Grady v. O'Reilly

Decision Date05 June 1893
Citation22 S.W. 798,116 Mo. 346
PartiesGrady, Appellant, v. O'Reilly, et al
CourtMissouri Supreme Court

Appeal fro St. Louis City Circuit Court. -- Hon. L. B. Valliant Judge.

Reversed and remanded.

Edmond A. B. Garesche for appellant.

(1) The trial court erred in subrogating respondent O'Reilly to the rights of his co-respondents Francis Fisher and John C Hacker as to the interest which he claims to have paid them on their respective deeds of trust, Exhibits A, B, C and E. The evidence shows he was a mere volunteer. Sheldon on Subrogation, sec. 1, page 2; Norton v. Highleyman, 88 Mo. 624; Bunn v. Lindsay, 95 Mo. 250; Price v. Courtney, 87 Mo. 387. (2) As against a junior incumbrancer no new terms could be incorporated into the prior mortgage, nor could any new indebtedness be secured by it. Sheldon on Subrogation, page 19. (3) The evidence shows that O'Reilly was a broker acting for the Morans; in regard to the loan on the property, the appellant, as the owner of the junior incumbrance, has a right to be subrogated to the rights of the Morans with respect to all payments which were made by them to O'Reilly; and has also a right to insist that the amounts paid by the said Morans to O'Reilly in excess of the amount which he paid out for them to carry these loans, should be accounted for and credited upon the deed of trust which is now held by him. Mason v. Bauman, 62 Ill. 76; DeBussche v. Alt L. R., 8 Ch. Div. 286; Story on Agency [9 Ed.], sec. 207; Sheldon on Subrogation, sec. 17, page 19; Bank v. Roberts, 70 Me. 384; Jones on Mortgages, sec. 1118; Harrison v. Wyse, 24 Conn. 1. (4) The court erred in refusing to permit appellant to offer and read in evidence the receipts and notes received by the owners of the equity of redemption from respondent M. B. O'Reilly.

W. F. Smith and D. D. Fassett for respondent.

The respondent, O'Reilly, is entitled to be subrogated to the rights of the respondent, Fisher, to the extent of the interest paid by O'Reilly to Fisher on the deeds of trust A, B and C. "And the right of subrogation remains unaffected by a renewal of the mortgage." 15 American and English Encyclopedia of Law, 867-869; 12 American and English Encyclopedia of Law, 866; Reyburn v. Mitchell, 106 Mo. 380. A stranger may become entitled to subrogation on payment, by consent of creditor. Fivel v. Zuber, 66 Tex. 275. Or on agreement with debtor, or without agreement, on general principles. Crippen v. Chapel, 35 Kan. 495; Gans v. Thiene, 93 N.Y. 225. Whenever he should be subrogated he will be. Yaple v. Stephens, 36 Kan. 680. If O'Reilly under an honest supposition or expectation that he was protected generally by exhibit "F" which for some reason became inoperative, or failed, he would be subrogated. Jones v. Mack, 53 Mo. 147; Honaker v. Shough, 55 Mo. 472; Burden v. Johnson, 81 Mo. 318; Flanikin v. Neal, 67 Tex. 629. (2) The respondent, O'Reilly, is entitled to subrogation to the extent of the interest advanced by him to the respondent Hacker, in payment of the interest on the deed of trust, "Exhibit E." Reyburn v. Mitchell, 106 Mo. 380; Jones v. Mack, 53 Mo. 147; Honaker v. Shough, 55 Mo. 472; Burden v. Johnson, 81 Mo. 318; A stranger entitled to subrogation on agreement with creditor. Fivel v. Zuber, 67 Tex. 275. Or on agreement with debtor, or may exist by contract, or without it, on general principles of equity. Crippen v. Chapel, 35 Kan. 495; Yaple v. Stephens, 36 Kan. 680. May be invoked to do justice generally. Gans v. Thiene, 93 N.Y. 225; 12 American and English Encyclopedia of Law, 866. (3) The respondent, O'Reilly, was and is lawfully entitled to the difference between the rate of interest collected from the Morans and that paid to Fisher upon "A, B and C," as well as that paid to Hacker on "E." O'Reilly's position was not that of Moran's agent, but: Even where an agency exists, where each of the principals has knowledge that the agent acts in a dual capacity, the disability will be removed. American and English Encyclopedia of Law, 381; Alexander v. University, 57 Ind. 466; Robinson v. Jarvis, 25 Mo.App. 421. (4) The court did not err in sustaining respondent's objection to the admission of the various documents offered in evidence, for the following reasons, to-wit:

First. Because they were incompetent, immaterial and irrelevant.

Second. Because there was no controversy about the matters to which they related, and would have been cumulative testimony on an uncontroverted issue or issues.

OPINION

Macfarlane, J.

-- This suit is against O'Reilly, Francis Fisher, John C. Hacken, Will J. Howard, Charles Moran and Mary Moran, his wife; and its purpose is to have an accounting and redeem lots three and four, block one of Goff's addition to the city of St. Louis, from certain deeds of trust made to secure notes held by defendants, as is charged.

