Johnson v. Shortridge

• Citation: 93 Mo. 227,6 S.W. 64
• Parties: JOHNSON v. SHORTRIDGE and others.
• Decision Date: 28 November 1887
• Court: United States State Supreme Court of Missouri

6 S.W. 64

93 Mo. 227

JOHNSON v. SHORTRIDGE and others.

Supreme Court of Missouri.

November 28, 1887.

MORTGAGES — LIEN — UNRECORDED TRUST DEED — CORPORATIONS — KNOWLEDGE OF OFFICERS.

In a suit to foreclose and enforce an unrecorded deed of trust as against subsequent purchasers, one of whom was a mining corporation which had by a trust deed conveyed the property to one Malone, as trustee of a banking corporation, and by a second deed of trust to one Guthrie, to secure bonds sold to defendant banking corporation, the evidence showed that Malone was an officer of the mining corporation, had notice of plaintiff's deed of trust, and, as cashier and manager of the banking corporation, had knowledge of plaintiff's deed of trust when he took the deed to himself from the mining corporation, and that the other officers of the corporations claiming the position of subsequent purchasers in good faith, who managed the transactions, also had notice of plaintiff's deed. Held, that the evidence was sufficient to show that the subsequent purchasers, although they were corporations deriving their knowledge through their officers, were not purchasers without notice of plaintiff's deed.

Appeal from circuit court, Macon county; ANDREW ELLISON, Judge.

Guthrie & Sears and Dysart & Mitchell, for appellant. John T. Jones and John F. Williams, for respondent.

NORTON, C. J.

On the twenty-ninth day of April, 1872, plaintiff owned 200 acres of land, described in the petition, situated in Macon county, and on that day conveyed by deed of general warranty all said land to Eli C. Shortridge and Charles G. Epperson, which deed was not recorded till the ninth day of August, 1878. At the time said deed was made, said Shortridge and Epperson, to secure to plaintiff two notes for the balance of the purchase money, amounting to $4,140, executed a deed of trust conveying the same land. This deed of trust was never recorded.

On the tenth of January, 1873, said Shortridge and Epperson conveyed said land by deed of general warranty to the Missouri Coal & Mining Company, a corporation duly organized under the laws of this state. This deed was recorded on the twenty-fourth day of August, 1878.

On the twenty-fourth of August, 1878, the said Missouri Coal & Mining Company gave a deed of trust on said lands to R. A. Malone, as trustee for the Macon Savings Bank, to secure a loan of $10,000, made by said bank to said company. This deed was recorded on the twenty-fourth of August, 1878. On the thirty-first of April, 1881, the said Missouri Coal & Mining Company gave a second deed of trust to Ben Eli Guthrie, as trustee, to secure the payment of $40,000 of bonds issued by the said company, which deed was recorded on the seventeenth of May, 1881. It is claimed that the larger portion of these bonds had been bought by the Macon Savings Bank, and the remainder by the Farmers' & Traders' Bank. On the sixteenth of February, 1882, the said Macon Savings Bank and Farmers' & Traders' Bank failed in business, and made an assignment for the benefit of creditors.

In May, 1882, suit was commenced to foreclose said deeds of trust, in which final judgment was rendered at the May term, 1882, of the Macon county circuit court, and said land ordered to be sold by special commissioners, who sold the same, and reported the same to the said circuit court at its August term, 1882, which was by said court affirmed, and the proceeds distributed to the said two banks according to their respective interests. At said sale the land was bought by Thomas Wardell, who is not made a party in this suit.

The plaintiff commenced this suit to foreclose his unrecorded deed of trust on the twentieth of July, 1882, and on the eighth of February, 1883, filed an amended petition adding other parties and a second count on another note. It is admitted in the petition filed by plaintiff that his deed of trust was never recorded, but he seeks to conclude the Missouri Coal & Mining Company and the two banks, on the ground that they took their respective conveyances with knowledge of his unrecorded and outstanding deed of trust. On the trial, the court gave a general judgment for an unpaid balance on the notes against said Shortridge and Epperson, and directed a sale of the lands for the payment thereof, from which the defendants have appealed to this court.

The vital question involved in this case is, does the evidence show that the Missouri Coal & Mining Company, the Macon Savings Bank secured by the deed of trust to Malone as trustee, the Farmers' & Traders' Bank, and the Macon Savings Bank, the beneficiaries, under the evidence, in the deed of trust made to Guthrie, had notice, at the time the respective conveyances were made to them, of the unrecorded deed of trust given to plaintiff to secure the notes sued on? If they had such notice the judgment must prevail; if they did not have it, the judgment is wrongful in decreeing a sale of the land to pay it. It is shown by the evidence that, on the tenth of January, 1873, when the conveyance was made to the Missouri Coal & Mining Company by Epperson and Shortridge, Epperson was president and Shortridge secretary of the company, both of whom had knowledge of plaintiff's deed of trust, because they were the grantors. But, inasmuch as in making the sale to the mining company they were acting for themselves and their interests, adverse to said company, their knowledge of the unrecorded deed of trust, acquired while not acting for the bank but for themselves, was not the knowledge of the said company. Innerarity v. Bank, 139 Mass. 332, 1 N. E. Rep. 282; Bank v. Chase, 72 Me. 226; Wickersham & Keith v. Zinc Co., 18 Kan. 481;...