Citizens Bank of Festus v. Frazier

• Decision Date: 03 January 1944
• Docket Number: 38631
• Parties: Citizens Bank of Festus v. George R. Frazier, Susan E. Frazier and Iva Decker, Appellants
• Court: Missouri Supreme Court

177 S.W.2d 477

352 Mo. 367

Citizens Bank of Festus v. George R. Frazier, Susan E. Frazier and Iva Decker, Appellants

No. 38631

Supreme Court of Missouri

January 3, 1944

Rehearing Denied February 7, 1944.

Appeal from Jefferson Circuit Court; Hon. Norwin D. Houser Special Judge.

Affirmed.

Albert S. Ennis for appellants.

(1) Defendants' plea in abatement setting up the ten-year Statute of Limitations as a bar to the second amended petition should have been sustained. Sec. 1013, R.S. 1939; Stark v. Zehnder, 102 S.W. 992; Turnmeyer v Claybrook, 204 S.W. 178; Hoester v. Sammelmann, 14 S.W. 728; Thomas v. Mathews, 51 Mo. 107. (2) The allegation of fraud negatives the allegation of mutual mistake. Stark v. Zehnder, 102 S.W. 992; Castleman v. Castleman, 83 S.W. 757, 184 Mo. 432. (3) The proof was lacking to show fraud at any time and especially insufficient to show fraud in the execution of the contract. Fraud is never presumed, but must be proved by clear and convincing evidence; and the person charging fraud has burden of proving fraud. Weitzman v. Weitzman, 156 S.W.2d 906; Dudley v. Wabash Railroad, 142 S.W. 338; Wetzell v. Wagoner, 41 Mo.App. 509; Scheerer v. Waltner, 29 S.W.2d 193, 225 Mo.App. 837. (4) Plaintiff's third amended petition is a departure from the cause of action pleaded in the second amended petition on which the case was tried. Stark v. Zehnder, 102 S.W. 992; Castleman v. Castleman, 83 S.W. 757, 184 Mo. 432; Walker v. Wabash Railroad, 92 S.W. 83; Wilson v. Albert, 1 S.W. 209, 89 Mo. 537. (5) Averment of mutual mistake negatives the idea of fraud. Stark v. Zehnder, 102 S.W. 992. (6) A party cannot be allowed to contradict the allegations of their own pleadings. Wilson v. Albert, 1 S.W. 209, 89 Mo. 537. (7) Claims must not be inconsistent. 1 Houts, sec. 160, p. 347; Perry v. Quincy, O. & K.C.R. Co., 122 Mo.App. 177, 99 S.W. 14. (8) It has been repeatedly held that the plaintiff cannot recover upon a theory not embodied in his petition even though there be evidence supporting the theory. 1 Houts, sec. 160, p. 343. (9) In action for relief on the ground of fraud where the fraud is concerned with the conveyance of realty, ten years constitutes a bar. Thomas v. Mathews, 51 Mo. 107. (10) In actions pertaining to real estate failure to discover the fraud or actions of defendant in concealing the fraud do not toll the running of the statute. Kober v. Kober, 23 S.W.2d 149; Turnmeyer v. Claybrook, 204 S.W. 178; Branner v. Klaber, 49 S.W.2d 169; Parish v. Cashner, 282 S.W. 392. (11) In an action for relief on the ground of fraud where the fraud is connected with the conveyance of realty, ten years constitutes a bar. (12) Amendment should not have been allowed because it was not requested or suggested by the plaintiff until after the total collapse of its case on the allegation of mutual mistake. Joyce v. Growney, 55 S.W. 469.

Matthes & Weier for respondent.

