Phillips v. Jackson
| Decision Date | 29 February 1912 |
| Parties | HENRY N. PHILLIPS et al., Appellants, v. MARY A. JACKSON et al |
| Court | Missouri Supreme Court |
Appeal from Bollinger Circuit Court. -- Hon. Charles A. Killian Judge.
Reversed and remanded (with directions).
Charles G. Revelle, David W. Hill, Erastus R. Lentz and Sam M Phillips for appellants.
(1) From the twelfth day of February, 1896, Mary A. Jackson through her husband and agent, was in the possession of all the farm lands in the petition. So that we have here the case of a mortgagee (or what is the same thing, the beneficiary in a deed of trust) in possession of the mortgaged property. Therefore she was a constructive trustee for the use and benefit of these plaintiffs and is bound to account for all the rents and profits in the due course of administration. Perry on Trusts (3 Ed.), sec. 243; Anthony v. Rogers, 20 Mo. 281; Ely v. Turpen, 75 Mo. 86; Stevenson v. Edwards, 98 Mo. 622; Turner v. Johnson, 95 Mo. 431; Hanna v. Davis, 112 Mo. 599; Baker v. Cunningham, 162 Mo. 140. (2) She held the property described in the petition in a three-fold trust relation toward the plaintiffs. (a) The trust clause in the deed of trust in which she was beneficiary constituted her the trustee of an express trust. All of the elements of an express trust are here present. 1 Perry on Trusts (3 Ed.), sec. 82; Guinnotte v. Ridge, 46 Mo.App. 257; Jones v. Shepley, 90 Mo. 431. (b) When she in person or by her agent took possession of the land described in the deed of trust, in which she was beneficiary, and under the deed of trust, she assumed the relationship of mortgagee in possession of the mortgaged property and thereby became the trustee in a constructive trust for the use and benefit of the plaintiff, so far as the lands described in the deed of trust were concerned. 1 Perry on Trusts (3 Ed.), sec. 243; Anthony v. Rogers, 20 Mo. 281; Ely v. Turpin, 75 Mo. 86; Turner v. Johnson, 95 Mo. 431; Stevenson v. Edwards, 98 Mo. 622; Hanna v. Davis, 112 Mo. 599; Baker v. Cunningham, 162 Mo. 140. (c) When, through her husband and agent, she made the agreement with the plaintiffs to furnish the money to pay off the judgment in favor of the Dunklin County Bank, upon which execution had been issued and levied upon the property in controversy, together with the town lots in Malden, which were not described in the deed of trust, and to hold the same under the same conditions as described in the deed of trust, upon the promises of the plaintiffs to repay her the amount of money so paid out by her and when she did, through her husband and agent, bid in the property, in the name of her husband and agent, and afterwards he conveyed the land to her, she became the trustee of an implied or resulting trust in favor of the plaintiffs in so far as the town lots in the deed of trust were concerned. Perry on Trusts (3 Ed.), secs. 112, 122, 124; Reilly v. Cullen, 159 Mo. 330; Phillips v. Hardenberg, 181 Mo. 464; Richardson v. Champion, 143 Mo. 538; Leahy v. Witte, 123 Mo. 207; O'Fallon v. Clopton, 89 Mo. 268; Shaw v. Shaw, 86 Mo. 594; Gillespie v. Stone, 70 Mo. 505; Fairy v. Kennedy, 68 S.C. 255; Swick v. Pease, 59 S. E. (W. Va.) 510; Elliott v. Machine Co., 139 S.W. 356; Damschroeder v. Thias, 51 Mo. 100; McNew v. Booth, 42 Mo. 189; Rose v. Bates, 12 Mo. 21; 10 Current Law, p. 1914. (d) There can be no question but that under all the circumstances in this case, both Colonel Phillips and Doctor Jackson, the latter acting either for himself or agent for his wife, understood and regarded the transaction of March 17, 1897, as a security for the money then advanced and paid by Doctor Jackson. Consequently the transaction must be regarded in a court of equity as a mortgage. 2 Story on Equity Jur., sec. 1018; 2 Jones on Mortgages, sec. 1039; Reilley v. Cullens, 159 Mo. 330; Bobb v. Wolf, 148 Mo. 335; Book v. Beasley, 138 Mo. 455; Hargadine v. Henderson, 97 Mo. 375; O'Neil v. Capelle, 62 Mo. 202; Turner v. Kerr, 44 Mo. 429. (e) The evidence of Jackson renders it clear beyond controversy that Phillips was to have the land back on certain contingencies. This transaction of March 17, 1897, was either a mortgage or a conditional sale. Which was it? Whether an instrument constitutes a mortgage or conditional sale depends upon the intention of the parties as shown by attendant circumstances, but if the intention is doubtful or not clearly expressed, it will be construed a mortgage. 14 Current Law, p. 888; Donovan v. Boeck, 217 Mo. 86; Moorhead v. Ellison, 120 S.W. 1049. (3) The express trust, created by the deed of trust of February 12, 1896, can never be terminated except by its complete execution, or by the full consent of all the parties in interest. 