Morrissey v. Bologna, 41525

• Decision Date: 10 October 1960
• Docket Number: No. 41525,41525
• Citation: 240 Miss. 284,123 So.2d 537
• Parties: Miss Hazel MORRISSEY v. Giuseppe BOLOGNA et al.
• Court: Mississippi Supreme Court

Page 537

123 So.2d 537

240 Miss. 284

Miss Hazel MORRISSEY v. Giuseppe BOLOGNA et al.

No. 41525.

Supreme Court of Mississippi.

Oct. 10, 1960.

Brunini, Everett, Grantham & Quin, Vicksburg, for appellant.

Teller, Biedenharn & Rogers, Vicksburg, Lott & Sanders, Greenwood, for appellees.

LEE, Justice.

Miss Hazel Morrissey filed her bills in the Chancery Court of Warren County against Giuseppe Bologna and J. G. Sherard, substituted trustee, to cancel certain deeds of trust as clouds on the title of her lands as described therein. At the conclusion of the evidence, the court dismissed the bills without awarding any relief whatever. From the decree entered, Miss Morrissey appealed.

This litigation grew out of the following facts and circumstances: For many years, Mike T. Morrissey had been engaged in the illegal liquor business in this State. He operated in Vicksburg under the firm name of Delta Distributing Company.

Bologna had operated a wholesale liquor business in Baton Rouge, Louisiana, for many years. The sale of liquor in that state was lawful. He had sold whiskey to Morrissey since 1946. Deliveries were made from his place of business to Delta Distributing Company under bills of lading, showing delivery to Vicksburg, Mississippi.

Morrissey got in arrears in his account and Bologna insisted on payment. Mrs. Elizabeth M. Morrissey, the wife of Mike, owned considerable real estate in Warren County, known as the 'Southall Place' and the home in the City of Vicksburg, known as 'Grey Oaks.' She knew that her husband was engaged in the liquor business, but she herself had no interest therein. To secure the payment of this outstanding debt of her husband to Bologna, Mrs. Morrissey on April 29, 1953, executed and delivered to L. A. Conaty, trustee, a note and deed of trust in the amount of $25,000, payable six months after date, covering the land known as the 'Southall Place'; and again on August 5, 1955, she and her husband executed and delivered to L. A. Conaty, trustee, a note and deed of trust in the amount of $75,000, payable in twenty-five equal installments of $3,000 on September 1, 1956, and annually thereafter, covering 'Grey Oaks'.

Bologna, on February 1, 1958, by separate instruments, substituted J. G. Sherard as trustee in the place of L. A. Conaty in these two deeds of trust; and on February 13, 1958, the substituted trustee began foreclosure proceedings to sell, on March 7, 1958, the properties described in the two deeds of trust.

Mrs. Elizabeth M. Morrissey, on February 19, 1958, filed separate bills against J. G. Sherard in which she alleged that Bologna, the beneficiary in the deeds of trust, knowingly and unlawfully sold intoxicating liquor to her husband, Mike T. Morrissey, and unlawfully exacted the deeds of trust as pretended security for such sales; that such indebtedness arose out of the illegal sale of intoxicating liquor, in violation of the laws of this State; that under Section 2612, Code of 1942, Recompiled, the debt claimed and the notes and pretended security therefor were utterly and completely void; and that Bologna and his substituted trustee were barred from collecting or attempting to collect the same. In her prayer, she sought a temporary and permanent injunction against the foreclosure and a declaration by the court that the indebtedness and the deeds of trust were void and of no effect, and that the same should be noted on the land records of the county.

Temporary injunctions were issued. Although the substituted trustee, in his answer and pleadings, suggested that Bologna, the beneficiary in the deeds of trust, and Mike T. Morrissey were necessary parties, neither was in fact made a party. After the evidence had been heard, counsel for the defendant Sherard again expressly called to the attention of the court the fact that these two named persons were not parties to the action.

At the conclusion of the evidence, the chancellor made a finding of fact and conclusions of law to the following effect: That Mrs. Morrissey executed the notes and deeds of trust in question of her own accord and without any request or duress from the beneficiary therein; that these instruments evidenced the debts of her husband, Mike T. Morrissey, for whiskey which he purchased in Louisiana and transported to Mississippi for resale; that she knew of her husband's business and the nature of the indebtedness, which she was securing, and that she was assisting her husband in continuing his unlawful business; and that she must be deemed in pari delicto and not entitled to the aid or interposition of a court of chancery. For that reason, he left the parties where he found them, dismissed the complaints and dissolved the injunctions, but held that the substituted trustee was not entitled to the statutory damages allowable under Section 1352, Code of 1942, Recompiled.

