Owen v. Long

• Decision Date: 21 April 1937
• Docket Number: 33044
• Parties: Dora Owen et al., Plaintiffs in Error, v. Albert Long et al., Defendants in Error
• Court: Missouri Supreme Court

104 S.W.2d 365

340 Mo. 539

Dora Owen et al., Plaintiffs in Error, v. Albert Long et al., Defendants in Error

No. 33044

Supreme Court of Missouri

April 21, 1937

Appeal from Phelps Circuit Court; Hon. W. E. Barton, Judge.

Affirmed.

Irwin & Bushman, Harry L. Buchanan and J. Ellis Walker for plaintiffs in error.

(1) The court erred in failing to find that Mrs. Lucretia Earls being a life tenant only, took title to the land in question as trustee for the remaindermen following her purchase thereof at foreclosure proceedings. (a) It is uniformly held that a life tenant purchasing at a foreclosure sale, takes as trustee for the remaindermen, provided the remaindermen within a reasonable time contribute their share of the purchase money. Witcher v. Handley, 299 Mo. 696, 253 S.W. 1005; Peak v. Peak, 228 Mo. 536, 137 Am. St Rep. 638; Morrison v. Roehl, 215 Mo. 556; Allen v. DeGroot, 98 Mo. 159; Keller v. Fenske, 123 Wis. 440; Moore v. Simonson, 27 Ore. 117; Downing v. Hartshorn, 69 Neb. 364, 111 Am. St. Rep 554; Varney v. Stevens, 22 Maine, 331; Werner v. Dolan, 106 Iowa 355; Myers v. Reed, 17 F. 407; Daviess v. Myers, 13 B. Mon. 511; Whitney v. Salter, 36 Minn. 103; I Washburn Real Property (5 Ed.), 129. (b) This is true regardless of whether the foreclosure sale was based upon foreclosure by suit and judgment or by trustee under the power, because the result is the same in either case. Allen v. DeGroot, 98 Mo. 162; Witcher v. Handley, 253 S.W. 1005, 299 Mo. 696; Daviess v. Myers, 13 B. Mon. 512; Whitney v. Salter, 36 Minn. 103, 1 Am. St. Rep. 656; Keller v. Fenske, 123 Wis. 435; Vizard v. Moody, 119 Ga. 918, 47 S.E. 350; Gossenheimer, Admr. v. Molton, 80 Ala. 524; L. & N. Ry. Co. v. Kentucky, 161 U.S. 693; 65 C. J. 468; 17 R. C. L. 640. (2) The court erred in finding that any of the defendants, including Gaddy and Asher, were bona fide purchasers for value without notice, in view of the fact that they took title through Mrs. Lucretia Earls, who was life tenant only by virtue of the will of W. L. Earls, deceased, which will was duly probated and of record in the Probate Court of Phelps County, Missouri; in view of the fact that the sheriff's deed to her recited a grossly inadequate consideration, which deed was a part of their chain of title; in view of the fact that Gaddy and Asher took possession from a person other than their vendor, and because they made no effort to find out the contents of the will of W. L. Earls, which they knew existed. (a) The admission in the answers was sufficient to show that the will of W. L. Earls had been recorded in the recorder's office of Phelps County, but even if it was not, due probate of the will in the office of the probate court of that county was sufficient to give constructive notice to all purchasers in the chain of title from a devisee under the will, of the contents of the will and the rights of the remindermen. Witcher v. Handley, 253 S.W. 1005; Dibble v. Winter, 93 N.E. 152, 247 Ill. 243; 3 Bouvier's Legal Dictionary, p. 2728; Nichols v. Hobbs, 197 S.W. 260; Wolff v. Brown, 142 Mo. 617; Lewis v. St. Louis, 4 Mo.App. 563; Dalmazzo v. Simmons, 25 Ky. L. R. 1532, 78 S.W. 179; In re Moores Appeal, 84 Mich. 483; Greig v. Lumber Co., 151 La. 358; 1 Perry on Trusts & Trustees, pp. 388-89.

