Mutual Bank & Trust Co. v. Goedecke

• Decision Date: 12 December 1941
• Docket Number: 37622
• Citation: 159 S.W.2d 258,348 Mo. 1164
• Parties: Mutual Bank & Trust Company, a Corporation, v. Stella Goedecke, Appellant
• Court: Missouri Supreme Court

159 S.W.2d 258

348 Mo. 1164

Mutual Bank & Trust Company, a Corporation, v. Stella Goedecke, Appellant

No. 37622

Supreme Court of Missouri

December 12, 1941

Rehearing Denied February 26, 1942.

Appeal from Circuit Court of City of St. Louis; Hon. Joseph J Ward, Judge.

Reversed and remanded (with directions).

Clem F Storckman, William L. Igoe and Victor A. Wallace for appellant.

(1) Neither under its petition nor its proof does plaintiff show the existence of facts necessary to a decree in its favor, because: (a) An equitable mortgage can only arise from a specific agreement, and equity requires clear and unequivocal proof of the intention of the parties to create an equitable mortgage lien, and the plaintiff has not sustained its burden of proof in this respect, but the evidence is to the contrary. 41 C. J. 294, Mortgages, sec. 33; Jones on Mortgages (8 Ed.), sec. 225, page 262; Jones on Liens (3 Ed.), secs. 31, 32; New Orleans Natl. Banking Assn. v. Adams, 27 L.Ed. 910, 109 U.S. 211; Smith v. Rainey, 9 Ariz. 362, 83 P. 463; Hibernian Banking Assn. v. Davis, 295 Ill. 537, 129 N.E. 540. (b) The collateral agreement upon which plaintiff bases its action does not describe any specific property, and equity requires the contract to clearly describe or point out the property to which the lien attaches. 41 C. J. 302, Mortgages, sec. 48; Carter v. Holman, 60 Mo. 498; Langley v. Vaughn, 57 Tenn. 554; Boehl v. Wadgymar, 54 Tex. 589; Industrial Lumber Co. v. Tex. Pine Land Assn., 72 S.W. 875, 31 Tex. Civ. App. 375; Pomeroy's Eq. Jur. (4 Ed.), sec. 1237; Sanderson v. Stockdale, 11 Md. 563; Jones on Liens (3 Ed.), sec. 33. (c) There is no pleading or proof of fraud, accident or mistake, which are the only equitable grounds that would entitle the plaintiff to the benefit of any agreement other than that expressed in the collateral pledge contract. Jones on Liens (3 Ed.), sec. 70; Cheff v. Haan, 257 N.W. 894, 269 Mich. 593; Printup v. Barrett, 46 Ga. 407. (2) Since the evidence showed that plaintiff made its loan in reliance on the commitment from Kurrus-Goddard Company, and that the plaintiff assumed the obligation of seeing that the building was completed and the title clear, and since the bank did not comply with its agreement, it is not entitled to any lien, for an equitable lien under the agreement of the parties only arises when the agreement is fulfilled. Jones on Liens (3 Ed.), sec. 38. (3) The collateral pledge agreement is complete upon its face, and since the ambiguity, if any, is patent, parol evidence is inadmissible to vary or contradict its contents, and plaintiff is not permitted to show that what is a complete pledge agreement upon its face was in fact intended as an equitable mortgage. Carter v. Holman, 60 Mo. 498; Jamison v. Wells, 7 S.W.2d 347. (4) Plaintiff cannot be permitted by parol to make out of the collateral pledge contract an agreement for a mortgage which would convey, or effect an interest in, land, as this would be, in contravention of the statute of frauds. Sec. 3354, R. S. 1939; Sleeth v. Sampson, 142 N.E. 355, 237 N.Y. 69, 30 A. L. R. 1400; Shy v. Lewis, 12 S.W.2d 719, 321 Mo. 688; Davis v. Holloway, 295 S.W. 105, 317 Mo. 246; Rosenberger v. Jones, 24 S.W. 203, 118 Mo. 559. (5) A pledge agreement relates to and deals exclusively with personal property, and, having prepared and used that form of agreement, the plaintiff cannot vary or contradict its own handiwork and now contend the collateral pledge contract covers real estate and creates an equitable mortgage. 49 C. J. 895; Jones on Liens (3 Ed.), sec. 11; Crooghan v. Savings Trust Co., 85 S.W.2d 239, 231 Mo.App. 1161. (6) It is admitted in the record that the Phoenix Mutual gave no consideration to Miss Goedecke for the note and deed of trust, and, since there was no endorsement or transfer of the note to the plaintiff, the plaintiff could not derive any right or benefit therefrom because the deed of trust could not, in and of itself, apart from the note, be assigned. Mo. Real Est. & Loan Co. v. Gibson, 220 S.W. 675, 282 Mo. 75; Thayer v. Campbell, 9 Mo. 280. (7) Under a general denial, coupled with a verified denial of execution, the defendant is entitled to adduce any evidence tending to show that the plaintiff never had a cause of action, and the court erred in excluding defendant's evidence offered to prove that the bank's agreement was to see that the building was completed and the title cleared and that it failed to do so. Cushing v. Powell, 109 S.W. 1054, 130 Mo.App. 576; Ornburn v. Haley, 225 S.W. 114; Harrington v. Dunham, 202 S.W. 1066. (8) Even if the Phoenix Mutual note and deed of trust and the other three series of notes and deeds of trust had been pledged, the collateral pledge contract provides for a method for relief, and the remedy at law is adequate, and the plaintiff could not forfeit title to the deeds of trust so pledged and foreclose upon the real estate security. 49 C. J. 982, sec. 213; Swofford Bros. Dry Goods Co. v. Randolph, 151 Mo.App. 385, 132 S.W. 255; Smith v. Becker, 192 Mo.App. 597, 184 S.W. 942.

