Linneman v. Henry

• Decision Date: 15 February 1927
• Docket Number: No. 25092.,25092.
• Citation: 291 S.W. 109
• Parties: LINNEMAN et al. v. HENRY.
• Court: Missouri Supreme Court

291 S.W. 109

LINNEMAN et al. v. HENRY.

No. 25092.

Supreme Court of Missouri, in Banc.

February 15, 1927.

Appeal from Circuit Court, Saline County; Samuel Davis, Special Judge.

Suit by Laura Linneman and another against E. W. Henry. Judgment for plaintiffs, and defendant appeals. Reversed and remanded, with directions.

W. H. Meschede and R. D. Johnson, both of Marshall, for appellant.

Sam C. Major, of Fayette, and James & Shook, of Marshall, for respondents.

BLAIR, J.

Suit in equity to cancel a note for $3,000 and deed of trust on real estate in Howard county, securing the same. From a judgment for plaintiffs an appeal to this court was granted to defendant. We will refer to respondents and appellant as plaintiffs and defendant, as in the trial court.

A suit to cancel a deed of trust upon real estate is a suit involving the title to real estate and this court has exclusive appellate jurisdiction, regardless of the amount in controversy. Conrey v. Pratt, 248 Mo. 576, 154 S. W. 749; Loewenstein v. Insurance Co., 227 Mo. 100, 127 S. W. 72; Vandeventer v. Bank, 232 Mo. 618, 135 S. W. 23.

In substance the petition alleges that defendant was an attorney and was the legal adviser of plaintiffs, who were the owners of certain real estate in Glasgow, Mo.; that defendant was advised of an agreement of one Hannaca (said name being variously spelled in the record) to procure a loan of $7,000 for plaintiffs on said property and of the inability of Hannaca to secure the full sum, and defendant offered to loan to plaintiffs $1,600; that plaintiffs agreed to borrow said sum from defendant and to secure the payment thereof by deed of trust on said property, subject to prior liens; that defendant prepared a joint promissory note for $1,600 and interest at 8 per cent.; and that plaintiffs signed and delivered same to defendant; and that defendant prepared a deed of trust and plaintiffs executed and acknowledged the same and delivered it to defendant.

It is further alleged that, prior to the execution of said note and deed of trust, plaintiffs were not indebted to defendant; that, without the knowledge of plaintiffs, and willfully, with intent to deceive, cheat, and defraud plaintiffs, the defendant inserted in said deed of trust certain words whereby said deed of trust was made to secure the payment of an additional note from plaintiff Fred J. Linneman to defendant for $3,000 and interest; that plaintiffs, believing said deed of trust only secured the payment of said $1,600 note, executed said deed of trust without reading or having read to them the contents thereof, and plaintiffs were thus deceived and overreached by the unfair and fraudulent practices and representations of defendant and would not have executed said deed of trust had they not been so deceived; that plaintiff Fred J. Linneman is a farmer and cannot read or write, and that his wife possesses only a very limited education and has had no experience in business matters, all of which defendant well knew; that said $3,000 note is without consideration and void.

The prayer of the petition is for a decree that said deed of trust is void and does not constitute a lien upon the real estate described therein, and that it be set aside and canceled and that said note for $3,000 be canceled and that defendant be perpetually enjoined from foreclosing said deed of trust and selling said property thereunder.

After unsuccessful demurrer, defendant filed an answer admitting that he was the attorney and legal adviser of plaintiffs; that plaintiffs were on January 15, 1921, the owners of the property described in the petition, subject to incumbrances; that plaintiffs executed and delivered to defendant their note for $1,600, and defendant prepared and plaintiffs executed, acknowledged, and delivered their deed of trust on said property, subject to prior liens; that appropriate words were contained in said deed of trust securing the payment of a $3,000 note, as well as the $1,600 note, and denied each and every other allegation contained in said petition.

Said answer then alleged that defendant had been the legal adviser and attorney of Fred J. Linneman for a long time and had rendered valuable services as such to him, and that on October 1, 1920, said Linneman employed defendant as his attorney and legal adviser for an additional period of one year, and, in consideration of such employment and in consideration of services theretofore rendered and to be rendered and in full settlement therefor, said Fred J. Linneman, on December 30, 1920, executed and delivered to defendant his promissory note for $3,000, with interest, and, to secure defendant in the payment thereof, executed and delivered to defendant his chattel mortgage on certain personal property.

