Brown v. Barber

• Decision Date: 01 June 1912
• Citation: 148 S.W. 892
• Parties: BROWN v. BARBER.
• Court: Missouri Supreme Court

148 S.W. 892

BROWN v. BARBER.

Supreme Court of Missouri, Division No. 2.

June 1, 1912.

MORTGAGES (§ 159)—PRIORITIES.

Parties interested in property can agree, on sufficient consideration, binding at least among themselves, that a foreclosure sale under a prior mortgage shall be subject to a junior lien, and that the latter shall remain a lien on the property after a sale under the former, and right to equitable relief under such an agreement is not affected by the fact that the parties acted under a misapprehension as to the priority of the trust deeds.

Appeal from Circuit Court, Jackson County; J. H. Slover, Judge.

Action by Harry C. Brown against C. H. Barber. Decree for plaintiff, and defendant appeals. Affirmed.

McCune, Harding, Brown & Murphy and Wash Adams, for appellant. J. M. Cleary and F. C. Downey, for respondent.

KENNISH, J.

This is an action to quiet title, brought in the circuit court of Jackson county. The real estate in controversy is residence property situated in Kansas City, and of the value of about $1,500. The real parties in interest are the respondent, Harry C. Brown, plaintiff below, and appellant, C. H. Barber, one of the defendants against whom the suit was brought. The other defendants were occupying the property as tenants, and are merely nominal parties to the suit. The case was tried by the court at the October term, 1907, and a decree entered in favor of the plaintiff, from which the defendant Barber alone appealed.

The facts are substantially as follows: On the 30th day of September, 1902, Brown was the owner of the property in controversy, and on that day conveyed the same to one Hursig for the consideration of $1,450. In payment of the purchase price the vendee executed to Brown three notes, two for $500 each, and one for $450. One of the notes for $500 was due in five years from date, and was secured by a deed of trust on the property conveyed. The other note for $500 due in four years, and the note for $450, maturing first, were secured by another deed of trust on the same property. The note for $450 was paid before the facts involved in this suit arose, and therefore will not receive further notice. Hursig afterwards conveyed the property and received for his equity therein a note for $800, secured by a third deed of trust on the property conveyed, and that note and the deed of trust securing it were sold and assigned to defendant Barber for the consideration of $500, and were held and owned by him at the time of the foreclosure sale hereinafter mentioned. The first two deeds of trust above described were executed at the same time and as one transaction, but the deed securing the note for $500 due in four years, by recitals therein, referred to the other as "a prior deed of trust of $500 on said property," and therefore we shall refer to the latter as the first deed of trust and to the former as the second. The two deeds were filed for record in the office of the recorder together, but the second was marked filed one minute before the first. Both notes and trust deeds remained the property of Brown, and on the 6th day of July, 1906, default having been made in the payment of the interest on each note, Brown, in accordance with the terms of the deed, sold the property under the first trust deed. Brown and witness Peltzer, the latter a real estate man whom Brown had requested to accompany him to the sale and advise him, and the defendant Barber, were present at the sale. All of them agree in their testimony that immediately before the sale the subject of Brown's claim against the property and also that of Barber were discussed, but they disagree as to what was said and as to the arrangement alleged to have been made. The testimony of Brown and Peltzer tended to prove that they talked with Barber concerning the sale about to be made on the assumption and with the understanding that the property was to be sold subject to the lien of the deed of trust which had been first placed of record; that Brown desired to purchase the property, and intended to bid therefor the amount of $1,100 or $1,200, and so informed Barber; that Barber said Brown could not get the property for that sum, as he would have to bid higher in order to protect his claim under the third deed of trust; that thereupon an arrangement was made between Barber and Brown by which the latter was not to bid above the amount of his claim under the deed then being foreclosed, and that Barber was to pay the overdue interest on the other note that day and would pay off the note soon thereafter; that Barber purchased the property at the sale, in accordance with the arrangement made, but that he refused to pay the interest or principal of the other note, and claimed that he held absolute title to the property, free from the lien of Brown's remaining trust deed. Barber denied that any arrangement was entered into as testified to by Brown and Peltzer, and further testified that he purchased the property knowing that it was being sold under the first deed of trust, and that by the trustee's deed he became the owner of the absolute title to the property. When Barber asserted title and denied that Brown had any right or interest in the property, Brown foreclosed under the second trust deed, became the purchaser at the sale, and brought this suit against Barber and the tenants occupying the property as above stated.

The court made a written finding of facts. That finding and the judgment and decree entered thereon are as follows:

"And now, on the 28th day of March, A. D. 1908, being a day of the regular January, A. D. 1908, term of this court, this cause comes on regularly for final determination, and the court, having considered the pleadings and the evidence and having heard and considered the arguments of counsel, finds:

"(1) That the defendants Eugene Sigers and Mary E. Sigers have no right of possession of, or right, title, or interest in or to, lot sixteen (16), Elder's addition to Kansas City, Mo., as against the plaintiff, Harry C. Brown, or as against the defendant C. H. Barber.

"(2) That Charlotte Hursig purchased the said premises from plaintiff on or about September 30, 1902, and on said date she, together with her husband, made, executed, and delivered to H. M. Brown (wife of Harry C. Brown) as part of the purchase price their three (3) promissory notes as follows: One for five hundred ($500) dollars due five (5) years after date; one for five hundred ($500) dollars due in four (4) years after date; and one for four hundred and fifty ($450) dollars due in monthly installments of $15 each. The note last described had been paid off and discharged in full prior to the several foreclosure suits referred to in the pleadings. That said notes were made to H. M. Brown merely as a matter of convenience; H. C. Brown being the real party in interest.

"(3) That to secure said promissory notes said Charlotte Hursig and husband executed two deeds of trust, the one securing the five-year note only, the other securing the four-year $500 note and the installment note. These deeds are identical in form excepting only: (a) In that portion of the latter deed providing for the maintenance of insurance it is provided that $800 insurance shall be maintained and such insurance is to be constantly assigned to `first mortgagee on property.' (b) In that portion of the same deed specifying what shall be considered a default there is interlined the following: `or in any agreement...