(1) Plaintiff's cause of action was not barred by ten-year Statute of Limitations because the petition clearly alleged and evidence substantiated charge that defendants were guilty of fraud, and that they were guilty of improper acts, which prevented plaintiff from discovering fraud, therefore court properly overruled defendants' plea in abatement. Secs. 1013, 1031, R.S. 1939. (2) The provisions of Section 1031, R.S. 1939, which appears in Article 9 of Chapter 6, R.S. 1939, extend to actions pertaining to real estate, and inasmuch as defendants were guilty of improper acts preventing plaintiff from discovering the fraud practiced by defendants, the ten-year Statute of Limitations, Section 1013, R.S. 1939, does not bar plaintiff from recovering relief prayed for. Clubine v. Frazier, 139 S.W.2d 529; Branner v. Klaber, 330 Mo. 306, 49 S.W.2d 169. (3) The court did not err in permitting plaintiff to amend its petition by alleging fraud on part of defendants, as said amendment merely conformed to the proof and did not substantially change the cause of action. The courts, in furtherance of justice, should be liberal in permitting amendments. Sec. 971, R.S. 1939; Eckhardt v. Bock, 159 S.W.2d 395; Adams v. Boyd, 58 S.W.2d 704; Jensen v. Hinderks, 92 S.W.2d 108; Dyers v. Harper, 77 S.W.2d 106; Natl. Life & Acc. Ins. Co. v. Lay, 39 S.W.2d 1070. (4) In an equity proceeding, such as this case, the court has full authority, in fact it is the duty of the court, to do and render full and complete justice between the parties, and in order to do so, should be liberal in amendment of pleadings. Eckhardt v. Bock, 159 S.W.2d 395. (5) There are five generally recognized tests for determining whether an amended petition constitutes a departure or a statement of a different cause of action. They are: (1) Whether the subject matter in dispute is different; (2) whether different evidence would be required; (In this case court merely permitted amendment to conform to proof of fraud, which was introduced, without objection by defendants); (3) whether the measure of damages would be different; (4) whether recovery under one petition would be a bar under the other; and (5) would same defense apply to both petitions. (Proof of fraud came from defendants so they could not have been prejudiced by amendment.) 1 Houts, Pleading & Practice, sec. 160, p. 331, and cases cited under note 7, p. 332. (6) The third amended petition filed herein, after proof had been made, did not constitute a departure, and the allegation of fraud was not necessarily inconsistent with the allegation of mutual mistake. The relief prayed for by plaintiff could have been granted upon either ground if sustained by the evidence. Regardless of the charge, the facts would have been the same except as to fraudulent conduct of Frazier, which developed from his testimony, after which amendment was made to conform to proof. Castleman v. Castleman, 184 Mo. 432. (7) Equity will reform an instrument where there is a mistake on one side and fraud on the other side, inducing the one party to act under such mistake. (8) Fraud does not necessarily need to be proven by direct evidence and may be established by circumstances, including circumstances disclosed by evidence of the parties accused of the fraud. Conrad v. Diehl, 129 S.W.2d 870; Castorina v. hermann, 104 S.W.2d 297. (9) The failure of defendant Iva Decker to appear in court and testify, or give her testimony by deposition, after she had been charged with fraudulent conduct, raised a strong presumption in favor of the charge. 27 C.J., sec. 148, p. 494; Baldwin v. Whitcomb, 71 Mo. 651; Parish v. Casner, 282 S.W. 392; Russell v. Franks, 120 S.W.2d 37. (10) In an equity case, especially where there is conflicting oral testimony, this court will usually defer to chancellor's finding. Wintz v. Johannes, 56 S.W.2d 109; Franklin v. Moss, 101 S.W.2d 711.

Dalton, C. Bradley and Van Osdol, CC., concur.

OPINION

DALTON

Action in equity to reform a deed of trust describing a particular tract of real estate (hereinafter referred to as tract #1) in Jefferson County so that it will describe another particularly described tract of real estate (hereinafter referred to as tract #2) in said county, and to set aside an alleged fraudulent conveyance of tract #2, as made by the grantors to their daughter after the execution of the said deed of trust. Plaintiff seeks to subject tract #2 to the lien of the deed of trust which secures a $ 1200 note owned by it (as assignee of the original payee). The third amended petition (on file at the time the relief prayed was granted to plaintiff) charged mistake on the part of the named cestui trust caused by fraud on the part of the grantors in the execution of the deed of trust (false and fraudulent representations by the grantors) by which tract #1 was described therein after tract #2 was exhibited, offered and agreed upon as security for the loan. Defendants have appealed from the judgment granting relief to plaintiff.

Defendants Frazier and wife were the owners of two tracts of land in Jefferson County of approximately 120 acres each. Tract #2 was valuable and improved. Tract #1 was of limited value and unimproved. On the 12th day of October 1921, defendants Frazier and wife had borrowed $ 1500 from the Festus State Bank and executed a note therefor and secured the note by a first deed of trust upon tract #1. At a later date the Citizens Bank of Festus took over the assets of the Festus State Bank, including this loan, and on or about October 11, 1927 defendants Frazier and wife, to discharge the balance due on this loan, obtained a new and independent loan for $ 1200 from the Farmers and Merchants Bank of Festus. A note for $ 1200, due one year after date, was duly executed and a new deed of trust describing tract #1 was executed and delivered as security for the new note. It is this deed of trust that is now sought to be reformed. On April 28, 1938, the plaintiff, Citizens Bank of Festus acquired the assets of the Farmers and Merchants Bank, including the $ 1200 Frazier note and deed of trust. On January 22, 1942, it instituted the present suit. Prior thereto, to wit, on November 26, 1941, defendants Frazier and wife had conveyed tract #2 to their daughter, Iva Decker. Mrs. Decker was made a party defendant in the second amended petition and plaintiff seeks to set aside the conveyance to her on the ground that it was voluntary, without consideration, fraudulent and void as to plaintiff.

Upon the filing of plaintiff's second amended petition, the defendants Frazier and wife and defendant Decker filed separate pleas in abatement, alleging laches, limitations and estoppel. These pleas in abatement were taken under advisement, and, on request of the court, the defendants filed their separate answers, and the cause proceeded to trial. After a full hearing of all the...