Breit v. Bowland, 18741.

• Decision Date: 03 April 1939
• Docket Number: No. 18741.,18741.
• Citation: 127 S.W.2d 71
• Parties: BREIT v. BOWLAND et al.
• Court: Missouri Court of Appeals

127 S.W.2d 71

BREIT v. BOWLAND et al.

No. 18741.

Kansas City Court of Appeals. Missouri.

April 3, 1939.

Appeal from Circuit Court, Andrew County; Richard B. Bridgeman, Judge.

"Not to be published in State reports."

Suit in equity by Peter C. Breit, executor of the estate of Joseph Bielman, deceased, against M. T. Bowland, W. Z. Johnson, Zippa Johnson and others seeking a decree declaring a deed of trust owned by deceased to be prior to one owned by defendant W. Z. Johnson. From a judgment establishing the priority of the deed of trust owned by the deceased, W. Z. Johnson and Zippa Johnson appeal.

Affirmed.

Chas. F. Johnson and Robert E. Rooney, both of Kansas City, for appellants W. Z. and Zippa Johnson.

Booher & Woolverton, of Savannah, for respondent.

BLAND, Judge.

This is a suit, in equity, brought by the plaintiff, as the executor of the estate of one Joseph Bielman, deceased, seeking a decree declaring a deed of trust, bearing date of March 19, 1925, and owned by the deceased at his death, to be prior to one filed of record on December 13, 1921, and owned by the defendant W. Z. Johnson.

From a judgment establishing the priority of the Bielman deed of trust, W. Z. Johnson and Zippa Johnson have appealed. The appeal was taken to the Supreme Court but that court transferred the cause here (see Breit v. Bowland, 92 S.W.2d 110), and the judgment was reversed by this court (see Breit v. Bowland, 231 Mo. App. 433, 100 S.W.2d 599). Subsequently, the Supreme Court, on certiorari, quashed the opinion of this court. See State ex rel. v. Shain, 119 S.W.2d 758. Thereafter, the case again was set for hearing in this court and it has been argued and submitted by the parties hereto.

The evidence shows that on December 31, 1919, Bielman, in his lifetime, loaned to one Bowland the sum of $4208.73, evidenced by two notes aggregating that sum, bearing interest at 7% per annum; one due in 1920 and the other in 1924. These notes were secured by a deed of trust, in which one Wells was trustee, on an interest in land situated in Andrew County owned by Bowland.

On December 13, 1921, Bowland executed his note in the sum of $1500, secured by a deed of trust (hereinafter referred to as the second deed of trust) on the same land in favor of the defendant W. Z. Johnson, stating that it was subject to a first deed of trust securing the sum of $4208.73. Both deeds of trust were duly filed of record. On March 23, 1925, Bowland and his wife executed a new note in the sum of $4200, bearing interest at the rate of 6% per annum, payable to Bielman, and to secure the same, gave Bielman a deed of trust on the property, in which Breit, the plaintiff herein, in his personal capacity, was named as trustee. This deed (hereinafter referred to as the third deed of trust) was dated March 19, 1925 and was acknowledged and recorded on March 23d, of that year. On the last mentioned date Bowland and Bielman went to the Recorder's Office and the notes dated December 31, 1919, aggregating the sum of $4208.73, were cancelled, the first deed of trust, securing the same, released on the margin of the record by Bielman, the new note dated March 19, 1925, for $4200, and the deed of trust securing the same, were delivered by Bowland to Bielman and the deed of trust recorded by the latter. A note for $8.73 was given by Bowland to Bielman covering the amount of interest due on the old note or notes. Bielman had personal knowledge of the Johnson mortgage at this time.

Plaintiff testified that in the fall of 1925 he had a conversation with W. Z. Johnson, who told him that the latter's lien would now be a first lien and plaintiff replied that he did not think so; that he had several conversations with Johnson in which the witness contended that the third deed of trust "was the first". Both defendant and his son denied that this conversation in the fall of 1925 took place. W. Z. Johnson foreclosed his deed of trust on March 26, 1932, bid in the property at the sale, and a trustee's deed was delivered to him. Thereafter plaintiff filed an amended petition making Zippa Johnson, the wife of W. Z. Johnson, a party defendant.

We have stated most of the material facts bearing on the issues in this case but other facts will be found stated in the opinion formerly rendered by this court in Breit v. Bowland, supra.

Appellants insist that: "Respondent wholly failed to ask relief that was possible under the law, in that, instead of asking to have the release of his first mortgage set aside he asks that his junior mortgage made three years after appellants' mortgage should be given preference and the recording acts wholly nullified."

