Gerardi v. Christie
| Decision Date | 19 April 1910 |
| Parties | JOSEPH GERARDI et al., Appellants, v. HARVEY L. CHRISTIE, Trustee et al., Respondents |
| Court | Missouri Court of Appeals |
Appeal from St. Louis City Circuit Court.--Hon. Hugo Muench, Judge.
AFFIRMED.
Judgment affirmed.
R. M Nichols for appellants.
(1) Gardner's contract under date of September 28, 1906, to pay as a part of the purchase money, the deed of trust dated September 29, 1905, executed by L. I. Finegan, for the sum of $ 2500, as shown by the contract of purchase, and his confirmation of that contract and further contract under date of October 8, 1906, as contained in the deed of the Euking Realty Co., to him, made the debt his own; and his attempted purchase, or assignment of that note, would under such contractual relation ipso facto, amount to a satisfaction and cancellation of the debt. 1 Jones on Mortgages (4 Ed.), sec 864; Nelson v. Brown, 140 Mo. 581; Allen v McDermott, 80 Mo. 56; Heim v. Vogel, 69 Mo. 529; Kellogg v. Schnaake, 56 Mo. 136; Wonderly v. Giesler, 118 Mo.App. 709; Pomeroy's Eq. Jur., secs. 797, 1206, 1213; Birke v. Abbott, 103 Ind. 7; Drury v. Holden, 121 Ill. 137; Hartshorne v. Hartshorne, 2 N. J. E. 349; McCable v. Swap, 96 Mass. 188; Carleton v. Jackson, 121 Mass. 592; Kneeland v. Moore, 138 Mass. 198; Winans v. Wilkie, 41 Mich. 264; Biles v. Kellogg, 67 Mich. 318; Ely v. McKnight, 30 How. Pr. 97; Mickles v. Townsend, 18 N.Y. 575; Natl. Investment Co. v. Norden, 50 Minn. 336; Johnson v. Walton, 60 Iowa 315; Fouck v. Delk, 83 Iowa 297; Bank v. Stone, 97 Iowa 183; Lewis v. Starkey, 10 Sm. & M. (Miss.) 120; Fretwell v. Branyon, 67 S.C. 95; Wilson v. Burton, 52 Vt. 394; Bier v. Smith, 25 W.Va. 830. (2) According to the court's finding Gardner, when he purchased the note, was acting in his individual interest. The rule is well settled that when an agent is acting for himself and not his principal, the rule does not apply that the principal is bound by the acts of the agent, and therefore the reasoning of the court that the Gerardis would be bound by the act of Gardner in selling the deed of trust to Mitchell would not apply. Bank v. Keyser, 127 Mo.App. 63; Hinkle v. Lovett, 114 Mo. 519; Smith v. Boyd, 162 Mo. 146. (3) Gardner, being the agent of the Gerardis, could not by a contract with Carter to keep the note alive, place himself in a hostile attitude to his principal, and this whether the fund he used to pay or purchase the note was his own fund, or the fund of the Gerardis. Story on Agency (8 Ed.), secs. 210, 211; Grumbley v. Webb, 44 Mo. 444; Harrison v. Craven, 188 Mo. 590; Montgomery v. Hundley, 205 Mo. 138. (4) The notation on the check "in payment of the deed of trust" does not mean purchase, but means payment, and is at variance with both Carter and Gardner's testimony as to intent when the note and deed of trust were delivered by Carter to Gardner. Clay v. Lakenan, 101 Mo.App. 568; White v. Black, 115 Mo.App. 28; Hopson v. Axle & Spring Co., 50 Conn. 597; Bradford v. Richard, 46 La. Ann. 1530. (5) The contract by which Gardner assumed and agreed to pay the note, contained in the deed placed of record, was notice to Mitchell. Smith v. Boyd, 162 Mo. 146; Hudson v. Cahoon, 193 Mo. 547; Magie v. Reynolds, 51 N. J. E. 113, 26 A. 150; Hoppe v. Szezeponski, 209 Ill. 88. (6) It was not shown that Gerardi knew that Gardner on October 23, 1906, had paid off the mortgage when he brought the attachment suit November 9, 1906, for the full amount, or that Gerardi had received anything by his attachment, or that Mitchell acted upon Gerardi's claim for the full amount, or that he was misled by Gerardi's claim as stated in the petition, or that he was a party to such suit, either of which would be necessary in order to estop Gerardi from taking the present position that the mortgage was ipso facto satisfied by the payment by Gardner, or that the payment by Gardner was out of funds belonging to Gerardi which he had received for that purpose. 16 Cyc., p. 796. (7) The $ 18,702.79 was confessedly trust funds in the hands of H. B. Gardner. If the $ 18,000 (less the $ 500) was not trust funds in the hands of Gardner for the benefit of the Gerardis, Gardner mixed the same in his bank account with the Gerardis' trust fund in his name, thereby making the entire account a trust fund. The payment of the note out of the fund on October 23, 1906, should be held to be a payment out of the trust fund. Snodgrass v. Moore, 30 Mo.App. 232; Bank v. Life Ins. Co., 104 U.S. 54; 28 Ency. Law, p. 915, tit. "Confusion of Property." (8) The covenants of warranty in the deed of trust from Gardner to the Euking Realty Company for the purchase money under date of October 8, 1906, under which the plaintiff, Rookery Realty, L., I. & R. Company claims title, and which are implied from the words grant, bargain, sell, convey and confirm, would estop Gardner from purchasing the Finegan mortgage and selling it, because such act would be in derogation of his warranty. Bohlcke v. Buchanan, 94 Mo.App. 320; Mickels v. Townsend, 18 N.Y. 575; Butler v. Stewart, 96 Mass. 466; Murphy v. Simpson, 42 Mo.App. 654. (9) The plaintiffs are not estopped from showing the invalidity and satisfaction of the deed of trust under the facts in this case. Brooks v. Owens, 112 Mo. 551; Lewis v. L. & B. Assn., 183 Mo. 351.
