Price v. Estill

• Decision Date: 31 October 1885
• Parties: PRICE et al., Appellants, v. ESTILL et al.
• Court: Missouri Supreme Court

87 Mo. 378

PRICE et al., Appellants,

v.ESTILL et al.

Supreme Court of Missouri.

October Term, 1885.

Appeal from Pettis Circuit Court.--HON. JOHN P. STROTHER, Judge.

REVERSED.

G. P. B. Jackson for appellants.

(1) Chilton made the loan understanding it to be to Courtney individually and not to or for the trust estate. He did not even loan the money for the purpose of paying off Moore's lien, although Houston, his agent, claims that he knew that Courtney intended to use it for that purpose. Still, if Chilton had made the loan for that express purpose, he would not be entitled to the relief given by the court below. One loaning money to pay off a vendor's lien, and which is used for that purpose, is not entitled to be subrogated to the lien. Wooldridge v. Scott, 69 Mo. 669; Dormer v. Miller, 15 Wis. 612; Barber v. Lyon, 15 Iowa, 37. Under such circumstances, the lender is a mere volunteer. (2) In making the deed of trust to Houston, Courtney pretended to act as “executor” of Price, when he had long ceased to be such. Those who dealt with him were bound to know the extent of his powers, and the nature of the title held by him. If the alleged power does not exist, they take nothing. McClure v. Logan, 59 Mo. 234-7. The deed to Courtney led to the fact that he did not hold as “executor,” and the investigation, which common prudence demanded, would lead to full knowledge of the condition of the trust property. Brush v. Ware, 15 Peters, 113-14. And when Estill took the note, secured by the pretended deed of trust, he was affected with notice of all such matters. Brownlee v. Arnold, 60 Mo. 78; Dan'l Neg. Inst., secs. 156 and 835. Persons dealing with trustees, at a considerable distance of time, without an apparent reason for raising money, are under some obligation to inquire into the bona fides of the trustees, where the latter are merely trustees, and not entitled to the estate. Hill on Trustees, p. (363) 553 note. The heir is not in privity with the executor--for he does not claim under him--and is not estopped by his acts or declarations. Bigelow on Estop. 78-9. (3) The evidence shows that Courtney, at the time he borrowed this money, had a large amount of money and other property belonging to these heirs, in his hands, and had, also, used a large amount for his own purposes; he never brought the money, borrowed from Chilton, into the trust fund, but he charged against the heirs in his settlements the amounts paid to Moore, thus showing that it was taken out of or charged against that which he held of the trust fund. (4) The decree of the lower court is wrong in that it compels the heirs to pay the above sum twice. Therefore, Estill should not be subrogated to Moore's lien. McGinnis' Appeal, 16 Pa. St. 445. In all cases permitting relief similar to that given in the decree of the lower court, the facts showed a sale made and avoided by some irregularity of proceeding or mistake of fact (but where the powers to sell existed, if it had been properly executed), and also that the purchaser had paid his money without any notice or suspicion of infirmity in his title. A purchaser with notice is not entitled to compensation for improvements. Dart v. Hercules, 57 Ill. 446; Davidson v. Barclay, 63 Pa. St. 406; Cannon v. Copeland, 43 Ala. 252; Cook v. Craft, 3 Lans. (N. Y.) 512. There is a clear distinction between the want of power and the defective execution of a valid existing power; a mistake or ignorance as to these would be, in the one case, of law; in the other, of fact. Equity may relieve in the latter, but never in the former. Hampton v. Nicholson, 23 N. J. Eq. 234; Shinn v. Budd, 14 N. J. Eq. 234; Branham v. Mayor, etc., 24 Cal. 585.

Draffen & Williams for respondent, Estill.

