Loewen v. Forsee

• Decision Date: 19 January 1897
• Citation: 38 S.W. 712,137 Mo. 29
• Parties: Loewen et al., Appellants, v. Forsee et al
• Court: Missouri Supreme Court

38 S.W. 712

137 Mo. 29

Loewen et al., Appellants, v. Forsee et al

Supreme Court of Missouri, Second Division

January 19, 1897

Appeal from Johnson Circuit Court. -- Hon. W. W. Wood, Judge.

Reversed and remanded.

F. M Black, Kinley & Kinley, and I. J. Ringolsky for appellants.

(1) An agreement, though verbal, that one of the two mortgages executed at the same time shall be a first lien, will be enforced, although the mortgage foreclosed was postponed first. Bigler v. Light, 90 Pa. St. 235; Beasley v. Henry, 6 Ill.App. 485; Maze v. Burk, 12 Phila. 335. (2) Parol evidence of an agreement and representations made by the parties at the time of making the mortgage, is admissible to show which of the mortgages the mortgagor directed to be filed first, and which of the mortgages it was agreed should be the first lien on lot 71 Carlton Place. Linville v. Savage, 58 Mo. 248. (3) If W. C. and S. P. Forsee were still the owners of the notes secured by the Hoos trust deed given to S. S. Forsee, and they induced Hicks to believe he was to have a first lien for the money loaned by him to improve the lot, then they would be estopped from claiming their deed of trust a prior lien to Hicks' deeds of trust. For their inducing Hicks to act on the theory, he was to have a first lien, it would be a fraud on Hicks for the Forsees to assert first lien in themselves. Brown v. Beers, 6 Conn. 108; Stafford v Ballou, 17 Vt. 320; Rice v. Bunce, 49 Mo. 231; Longworth v. Aslin, 106 Mo. 155. (4) Mrs. Forsee took the Hoos notes subject to the equities in favor of Hicks, because it has been uniformly held that in order to entitle innocent grantees and assignees of mortgages to protection against prior unrecorded conveyances, or other equities, they must have parted with something of value, as a consideration before receiving notice of the prior conveyance or equity. Mrs. Forsee parted with nothing for the Hoos notes and security; she took them, if at all, as security for a preexisting debt. Napa Valley Wine Co. v. Rinehart, 42 Mo.App. 171; Conrad v. Fisher, 37 Mo.App. loc. cit. 412; Aubuchon v. Bender, 44 Mo. 560; Halsa v. Halsa, 8 Mo. 303; Chouteau v. Burlando, 20 Mo. 482; Paul v. Fulton, 25 Mo. 156; Digby v. Jones, 67 Mo. 104; Bishop v. Schneider, 46 Mo. 482; Rice v. Bunce, 49 Mo. 231; Fox v. Hall, 74 Mo. 315. (5) One is charged with notice of equities when taking a note before maturity as security for a preexisting debt; and is also charged with equities who takes a note after maturity as security for a debt then contracted. Slink v. Thomas, 121 Ind. 147; Wells v. Jones, 41 Mo.App. 1; Beach's Modern Eq. Jur., sec. 355; Turner v. Hoyle, 95 Mo. 337; Owens v. Evans, 134 N.Y. 514; Shaeffer v. Rulett, 50 N.Y. 61; Green v. Warner, 64 N.Y. 220; Napa Valley Wine Co. v. Rinehart, 42 Mo.App. 171; Conrad v. Fisher, 37 Mo.App. loc. cit. 412; Bank v. Frame, 112 Mo. 502; Bank v. Bates, 120 U.S. 567.

S. P. Forsee and Kagy & Bremermann for respondents.

(1) The petition does not state a cause of action. (2) There was no mutuality of contract. Forsee could not have enforced the alleged contract against Hicks or Hoos. Martin v. Halley, 61 Mo. 196; Bishop on Contracts, sec. 78. (3) Equity will not relieve against one's own negligence. Plaintiffs purchased with record notice of the priority of the Forsee lien, and are bound by what the record showed. Orrick v. Durham, 79 Mo. 174; Mason v. Black, 87 Mo. 341; Hagerman v. Sutton, 91 Mo. 532. (4) So far as they are concerned "it is not a question of innocent purchaser of commercial paper, but as to the priority of securities." Orrick v. Dunham, supra; Turk v. Funk, 68 Mo. 18; Morris v. Pate, 31 Mo. 315; Tucker v. Rogers, 94 Mo. 346. (5) The alleged contract is within the statute of frauds and void. Wendover v. Baker, 121 Mo. 290; Bogy v. Shoab, 13 Mo. 379; Page v. Gardner, 20 Mo. 511; Turk v. Funk, 68 Mo. 18; Wright v. Bircher, 72 Mo. 186; France v. Thomas, 86 Mo. 84. (6) Mrs. Forsee is protected as an innocent purchaser. Daniel on Neg. Inst., secs. 7451, 7487; McGee v. Riddlesbarger, 39 Mo. 365. (7) The uncontradicted evidence shows that she paid value for the notes, whether taken at one time or another. If she took them before maturity, she is entitled to all the advantages these facts conferred upon her. Daniel on Neg. Inst., secs. 832, 824, 1264; Deere v. Marsden, 88 Mo. 512; Hagerman v. Sutton, 91 Mo. 520. (8) The transferee of negotiable paper after maturity takes the paper "subject only to its existing equities," and free from any collateral defenses. The text writers say that this is the settled law of England and America, "and has been uniformly followed, and has been held to apply even though the indorsee had notice, gave no consideration, and took the paper on purpose to defeat the set-off." The doctrine recited in this subpoint is abundantly sustained by Daniel on Neg. Inst., secs. 724, 725; Randolph's Com. Pap., secs. 674, 675, 678; Byles on Bills, sec. 286; Jones on Mort., sec. 841; Kellogg v. Schnaake, 56 Mo. 136; Davis v. Carson, 69 Mo. 609.

