Hower v. Erwin

• Decision Date: 31 May 1909
• Citation: 119 S.W. 951,221 Mo. 93
• Parties: ARTHUR HOWER, Appellant, v. ELLEN J. ERWIN
• Court: Missouri Supreme Court

119 S.W. 951

221 Mo. 93

ARTHUR HOWER, Appellant, v. ELLEN J. ERWIN

Supreme Court of Missouri, First Division

May 31, 1909

Appeal from Crawford Circuit Court. -- Hon. L. B. Woodside, Judge.

Reversed and remanded (with directions).

A. H Harrison for appellant.

(1) The note in suit, being dated June 2, 1884, and being due five years after date, did not mature until June 2, 1889, and was not barred by limitation until June 2, 1899, and the plaintiff could institute suit to foreclose the mortgage or deed of trust securing the note at any time within twenty years after the maturity of the note, and this suit being filed the 16th day of June, 1904, plaintiff's cause of action was not barred by limitation. Little v. Reid, 75 Mo.App. 270; Stockton v. Teasdale, 115 Mo.App 245; Bumgardner v. Wealand, 197 Mo. 433; McCauley v. Brady, 123 Mo.App. 558; Martin v Teasdale, 212 Mo. 614. (2) The note sued upon having matured June 2, 1889, was not barred until June 2, 1899, and therefore Sec. 4277, R. S. 1899, which was first passed in 1891, did not apply in this case, as that act was applicable only to mortgage or deed of trust securing notes barred when the act was passed. Bumgardner v. Wealand, 197 Mo. 437; Stockton v. Teasdale, 115 Mo.App. 252; McCauley v. Brady, 123 Mo.App. 558; Martin v. Teasdale, 212 Mo. 614. (3) The land described in the mortgage not being in the actual possession of any person, the right to foreclose the mortgage existed for twenty years after the maturity of the obligation it was given to secure. Eyermann v. Piron, 151 Mo. 116; Stockton v. Teasdale, 115 Mo.App. 248; Bumgardner v. Wealand, 197 Mo. 433. (4) Appellant, as indorsee and holder of the note, was the real cestui que trust, and the only party authorized by law to release the deed of trust or mortgage. Sec. 7094, R. S. 1889; Ewing v. Shelton, 34 Mo. 518; Bank v. Ins. Co, 145 Mo. 160. (5) The release deed executed by Nathan V. Barlow was without authority, as shown by the record, and did not operate as a release of the deed of trust or mortgage. Sec. 7094, R. S. 1889; Lakenan v. Robards, 9 Mo.App. 179; Joerdens v. Schrimpf, 77 Mo. 383; Bank v. Grew, 84 Mo. 478; Lee v. Clark, 89 Mo. 553; Hagerman v. Sutton, 91 Mo. 533; Bank v. Trame, 112 Mo. 514; Feld v. Roanoke Investment Co., 123 Mo. 603; Kelly v. Stead, 136 Mo. 430; Borgess Investment Company v. Vette, 142 Mo. 574; Bank v. Life Ins. Co., 145 Mo. 160.

Frank H. Farris and A. L. Reeves for respondent.

It must be conceded that the note and mortgage, not being barred at the time of the passage of the Act of 1891, now Secs. 4276 and 4277, R. S. 1899, the defense of limitations raised by respondent must be ruled against her. Bumgardner v. Wealand, 197 Mo. 439. Respondent, however, rests her case upon the payment of the note. Where a mortgage security takes the form of a deed of trust, the legal title is vested in the trustee, and he is, therefore, the proper person to execute a release, but his authority is limited by the terms of the deed, and he cannot give a valid release without the payment of the debt secured or through performance of the condition of the trusts. 27 Cyc. 1417. It has been held in many jurisdictions that a release or entry of satisfaction made by the trustee, when the secured debt had not been paid, and when the act is not authorized by the holder of the obligation, will not discharge the lien of the trust deed as between the original parties, nor as to subsequent purchasers or encumbrancers who are chargeable with notice of the non-payment of the debt; but as to those who had no notice and relied on the title as shown by the record, whether as a purchaser from the mortgagor, or as a subsequent encumbrancer, the trustee's release would be effective both at law and in equity. Lennartz v. Quilty, 191 Ill. 174; Stiger v. Bent, 111 Ill. 328; Williams v. Jackson, 107 U.S. 478. The evidence was sufficient to warrant the finding of the court for defendant, on the theory that the debt secured by the mortgage has been paid and the lien on the land discharged. The note and mortgage were more than twenty years old. No interest is claimed to have been paid, and no recognition of the debt by any one, other than by the execution of the papers, for more than twenty years. A serious doubt arises if the note offered in evidence is the one described in the mortgage. The note in evidence recites that it draws interest from maturity; the mortgage recites the execution of five interest notes for $ 400 each, due in 1, 2, 3, 4, and 5 years, respectively. What has become of them? How could they be issued in conjunction with a note which would draw no interest until after maturity? If they were issued and unaccounted for, the presumption is they were paid. If they were promptly paid at maturity, is not the presumption of payment of the note so strong that, when supported by the acknowledged statement of the trustee in a deed of release duly of record for years, sufficient to support a finding that the note was paid and the lien discharged in the absence of anything to the contrary? McNair v. Lott, 34 Mo. 285; Clapp v. Leavens, 164 F. 320; Cape Girardeau Co. v. Harbinson, 58 Mo. 96; Russell v Whitely, 59 Mo. 196; Chiles v. School District, 103 Mo.App. 243; Cobb v. Houston, 117 Mo.App. 648. The presumption of payment of a note from lapse of time is a question of fact and law to be determined by the court from all the evidence. Lewis v. Schorem, 93 Mo. 26; Pratte v. Coffman, 33 Mo. 71; Chappel v. Allen, 38 Mo. 223. A mortgage is discharged by the payment of the debt, though the discharge is not recorded. McNair v. Picotle, 33 Mo. 57; May v. Mortgage Co., 138 Mo. 452; R. S. 1889, secs. 7094 and 7095.

