Holland Banking Company v. See
| Decision Date | 06 June 1910 |
| Citation | 130 S.W. 354,146 Mo.App. 269 |
| Parties | HOLLAND BANKING COMPANY, Respondent, v. FRED W. SEE, Trustee, et al., Appellants |
| Court | Missouri Court of Appeals |
Appeal from Barton Circuit Court.--Hon. B. G. Thurman, Judge.
Judgment affirmed.
Mann Johnson & Todd and Patterson & Patterson for appellant.
(1) The court erred in rendering judgment against the defendant because under the petition and the agreed statement of facts which was all the evidence, no cause of action is alleged or stated in this, that it appears that there was no relation of contract or legal obligation between plaintiff and defendant. State ex rel. v. Loomis, 88 Mo.App. 507; State v. Railroad, 125 Mo. 615; Lewis v. Land Co., 124 Mo.App. 685; Insurance Co. v. Water Co., 42 Mo.App. 118; State ex rel. v. Winterbottom, 123 U.S 215, 31 Law Ed. 124; Bank v. Ward, 100 U.S. 202, 25 Law Ed. 623; Hedges v. Dixon County, 150 U.S. 192; Bank v. Ward, 100 U.S. 195, 25 Law Ed. 621.
Barbour & McDavid for respondent.
(1) The statute limiting the time within which a debt due an estate must be filed, or section 185 referred to, does not affect a mortgage lien or any remedy thereon, nor does it release it nor pay the debt. This has been held to be the law of Missouri. Burris v. Cook, 215 Mo. 508; Conway v. Mueller, 176 Mo. 192. (2) Much has been written on the subject of subrogation and it has been likened to substitution and possesses some of the features of an equitable lien. In consideration of this subject the following authorities are cited. Harris on Subrogation, sec. 1; Sheldon on Subrogation, sec. 1; Pomeroy on Equity Jurisprudence, sec. 1211; Bispham's Equity, sec. 18; Furnold v. Bank, 44 Mo. 338; Capen v. Garrison, 193 Mo. 341; Clark v. Bank, 57 Mo.App. 286; Burnside v. Fetzner, 63 Mo. 111; Bank v. Leyser, 116 Mo. 78; Thornton v. Bank, 71 Mo. 232; Rachal v. Smith, 101 F. 164; In re Bruce, 158 F. 123; National Surety Co. v. Bank, 156 F. 26; Crippen v. Chappel, 35 Kan. 499, 11 P. 453, 57 Am. Rep. 187; Barnes v. Mott, 64 N.Y. 401, 21 Am. Rep. 625; Arnold v. Green, 116 N.Y. 571, 23 N.E. 1; Cobb v. Crittenden, 176 F. 513; Railroad v. Dow, 120 U.S. 287; Bank v. Bierstadt, 168 Ill. 618; Prindville v. Curran, 132 Ill.App. 172; Smith v. Surety Co., 59 N.Y. 791; Vassar v. Liberty, 110 S.W. 121; Goldsmith v. Stewart, 45 Ark. 154; Chaffee v. Oliver, 39 Ark. 542; Cook v. Berry, 44 A. 77; Tarver v. Bank, 27 S.W. 40; McNeil v. Miller, 2 S.E. 335; Polluckie v. Wegenke, 119 N.W. 189; Emmert v. Thompson, 52 N.W. 31; Crippen v. Chappel, 11 P. 453; Arnold v. Green, 116 N.Y. 574; Barnes v. Motts, 64 N.Y. 401; Bank v. Paulsen, 78 N.W. 313.
On the 16th day of November, 1907, the plaintiff filed in the circuit court of Greene county, its petition against the defendants herein. At the May term, 1908, of said court, the defendants were granted a change of venue to the Barton County Circuit Court. The cause was tried in the Barton County Circuit Court, resulting in a judgment in favor of the plaintiff, and the cause is in this court on the appeal of the defendant, Fred W. See, trustee, from that judgment.