Said answer alleged that on January 15, 1921, plaintiffs requested defendant to loan them $1,600, and agreed that, if defendant would make said loan and would release from the chattel mortgage such personal property as plaintiff desired to sell, they would execute, acknowledge, and deliver to defendant their deed of trust on the real estate here involved and certain fixtures and personal property to secure the payment of said $1,600 loan and the payment of said $3,000 note, which the plaintiffs agreed to and did do; that defendant thereafter released from the lien of said chattel mortgage the valuable chattels therein described, and plaintiffs thereafter sold said chattels; that plaintiffs well knew the deed of trust covered both the $1,600 loan and the $3,000 note when they executed, acknowledged, and delivered said deed of trust; that defendant has fully performed his contract as attorney for plaintiff for said year.

Defendant further alleged that he is the owner of said two notes for $1,600 and $3,000, and that $200 has been paid on said $3,000 note, and that the remainder of said note and said $1,600 note remain due and unpaid, and that default has been made in the payment thereof, and prayed for a decree declaring said notes to be valid, just, and existing debts, and that said deed of trust is legal, valid, and binding and a lien upon the real estate and other property therein described for the payment of said debt, and praying for an order of sale of said property in satisfaction thereof.

The reply was a general denial of new matter alleged in the answer and a specific denial that plaintiff Fred J. Linneman was on December 30, 1920, indebted to defendant for legal services rendered or to be rendered by defendant, and denied the alleged employment of defendant for one year or for any time, and alleged that, if defendant obtained said $3,000 note from plaintiff Fred J. Linneman, the same is fraudulent and void and was executed without consideration; that plaintiff Fred J. Linneman cannot read or write, except that he can sign his name, and, if he executed said $3,000 note, he did it without knowledge that it was a note, upon the fraudulent representation and at the instance and request of defendant. Plaintiffs disclaimed knowledge of the execution of said $3,000 note or that a provision securing its payment had been inserted in the deed of trust, if said provision was in said deed when they executed, acknowledged, and delivered the same.

Plaintiff Laura Linneman alleged that she was the sole owner of the real estate conveyed by said deed of trust and had no knowledge of the existence of said $3,000 note and never heard of it until about the time this suit was instituted; that she was not a party to said note, and that no consideration passed to her for the inclusion of said $3,000 note in said deed of trust. This and other allegations in the reply were repetitions of allegations made in the petition.

Plaintiffs alleged the payment of said $1,600 note, and further alleged that the $200 which defendant claimed was paid on the $3,000 note was not paid by their knowledge or authority, but was paid out of moneys in the hanls of W. L. Hannaca belonging to plaintiffs, and, for that reason, defendant is indebted to the plaintiffs in said sum, for which, together with the relief prayed for in their petition, they prayed judgment.

The evidence in chief for plaintiffs consisted only of the testimony of plaintiffs, who are husband and wife. Their testimony tended to prove the following state of facts: Fred J. Linneman was the owner of a farm of about 300 acres in Chariton county, Mo., against which there was an incumbrance of $20,000. An exchange of properties was arranged whereby the equity in said farm was traded by plaintiffs to William L. Hannaca for certain land and buildings thereon in the town of Glasgow, in Howard county, free of incumbrances, the title to which was taken in the name of Laura Linneman. In said trade Hannaca agreed to effect a loan for plaintiffs upon such Glasgow property in the sum of $7,000. He was unable to secure the full $7,000, and was able to secure only something over $6,600, made up of three different items. $1,600 of the amount was procured from defendant, and a deed of trust to secure said loan of $1,600 was executed in favor of defendant upon the Glasgow property.

Plaintiff Fred J. Linneman could not read and could only write his name. Mrs. Linneman could read and write, but was unfamiliar with business matters. Defendant prepared the deed of trust and presented the same to plaintiffs, and represented that it was given to secure the $1,600 borrowed from him. Plaintiffs had no knowledge that said deed of trust also provided that it was given to secure the payment of a note for $3,000. Upon discovery of the presence in the deed of trust of the provision securing the payment of the $3,000 note, plaintiffs filed this suit to cancel said note and the deed of trust. At the trial the $1,600 note was admitted to have been paid.

Defendant's evidence tended to prove the following facts: Defendant is an attorney at law, practicing at Glasgow. He had known Fred J. Linneman for many years...