OPINION

WOODSON, J.

This case originated in the circuit court of Crawford county, and had for its purpose the foreclosure of a deed of trust, conveying certain lands lying in said county, executed by Henry A. Morrison, to N. V. Barlow, trustee, to secure his promissory note, dated June 2, 1884, for the sum of $ 4,000, with ten per cent interest, payable to James Bauer, due and payable five years after its date.

The answer was a general denial, a plea of payment and the Statute of Limitations.

The reply was a denial of the new matter pleaded in the answer and the unconstitutionality of the statutes set up in bar.

A jury was waived, and the court found the issues for the defendant and entered judgment accordingly. In due time, and in proper form, the plaintiff appealed the cause to this court.

The facts of the case are few and they are practically undisputed. On June 2, 1884, Morrison executed his note to James Bauer for the sum of $ 4,000, due five years from date, with ten per cent interest from maturity. To secure the payment of said note said Morrison executed a deed of trust to Barlow as trustee on two hundred and eighty acres of land, situate in said county, which was duly recorded in the recorder's office. On January 1, 1885, Bauer, being the owner of said note and deed of trust, for a valuable consideration, assigned and delivered said note and deed to Arthur Hower, the plaintiff in this cause. Subsequently thereto Morrison conveyed the land to one John F. Richards, who in turn conveyed it to Ellen J. Erwin, the defendant herein, both of which deeds were made subject to the aforesaid note and deed of trust, and both were properly recorded. Said lands were wild and uncultivated and were not and had not been in the actual possession of any one since the date of the note and deed of trust. At the time of filing the suit, said note and the interest thereon were due and wholly unpaid.

On August 5, 1889, Barlow, the trustee in said deed of trust, executed a deed releasing said deed of trust, reciting therein that said note, both principal and interest, had been paid in full, which was filed for record August 8, 1899. Plaintiff objected to the introduction of this deed of release in evidence for the reason that there was nothing contained in the deed of trust which authorized him to make the release, which objection was, by the court, overruled, and plaintiff duly excepted. Plaintiff testified that he never authorized Barlow, the trustee, or anyone else to execute said deed of release.

At the request of defendant, and over the objection and exceptions of plaintiff, the court gave the following instructions:

"1. The court declares the law to be that the note, which is the foundation of this action, is barred by the Statute of Limitation, and that no valid judgment against the maker thereof, or any person who assumed the payment thereof can be had. And that no lien created on the land in dispute by any instrument of writing to secure the payment of said note can be enforced.

"2. The court declares the law to be that under the evidence plaintiff's cause of action is barred by the Statute of Limitation, and that plaintiff has no right to prosecute the action, and that judgment must be for the defendant."

I. The first question presented for determination is, did Barlow, the trustee in the deed of trust, executed by Morrison, conveying the land mentioned in the evidence to him to secure the payment of the note for $ 4,000, dated June 2, 1884, payable to Bauer, and by him endorsed before maturity to plaintiff, have authority to execute the deed of release, dated August 5, 1889, and recorded August 8, 1899?

The only evidence introduced upon that question, as disclosed by this record, was the testimony of appellant, and he testified positively and unequivocally that he did not authorize Barlow or any one else to release the deed of trust. So that must settle the matter against the contention of respondent without the statute which was in force at that time authorized the trustee named in a deed of trust to...