Brooks v. Owen

• Decision Date: 31 May 1892
• Citation: 19 S.W. 723,112 Mo. 251
• Parties: BROOKS v. OWEN et al.
• Court: Missouri Supreme Court

19 S.W. 723

112 Mo. 251

BROOKS v. OWEN et al.

Supreme Court of Missouri, Division No. 2.

May 31, 1892.

DEED OF TRUST — RECITALS — ESTOPPEL — NOTES — CONSIDERATION — EQUITY JURISDICTION — INJUNCTION.

1. Where an incumbrance is not made a part of the consideration, and not deducted from it, and where it is not assumed by the grantee, the recital in a deed that the conveyance is subject to an incumbrance does not estop the grantee from showing that what purports to be an incumbrance is not one in fact, because of its invalidity.

2. A deed of trust, as security for notes given in consideration of love and affection, is without consideration, and cannot be enforced against the grantee of the maker, where no price was fixed on the property, and the grantee did not, in the deed or otherwise, assume to pay the notes.

3. Where a son gives his mother money towards the purchase of certain property, the execution by her of a bond and mortgage for the balance of the price is not a valid consideration for a note by him to her.

4. Equity has jurisdiction to enjoin a sale under a deed of trust for the payment of a debt which has no consideration.

Appeal from circuit court, Jackson county; R. H. FIELD, Judge.

Action by Henry C. Brooks against Sophia C. Owen, Louis H. Owen, and Elias H. Owen, as trustee of Sophia C. Owen, to enjoin a trustee's sale, and to cancel a deed of trust and two promissory notes secured by such deed. Judgment for plaintiff. All parties appeal. Reversed.

Lathrop, Morrow & Fox, for plaintiff. L. P. Cunningham and Thos. Dolan, for defendants.

THOMAS, J.

This is a suit to enjoin a trustee's sale, and to cancel the deed of trust on which the sale was to have been made, and also to cancel two certain notes, of $5,000 each, secured by said deed of trust. The decree was to the effect that the said notes and deed of trust be canceled upon the plaintiff paying into court $1,500 and interest, amounting to $1,699.50, for the use and benefit of defendant Sophia C. Owen. The plaintiff paid the sum, as required by the decree, into court, but said Sophia C. Owen refused to accept any part of it. All parties, including both plaintiff and the defendants, have appealed.

1. The defendants' first contention, that the petition wholly fails to state a cause of action, is not well taken. The petition substantially sets out the facts essential to the relief plaintiff seeks, which facts will fully appear in our consideration of the evidence.

