Long v. Greene County Abstract & Loan Company

• Decision Date: 10 July 1913
• Parties: OSCAR LONG et al. v. GREENE COUNTY ABSTRACT & LOAN COMPANY et al., Appellants
• Court: Missouri Supreme Court

158 S.W. 305

252 Mo. 158

OSCAR LONG et al. v. GREENE COUNTY ABSTRACT & LOAN COMPANY et al., Appellants

Supreme Court of Missouri, First Division

July 10, 1913

Appeal from Greene Circuit Court. -- Hon. Alfred Page, Judge.

Reversed.

W. R Self and T. J. Murray for appellants.

Equity will not entertain jurisdiction where there is an adequate remedy at law. Thias v. Siener, 103 Mo. 314; Davidson v. Dockery, 179 Mo. 687. The plaintiffs had an adequate remedy at law. The defendants are admitted to be solvent. The laws give them an adequate remedy. Laws 1905, p 173, sec. 3708. He who seeks equity must do equity. Ruppel v. Savings Association, 158 Mo. 622. Unless a judgment is responsive to the issues set up in pleadings it is erroneous, and motion in arrest of such judgment should be sustained. Schneider v. Patton, 175 Mo. 684; Jackard v. Anderson, 32 Mo. 188. One seeking to rescind a contract must as a condition precedent restore or offer to restore what he got by the contract, or refund its value. Culbertson v. Young, 86 Mo.App. 277; Robinson v. Siple, 129 Mo. 220; Ruppel v Savings Association, 158 Mo. 621. The plaintiffs must tender into court the amount admitted to be due before an injunction will be granted to prevent the sale under deed of trust. Ferguson v. Soden, 111 Mo. 208; Price v. Empire Loan Association, 75 Mo.App. 556. A court of equity cannot reform an instrument unless there is a mutual mistake made in drafting the contract. Plaintiffs do not claim that there was a mutual mistake in making the contract. Therefore it cannot be reformed. It must be enforced as made or declared void. The decree attempted to make a new contract between plaintiffs and defendants. If an agreement is what the parties thereto intended it should be, equity will not interfere because they did not understand its legal effects. Corrivan v. Tillney, 100 Mo. 276; Henderson v. Dickey, 35 Mo. 120.

Henry C. Young for respondents.

(1) The second deed of trust was null and void because given for a wholly fictitious indebtedness, and it therefore constituted a cloud upon the plaintiffs' title which the court had a right to remove. The decree in that behalf is manifestly correct. (2) The equitable jurisdiction of the court was correctly invoked, if for no other reasons, upon the ground that the removal of clouds from titles and the correction of fraud are among the most ancient subjects of equity jurisdiction. Superadded to this we have a case of mistake on the part of plaintiffs which was induced by the conduct of defendants. Smith v. Patterson, 53 Mo.App. 73; Janney v. Spedden, 38 Mo. 395; Harper v. Rosenberger, 56 Mo.App. 388; Pratt v. Clark, 57 Mo. 189; Dingle v. Pollock, 49 Mo.App. 479; Paris v. Haley, 61 Mo. 453; Stewart v. Caldwell, 54 Mo. 536; Bank v. Chambers, 96 Mo. 459; Dingle v. Pollock, 49 Mo.App. 479; Leeper v. Eylor, 111 Mo. 312; Swathen v. Swathen, 104 Mo. 201; Gardner v. Ercy, 99 Mo. 523; Verdin v. St. Louis, 131 Mo. 26; State ex rel. v. Phillips, 97 Mo. 331; Chrisman v. Linderman, 202 Mo. 613. (a) The deed of trust to secure a fictitious debt of $ 50 is certainly a cloud upon title; and the excess interest amounting to usury in the $ 612 note is certainly pro tanto, to the extent of such interest, also a cloud thereon. (b) The conduct of the chief managing officer of the defendant abstract company was of such a fraudulent character as to justify the interposition of a court of equity in behalf of respondents. Smith v. Patterson, 53 Mo.App. 66. (3) A court of equity has power to purge a contract of its usurious interest. Lewis v. Loan Assn., 183 Mo. 351; McDonnel v. Loan Assn., 175 Mo. 270; Ruppel v. Savings Assn., 158 Mo. 613; Storage Co. v. Glassner, 169 Mo. 38; Vandergriff v. Swinney, 158 Mo. 527. (4) Plaintiffs, by their bill, offer to do full equity. This is sufficient to give them standing in a court of equity. Ruppel v. Association, 158 Mo. 613; Kline v. Vogel, 90 Mo. 239. (5) Plaintiffs are entitled to have their contract reformed according to the true intent of the parties. And if by reason of fraud, mistake or accident, the contract fails to express that intent, equity will intervene and compel the doing of that which should have been done in the first instance. Bruer v. Pritchett, 163 Mo. 560; Blair v. Railroad, 89 Mo. 383; Miller v. Railroad, 162 Mo. 424.