Bryan & Christie for respondents.
(1) The Rookery Realty, Loan, Investment and Building Company acquired the property in question by a deed which expressly recited that it was subject to the second mortgage which was held by respondent Mitchell, and it cannot now dispute the fact of that second mortgage, or its validity. 1 Jones on Mortgages (5 Ed.), sec. 744; Water Works v. Loan and Trust Co., 30 C. C. A. 133; Guernsey v. Kendall, 35 Vt. 201; Landau v. Cottrill, 159 Mo. 308; Young v. Com. Co., 158 Mo. 395; Davis v. Tandy, 107 Mo.App. 437; Parkey v. Veatch, 164 Mo. 375. (2) The money which was used by Gardner in purchasing the note from Carter was Gardner's own money, and was not the money of Joseph Gerardi, Jr., and the note was the property of Gardner Bros. & Co., when it was by them sold to defendant Mitchell. Finding of Judge Muench, appellant's record, pp. 324, 325 and 328. (3) Even if Joseph Gerardi, Jr., had been the owner of the note, still, if he so acted as to place it under the control of Gardner, and enabled Gardner to deal with it as if he, Gardner, were the true owner, and since defendant Mitchell is an innocent purchaser of said note for value, no equity could possibly attach to the note in favor of Gerardi, Jr., as against Mitchell; and this is true even though Mitchell did purchase the note after its maturity. Lee v. Turner, 89 Mo. 489; Gardner v. Trust Co., 76 N.E. 455, 2 L. R. A. (N. S.) 767. (4) Not only has there been no payment of the note in fact, but there has been no merger. (a) This is a suit in equity, and in equity estates are kept distinct when the interest of either party requires it. Mergers are not favored, and never take place contrary to the intention of the parties or the requirements of justice. Chrisman v. Linderman, 202 Mo. 605; Jones on Mortgages (5 Ed.), sec. 848; 20 Am. and Eng. Ency. Law, 590. (b) The record title to the equity of redemption held by Gardner, he held as trustee for the Monarch Realty & Building Company. The right which he acquired to the note, he acquired in his own right, and no merger can take place, even at law, unless the right previously held and the right subsequently acquired coalesce in the same person and in the same right. Jones on Mortgages (5 Ed.), sec. 848; Curry v. Lafon, 133 Mo.App. 163. (c) Between the record title to the equity of redemption in Gardner and the right which he acquired to the note by purchase, there intervened the right of the Monarch Realty & Building Company, which was at that time the real beneficial owner of the property in question. There also intervened the legal title of Harvey L. Christie, the trustee in the deed of trust securing that note. Because there was an intervening title between the right held by Gardner prior to the time when he purchased the note, and the right which he acquired by the purchase of the note, there could be no merger. Jones on Mortgages (5 Ed.), sec. 848; Curry v. Lafon, 133 Mo.App. 163; Kellogg v. Ames, 41 N.Y. 259; Rouse v. Johnson, 66 Mo.App. 57; Hospes v. Almstedt, 13 Mo.App. 270. (d) Nor does it make any difference in this case that in the deed by which the Euking Realty Company conveyed the property in question to Gardner, it was recited that the purchaser assumed to pay the deed of trust here in question. Such agreement was in no sense made for the benefit of the Rookery Realty, Loan, Investment and Building Company, who succeeded Gardner in the title and who acquired the property subject to the second deed of trust. Kelly v. Staed, 136 Mo. 430; Sater v. Hunt, 66 Mo.App. 527; Kellogg v. Ames, 41 N.Y. 259; Wallach v. Schulze, 22 A.D. 57; Jones on Mortgages (5 Ed.), sec. 853; Powell v. Smith, 30 Mich. 451; Goodwin v. Kene, 47 Conn. 486; Pingree on Mortgages, sec. 1066.
This action is in the nature of a suit in chancery and was filed to have defendant Christie enjoined from selling a parcel of ground situate in city block No. 3881 in the city of St Louis, fronting 225 feet on the east line of Kingshighway and extending eastwardly 150 feet along the north line of Maryland avenue; the depth eastwardly being 180 feet on the north boundary of the lot. The threatened sale was pursuant to a power conferred on Christie as trustee and party of the second part in a deed of trust executed by Louis I. Finegan, September 29, 1905, to secure Thomas P. Plumridge of the third part as payee of a note for $ 2500. When the present action was commenced, defendant ...
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