Linville v. Savage

• Decision Date: 31 October 1874
• Citation: 58 Mo. 248
• Parties: PHILLIP B. LINVILLE, et al., Appellants, v. SAMUEL SAVAGE, et al., Respondents.
• Court: Missouri Supreme Court

58 Mo. 248

PHILLIP B. LINVILLE, et al., Appellants,

v.SAMUEL SAVAGE, et al., Respondents.

Supreme Court of Missouri.

October Term, 1874.

Appeal from Shelby Circuit Court.

Glover & Shepley, with J. G. Blair, for Appellants.

I. When the several debts passed into the hands of third persons, they should be paid in the order in which they respectively become due. (Mitchell vs. Ladew, 36 Mo., 526; Mason vs. Barnard, 36 Mo., 384; Thompson vs. Field, 38 Mo., 320; Ellis vs. Lamme, 42 Mo., 153; Hunk vs. Erskine, 45 Mo., 484; Matthews vs. Switzer, 46 Mo., 301.)

II. The alleged agreement between Alkire and Savage, that Martin's deed of trust should have precedence over the other was simply void. It could neither qualify, alter or modify the legal effect of the written instruments. (Jones vs. Jeffries, 17 Mo., 577; Bunce vs. Beck, 43 Mo., 266; Murdock vs. Ganahl, 47 Mo., 135; Benson vs. Harrison, 39 Mo., 303; Massman vs. Holscher, 49 Mo., 87; Inge vs. Hance, 29 Mo., 399; Barton vs. Wilkins, 1 Mo., 74; Cockville vs. Kirkpatrick, 9 Mo., 697; Deitz vs. Mound City Mut. Fire & Life Ins. Co., 38 Mo., 85.)

Anderson & Boulware, for Respondents.

I. The assignment of the notes cannot vest the assignees with any higher rights or stronger equity in the security than the assignor himself had. (Potter vs. McDowell, 43 Mo., 97.)

II. An agreement made at the time by a mortgagee that one of two simultaneous mortgages shall have precedence over the other is binding upon said mortgagee. (Gilman vs. Moody, 43 N. H., 243; Freeman vs. Schroeder, 43 Barb., 620; Washb. Real Pr. [3rd Ed.], p. 111, § 10.)

And parol evidence is competent to show which of two simultaneous deeds was intended to take precedence.

III. An express lien does not operate to merge the implied lien of a vendor for the purchase price of land, when it would be inequitable for such lien to be lost. (Morris vs. Pate, 31 Mo., 317.)

IV. The doctrine recognized by this court, that where a deed of trust is given to secure notes maturing at different times the proceeds of sale are to be applied to the payment of the notes in the order of their maturity, can have no application to this case. Here the question is one of preference between two different deeds. Moreover the two sets of notes were secured by two deeds instead of one, for the express purpose of giving precedence to one of them.

NAPTON, Judge, delivered the opinion of the court.

The petition in this case, which was filed in Oct., 1870, had for its object a judgment upon two notes given by Savage, one of the defendants, to Alkire, another defendant, and the foreclosure of a mortgage or deed of trust given by Savage to secure these notes. Martin was made a party defendant because he also held a mortgage or deed of trust on the same land, and Hatcher, the other defendant, was the trustee in both deeds.

A very elaborate and detailed statement of the facts in this case, about which there is scarcely any controversy, is contained in the finding of the court, which occupies twenty pages of the record--but for the purpose of this review of them here, it will only be necessary to give a summary history of them.

Martin, one of the defendants, owning a tract of land in Lewis County (where this suit was first brought) sold it to Alkire, another defendant, on the 1st of March, 1866, and made him a deed. The purchase money was $10,500.00, $1,000 of which was paid down and nine notes for the remainder, $9,500.00, executed by Alkire to Martin, payable yearly from the 1st of March, 1865, to 1st March 1875, with interest at 8 per cent., amounting in the aggregate to $13,460.00. To secure these notes, Alkire made a deed of trust, with Hatcher as trustee, and both deeds were duly recorded.

On the 17th May 1866, Alkire sold this same land to defendant, Savage, at an advance upon the price he agreed to pay Martin, of $3,628, and gave Savage a deed, and took from Savage nine notes exactly corresponding in dates, amounts, rate of interest, etc., with those he had given to Martin; and to secure their payment, Savage also executed a deed of trust, making Hatcher trustee. This deed was dated May 17, 1866, was acknowledged the 27th May, 1866, and was recorded Aug. 30th, 1866. At the same time Savage executed four other notes to Alkire, for the advance price which he had agreed to give Alkire, and made also another deed of trust to Hatcher to secure these four notes. These four notes fell due, according to their tenor, before the nine notes herein before referred to.

The object of this transaction between Alkire and Savage, as the court finds, and as is indeed apparent on its face, was to relieve Alkire of further responsibility to Martin, and substitute Savage's notes for his, and Savage's deed of trust; to secure them in place of the notes and deed of trust which Alkire had previously, on the 1st March, given to Martin. The nine notes represented the original purchase money and the four notes the advance on this.

The second deed of Savage to Alkire bears the same date with the first (17 May 1866). It was acknowledged on that day and recorded Oct. 20, 1866.

This arrangement was satisfactory to Martin, who was informed of the second deed of trust to secure the four notes for the advance price; but being also informed by Alkire and Savage, that the first deed was entitled to priority and that the nine notes for the original purchase money would have to be paid before the four notes for the advance, he gave up to Alkire his nine notes, and entered a discharge of the mortgage or deed of trust to secure them on the record. This was done on the 30th August, 1866, the day on which the deed first named was recorded. Martin did not see the deed to secure the four notes; it was not recorded till Oct., 1866.

The first of the four notes of Savage (for the advance) was paid, and on the 19th of Oct., 1866, the day preceding the date of filing the deed of trust to secure them, the second and third of these four notes were assigned by Alkire to plaintiffs, who had no notice, except what the deeds and records furnished; and these two notes are the notes upon which the plaintiffs claim judgment and a decree of foreclosure.

Savage also paid off the first of the nine notes, which Alkire had transferred to Martin, and paid some money on the second previous to this suit. Two other notes of the nine were due and unpaid, at the date of the filing of this action.

The court, after a recital of the facts as above stated, ordered the trustee to sell the land described in both deeds of trust, and directed the proceeds, after paying expenses, to be applied, first, to the payment of the nine notes which had been substituted for the original purchase money, and then to the payment of plaintiffs' two notes. A personal judgment against Savage was rendered also in favor of plaintiffs, as well as Martin, for the amounts respectively due them.

The only question here, is as to the propriety of the decree, in giving a priority to the claims of Martin, over the claims of plaintiffs who insist on their rights to have their notes first paid, as being first due.

If this question was one between Martin and Alkire, from whom plaintiffs bought the notes, we suppose no argument or authority would be needed to justify the priority given to Martin in the decree. For, laying aside any consideration of the admissibility of the parol evidence, the transaction itself could lead to no other conclusion, than that Martin and Alkire, in substituting one deed of trust for the other, had no design that the...