Eubank v. Finnell

• Court: Kansas Court of Appeals
• Writing for the Court: JOHNSON, J.
• Citation: Eubank v. Finnell, 118 Mo. App. 535, 94 S.W. 591 (Kan. App. 1906)
• Decision Date: 04 June 1906
• Parties: J. ROGER EUBANK, Respondent, v. MORGAN FINNELL, Appellant

94 S.W. 591

118 Mo.App. 535

J. ROGER EUBANK, Respondent, v. MORGAN FINNELL, Appellant

Court of Appeals of Missouri, Kansas City

June 4, 1906

January 4, 1906;

Appeal from Randolph Circuit Court.--Hon. John A. Hockaday, Judge.

REMANDED (with directions).

Cause remanded.

J. H LaMotte for appellant.

(1) The lien of the note in this case is subsequent to that of the deed of trust given at the same time the note was, and attaches to the equity of redemption. 2 Jones on Liens (1 Ed.), chap. 23; secs. 1079 and 1080 and cases cited in notes 2 Sugden on Vendors (7 ed.), chap. 18, p., 329, sec. 8. (2) The lien may be waived by the act of the parties showing that it was not intended to be retained, and is a question of intention to be gathered from all the facts and circumstances. Delassus v. Poston, 19 Mo. 425; Partridge v. Logan, 3 Mo.App. 509; Rantle v Murry, 48 Mo.App. 15; Sheely v. Estes, 83 Mo.App. 310; Pratt v. Eaton, 65 Mo. 157; and cases there cited; Orrick v. Durham, 79 Mo. 174; Briscoe v. Callahan, 77 Mo. 134. (3) The taking of security, or obligation of third party pro tanto waives the lien. Winn v. Inv. Co., 125 Mo. 528; Stevens v Rainwater, 4 Mo.App. 292, 298. (4) Equity and good conscience will not allow a vendor to come with his lien ahead of one whom he induces to loan his money on the land that he may get that money. Partridge v. Logan, 3 Mo.App. 509; Rantle v. Murry, 48 Mo. App., 15; Sheely v. Estes, 83 Mo.App. 310. (5) The surplus of the sale under deed of trust is treated in the law as realty. Huffard v. Gottberg, 54 Mo. 271; Keyling v. O'Reilly, Mo.App. . (6) Surplus arising from sale under first lien goes to pay off second lien. Helweg v. Heitcamp, 20 Mo. 569; Mead v. McLaughlin, 42 Mo. 198. (7) The words "grant, bargain and sell" in conveyances are construed to be the following express covenant on the part of the grantor--that the real estate conveyed was free from incumbrances done or suffered by the grantor or any person under whom he claims. R. S. 1899, sec. 907. The statutory covenants are as operative in a deed of trust as they would be in a conveyance in fee simple inter partes. Blanchard v. Haseltine, 79 Mo.App. 248; Coleman v. Clark, 80 Mo.App. 339. And the knowledge of the covenantee at the time of the purchase, that a portion of the land was previously incumbered will not preclude him from relying upon the express covenants in the deed under which he purchases. Whiteside v. Magruder, 75 Mo.App. 364; Blanchard v. Haseltine, 79 Mo.App. 248. A mortgagee is a purchaser in good faith and acquires the legal title. Steadman v. Hayes, 80 Mo. 319.

John N. Hamilton for respondent.

(1) The court committed no error in holding that the vendor's lien of the defendant was a superior and prior encumbrance to the lien of the deed of trust given to N. P. Hurt, the mortgagee; as said mortgagee had notice prior to and at the time of the execution of the mortgage to him by the vendee that all the purchase price had not been paid, and had actual knowledge that the vendee had executed and delivered to the vendor his promissory note for $ 460, without security, for the balance due on the purchase price of the land. Truesdale v. Brennan, 153 Mo. 600, 55 S.W. 147; Rogers v. Tucker, 94 Mo. 351; Turk v. Funk, 68 Mo. 18; Cornell v. Bartellsman, 61 Mo. 118; Ficklin v. Stephenson, 33 Mo. 341; Delassus v. Poston, 21 Mo. 543; Delassus v. Poston, 19 Mo. 432. (2) The lien of the vendor is not waived by the mere seeming intention, but, by the express agreement, between the parties thereto, made at the time of the creating of the lien. For the lien of the vendor "will be sustained wherever the vendor has taken the personal security of the vendee only, and therefore any bond, note or covenant given by the vendee alone will be considered as intended only to countervail the receipt of the purchase money contained in the deed, or to show the time and manner in which the payment is to be made, unless there is an express agreement between the parties to waive the equitable lien." Emison v. Whittlesey, 55 Mo. 259; Davenport v. Murray, 68 Mo. 201; Carr v. Thompson, 67 Mo. 472; Ficklin v. Stephenson, 33 Mo. 341; Lawson v. Spencer, 90 Mo.App. 514, 81 Mo.App. 169. That there was no express agreement between the parties, is unquestionably shown by the testimony of the mortgagee, vendor and vendee. (3) The evidence is amply sufficient for the court to require defendant to sell the land under his vendor's lien before subjecting the surplus money from the sale by the trustee, to the payment of the debt of the defendant, as the vendor had a lien on the land for the amount of the unpaid purchase money, not only against the vendee himself and his heirs and other privies in estate, but also, against purchasers having notice that the purchase money remained unpaid. 2 Story's Equity Jur. (7 Ed.), pp. 580-1-2, chap. 33, secs. 1217-18-19; Bailey v. Winn, 101 Mo. 649; Skinner v. Durnell, 52 Mo. 96; Bronson v. Wanzer, 86 Mo. 408; Morris v. Pate, 31 Mo. 315; Walton v. Hargrove, 42 Miss. 28; Green v. DeMoss, 10 Hump. (Tenn.) 375. (4) The vendor's lien was adverse to the lien of the mortgagee and consequently the vendor could have no right except to enforce his lien by a sale under his decree. Hockiday v. Lawther, 17 Mo.App. 636, and the authorities above cited. (5) No error was committed in permitting interpleader to claim the surplus, notwithstanding the covenants in the deed of trust to N. P. Hurt, as all the interest conveyed by this deed of trust was the title owned by the vendee at the time of the execution of the deed of trust, which was subject to the vendor's lien, for the unpaid purchase price, and the purchase at the trustee's sale under the law and facts in this case acquired no greater title than the mortgagee had. Justice will not permit the surplus arising from a sale under a second lien to be applied to the payment of the first lien; as is sought to be done in this case, by the appellant. Scheppelman v. Feurth, 87 Mo. 353; Helweg v. Heitkamp, 20 Mo. 570; Schmidt v. Smith, 57 Mo. 135; Scott v. Shy, 53 Mo. 478; Watson v. Printing Co. , 52 Mo.App. 145.

OPINION

JOHNSON, J.

This cause was before us at the March term, 1903, 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 eighty 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 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, 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 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...