2. The evidence, as preserved in the bill of exceptions, discloses about this state of facts: The defendant Louis H. Owen, a son of defendants Sophia C. and Elias H. Owen, was the owner of the real estate described in the petition, viz., lot 57, in Swope's addition to Kansas City, Mo., and on the 10th day of January, 1888, wishing to raise money for his own use, made the two $5,000 notes in controversy to H. E. Dickinson, and secured them by a deed of trust upon said lot, of the same date as the notes, which deed of trust was duly recorded January 25, 1888. Dickinson went from Kansas City to New York to sell the said notes, intending to turn the proceeds over to Louis H. Owen, but was not successful, and early in February, 1888, indorsed the notes in blank, without recourse, and turned them over to said Louis H. Owen. The notes fell due five and seven months after date, drew interest at 8 per cent. per annum from their date, and were negotiable. Louis H. Owen, prior to these dates, had become indebted to the plaintiff on account of partnership transactions in Denver, Colo., to the amount of about $25,000; and believing he was in failing circumstances, and desiring to protect plaintiff, he executed to him a warranty deed for said lot. The deed is dated April 2, 1888, recites a consideration of $70,000, and in the granting part uses this language: "Subject, however, to total incumbrances of fifty-eight thousand dollars, ($58,000;)" and in the warranty clause are these words, "except incumbrances herein named and taxes for 1888 and subsequent years." Louis H. Owen filed this deed for record April 5th. The plaintiff was in Denver at the time, being a resident there, and knew nothing about the execution and recording of the deed till Louis H. Owen informed him by telegram on the 6th day of April. He immediately went to Kansas City, arriving there April 7th. When he got there, he learned that Louis H. Owen was insolvent, and that this lot was all he had with which to secure him. Plaintiff investigated the matter to ascertain if it was advisable for him to accept the deed that had already been made and recorded. He found there was on the property undisputed incumbrances of $43,000; also a deed of trust to secure to Sheidly and Tomb $5,000; and the deed of trust in controversy, which, so far as the record showed, was to secure two notes, of $5,000 each, to H. E. Dickinson. These incumbrances aggregated $58,000, as recited in the deed. During the investigation, which lasted some days, Louis H. Owen and plaintiff had several interviews, in which Owen told him the deed of trust and notes in controversy were held by his mother, Sophia C. Owen, to secure to her the sum of $2,500 which he owed her, and which would be due in August, 1888, and that, if this sum was not paid when due, they were to become her absolute property. Plaintiff, about the last of April, concluded to accept, and did accept, the deed in payment of Louis H. Owen's indebtedness to him. Louis H. Owen tried to get Sheidly and Tomb to release the lot in controversy from their deed of trust for $5,000, but failed. After plaintiff accepted the deed, and before the institution of this suit, he paid large portions of the prior incumbrances on the land. Sophia C. Owen and her husband, Elias H. Owen, lived in a rented house in Owego, N. Y. Louis H., their son, visited them in July, 1887, and while there bought the property in which they lived for a home for them for the price of $2,000, paying $500 in cash, and causing the deed to be made to Sophia C. Owen, who executed a mortgage and bond to secure to the grantor the sum of $1,500, the balance of the purchase money. When this property was bought Louis told his mother he would pay for it in full, and make her a present of it for a home. Louis and his mother both testified that she had raised money at various times to send him to school and for other purposes, amounting in all to $600 or $700, but the most of it, if not all, was furnished while he was a minor, and neither party regarded it as a loan. He became of age February 22, 1880. For this, and on account of his relationship to her, he felt under obligations to furnish her a home. When Louis returned to Kansas City he sent his mother his note for $2,500, dated about August 1, 1887, payable a year after date. Fifteen hundred dollars of this he intended for her to use in payment for the place, and the remaining thousand in putting the property in repair; and this is the debt to secure which the notes in controversy were held by her. In January, 1889, Sophia C. sent the two notes, of $5,000 each, and the deed of trust, to Louis H., and he caused the property to be advertised for sale by the trustee, Elias H. Owen, and to enjoin that sale this suit was brought. The great weight of the evidence is that the property at the time the deed to plaintiff was executed was not worth more than $50,000, and that there was no market demand for it. The notes in controversy, subject, as they were, to prior incumbrances of $48,000, could not be negotiated in New York or Kansas City; and when Louis H. gave them to his mother, which was in February or March, 1888, he said, "Here, mother, take these; you may get something, you may get nothing, and you may get it all." The evidence shows also that Elias H., Sophia C., and Louis H. Owen were all insolvent, not only at the time the suit was instituted and the time of trial, but also in February and March, 1888. Plaintiff and Louis H. Owen differ in their testimony as to what was said between them in reference to the notes in controversy prior to plaintiff's acceptance of the deed. Plaintiff says Louis H. told him that he had control of the notes, and he would have them released, and plaintiff says he would not have accepted the deed if he had known the property was to be held for them; while the defendant says that he did not say that he controlled the notes, but that he saw his mother, who was then in Kansas City, and asked her if she was willing to surrender them, and she refused, which he reported to plaintiff, and that the plaintiff after this accepted the deed as written and recorded. The evidence further shows that plaintiff wrote Louis H. Owen under date of July 16, 1888, as follows: "If your mother has the notes that belong to the trust deed to Dickinson, if you will please give me her address, and also a line to her, showing it is your wish, I will write for them. If either one of the notes is payable to her order, I would suggest she simply indorse them in blank. It may be possible I may be able to use them, too, as security, if I should want to, and be a great help to me." On July 25th, Louis H. wrote to plaintiff as follows: "I have written mother to-day, and inclose a line for your introduction to her." Sophia C. Owen testified as follows: "Mr. Brooks wrote me to send the notes and trust deed to him, and Louis sent a line in the letter asking that they be sent to Mr. Brooks, the plaintiff. I received that letter in the summer of 1888." January 26, 1889, Louis H. Owen telegraphed plaintiff as follows: "Mother refuses to send notes. Will you pay two thousand eight hundred and seventy-five for them? Answer Sunday, sure." On these facts the trial court held that Sophia C. Owen was entitled to hold the notes and deed of trust to secure the $1,500 she still owed on her New York home, with interest thereon amounting at the time of trial to $199.50, making $1,699.50 in all. This sum plaintif...