A. B. Holmes and Harry Clymer for defendants in error.

At the time of the death of W. L. Earls the land involved in this suit was encumbered by three deeds of trust, all of which had been executed by him and Lucretia Earls, his wife, to secure the three certain promissory notes he had given, two being given to A. S. Long and one to Edwin Long. All such liens had been placed on the land by him and when the equity of redemption was foreclosed by the judgment rendered by the Circuit Court of Phelps County, in September, 1927, in an action in which all the heirs of W. L. Earls were parties, and the land ordered sold to pay the amount the court found to be due on the note secured by the deed of trust executed on December 1, 1916, any one, including Mrs. Earls, was legally entitled to become the purchaser. Becker v. Becker, 254 Mo. 680, 163 S.W. 865; Dudgeon v. Hackley, 182 S.W. 1006. It is a well-established principle of law that a judgment is conclusive and binding, not only upon the parties to the action or proceeding in which it was rendered, but also upon persons who are in privity with them in respect to the subject matter of the litigation. Wors v. Tarlton, 95 S.W.2d 1206; In re Flynn's Estate, 95 S.W.2d 1212. The issues involved in the foreclosure suit under which the land was ordered sold was the execution of the note and deed of trust securing the same and the question whether or not that note had been paid and if not paid, the amount then due thereon and it is well settled law that a judgment is conclusive not alone as to the questions raised, but as to every question that could have been raised in that proceeding. Custer v. Kroger, 313 Mo. 130, 280 S.W. 1037; Powell v. Joplin, 73 S.W.2d 412. A judgment in an action involving land in which all persons then having an interest in said land were made parties defendant and brought into court by proper process is binding and conclusive upon all such parties. Edwards v. Harrison, 236 S.W. 328. As between the parties to a suit a judgment, in the absence of fraud or collusion, is conclusive as to the indebtedness and the liabilities which it adjudged, both as to fact and amount. 34 C. J., p. 908, sec. 1321; Morehead v. Cummins, 230 S.W. 656.

Cooley, C. Westhues and Bohling, CC., concur.

OPINION

COOLEY

This is an action to ascertain and determine title to 210 acres of land in Phelps County, the plaintiffs in error claiming to own interests therein as remaindermen under the will of W. L. Earls. It was tried to the court as an action in equity, the court finding and rendering judgment for the defendants below. The plaintiffs below appealed and later dismissed their appeal and sued out this writ of error. Since the writ of error was sued out certain of the original parties have died and their heirs or representatives have been substituted here. No point being made that all proper parties are not before the court we shall assume such to be the case, and for convenience shall refer to plaintiffs in error as plaintiffs and to defendants in error as defendants as the parties were originally styled below.

The land in question was owned in his lifetime by W. L. Earls, he being the common source of title. On September 3, 1902, he borrowed of A. S. Long $ 1500, giving his note therefor, due in two years, and on December 22, 1903, he borrowed of Long $ 200, giving his note due in one year. In each instance he and his wife, Lucretia, executed a deed of trust on the lands in question to secure the loan. Lucretia did not sign those two notes. A. S. Long died owning those notes and they passed to his surviving son, Edwin Long. On about November 16, 1916, W. L. Earls borrowed of Edwin Long $ 1190. His wife, Lucretia, signed that note and, to secure it, Earls and wife gave Long a deed of trust intended and then understood by all parties to convey the land in question, but by mistake misdescribing part of it. Certain payments were made by Earls from time to time so that when he died, about July 28, 1919, all three notes were live obligations and charges upon his real estate. He left a will by which he gave his surviving wife, Lucretia, a life estate in said realty, making her also executrix, and, subject to certain conditions as among themselves not necessary here to state, devised the remainder to children and grandchildren, who constituted all of his heirs. These remaindermen are the plaintiffs in this action, claiming through the will, which was duly probated. It is not shown, however, to have been recorded in the recorder's office, as provided by Section 548, Revised Statutes 1929 (Mo. Stat. Ann., p. 337).

Shortly after her husband's death Lucretia Earls received $ 2000 life insurance money. That belonged to her. She paid it to Edwin Long on the indebtedness owing him, represented by the notes above mentioned. It does not appear that she directed it to be applied on any particular note but she took from Long a receipt reciting that it was "to apply on indebtedness of W. L. Earls, deceased." That payment was not endorsed on either of the three notes, all of which were then held by Edwin Long, but was taken into account when, later, as will be presently mentioned, the amount due on the three notes was calculated. Mrs. Earls knew of the $ 1500 and $ 200 notes, though she had not signed them. It may be stated here that none of the three notes was presented or allowed as a demand against the estate of W. L. Earls in the probate court, the holder evidently relying upon his security.

In the early part of 1926 a Mr. Dixon, representing Mrs. Earls, and a Mr. McGregor, acting for Long, computed the amount due on the three notes, giving credit for payments endorsed on the notes and for the $ 2000 payment made by Mrs. Earls, as of its date. According to McGregor's figures there was due a net total balance of $ 3,307.18 as of April 4, 1926. Dixon's calculation showed a little more. The result of this calculation was reported to Mrs. Earls and, as we understand the record, to her son-in-law, Mr. Owen, husband of plaintiff Dora Owen. No complaint was made. About that time or perhaps a little later it was discovered that the deed of trust securing the $ 1190 note did not correctly describe the land intended to be conveyed. About February 1927, Edwin Long, payee and holder of that note, brought suit to reform and to foreclose the deed of trust, making Lucretia Earls and all of the heirs and devisees of W. L. Earls parties defendant. All were duly served with process or notified. ...