Eubank v. Finnell

• Decision Date: 04 June 1906
• Citation: 94 S.W. 591,118 Mo. App. 535
• Parties: EUBANK v. FINNELL.
• Court: Missouri Court of Appeals

94 S.W. 591

118 Mo. App. 535

EUBANK v. FINNELL.

Kansas City Court of Appeals. Missouri.

June 4, 1906.

1. MORTGAGES—DEED OF TRUST—FORECLOSURE —SURPLUS—NATURE OF FUND.

Surplus money realized by the sale of land under a deed of trust is realty, and not personalty, in respect to rules governing its disposition as between the parties and creditors.

2. VENDOR AND PURCHASER—VENDOR'S LIEN— CHARACTER.

A vendor's lien is an equitable security arising from the fact that a vendee has received from his vendor an estate for which he has not paid the full consideration, and is not dependent for its existence on the express agreement of the parties.

3. SAME—WAIVER.

A vendor does not waive his right to a lien by taking the unsecured note or bond of the vendee to evidence the deferred payment secured by the lien, nor by accepting, after the maturity of such note or bond, a new obligation of the vendee in lieu thereof.

4. MORTGAGES—TRUST DEED—VENDOR'S LIEN —PRIORITIES.

As part of the negotiations for a sale of land, the vendee arranged to borrow a portion of the purchase price from H. and to execute a deed of trust on the land to secure the same. The vendor agreed to accept the proceeds of this loan, with certain other property and the vendee's unsecured note for the balance in full payment of the price. The vendor, vendee, and the lender met to close the transaction, whereupon the land was conveyed to the vendee, who delivered his note to the lender for the amount of his loan, executed and delivered a trust deed conveying the land to secure the same, and paid the proceeds of the loan to the vendor, together with his unsecured note for the balance of the price; all parties having full knowledge of the entire transaction. The vendor subsequently sued on the note, claiming a vendor's lien, and filed a lis pendens, after which the property was sold on foreclosure of the trust deed. Held, that the vendor's lien was prior to the lien acquired by the lender under the trust deed, and that the purchaser at the sale acquired title subject to such vendor's lien.

5. SAME—FORECLOSURE OF TRUST DEED—SURPLUS.

Where land subject to a vendor's lien, which had been merged in a judgment foreclosing the same, was sold on foreclosure of a trust deed, which was a subsequent lien on the property, the surplus arising on foreclosure of such trust deed was only applicable to a deficiency arising on a sale of the land under the judgment foreclosing the vendor's lien.

Appeal from Circuit Court, Randolph County; Jno. A. Hockaday, Judge.

Action by Morgan Finnell against J. Roger Eubank, interpleader. From a judgment in favor of defendant, plaintiff appeals. Reversed and remanded.

J. H. La Motte, for appellant. John N. Hamilton, for respondent.

JOHNSON, J.

This cause was before us at the March term, 1903 (73 S. W. 354), and speaking through Smith, P. J., we delivered the following opinion therein:

"The case disclosed by the record may be stated in this wise: E. C. Gibson sold to Eubank 80 acres of land for $1,550; the latter borrowed of N. P. Hurt, $955, with which to make the cash payment of the purchase price and, with the knowledge and consent of Gibson, executed a deed of trust covering the land to secure the payment of the note given for the amount so borrowed. The deed from Gibson to Eubank conveying the title in fee and the deed of trust were executed and recorded on the same day. It does not appear which was first filed by the recorder. Eubank, at the time of the sale of the land, executed to Gibson his promissory note for $460, for the balance of the purchase money, which note was afterwards assigned by the latter to Finnell, who brought an action thereon against Eubank, claiming a vendor's lien for the amount thereof against the land, and on which action he had judgment for the enforcement of the lien. In the meantime, the note given by Eubank to Hurt had matured, and, default having been made in the payment thereof, the trustee, at the request of Hurt, advertised and sold the land in accordance with the provisions of the deed of trust, and from which sale he realized $547, in excess of the amount required to pay Hurt's note and the expenses of the trust. Finnell sued out an execution on his judgment against Eubank, and on which he caused the amount so in the hands of the trustee to be garnisheed. The trustee, in answer to the garnishment, admitted that he had in his hands the said $547 realized from the sale of the land under the deed of trust, as already stated. He further stated that Eubank, the defendant in the execution, claimed to own the said fund, and he therefore prayed to be permitted to pay the same to the sheriff and that he be discharged, etc.; and further, that the said Eubank be made a party to the proceeding and brought into court and required to assert whatever claim he might have to said fund. Shortly thereafter Eubank voluntarily appeared and by leave of the court filed his interplea wherein he stated that he purchased the land of Gibson, paying therefor $935 in cash and executing his promissory note for $460, the balance of the purchase price; that Gibson thereupon executed and delivered to him a warranty deed conveying the land to him; that the $935 he paid Gibson was borrowed by him of Hurt, and to secure the payment of which he executed and delivered a deed of trust on the land to W. R. Samuel as trustee for the benefit of Hurt; that Hurt loaned said $935 and accepted said deed of trust, knowing that Gibson had not waived but claimed a first lien for said balance of $465 of the purchase price of the land, which had not been paid, and that he (the interpleader) had made and delivered to Gibson his promissory note therefor, there being no agreement that said deed of trust should be other than a second lien on the land. Interpleader further alleged the transfer of the $460 note to Finnell, the action to enforce his vendor's lien against the land, etc., the rendition of the judgment, the issue of the special execution thereon, the levy of the same upon the land, the failure of the sheriff to sell, and the garnishment of the trustee, etc., and concluded with a prayer that the fund be ordered paid to him. The plaintiff in the execution replied, putting in issue the allegations of the interplea.

"The finding and decree of the court was `that the fund paid into court is subject to any deficiency of the execution debt of said plaintiff in execution, Morgan Finnell, after he shall have enforced his vendor's lien against the real estate hereinafter described; and that the interpleader is entitled to any surplus thereafter remaining. Whereupon it is...