Campbell v. Boyers

• Decision Date: 28 March 1912
• Parties: SUSAN E. CAMPBELL et al. v. JOHN A. BOYERS et al., Appellants
• Court: Missouri Supreme Court

145 S.W. 807

241 Mo. 421

SUSAN E. CAMPBELL et al. v. JOHN A. BOYERS et al., Appellants

Supreme Court of Missouri

March 28, 1912

Appeal from St. Louis City Circuit Court. -- Hon D. G. Taylor Judge.

Affirmed.

Charles P. Williams, H. A. Loevy and W. A. Kinnerk for appellant.

(1) The judgment in this cause is irregular and unsupported by the record proper in at least two particulars. The record shows that the second amended petition filed after the case had been tried, contained for the first time, a number of allegations that are not contained in the two preceding petitions. No opportunity was ever given to the defendant Boyers to plead to this second amended petition or to offer evidence with respect to these new charges. No answer of the defendant Boyers was ever filed or considered by the court with respect to this second amended petition. The court shut off all debate by the interlocutory decree entered on the same day that the defendant Boyers's motion to strike out was overruled. 2nd: The record shows that the final decree was entered in this case without the court ever having passed upon the report of the referee, which had been filed in the cause. The judgment below, having been improvidently entered without disposing of the foregoing matters, ought to be reversed and remanded. No final judgment can be rendered while issues either of fact or of law remain undisposed of or before the cause is at issue. R. S. 1909, sec. 1859; Black on Judgments (2 Ed.), sec. 184; 11 Ency. Pl. & Pr., 864. (2) The court erred in refusing to allow to Boyers any credit for the interest notes that he paid as the holder of the second deed of trust, and in possession thereof. Nothing is better settled than that he who comes into equity must do equity. The only way Boyers could have gotten any rent or profit out of the property at all was to pay these superior charges accruing under the first deed of trust. If the plaintiffs themselves had kept possession of the property they would have been obliged to pay these charges. They ought not only by the decree be put in a better position than if they had occupied the property and collected the rents and profits. Their loss arising out of the failure to properly construct the building was fixed by the decree, by finding against Boyers in the sum of $ 1000. That disposed of the issue of failure of consideration. The decree by reason of the failure to allow for the payment of these several charges, while at the same time allowing for water rates and taxes, is unjust and inequitable. Rutherford v. Williams, 42 Mo. 18; Land Co. v. Jefferson, 30 Am. St. Rep. 587; Ruppel v. Bldg. Ass'n, 158 Mo. 122; Reed v Taylor, 56 Ill. 288; Albert v. Sanford, 201 Mo. 132; Elder v. Bank, 12 Kan. 238; Pomeroy's Eq. Jur. (3 Ed.), sec. 386, 910. (3) There is not sufficient evidence in this case to show that the contract itself to erect the buildings, was entered into or induced by the fraud of Boyers. Under these circumstances, Boyers was entitled as a matter of law, to the profit that he would have made if he had completed the buildings according to plans and specifications. The measure of the plaintiff's damages and the extent of the failure of consideration ought to be arrived at by subtracting from the reasonable value of the building if it had been erected in full compliance with the plans and specifications, the reasonable value of the building as it was actually erected. To the extent of this difference only would there be a failure of consideration entitling the plaintiffs to the cancelation of the mortgage or to a personal judgment against the defendant. There is absolutely no evidence in this record upon which to compute or found such difference. Therefore, the decree ought to be reversed and the cause remanded. The measure of damages above is correct. Moulter v. McOwen, 103 Mass. 587; Morton v. Harrison, 20 Jones & S. 305; Kidd v. McCormack, 83 N.Y. 391. (4) Under the second deed of trust Boyers was not a volunteer in making the payments of interest accruing under the first deed of trust. The parties making this second deed knew and understood that Boyers was the beneficiary. This was part of the consideration for his building the house. While a sale by an interested trustee may doubtless in proper cases be set aside, yet the fact that the trustee is the real owner of the loan ought not to absolutely destroy the mortgage. It would still stand as an equitable lien upon the land and the holder of that lien in paying off prior liens for his own protection under authority of the second mortgage would not be a volunteer. Jones on Mortgages (Rev. Ed), sec. 1772; Long v. Long, 79 Mo. 644; Darst v. Bates, 95 Ill. 573; Lantron v. Barr, 63 Mo. 48; McQuies v. Peay, 58 Mo. 56; Blackburn v. Tweedie, 60 Mo. 505; Morton v. Nixon, 92 Mo. 26.

Robert & Robert for respondents.

