Mississippi Val. Trust Co. v. McDonald

• Decision Date: 08 December 1898
• Citation: 146 Mo. 467,48 S.W. 483
• Parties: MISSISSIPPI VAL. TRUST CO. v. McDONALD et al.
• Court: Missouri Supreme Court

48 S.W. 483

146 Mo. 467

MISSISSIPPI VAL. TRUST CO. v. McDONALD et al.

Supreme Court of Missouri, Division No. 1.

December 8, 1898.

MORTGAGE — MISTAKE IN AMOUNT — REFORMATION — NOTICE — FORECLOSURE — APPEAL.

1. As against one who takes a deed of property to be subject to mortgages aggregating $28,000, and who buys at foreclosure sale of one of the mortgages, which recites that it is subject to five mortgages of the same date, each for $3,750, one of the latter, which by mistake is written for $1,350, may be reformed, the amount of interest provided therein showing that it was on $3,750, it being necessary that it be $3,750 to make up the total of $28,000 in mortgages, and the advertisement of sale giving notice that the sale would be subject to the five mortgages of $3,750 recited in the mortgage foreclosed.

2. One may in a suit in equity, not only reform, but foreclose, a mortgage; the statutory remedy of foreclosure not being exclusive.

3. Decree in equity will not be reversed for admission of incompetent evidence.

4. A mortgage being made out to correct an error in amount in a prior one, and, on discovery of an intervening mortgage, being accepted only as collateral to the first, and to show that there had been an error, as acknowledged by the parties thereto, does not waive the lien of the first mortgage.

5. There being sufficient notice on the records of a mistake in the amount of a mortgage to authorize its reformation against one who buys subject to it, it may be reformed against one to whom such purchaser mortgages the property, it being alleged in the petition that he claims an interest in the property by virtue

of the mortgage so given him, and he having merely joined in the answer of the other defendant, and neither claimed nor given evidence of any interest.

Appeal from St. Louis circuit court; Daniel Dillon, Judge.

Action by the Mississippi Valley Trust Company against John R. McDonald and others. Decree for plaintiff. Defendants appeal. Affirmed.

This is an action to reform and foreclose a deed of trust. The facts in the case, as shown by the evidence, are substantially as follows: On the 10th day of October, 1892, the defendant McDonald, being indebted to A. K. Florida in the sum of $18,750, for part of the purchase money for a lot of ground in block 913 in the city of St. Louis, fronting 84 feet 6 inches on the north line of Market street, to secure the payment of same, divided the lot into five equal parts, each fronting 16 feet 10 inches on the north line of Market street, and the indebtedness into five equal payments of $3,750 each, for which be executed five several principal notes, each for the sum of $3,750, payable three years after date, and six notes, each for $112.50, for the semiannual interest on each of said principal notes, and executed five separate deeds of trust, each on one of the distinct parcels aforesaid, to secure the payment of one of the said principal promissory notes, and its interest notes. All the notes were payable to A. K. Florida, and on the same day were delivered to him, and, in due course of business, negotiated, indorsed, and delivered to the plaintiff trust company; and thereafter, on the 12th day of October, 1892, the five deeds of trust were duly recorded; the said McDonald being also on the 14th day of October, 1892, indebted to the said Florida in the further sum of $5,500 of the purchase money for said lot of ground fronting 84 feet 6 inches on Market street, for which he on that day executed another principal promissory note for that amount, with notes for the semiannual interest thereon. To secure the payment thereof, on the same day, he executed a second deed of trust on the whole of said lot of ground, subject to the five deeds of trust aforesaid, which was also duly recorded on the 12th day of October, 1892. This deed of trust and the notes secured thereby passed into other hands. The subjecting clause therein is as follows: "This deed is made subject to five deeds of trust of even date herewith, for the sum of $3,750 each, payable in three years after date, with interest at the rate of six per cent. per anum, payable semiannually." The indebtedness secured by the first five deeds of trust and the notes given therefor were correctly recited in all of said deeds, except one in which the recital was as follows: "Whereas, the said John R. McDonald, for a part of the purchase money for the property hereinbefore described, is justly indebted unto the said party of the third part in and to the amount of thirty-seven hundred and fifty dollars ($3,750), in seven promissory negotiable notes bearing even date herewith, and made payable to the order of said A. K. Florida, described and payable as follows, to wit: One principal note, for the sum of thirteen hundred and fifty dollars, payable in three years after date; six interest notes, for the sum of one hundred and twelve and 50/100 dollars, each payable, respectively, in six, twelve, eighteen, twenty-four, thirty, and thirty-six months after date, — all of the above notes to bear interest at the rate of eight per cent. perannum from maturity." The error in the recital of the amount of the principal note therein coming to the knowledge of the plaintiff some time after, upon its suggestion another deed of trust, of like tenor, except that the amount of the principal note was correctly recited therein to be $3,750, was executed by McDonald, making no reference, however, to the former deed of trust. This second deed of trust to secure this $3,750 indebtedness was dated January 7, 1893, and recorded the same day. In regard to this deed of trust, Mr. Breckenridge Jones, plaintiff's vice president, but then secretary of the company, testifies as follows: "When we found this discrepancy in the deed of trust, I made an effort to have that corrected, and have McDonald sign a new deed of trust for the same amount on the same property; which, when found correct, and found to be a first lien, — as we had understood the first one to be, — was to take the place of the first deed of trust. He delivered it to us, we holding it as collateral until the certificate could be run down to find out whether it were a first deed of trust, as the first one had been. When that examination was made, we found that between the time, October 10th, the date of the first deed of trust, and, I think, January 7th, the date of the second deed of trust, which was intended to take its place, a deed of trust for $5,500, I think it was, had been put on the property. So, we refused then to accept the second deed of trust in payment or in cancellation of the first, but held it as collateral to the first, and in order to show that...