(1) The debt due Moore was a lien upon the land in controversy. The title was held by Courtney, as trustee for the Price heirs, subject to said lien. In order to redeem it, Courtney, as such trustee, borrowed the money from Houston, as agent for Chilton. The plaintiffs, having received the benefit of the money, cannot be granted equitable relief, except upon condition that they do equity, themselves. They will not be permitted to enjoy the benefits of the transaction, and repudiate the obligation created. The money was advanced upon what the parties understood to be a valid deed of trust, in favor of Chilton, and was used to pay a debt, confessedly a lien upon this land, and for which the trust estate was bound. This creates a clear equity in favor of the respondent, Estill, to be reimbursed the amount so used. Valle's Heirs v. Fleming's Heirs, 29 Mo. 152; Shroyer v. Nickell, 55 Mo. 264; Jones v. Manly, 58 Mo. 559; Schafer v. Causey, 76 Mo. 365; Bagby v. Emmerson, 79 Mo. 139; Gilbert v. Gilbert et al., 39 Iowa, 657; Levy v. Martin, 48 Wis. 198; McGee v. Wallis, 34 American Rep. 484; Everston v. Central Bank of Kansas (Supreme Court of Kansas, 1885, not reported). (2) The will in this case was sufficient to confer the power to mortgage. Hill on Trustees, secs. 476 and 355; 1 Jones on Mortgages (2 Ed.) sec. 129; Starr v. Moulton, 12 C. L. J. 189; Carter v. Bank, 36 Amer. Rep. 338.

NORTON, J.

Hugh M. Price died in Pettis county in the year 1873, leaving a will by which he devised all of his estate real and personal to Peter Courtney in trust for the testator's children. Said Courtney was also by said will named as executor, and was also empowered to act as guardian and curator for the minor children of said Price. While the will invested the said Courtney with very large powers in reference to loaning and investing the money of the estate and selling and conveying the real estate of the testator, the power to encumber the estate by mortgage was not given. It appears that said Courtney, as executor, took charge of the estate and made his final settlement as such on the thirty-first of August, 1876, at which time he was by order of the court discharged as executor. It appears that Courtney, during his executorship, loaned two thousand dollars money of the estate to one S. B. Hoss, and to secure the same took a deed of trust on certain lands (the subject matter of controversy in this suit) and that Hoss, having made default, the land was sold and purchased by said Courtney, to whom, as guardian and curator of the heirs of H. M. Price, deceased, the land was conveyed in September, 1876. In his final settlement Courtney took a credit for the $2,000 so loaned, stating that he had been compelled to buy the land taken as a security for the loan.

It appears that afterwards on the twenty-ninth day of January, 1878, said Courtney as “executor and trustee of H. M. Price, deceased,” conveyed by deed of trust to F. Houston, trustee, for V. T. Chilton, the said land so bought of Hoss to secure the payment of a note described in said deed as follows:

“$900.00.

SEDALIA, Mo., January 29, 1878.

Three years after date, I promise to pay to the order of V. T. Chilton nine hundred dollars, for value received, with interest from date, at the rate of ten per cent. per annum, payable annually at the end of each year, from this date to-wit: Ninety dollars each day, on the twentieth days of January, 1879, 1880, and 1881; and if the interest be not so paid annually, when due, as aforesaid, then it shall become as principal, and bear the same rate of interest, and this note both principal and interest shall then become wholly due and payable.

(Signed)

PETER COURTNEY.”

It also appears that default having been made in the payment of said note, Houston, the trustee, sold the land and conveyed it to defendant, Estill, who purchased it at said sale. The plaintiffs, who are the children and heirs of said H. M. Price, deceased, brought this suit setting up, substantially, the above state of facts, and further alleging that at the time said deed of trust was executed by said Courtney to Houston, he had no authority to borrow money for these plaintiffs and encumber their real estate; that the money borrowed of Chilton by Courtney was a transaction of his own and on his own account and that he was at the time largely indebted to the plaintiffs. The petition concludes with a prayer asking the court to set aside the sale made to Estill and declare the deed made to him by Houston void,...