Jones v. Hubbard

• Decision Date: 31 January 1906
• Parties: JONES v. HUBBARD et al.
• Court: Missouri Supreme Court

90 S.W. 1137

193 Mo. 147

JONES v. HUBBARD et al.

Supreme Court of Missouri, Division No. 2.

January 31, 1906.

1. EXECUTION — SALE — TITLE ACQUIRED BY PURCHASER.

A purchaser of land at an execution sale acquired only such interest as the judgment debtor had at the date of the judgment on which the execution was based.

2. MORTGAGES — ABSOLUTE DEED AS MORTGAGE — PLEADING.

Where a petition alleged the execution of a pretended deed for a consideration named and an agreement to give the grantor an option to repurchase the land, an allegation that the deed and the option were intended by the parties to be, and in fact and in law were nothing more than, a secret and disguised mortgage to secure the payment of certain sums furnished, was insufficient to show that the deed constituted a mortgage; it being necessary to allege a loan constituting a subsisting indebtedness.

3. JUDGMENT—PERSONS CONCLUDED — PRIVIES.

A judgment that a transaction was not a mortgage, but a sale and option to repurchase, is conclusive against a purchaser of land under execution against the grantor.

4. SAME — JUDGMENTS CONCLUSIVE — CONSENT OF PARTIES.

A judgment that a transaction was not a mortgage debt, but a sale and option to repurchase, is conclusive against the parties and their privies, though rendered by consent of the parties.

Appeal from Circuit Court, Jackson County; James H. Slover, Judge.

Action by T. A. Frank Jones against Charles J. Hubbard and another. From a judgment sustaining a demurrer to the petition, plaintiff appeals. Affirmed.

Johnson & Lucas, for appellant. Pratt, Dana & Black, for respondents.

GANTT, J.

This suit was commenced in the circuit court of Jackson county April 4, 1902, by filing the following petition:

"Plaintiff says that on the 1st day of August, 1891, one Thomas H. Mastin was indebted to one Susan N. Jones in the sum of $6,500, as evidenced by a written agreement between them of that date, and on the 1st day of August, 1897, a settlement was had between them by which there was found due the said Susan N. Jones the sum of $7,500, for which sum the said Thomas H. Mastin executed and delivered to her his negotiable promissory note due three years from that date and bearing interest from date at the rate of 6 per cent. per annum; that afterwards, for value received, the said Susan N. Jones sold, indorsed, assigned, and delivered the said note to the plaintiff herein, and on the 16th day of June, 1900, plaintiff herein filed a suit on said note in the circuit court of Jackson county, Mo., by attachment against the said Thomas H. Mastin, and on that date the writ of attachment was levied on the following (along with other) real estate in Kansas City, Jackson County, Mo., to wit: Lots 17 to 27, inclusive, block 1; lots 1 to 19, inclusive, and lots 34 and 35, block 2; lots 1 to 8, inclusive, and lots 12 and 13, block 3; lots 10 to 22, inclusive, block 4; lots 1 to 18, inclusive, and the north 10 feet of lot 19, and lots 20 to 32, inclusive, in block 25; lots 1 and 2, lots 5 to 14, inclusive, the N. ½ of lot 23 and lot 24, block 32; the N. 3840/100 feet of lot 14, and lots 15 to 24, inclusive, block 33; lots 1 to 9, inclusive, and lots 11 and 12, block 34—all in Hyde Park, according to the plat thereof on file and of record in recorder's office of said Jackson county, Mo. Also lots 1 to 24, inclusive, and lots 38 to 49, inclusive—all in Park Place, an addition to the city of Kansas (now Kansas City), as shown by the plat thereof on file and of record in the recorder's office of said Jackson county, Mo. That on the 9th day of April, 1901, a judgment was given by the circuit court of Jackson county, Mo., in the suit so instituted for the sum of $7,900 in favor of the plaintiff and against the said Thomas H. Mastin, and on the 16th day of May, an execution issued from the clerk's office of said circuit court upon the said judgment, by virtue of which the sheriff of Jackson county, Mo., levied upon all the right, title, interest, and estate of said Thomas H. Mastin of, in, and to the above-described (along with other) real estate, and upon the 10th day of July, under the said judgment and execution, the said sheriff of Jackson county, at public sale held and conducted in accordance with the law, sold all the right, title, interest, and estate of the said Thomas H. Mastin of, in, and to the above-described (along with other) real estate to the plaintiff herein for the sum of $500, and executed and delivered to the plaintiff a deed therefor, which said deed was on the 13th day of July, 1901, filed for record in the office of the recorder of deeds of Jackson county, Mo.