Bryan, Williams, Cave & McPheeters for respondent.

(1) Under its petition and proof, plaintiff alleged and proved the facts necessary to a decree in its favor. (a) By executing, delivering and pledging to plaintiff bank the note to Phoenix Mutual Life Insurance Company, and deed of trust securing the same, as collateral security under the terms and conditions of the Collateral Pledge Contract, defendant undertook to create and give to the plaintiff a mortgage lien upon the premises described in said deed of trust as security for the payment of the $ 45,000 loan from plaintiff to defendant, and by reason of the fact that said note to Phoenix Mutual Life Insurance Company was not endorsed by Phoenix Mutual Life Insurance Company, plaintiff obtained an equitable mortgage lien upon said premises. Fendler v. Roy, 331 Mo. 1083, 58 S.W.2d 459; Harwood v. Toms, 130 Mo. 225, 32 S.W. 666; Campbell v. Hoff, 129 Mo. 317, 31 S.W. 603; Warren v. Richie, 128 Mo. 311, 30 S.W. 1023; Mellier v. Bartlett, 103 Mo. 381, 17 S.W. 295; 41 C. J. 294; Jones on Mortgages (8 Ed.), sec. 225, p. 262; Stark v. Kirkley, 129 Mo.App. 353; Laurenceville Cement Co. v. Parker, 60 Hun, 586, 15 N.Y.S. 577; Chauncey v. Arnold, 24 N.Y. 330; Jones on Collateral Securities and Pledges (3 Ed.), sec. 142, p. 169. (b) The Collateral Pledge Contract describes with sufficient accuracy the property pledged thereunder. Klaber v. Lahar, 63 S.W.2d 103; Chattanooga Natl. Bank v. Rome Iron Co., 102 F. 755; 49 C. J. 905; Virginia-Carolina Chemical Co. v. McNair, 139 N.C. 326, 51 S.E. 949; 2 Paton's Digest, 1926, sec. 3820a. (c) It is not necessary for plaintiff to plead or prove fraud, accident or mistake as a ground of equitable jurisdiction in the present case. 21 C. J. 119; 19 Am. Jur., 152; Hughes v. Community Bank of Dawn, 336 Mo. 305, 78 S.W.2d 98. (2) The evidence did not show that plaintiff made its loan in reliance on the commitment from Kurrus-Goddard Company, or that the plaintiff assumed the obligation of seeing that the building was completed and the title clear, or that the bank failed to comply with any such agreement. (3) No parol evidence was offered to vary or contradict the Collateral Pledge Contract, but merely parol evidence to identify the collateral in its possession. 20 Am. Jur. 1006; 22 C. J. 1261. (4) Plaintiff did not attempt to prove by parol evidence any agreement within the statute of frauds. 22 C. J. 1261; 49 C. J. 905; 21 R. C. L. 641. (5) Under the terms of the Collateral Pledge Contract personal property was pledged, to wit, various notes which were secured by deeds of trust, which deeds of trust "followed" the pledge of such notes. Smith v. Holdoway Const. Co., 344 Mo. 862, 129 S.W.2d 894; Missouri Real Est. & L. Co. v. Gibson, 282 Mo. 75, 220 S.W. 675; George v. Surkamp, 336 Mo. 1, 76 S.W.2d 368; St. Louis Mut. Life Ins. Co. v. Walter, 329 Mo. 715, 46 S.W.2d 166; American Bank v. Bray, 321 Mo. 576, 11 S.W.2d 1016; Baade v. Cramer, 278 Mo. 516, 213 S.W. 121; Lipscomb v. Talbott, 243 Mo. 1, 147 S.W. 798. (6) The Phoenix Mutual Life Insurance Company deed of trust was not assigned apart from but along with the note which it secured. (7) The evidence offered by the defendant with respect to an alleged contract of the bank to see that the building was completed was properly excluded. 49 C. J., 800; 21 R. C. L. 568; Kelleher and Little v. Henderson, 203 Mo. 498; Carter v. Insurance Co., 275 Mo. 84; Arn v. Arn, 264 Mo. 19; McDearmott v. Sedgwick, 140 Mo. 172; Grafeman v. Northwestern Bank, 288 S.W. 359. (8) Plaintiff had no adequate remedy at law. 21 C. J. 119; 19 Am. Jur. 152; Hughes v. Community Bank of Dawn, 336 Mo. 305, 78 S.W.2d 98; 49 C. J., pp. 1013, 1016, 1019; 21 R. C. L. 666; Farmers' State Bank v. Miller, 222 Mo.App. 633, 300 S.W. 834; Welker v. Hayes, 224 Mo.App. 392, 22 S.W.2d 1052; 1 C. J. S. 1266; 1 C. J. 1090; Martin v. Lee County State Bank, 265 S.W. 1057; Plankinton v. Hilldebrand, 89 Wis. 209, 61 N.W. 839; Farmers, etc., Natl. Bank v. Rogers, 1 N.Y.S. 757, 15 N. Y. Civ. Proc. 250.

OPINION

Gantt, P. J.

Action to decree an equitable mortgage on land described as follows:

"A lot in Block 1518 of the City of St. Louis, fronting Thirty feet (30') on the North line of Cherokee Street by a depth Northwardly of One Hundred Eighteen feet (118') one inch (1") to an alley; bounded west by Ohio Avenue, together with improvements erected thereon known as and numbered 2649 Cherokee Street."

The chancellor decreed such a mortgage and the land was sold under the decree to plaintiff. Defendant appealed without bond. In this connection it may be stated that, absent an intent to create a mortgage, a chancellor is without authority to decree an...