It is charged in the petition and shown by the evidence, that on the twentieth day of February, 1871, Robert Wright, being the owner of the property, conveyed the same to Andrew S. Barada, as trustee, to secure a note of $ 2,000, payable to Margaret Barada; on the ninth day of April, he conveyed the same property to the same trustee to secure to the said Margaret another note for $ 1,000; and on the twenty-fourth day of April, 1875, he again conveyed the lots to one A. C. Taylor as trustee, to secure a note of $ 500. These notes bore interest at ten per cent. per annum. The notes and deeds of trust are in the pleadings and evidence designated respectively as exhibits A, B, and C.

On the twenty-eighth day of August, 1875, the said Wright by deed of warranty conveyed the lots to defendants Moran and wife. Moran assuming as part of the purchase price the notes secured by deeds A, B, and C. On this purchase by Moran and wife they gave back a deed of trust on the property to Wright to secure $ 1,000 purchase price which is called exhibit E. On the fifth of October, 1876, Moran and wife conveyed the same property to secure some notes due the Citizen's bank. On the third day of March, 1877, Moran and wife conveyed the same property to a trustee to secure a note of $ 3,500 payable to Will J. Howard five years after date with interest at ten per cent. and ten semi-annual interest notes of $ 140 each. This deed was designated as exhibit F, and its validity is in question.

On the second day of February 1880, the said Moran and wife conveyed the property to a trustee with power of sale, to secure to plaintiff a certain note therein described, and on the twenty-first day of February, 1888, the trustee sold and by deed conveyed the property to plaintiff. Holding the equity of redemption under this conveyance, plaintiff asked that an account be taken of the amount due on the prior deeds of trust and for leave to redeem. It was charged that the notes secured by Exhibits A, B, and C were held by defendant Fisher, and that secured by exhibit E by defendant Hacken. It was also charged that the note for $ 3,500 was given to defendant O'Reilly (though made in the name of Howard) in consideration that he would pay the notes secured by Exhibits A, B and C, and also that said defendant had collected from Moran and wife sums which had not been accounted for. A separate answer and cross bill were filed by defendant O'Reilly, in which he admitted the execution and delivery of all the conveyances mentioned in the petition. Admitted that the note for $ 3,500 (F) was assigned by Howard to him but he denied that he undertook and agreed to pay said first three notes (A, B and C) as charged.

In respect to the $ 3,500 note (F) said defendant charged that on the third day of March he was engaged in the business of financial agent in the city of St. Louis, and at the time the holders of notes (A, B and C) amounting to $ 3,500 were pressing Moran and wife for payment and they applied to him for a loan of that amount with which to pay these notes and undertook to give him as security a first lien on said lots, representing that there were no other liens on them. That he undertook to furnish them the money on this condition, and thereupon took the note and deed of trust and had the latter recorded. That upon investigation he found the other deeds of trust (E and the one to the bank) and declined to furnish the money on the deed of trust subject to those. That it was thereupon agreed that said defendant would furnish the money, but instead of paying the notes, A, B and C, he would take an assignment of them, and extend the time of their payment for five years, and reduce the interest to eight per cent. That this was done and defendant thereupon re-assigned the notes to defendant Fisher from whom he got the money. That it was also agreed that defendant should retain and hold the $ 3,500 note and deed of trust (F) as additional security.

He stated further that at the request of said Moran and wife, he did on the twenty-seventh of November, 1887, purchase from Wright the note for $ 1,000 (Ex. E.) and assigned the same to defendant Hacken, who afterwards re-assigned the same to him and that he was hen the owner thereof and said defendant Hacken had no interest therein or in this suit. That in consideration that defendant would secure an extension of time on this note "E," said defendant Moran agreed to pay interest thereon at nine per cent. semi-annually, and on the twenty-eighth of February, 1882, in consideration of procuring a further extension they agreed to pay ten per cent. interest. That the interest was so paid by said Moran until February, 1884, after which and up to June 1888, at the request of said Moran he had advanced and paid the interest on said note. He charged that on the expiration of the extension for five years of the notes (A, B and C) further extensions were made of two...

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8 cases
  • Mansur & Tebbetts Implement Company v. Jones
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    • 15 mars 1898
    ...Gilstrap note Mrs. Jones became subrogated to all the rights of the original holder thereof. Reyburn v. Mitchell, 106 Mo. 365; Grady v. O'Reily, 116 Mo. 346; Long v. Long, 111 Mo. 12; Jones on Mort., 1137, 1080. The assignment of the note carried with it the security and power of sale. Jone......
  • Funk v. Seehorn
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  • Clark v. Bettelheim
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    ... ... equitable defense. Reyburn v. Mitchell, 106 Mo. 365; ... Wolf v. Walter, 56 Mo. 292; Orrick v ... Durham, 79 Mo. 174; Grady v. O'Reilly, 116 ... Mo. 346. (2) The judgment of allowance in the probate court ... was rendered November 13, 1884, and that in the ejectment ... ...
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    ...The doctrine of subrogation could not be invoked by plaintiffs under the facts as disclosed by the evidence in the case. Grady v. O'Reilly, 116 Mo. 346; Bunn v. Lindsay, 95 Mo. 250. (2) At plaintiff's equity was a latent one, which can not be enforced against appellants, who were subsequent......
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