"Plaintiff further says that in the month of May, 1803, the said Thomas H. Mastin, jointly with Julia Mastin, executed and delivered to the defendants Hubbard and Morse a pretended deed purporting to convey to them, for the consideration of $225,000, the above-described (along with other) real estate, the said Thomas H. Mastin being the owner in fee simple of an undivided half interest in said real estate, and on the same date the said Hubbard and Morse, on the one part, and the said Thomas H. Mastin and Julia Mastin, on the other part, entered into a pretended agreement in writing which recites that the said Hubbard and Morse, being the owners of the property described in the said deed, gave to the said Thomas H. Mastin and Julia Mastin an option to buy said property within three years, upon the payment of $225,000 with interest, and of an additional sum amounting to 10 per cent. upon that part of the payment made before one year from date, 18 per cent. upon that part of the payment made after one year and before two years from date, and 25 per cent. on that part of the payment made after two years and before three years from date; that the said deed and agreement were executed at the same time and were parts of the same transaction (although for the purpose of deception, the deed was dated May 15, 1893, and the agreement May 16, 1893, and the deed was recorded at once, while the agreement was withheld from record for more than a year), and were intended by the parties to be, and in fact and in law were nothing more than, a secret and disguised mortgage to secure the payment of certain sums of money furnished by the said Hubbard and Morse to the said Thomas H. Mastin and Julia Mastin; that the said deed was not intended, or understood to be, and was not, in fact or in law, an absolute or unconditional conveyance of said property; that the recital in said agreement that the said Hubbard and Morse were owners of the real estate was false and known by all the parties to be false, and the pretended option given by them to the said Thomas H. Mastin and Julia Mastin to buy said property was a fiction devised for the purpose of carrying out the terms of the secret mortgage; that the whole scheme of the deed and agreement, thus concealing and covering up the true state of the title and the real facts of the transaction, was cunningly devised by the said Hubbard and Morse to enable them to exact and receive unlawful and usurious interest upon the money furnished by them to the said Thomas H. Mastin and Julia Mastin and to evade and defeat the usury laws of this state for such cases made and provided; that the pretended option to sell provided for the repayment to them not only of the money loaned, with interest and all other proper charges, but an additional sum of 10 per cent., 18 per cent., or 25 per cent. upon such amount (being from $25,000 to $50,000) according to the time of payment, and this additional sum or bonus was an unlawful and usurious charge and would have appeared as such if the true nature of the transaction between the parties had been shown in the form of an ordinary mortgage or deed of trust.

"Plaintiff further says that in the year 1894 the said Julia Mastin filed a bill of complaint in the United States Circuit Court for the Western Division of the Western District of Missouri, against the said Thomas H. Mastin, alleging, among other things, their joint ownership of the real estate hereinbefore described (although they had previously executed said pretended conveyance thereof to the said Hubbard and Morse), and asking, among other things, for an accounting and dissolution of the partnership existing between them, and that in pursuance of an order of the said court to that effect the said Thomas H. Mastin and Julia Mastin, by their deed dated ____ day of ____, 1894, conveyed the said real estate to Hugh C. Ward, receiver, appointed such by the said court in that suit; that afterwards, upon the intervening petition of the said Hubbard and Morse filed in the last-mentioned suit, and by agreement between them and the said Thomas H. Mastin, Julia Mastin, and Hugh C. Ward, receiver, and without examination or intervention by the court, a decree was entered on June 13, 1895, defining their respective interests in the said real estate, and that the decree thus entered, by agreement of the said parties, recites: First, that the agreement of May 16, 1893, above referred to, was not a mortgage but a mere option for the purchase of the property; second, that the entire fee-simple title to the property described is vested in the said Hubbard and Morse free from any claim of the said Thomas H. Mastin or Hugh C. Ward, receiver; and, third, that the said Hugh C. Ward, receiver, his successors or assigns, shall have the option to buy the said property from the said Hubbard and Morse by paying therefor $303,417 with 5 per cent. interest thereon, upon certain conditions and terms therein set out, and ordered said Thomas H. Mastin and Julia Mastin to make another deed of conveyance to said Hubbard and Morse, which was accordingly done.

"Plaintiff further says that the state of title and the relations between the parties remained the same under this deed and decree as under the former deed and agreement, except in the following...