The defendant Sherard appealed from that portion of the decree denying to him the recovery of damages, made mandatory, as he contended, by the statute; and on that appeal, in the case entitled J. G. Sherard, substituted trustee, v. Mrs. Elizabeth M. Morrissey, 111 So.2d 662, this Court affirmed, without an opinion, the action of the trial court in denying the recovery of damages.

Two deeds of trust, which were first liens, were outstanding in favor of the First National Bank & Trust Company of Vicksburg, dated July 30, 1952, and December 15, 1954, against 'Southall Place' and 'Grey Oaks', respectively. Both deeds of trust were in default and payment had been demanded. On October 7, 1958, for considerations of $3,992.01 and $388.87, and the assumption of the payment of these deeds of trust, Elizabeth M. Morrissey, in the first instance, and she and her husband, Michael T. Morrissey, in the second instance, conveyed and warranted the 'Southall Place' and 'Grey Oaks', in each instance correctly described, to Hazel Morrissey, a sister of Michael T. Morrissey.

Thereafter, Miss Hazel Morrissey, on October 8, 1958, filed this suit, being two separate bills in which she made both J. G. Sherard, substituted trustee, in the deeds of trust, and Giuseppe Bologna, defendants. She alleged that she was the owner in fee simple of both the 'Southall Place' and 'Grey Oaks', describing the properties in detail. She charged that her title was derived from the U. S. Government, and by mesne conveyances, through Mrs. Elizabeth M. Morrissey. Copies of her deeds were attached as exhibits to the bills. She averred that the claim of the defendants arose by reason of the deeds of trust of the same Mrs. Elizabeth M. Morrissey, the common source of title, executed by her to them on the same property under the dates of April 29, 1953, and August 5, 1955, as heretofore mentioned. She also charged that the indebtedness for which the deeds of trust had been given as security was incurred by Mike T. Morrissey, husband of Mrs. Elizabeth M. Morrissey, for the purchase of intoxicating liquor from the defendant, Bologna in violation of the laws of Mississippi, and that the debt and the deeds of trust were void and of no effect and were unenforceable in this State. Inasmuch as the defendants were undertaking to foreclose the deeds of trust and to claim the property, she prayed that the deeds of trust should be declared null and void, and that they should be cancelled and removed as clouds upon her title. When it subsequently appeared that the substituted trustee had consummated the sales on October 9, 1958, the court permitted an amendment of the original bills so as to pray for cancellation also of the trustee's deeds which were executed pursuant thereto.

Sherard, the substituted trustee who was served with process on October 8, 1958, in his answer, reported that he had made the sale on October 9, 1958, and asked to be discharged. The answer of the defendant, Bologna, who was served with process on October 9, 1958, after denying all of the material allegations of the bills, asserted that he had acquired title by virtue of the trustee's deeds, and set up several special pleas in which he maintained the following: (1) That in the previous proceedings, it was adjudicated that Mrs. Elizabeth M. Morrissey, in assisting her husband to continue his illegal business of selling whiskey in Mississippi, had no right in a court of equity to receive any affirmative relief; that the complainant knew and was charged with knowledge thereof; that the conveyance to her was a mere sham or pretense; that she was not a bona fide purchaser for value; and that her position was no different from that of Mrs. Elizabeth Morrissey. He pled the doctrine of res judicata; but said also that if it was not applicable, then he invoked the doctrine of estoppel by judgment. He further set up that Mike T. Morrissey's indebtedness was validly incurred in Louisiana, where the sale of liquor was lawful, and such contract should not be impaired.

Bologna, called as an adverse witness, admitted that he had been selling liquor to Mike T. Morrissey, operating in the City of Vicksburg as Delta Distributing Company since 1946; that his place of business was in Baton Rouge, Louisiana; that he went back and forth to Vicksburg to confer with Morrissey; that bills of lading for the shipments were made to Vicksburg and the liquor was sold to Morrissey in Mississippi; that he knew that Morrissey was selling this liquor in Mississippi; that the notes and deeds of trust involved in this litigation were given as security for Morrissey's purchases of liquor; that he knew that the sale of liquor in Mississippi was illegal; that he had been in Morrissey's place of business about fifty times, and, on occasions, had made collections while there; and that the notes and deeds of trust were executed and delivered in Mississippi.

The learned chancellor, at the conclusion of the evidence, took the case under advisement for decision in vacation, and, thereafter, without making a finding of fact or conclusion of law,...