1 Perry on Trusts (3 Ed.), sec. 104; Newton v. Rebeneck, 90 Mo.App. 657; Smith v. Smith, 70 Mo.App. 451; Ewing v. Warner, 47 Minn. 446; Ewing v. Shannahan, 113 Mo. 196. (4) The deed of trust for $ 6700 was by its very terms in the nature of a mortgage, and the transaction of March 17, 1897, being in equity a mortgage, and neither having been foreclosed in any manner provided by law, plaintiff's right of redemption still continues. 2 Jones on Mortgages (3 Ed.), sec. 1039; 2 Story, Equity Jur. (9 Ed.), sec. 1019; Reilly v. Cullen, 159 Mo. 328; Gerhardt v. Lucker, 187 Mo. 46; Duell v. Leslie, 207 Mo. 666, and cases cited; Jones v. Gillett, 118 N.W. 314; Griffin v. Cooper, 68 A. (N. J. Eq.) 1095; 2 Perry on Trusts (3 Ed.), secs. 821, 822; Blauvelt v. Ackerman, 23 N.J.Eq. 493; Pomeroy v. Benton, 77 Mo. 84. (3) When by the terms of the mortgage, or by subsequent agreement, the mortgagee is to take and hold possession of the property until he shall satisfy his claim from the rents and the profits, his possession does not become adverse until his claim has been satisfied from that source, or he asserts an absolute title in himself, and he gives distinct notice to the mortgagor. 2 Jones on Mort. (3 Ed.), secs. 1152, 1153; Cockrell v. Stafford, 102 Mo. 69. (4) In order to create an estoppel by laches it is necessary that the plaintiff should be shown to be guilty of negligence and sleeping on his rights. Perry v. Craig, 3 Mo. 516; Miller v. Bernecker, 46 Mo. 194; Smith v. Washington, 11 Mo.App. 519; Ibid., 88 Mo. 475. In this case the defendants were in possession of the premises under a deed of trust requiring them to collect the rents and apply them to the payment of interest, taxes and principal, until their debt was fully paid. This time had not arrived when this suit was brought. The Statute of Limitations has not begun to run. The time had not yet arrived when the plaintiffs were required to take any action.
E. A. Rozier, N. A. Mozley and Ralph Wammack for respondents.
(1) A Under the brief of appellants it must appear that they are presenting this cause upon the following four theories: (a) That the facts constitute an express trust. (b) That the facts constitute a trust ex maleficio. (c) That the facts establish a mortgage, with the mortgagee in possession by agreement. (d) That they have the right to join them all together, and take the benefit of all of them, and failing so to do, to treat the transaction as a conditional sale, or as some sort of constructive trust not named, or as a resulting trust; or perhaps as a final resort, ask for specific performance. B. The issues in this cause must be determined from the petition of plaintiffs; and this cause must here be tried upon the theories advanced in the lower court. No citation of authorities is required to show that this court will only retry this case upon the issues made by the pleadings and the theories upon which it was tried below. C. The pleadings, especially the petition in the case, only set up facts that would either constitute an express trust or a trust ex maleficio; and there are no statements of facts upon which a chancellor could consider the question of a conveyance absolute upon its face being in fact a mortgage. D. All the authorities cited by appellant relating to absolute conveyances being held to be mortgages; and all authorities relating to the duty of a mortgagee in possession cannot be considered by the court. Weiss v. Heitkamp, 127 Mo. 29. E. Appellants should be prepared to state upon which ground they stand, either for the establishment of an express trust or a trust ex maleficio; and unless they are so prepared this court should determine from the allegations of the petition this matter. But we do insist that this court can only permit them to stand upon the one or the other, under the allegations made in the petition. Richardson v. Champion, 143 Mo. 538; Curd v. Brown, 148 Mo. 82; Heil v. Heil, 184 Mo. 665. (2) (a) The facts show that they are seeking to establish an express trust, as distinguished from one arising by operation of law. Heil v. Heil, 184 Mo. 665; Bispham's Pr. of Eq. (4 Ed.), sec. 80; 2 Pomeroy's Eq. Jurisprudence (2 Ed.), sec. 987; Hammond v. Cadwallader, 29 Mo. 166; Richardson v. Champion, 143 Mo. 538; Hillman v. Allen, 145 Mo. 638; Price v. Kane, 112 Mo. 412; Mount Calvary v. Albers, 174 Mo. 331; Miltenberger v. Morrison, 39 Mo. 71; Weiss v. Heitkamp, 127 Mo. 23; Cawley v. Crafton, 191 Mo. 421. (b) If an express trust, then same must have been evidenced by some writing, executed by the party to be charged. Heil v. Heil, 184 Mo. 665; Mulock v. Mulock, 156 Mo. 431; Weiss v. Heitkamp, 127 Mo. 27; Hillman v. Allen, 145 Mo. 638; Woodford v. Stephens, 51 Mo. 443; Green v. Cates, 73 Mo. 115; Curd v. Brown, 148 Mo. 82; Mt. Calvary v. Albers, 174 Mo. 331. (c) If there was a verbal agreement on March 17, 1897, attempting to create an express trust, and the trustee thereafter refused to perform, then such refusal would not constitute him a trustee ex maleficio. Weiss v. Heitkamp, 127 Mo. 23; Green v....
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