The relief prayed for in the petition was that plaintiff be adjudged to have a lien prior to that of the appellants', and for general relief. "Under the prayer for general relief in a bill the court may grant any relief warranted by the allegations of the bill". 41 C.J. p. 599. However, there is no question but that it was not an improper relief for the court to adjudge the priority of the lien of the third deed of trust over the second. "The relative priority of two mortgages or other liens on land may be determined on a bill in equity, filed by one of the claimants against the other, asking a decree establishing his lien as the prior claim, provided, the court has jurisdiction thereof." 41 C.J. p. 597. See, also, State ex rel. v. Barnett, 245 Mo. 99, 116, 149 S.W. 311; Roberts v. Doan, 180 Ill. 187, 54 N.E. 207; McKenzie v. McKenzie, 52 Vt. 271; Johnson v. Myer, 197 Iowa 1110, 198 N.W. 654. No reason is assigned as to why the fact that the lapse of three years between the giving of the second and the third deed of trust should constitute a bar to a court of equity giving the latter preference over the former. The words "and the recording acts wholly nullified," as used by appellants, will be alluded to in the discussion of other points raised by them.

It is next contended: "The decision of the Supreme Court seems to be based on misapprehension of the facts as found by the Kansas City Court of Appeals."

If the Supreme Court in State ex rel. v. Shain, supra, misconstrued the facts found by this court in Breit v. Bowland, supra (and we think that it did not), appellants have cited no authority indicating that we may give them any relief as a result thereof. Francis v. City of West Plains, Mo. App., 226 S.W. 969; West v. Duncan, Mo. App., 249 S.W. 127. For this reason the point must be ruled against them. If we, ourselves, misstated the facts in our former opinion, or omitted to state material facts, it is our duty, now, to correct our error in failing to perform our duty in this regard.

Appellants ask us to find, in addition to the facts stated in our former opinion, that it was Bielman's and Bowland's intention, at the time of the execution of the third deed of trust, to take a new security and to extinguish the lien of the first deed of trust, inasmuch as Bielman had full knowledge of all of the facts and took a new surety on the note. It is also contended that "plaintiff did not prove that some of the first note had not been paid."

It appears that the first deed of trust and the notes secured by it were signed by Bowland, alone, whereas, the third deed of trust and new note which it secured were signed by both Bowland and his wife. The record fairly discloses that the release of the first deed of trust and the giving of the third, and the recording thereof, were all approximately contemporaneous acts and that the amount of the new note and the deed of trust was substantially the same as the old. Under such circumstances plaintiff established prima facie that it was the intention of Bielman not to release the lien of the first deed of trust but the transaction was to constitute a renewal of the loan secured by it. The intention to release the lien of the first deed of trust, under such circumstances, is not to be presumed "and any reasonable doubt as to this issue is always resolved in favor of the first lien holder." See Christy v. Scott, 31 Mo.App. 331, 336, 337. In United States v. Grover, D.C., 227 F. 181, 183, 184, it is stated: "So long as the same debt, or some part of it, subsists, the presumption ordinarily is that the new mortgage is intended as a renewal of the old, and a continuance of the same security. Sloan v. Rice, 41 Iowa 465; Markell v. Eichelberger, 12 Md. 78; McDonald v. McDonald, 16 Vt. 630. Nor does the including in the new mortgage of an additional indebtedness not covered by the first discharge the lien of the old mortgage, so far as the indebtedness secured thereby remains unpaid, unless such be the purpose of the parties. London & S. F. Bank v. Bandmann, 120 Cal. 220, 52 P. 583, 65 Am. St.Rep. 179; De Cottes v. Jeffers, 7 Fla. 284. And very clearly the difference in the rate of interest between the two mortgages where, as here, the rate is less in the last mortgage than in the first, cannot be regarded as material to indicate an intention to create a new obligation and abandon the security of the old. Kern v. Hotaling Co., 27 Or. 205, 40 P. 168, 50 Am. St.Rep. 714." See, also, American Savings Bank & Trust Co. v. Helgesen, 67 Wash. 572, 122 P. 26, Ann.Cas.1913A, 390; Roberts v. Doan, supra; Johnson v. Meyer, supra; McKenzie v. McKenzie, supra. We do not believe the fact that Bowland's wife signed the third deed of trust and the note it secured (Bowland having married after the execution of the first) and that a new trustee was named in the third deed of trust deprives the plaintiff of the presumption. Defendants introduced no substantial evidence on the question of Bielman's intention in releasing the first mortgage. Therefore, the facts bearing upon it are practically undisputed. It is true that Bielman knew of the second deed of trust when he released the first one but he also knew that the former recited that it was subject to the first. His knowledge of the second deed of trust would go only...