German-American Bank v. Carondelet Real-Estate Co.

• Decision Date: 23 May 1899
• Citation: 51 S.W. 691,150 Mo. 570
• Parties: GERMAN-AMERICAN BANK v. CARONDELET REAL-ESTATE CO. et al.
• Court: Missouri Supreme Court

51 S.W. 691

150 Mo. 570

GERMAN-AMERICAN BANK v. CARONDELET REAL-ESTATE CO. et al.

Supreme Court of Missouri, Division No. 1.

May 23, 1899.

NOTES — BONA FIDE PURCHASER — TRUST DEED — TRANSFER — RECORD — ACKNOWLEDGMENT.

1. Notes of a corporation were executed in its name by the president, payable to one from whom he had power of attorney to accept and indorse negotiable paper, and by him indorsed with the payee's name in blank, the indorsement showing that it was by him as attorney in fact for the payee, and he then transferred them before maturity, as collateral for his loan. Held, that the transferee was a bona fide purchaser without notice.

2. The purchaser of notes secured by a trust deed acquires the title under the deed as incident to the notes, without a formal assignment of the deed.

3. The record of a trust deed acknowledged by the grantor before the trustee as notary is improper, and is not constructive notice to a subsequent purchaser.

4. Rev. St. 1889, § 4864, making records, made one year before the passage of the law, of unacknowledged deeds and conveyances, or deeds and conveyances imperfectly acknowledged, constructive notice, does not apply to instruments recorded after its taking effect.

Appeal from St. Louis circuit court; Pembrook R. Flitcraft, Judge.

Suit by the German-American Bank against the Carondelet Real-Estate Company and others. There was a decree for defendants, and plaintiff appeals. Affirmed.

Fred. Wislizenus, for appellant. Fisse & Kortjohn, for respondents.

BRACE, P. J.

This is a suit in equity to set aside a release of and to foreclose a deed of trust, in which the judgment was for the defendants, the bill dismissed, and the plaintiff appeals.

On the 19th of May, 1892, one William B. Lange, being at the time attorney in fact of his mother, Mathilda Lange, and president of the Carondelet Real-Estate Company, executed a deed of trust, of that date, upon the real estate described in the petition, signed, "Carondelet Real-Estate Company, by Wm. B. Lange, President," to secure the payment of five negotiable promissory notes, one principal, for $4,000, and four interest notes, for $120 each, of the same date, executed by him, and signed in the same manner, payable to the said Mathilda Lange, the principal note payable two years after date, and the interest notes payable semiannually during the period of the principal. On the next day, May 20, 1892, William B. Lange, as president of the real-estate company, acknowledged the deed before a notary public, and the same was on the same day filed for record. At the time the deed was acknowledged the name of Ernst Renner appeared in the deed as trustee. When filed for record, that name had been erased, and "Chas. F. Vogel" written in place of it, and the notes had been indorsed "Without recourse on me. Matilda Lange, per Wm. B. Lange, Atty. in Fact." In this condition the deed and notes were exhibited by William B. Lange at the recorder's office just before the filing of the deed for record to August Gehner, president of the plaintiff bank, of which the said Lange had been a customer since September, 1891, with the view of obtaining a loan upon the security from Mr. Gehner; and, upon his consenting to consider the proposition, the deed was delivered to the officer for record, and the notes to Gehner, in whose personal possession they remained until the 6th day of August, 1892, when, Lange having negotiated for a loan from the bank on his individual note of that date for the sum of $3,800, the five notes aforesaid, at his request, were on that day delivered to the bank by Mr. Gehner as collateral security for the loan, and thereafter, except two of the interest notes, which seem to have been taken up, continued in the possession of the bank as such collateral until this suit was brought, on the 18th of January, 1895; Lange's note for the loan being renewed from time to time until his death, and the last renewal note being for the sum of $2,300, dated January 30, 1894. The deed of trust was never delivered to the bank by Lange, he accounting for its absence, at the time of the delivery of the notes secured thereby, by saying it had been lost, and that he would furnish a certified copy thereof, which he afterwards did. On the 20th of April, 1893, while the bank was thus holding these notes, Lange executed a quitclaim deed to the Carondelet Real-Estate Company, signed, "Mathilda Lange, by Wm. B. Lange, Attorney in Fact," in release and satisfaction of said deed of trust, which on the same day was duly acknowledged by him in that character, filed for record, and duly recorded, which is the release sought to be set aside. Afterwards, on the 20th of May 1893, Lange executed and acknowledged a deed of trust signed, "Carondelet Real-Estate Company, by Wm. B. Lange, President," conveying the premises to Mott, trustee, to secure a bond of that date to the South End Building & Loan Association of St. Louis, for the sum of $5,400, executed by him, and signed in the same manner, which deed of trust was on the 23d of May, 1893, filed for record and duly recorded. And afterwards, on the 7th of July, 1893, in like manner, the premises were conveyed to Maggie Christie, subject to the deed of trust in favor of the Building & Loan Association, who, with her husband, Edward Christie, are in possession of the premises, and who, together with said association, the trustee, Mott, and Vogel, Mrs. Lange, and William B. Lange's administrator, are made parties defendant in this action.

The evidence tends to prove that during the period of these transactions the said William B. Lange was of good reputation; that he was in fact the Carondelet Real-Estate Company, which existed as a corporation simply for the purposes of his business; that in all these dealings of the parties with him they acted in entire good faith; that Mrs. Lange had in fact no interest whatever in the property being dealt with, and knew nothing of these transactions. Thus it was that William B....