(1) No objection was made and no exception was saved to the filing of the second amended petition. Nor to the court's order in overruling defendant Boyers's motion to strike it from the files. Under these circumstances this court will not consider the question. Grymes v. Lumber Co., 111 Mo.App. 358; Allen v. Railroad, 126 S.W. 254; Lewis v. Mining Co., 199 Mo. 463; Carter v. O'Neil, 102 Mo.App. 391; Casler v. Chase, 160 Mo. 418; Hoffman v. Trust Co., 151 Mo. 520; Ross v. Railroad, 141 Mo. 390; Tobacco Co. v. Walker, 123 Mo. 662; Jackson v. Railroad, 80 Mo. 147; Wilson v. Haxley, 76 Mo. 345; Parsons v. Clark, 98 Mo.App. 28; Lith. Co. v. Fennimore, 84 Mo.App. 228. Nor is any complaint made in the motion for a new trial or in the assignment of errors that the court erred in this particular. Atkinson v. Dixon, 96 Mo. 582. Defendant Boyers had from July 8, 1907, to December 2, 1907, within which to file any pleading to the second amended petition but defaulted. The other defendants filed theirs December 21 and 24, 1906. The plaintiff, with the court's permission, had the right to file the second amended petition and insert in it "other allegations material to the case" at any time before final judgment. R. S. 1909, sec. 1848 (R. S. 1899, sec. 657); Russell v. Sharp, 192 Mo. 270. (2) Boyers was entitled to no setoffs. His answer to the first amended petition was simply a general denial and he filed no answer to the second amended petition. As a matter of fact he should have been allowed nothing under this state of the pleadings. Water Co. v. Neosho, 136 Mo. 498. (3) No credit should have been allowed Boyers for his payments of interest on the $ 4200 deed of trust. In the first place he did not plead a setoff or counterclaim. He was at best a mere volunteer. He had no right to "any rent or profit out of the property." The deed of trust which he held was fraudulent and void, as was the whole transaction. He paid the interest (if he did so) to protect his fraudulent deed and to further his scheme to become possessed of the land. There is absolutely no evidence for what reason Boyers paid this interest. The only testimony is that he did pay it. Shumate v. Snyder, 140 Mo. 86; Horrigan v. Wellmuth, 77 Mo. 545; Napton v. Leaton, 71 Mo. 369; Rhodes v. Dickerson, 95 Mo.App. 395; State ex rel. v. Stonestreet, 92 Mo.App. 214. (4) There was an abundance of evidence of fraud upon Boyers's part. To establish fraud it is not necessary to prove it by direct and positive evidence. Circumstantial evidence is not only sufficient, but in most cases it is the only proof that can be adduced. Martin v. Estes, 132 Mo. 402; Funkhauser v. Lay, 78 Mo. 458; Baldwin v. Whitcomb, 71 Mo. 651; Hopkins v. Sivert, 58 Mo. 201; Massey v. Young, 73 Mo. 260. (5) A trustee cannot purchase at his own sale. Boyers knew this, hence had defendant McCarthy take the title in her name and delivered to him a quitclaim deed, which he concealed and did not record. This, too, was a part of the whole fraudulent scheme. Lass v. Sternberg, 50 Mo. 124; 1 Perry on Trusts & Trustees (6 Ed.), secs. 194-5; 2 Perry on Trusts & Trustees (6 Ed.), sec. 602v.

KENNISH J. Graves, J., dissents.

OPINION

In Banc

KENNISH, J.

This is an appeal from a judgment of the circuit court of the city of St. Louis, in favor of plaintiffs, in an equity case. Defendants appealed.

The pleadings are of too great length to be set out in this opinion. In the second amended petition, on which the final decree was entered, it is alleged, in brief: That the plaintiffs are two women, unaccustomed to the transaction of business, and that the defendant Boyers, an architect and builder, was regarded as an old and trusted friend of the family; that plaintiffs owned and resided upon a lot in said city and, with a view of improving the same, conferred with said Boyers and wholly relied upon his advice as to making the proposed improvements; that a written contract was entered into between plaintiffs and said Boyers, by the terms of which, in consideration of the sum of $ 4770, Boyers was to remove the old building to the back part of the lot and erect a new brick structure to be used and occupied as flats on the former site of the building removed; that plaintiffs agreed to execute two trust deeds to said Boyers in payment for said improvement, one for $ 4000, to be executed at the date of said agreement, and the other, for $ 770, when the work was done; that the old house was removed and the new building erected. That the said Boyers fraudulently induced plaintiffs to execute the first trust deed for $ 4200; and the second trust deed for the balance of the amount to be paid, before the completion of the work, and that plaintiffs, relying upon and having confidence in said Boyers, did as he directed; that an interest note matured at intervals of six months on the first trust deed, and of three months on the second; that plaintiffs thereafter learned that...