Pouder v. Colvin

• Decision Date: 21 April 1913
• Citation: 170 Mo. App. 55,156 S.W. 483
• Parties: POUDER v. COLVIN.
• Court: Missouri Court of Appeals

156 S.W. 483

170 Mo. A. 55

POUDER v. COLVIN.

Kansas City Court of Appeals. Missouri.

April 21, 1913.

1. MORTGAGES (§ 249)—RELEASE—FRAUD.

A marginal release of a deed of trust by one as assignee of the note secured is void; the note presented to and canceled by the recorder at the time being a fraudulent duplicate, and the one making the release not being the holder or owner of the genuine note, and having no authority from its owner to make the release.

2. MORTGAGES (§ 414) — FORECLOSURE — VOID RELEASE.

A deed of trust may be foreclosed by the holder of the note secured without his first having set aside an attempted unauthorized release by a holder of a fraudulent duplicate of the note.

3. APPEAL AND ERROR (§ 854)—GROUNDS OF DECISION OF LOWER COURT.

The court's statement of why it granted a new trial being capable of two constructions, one giving three reasons therefor, the other one reason, based on the other two, the former, being adopted by both parties, will be adopted by the court on appeal.

4. NEW TRIAL (§ 70)—GROUNDS—INDEFINITENESS OF PROOF.

It is no reason for granting plaintiff a new trial, in a suit to enjoin foreclosure of a deed of trust, that the proof as to defendant's ownership of the note, by virtue of which he seeks the foreclosure, is indefinite; no question being raised in the pleadings or evidence as to his ownership, but the real issue being whether his note, or one by virtue of which the deed of trust was released, was the genuine note secured, and he having made a prima facie showing of ownership.

5. NEW TRIAL (§ 87)—GROUNDS.

That the case was not tried as efficiently as might be is no ground for a new trial.

6. APPEAL AND ERROR (§ 1015)—REVIEW— EQUITY CASE.

Though in an equity case the appellate court can weigh the evidence and determine the cause for itself, yet the trial court having certified that it was not satisfied, but that a rehearing should be granted in the interest of justice, and having granted plaintiff a new trial on the ground that the judgment was not justified by the evidence, and there being much uncertainty in the testimony in support of the judgment, its action will not be disturbed.

7. ESTOPPEL (§ 52)—KNOWLEDGE—RELIANCE.

Defendant cannot be estopped to assert his rights under a note; it not being shown he had knowledge of plaintiff's course, or that plaintiff was induced or led to change his position through anything defendant did or failed to do.

Appeal from Circuit Court, Jackson County; O. A. Lucas, Judge.

Suit by H. C. Pouder against F. E. Colvin. From an order granting plaintiff a new trial, defendant appeals. Affirmed.

Sebree, Conrad & Wendorff, of Kansas City, for appellant. Cowherd, Ingraham, Durham & Morse, of Kansas City, for respondent.

TRIMBLE, J.

Injunction to prevent a foreclosure by defendant, who claims to be the owner and holder of the note described in and secured by a deed of trust. The court found for defendant and dismissed the bill, but granted a new trial. From this order defendant appealed.

The deed of trust in question was executed June 10, recorded June 22, 1903, and was given to secure a note of even date therewith for $2,000 due five years after date with interest coupons attached. The whole trouble between the parties to this suit grows out of the fraudulent conduct of the beneficiary, Arthur M. Howell. He was a dealer in real estate, building houses in Kansas City and borrowing various sums of money from different sources. To secure these loans he would have his brother execute a note to him and secure it by deed of trust. Having a note payable to himself and thus secured, he, in some manner, would obtain the execution of a duplicate note, genuine as to signature, but fraudulent in that it could be negotiated as being secured by the deed of trust recorded as security for the original.

At some time, not known when, Howell prepared a duplicate of the note secured by the deed of trust above mentioned, so that there were two notes in existence each apparently secured by the deed of trust. Under one of these notes, the deed of trust was released on the margin of the record June 4, 1909, by B. C. Howard as assignee. Thereafter another deed of trust was placed on the property, under foreclosure of which plaintiff purchased and became the apparent owner. Defendant, as the owner and holder of the other note apparently secured by the deed of trust of June 10, 1903, began foreclosure thereof, whereupon plaintiff brought this action. The question is: Which is the genuine note and which the fraudulent duplicate?

If the note presented to and canceled by the recorder, at the time of the marginal release by Howard as assignee, was the fraudulent duplicate, then such release was void, since he was not the holder nor owner of the note secured and had no authority from the true owner to make the release. Borgess Inv. Co. v. Vette, 142 Mo. 560, 44 S. W. 754, 64 Am. St. Rep. 567; Joerdens v. Schrimpf, 77 Mo. 383; Brown v. Koffler, 133 Mo. App. 494, 113 S. W. 711; Ripley Bank v. Life Ins. Co., 145 Mo. 142, 47 S. W. 1. And defendant can foreclose said deed of trust without first having the attempted release set aside. Authorities, supra. On the other hand, if the note now held by defendant is the genuine note described in and secured by the deed of trust, defendant is entitled to foreclose without regard to the release made by Howard. So that the all-important question at the trial was: Which was the genuine note?

The court sustained the motion for new trial "for the reason that the court is of the opinion that the judgment rendered in this case was not justified by the evidence. A transcript of the evidence has been made and submitted to the court, and on reading the same the court is of the opinion that the proof that Colvin was the bona fide holder and owner of the indebtedness, and by reason of that authorized to demand a foreclosure of the property, is indefinite and does not sufficiently establish that fact. The case was not as efficiently tried as it might have been, and the court is of the opinion in the interest of justice that there should be a rehearing of the matter." This may mean that the judgment was not justified by the evidence because the proof as to Colvin's bona fide ownership of the note was indefinite. Or it may mean that the judgment is against the weight of the evidence; and the indefiniteness of the proof as to Colvin's ownership and the...