Burgess, J. Gantt, P. J., and Sherwood, J., concur.

OPINION

Burgess, J.

Action by plaintiffs for the removal of a cloud on their title to the south half of lot number 71, Carlton Place, Kansas City, Missouri. The suit was brought in the circuit court of Jackson county, but the venue was subsequently changed to the circuit court of Johnson county, where a trial was had, resulting in a judgment for defendants, from which plaintiffs appealed.

The petition is in two counts.

The first count, leaving off the formal parts, is as follows: "(1) That Louis Loewen is husband of plaintiff, Julia Loewen. (2) That Morris Loewen is husband of Ida Loewen. (3) That, prior to June, 1888, defendant W. C. Forsee was the owner in fee simple of lot number 71, in Carlton Place, an addition to the city of Kansas, now Kansas City, Jackson county, Missouri. (4) That said defendant, W. C. Forsee, and wife, by warranty deed dated June 14, 1888, recorded July 9, 1888, sold and transferred said property, lot number 71, Carlton Place, to one J. J. Hoos. (5) That afterward said John J. Hoos and wife executed two deeds of trust to Samuel Foster for Charles R. Hicks. Said deeds of trust were dated June 15, 1888, acknowledged June 18, 1888, and filed for record July 9, 1888. One of said deeds of trust covers the north half of said lot 71, and the other the south half of said lot 71, each given to secure a loan of $ 1,500. (6) That afterward the said J. J. Hoos and wife made and executed a deed of trust to S. S. Forsee, trustee for W. C. Forsee. Said deed of trust is dated June 22, 1888, acknowledged July 6, 1888, and filed for record July 7, 1888. (7) That thereafter, on August 13, 1891, the debts described in each of the deeds of trust executed and given by said J. J. Hoos and wife to Samuel Foster, trustee for Charles R. Hicks, coming due, and default being made in the payment of the same, said deeds of trust were foreclosed, according to the terms and conditions mentioned in the same, and at the foreclosure sale of said property above described, by said trustee, Samuel Foster, the same was purchased by plaintiffs, Julia and Ida Loewen, who paid full value for the same; and said north half and said south half of said lot number 71, Carlton Place, were transferred to said plaintiffs, Julia and Ida Loewen, by said trustee, Samuel Foster, by two trustee deeds, both dated August 13, 1891, and recorded August 20, 1891. (8) Plaintiffs further state that, at the time the trust deeds were made and executed by said J. J. Hoos and wife to Charles R. Hicks and to W. C. Forsee, beneficiaries, it was orally agreed, by and between said Hoos, said Hicks, and said W. C. Forsee, that the deeds of trust made to Samuel Foster, trustee for Charles R. Hicks, were to be a first lien on said lot 71, Carlton Place, and it was mutually agreed by all of said parties that the deeds of trust made by said J. J. Hoos to S. S. Forsee, trustee for W. C. Forsee, were to be a second lien on said lot 71, Carlton Place, subject to the two deeds of trust made to Samuel Foster, trustee for Charles R. Hicks.

"Plaintiffs further state that said loans and deeds of trust were all made about the same time, with the understanding and agreement that said trust deeds made to said Charles R. Hicks were to be first liens on said lot described herein, and were to be filed on record first, said trust deeds being given to secure loans made to said Hoos to erect buildings on said lots, which buildings were erected on the same with said loans; and it was also mutually agreed by all parties thereto, in consideration of said Hicks agreeing to and making said loan, that said trust deed to S. S. Forsee, trustee for W. C. Forsee, was to be filed in recorder of deeds' office in Jackson county, Missouri, after the filing of said Hicks's trust deeds, and that it should be a lien on said lot, subject to the liens of the Hicks trustee deeds.

"And the plaintiffs further state that the defendant W. C. Forsee, contrary to the express agreement mentioned herein, made with said Hicks and said Hoos, wrongfully and fraudulently, and without the knowledge or consent or acquiescence of the said Samuel Foster or Charles R. Hicks, placed the trust deed executed to him on the records of Jackson county, Missouri, on July 7, 1888, which was on Saturday; the said trust deeds to Samuel Foster, trustee for Charles R. Hicks, not being recorded until July 9, 1888, which was on the following Monday.

"Plaintiffs further state that said trust deed, appearing as filed of record prior to the time of the trust deeds made to Charles R. Hicks, is a cloud on their title to the south half of said lot number 71, Carlton Place; that they are now in the possession of said south...