WOODSON P. J. Bond, J., dissents.

OPINION

WOODSON, P. J.

This was a suit instituted in the circuit court of Greene county by the plaintiffs, having for its object the injunction of defendant from selling two certain lots of ground situate in Block H in Eagle Heights Place, Springfield, Missouri.

A demurrer was filed to the bill by defendants, which was by the court overruled; and they, declining to plead further, judgment was rendered in favor of plaintiffs, enjoining the sale of the lots and reforming the contract, eliminating therefrom all usurious interest from the evidence of the debt and securities of the loan, purging the first note and deed of trust of all usury, and cancelling the second note and deed of trust because they were wholly based upon usury, otherwise leaving the loan and the securities thereof in full force and effect, except the monthly payments provided for in the deed of trust were to begin with and date from the rendition of the judgment, and not from the date of the notes and deeds of trust.

From this judgment of reformation and cancellation the defendants in due time and in proper form appealed the cause to this court.

This state of the record calls for a careful consideration of the bill or petition filed in the trial court, and upon which the judgment was predicated; and before we can do that intelligently the bill will have to be set out, which, omitting formal parts is as follows:

"Comes now the plaintiffs in the above entitled cause, and state that the defendant, the Greene County Abstract and Loan Company is a corporation duly organized and acting as such under the laws of the State of Missouri, and that the defendant W. E. Freeman is the duly qualified and acting sheriff of Greene county, Missouri. Plaintiffs further state that on or about the 17th day of January, 1908, they borrowed of and from the Greene County Abstract & Loan Company of Springfield, Missouri, the sum of $ 400, and no other or further sum, and agreed to secure the same by deed of trust upon the following described lots and parcels of land situated in the county of Greene and the State of Missouri, to-wit: Lots two and three in Block H in Eagle Heights Place, an addition to the city of Springfield Missouri. That at the time of securing said loan and making said agreement for the execution of the deed of trust upon the real estate hereinbefore described, the defendant the Greene County Abstract & Loan Company caused and procured the plaintiffs to make and execute a deed of trust upon said premises, which was so drafted and prepared as to demand and require of the plaintiffs a sum of money, in payment of said loan of $ 400, which was largely in excess of said amount and extortionate and usurious in this: That said deed of trust called for and required payment of a certain installment note, bearing date of January 17, 1908, amounting in the aggregate to $ 612, payable in seventy-two monthly installments of $ 8.50 each, beginning on the first day of March, 1908, and payable on the first day of each and every succeeding month thereafter, for a period of seventy-one months, until the whole of said sum of $ 612 should be paid off and discharged, and that it was expressly provided by the terms of said installment note that each and every one of said installments should, unless paid at maturity thereof, bear interest at the rate of eight per cent per annum. Plaintiffs further state that at the time when the deed of trust last hereinbefore referred to was executed, the defendant the Greene County Abstract & Loan Company caused and required plaintiffs, without any consideration whatsoever therefor, to execute an additional deed of trust bearing date on the 17th day of January, 1908, and recorded in Book 209, page 434, in the Recorder of Deeds' office of Greene county, Missouri, for the purpose of securing a pretended but wholly fictitious indebtedness of fifty dollars, evidenced by the promissory note of the plaintiffs for that amount, due in six years after date and bearing interest at the rate of eight per cent per annum after the maturity thereof. Plaintiffs further state that either of the defendants, the Greene County Abstract & Loan Company, or the defendant T. J. Murray, is the holder and pretended owner of said notes for the sum of $ 612 and fifty dollars, respectively, and they are ignorant as to which of said two defendants is the pretended owner and holder of same, but they allege the fact to be that one or the other of said two defendants is such pretended owner and holder.

"Plaintiffs further state that the defendant W. E. Freeman is as aforesaid the acting sheriff of Greene county, Missouri, and claims to be acting trustee under the terms and provisions of the last deed of trust hereinbefore described given as aforesaid to secure the payments of the said note for fifty dollars. That under and by virtue of provisions mentioned and described of said last deed of trust it is provided that if default be made in the payment of the principal or the interest or any part thereof of the note or notes secured by the first deed of trust hereinbefore described for the sum of $ 612, and if such defaulted payments are made by the beneficiary of said second deed of trust, the indebtedness secured by said second deed of trust should at the election of holder of said note or notes immediately become due and payable, and the trustee named in the said deed of trust...