The conceded facts in the case are as follows: E. M. Robords departed this life in 1904, and the defendant, Fred W. See, duly qualified as his administrator, and was acting as such at the time this suit was commenced and tried. Robords prior to his death, was engaged in the business of handling Soldiers Additional Homestead Claims, and he purchased from the defendant, Allmon, claims of that character in the names of one Fitzgerald, Clark, Smith and Miller, paying for the claims of Smith and Miller nine hundred dollars; that after Allmon had transferred said claims to Robords, Allmon executed to the defendant, See, as trustee for Robords, a deed of trust on certain property in the city of Springfield. This deed of trust was executed because some question had come up concerning the validity of the homestead claims purchased by Robords from Allmon, and in order to secure Robords against loss. In addition to the deed of trust for twelve hundred dollars, the sum of five hundred dollars was deposited with Robords, and a warranty deed to a house and lot.
A written contract was entered into between Allmon and Robords, by which it was agreed should the said homestead claims be fraudulent or worthless, Robords was to retain from the said securities the amount required to compensate him for the amount originally paid for the claims, and after he had made himself whole, the surplus of the indemnity fund was to be returned to Allmon. It was further agreed that the securities should be appropriated for the purposes for which they were given, in the following order: The cash deposit of five hundred dollars, the house and lot for the sum of five hundred dollars, and last, the deed of trust should be foreclosed.
Robords borrowed from the respondent bank $ 15,500, for which he executed his several promissory notes, payable on demand. To secure the payment of the notes, he pledged and transferred to said bank, a number of homestead claims, including the claims of Smith and Miller above mentioned. Robords was unable to pay his notes, and the bank had disposed of, at a fair and reasonable valuation, all the security given by Robords to secure the payment of his notes, except the two homestead claims of Smith and Miller, and one additional claim. These three claims are absolutely worthless, and plaintiff tendered them into court at the trial of the case.
The contract between Allmon and Robords further provided for the return of the claims to Allmon when Robords had realized from his securities the amount paid for the claims.
In September, 1904, letters of administration were issued and notice thereof published in accordance with the law, and the plaintiff filed no claim against the estate of Robords within two years from the date of the publication of the notice of letters of administration. Upon the death of Robords, the twelve hundred dollar note secured by the deed of trust was found among his assets, and came into the possession of the administrator, and who, as trustee, afterwards advertised the property for sale under the terms of the deed of trust and the same was sold for $ 1150. The contest is over this fund.
The plaintiff alleges in his petition the facts as above stated, and claims that the funds in the hands of the defendant, See, arose out of the sale of the property given to secure the validity of the homestead claims held by plaintiff, and that by reason of the assignment of said claims to plaintiff by Robords for a valuable consideration, plaintiff became vested with the rights of Robords in and to all moneys arising from the foreclosure of property given to secure the payment of such claims.
It is alleged in plaintiff's petition that giving due credit for all payments made by Robords on his notes to plaintiff, there is due plaintiff on said notes, the sum of three thousand dollars, for which it holds no security, except its claim against said funds in the hands of the defendant, See. The petition asked that the funds in the hands of See, to the amount of nine hundred dollars, arising from the sale of the real estate, be paid to the plaintiff.
The defendant, Allmon, filed an answer in the nature of an affirmative pleading, and upon motion of the appellant, he was required to give bond, and failing to do so, his pleading was, on motion of appellant, stricken out, and the cause was, by Allmon, abandoned.
The answer of the defendant, See, is a general denial, and a plea of the Statute of Limitations, alleging that the plaintiff presented no demand against the estate of Robords within the two-year period fixed by the statute.
We do not believe the two-year Statute of Limitations prescribed for presenting demands against the estates of deceased persons applies to cases of this character.
In Cowan v. Mueller, 176 Mo. 192, 75 S.W. 606, it is expressly held that the owner of a note made by decedent, can after the two-year Statute of Limitations, and without ever having presented such note for allowance, have the deed of trust executed by decedent as security for the payment of the note, foreclosed at any time within the period fixed by the general statute limiting the life of notes. The reasoning in that case is so applicable to the facts in the present case that we consider the same decisive of the point.
The main controversy is the right of respondent to be substituted or subrogated to the rights of the administrator of Robords to the security taken by Robords to protect him against any loss by virtue of the homestead claims proving to be worthless.
"Subrogation" is defined by Anderson in his Law Dictionary to be "The substitution of a new for an old creditor; more generally, the act of putting, by transfer, a person in the place of another."
The right is not founded on contract. It is a creation of equity; is enforced for the purpose of accomplishing the ends of substantial justice; and is independent of any contractual relation between the parties. [Memphis R. R. Co. v. Dow, 120 U.S. 287, 30 L.Ed. 595, 7 S.Ct. 482.]
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