action of ejectment, in which both parties claim title to the land in controversy under John C. Peirsol.

The plaintiff purchased the land at a sale under a decree of the circuit court of Morgan county, rendered in obedience to the mandate of this court in the case of Westminster College v. Peirsol, 161 Mo. 270, foreclosing a mortgage executed on the first day of April, 1893, by said Peirsol and wife.

Ouster is laid as of October 16, 1901. Edward J. Fry was originally the only defendant. On December 9, 1901, Fry filed his answer admitting that he was in possession of said lands as tenant of Peter George Woods and denied the other allegations of the petition. Upon the same day, by consent, Woods was made a party defendant and filed his answer. Randolph R. Fry was in possession of the land at the time the above-mentioned foreclosure suit was begun and was made a desaid Peirsol, dated on the first day of February, 1893. It fendant in said action. He defended on the ground that he had a prior right to the land under a contract with appeared, however, in said suit, that the deed made to him by Peirsol recited upon its face that it was subject to the deed of trust under which plaintiff in this suit purchased the land, and while he denied that he had ever accepted this deed, it was shown that he had executed a deed of trust upon the land in which he stated that said deed of trust was subject to the lien of the deed of trust executed by Peirsol on the first day of April, 1893, and he made payments on the debt secured by the latter instrument. The facts developed in the foreclosure suit are fully set out in the opinion of this court in Westminster College v. Peirsol, 161 Mo. 270.

The circuit court heard the suit to foreclose the Peirsol mortgage on the 17th of December, 1897, and took the case under advisement until the 21st of April, 1898, at which time judgment was entered for the defendants. The Peirsol mortgage of April 1, 1893, was not set aside or vacated by this judgment, nor was there any affirmative relief granted to said ...