Rehm v. Alber
| Decision Date | 03 December 1917 |
| Parties | JACOB REHM v. EMIL G. ALBER et al.; HIRAM H. and PEARL E. SEVERANCE, Appellants |
| Court | Missouri Supreme Court |
Appeal from Jackson Circuit Court. -- Hon. Frank G. Johnson, Judge.
Reversed and remanded (with directions).
Wm. R Thurmond and James M. Chaney for appellants.
(1) Under the pleadings and the evidence the court erred in decreeing a cancellation of the release of the deed of trust and reinstating same as a lien superior to appellants' title under the sheriff's sale in execution. Davis v Owenly, 14 Mo. 170; Valentine v. Havener, 20 Mo. 133; Stillwell v. McDonald, 39 Mo. 282; Potter v. McDowell, 43 Mo. 93; Reed v Owenby, 44 Mo. 204; Black v. Long, 60 Mo. 181; Vance v. Corrigan, 78 Mo. 94; Stafford v. Fizer, 82 Mo. 393; Land Co. v. Rhodes, 54 Mo.App. 132; Blevins v. Smith, 104 Mo. 601; Wilson v. Jackson, 167 Mo. 135; Machine Works v. Bowers, 200 Mo. 231; Land & Lbr. Co. v. Bippus, 200 Mo. 697; Tate v. Saunders, 245 Mo. 217; White v. Lbr. Co., 240 Mo. 20; Higbee v. Billick, 244 Mo. 427. (2) The court erred in admitting evidence by plaintiff as to his ignorance of the effect of his release of the deed of trust, so as to establish appellants' title under the sheriff's deed as superior to plaintiff's alleged lien. Kingman v. Shawley, 61 Mo.App. 54; McIntyre v. Casey, 182 S.W. 969; Garrett v. Wiltse, 252 Mo. 714. The court erred in admitting vague and uncertain testimony by plaintiff as to his expense in maintaining the property. 13 Cyc. 214; Barngrover v. Maack, 46 Mo.App. 407.
Charles S. Owlsey and Roland Hughes for respondent.
(1) A court of equity will set aside the satisfaction of a mortage or deed of trust where the entry of satisfaction is made by mistake, and where there are no intermediate rights acquired upon the faith of the satisfaction. Christy v. Scott, 31 Mo.App. 337; Bruce v. Nelson, 35 Iowa 157; Young v. Morgan, 89 Ill. 199; Stinson v. Pease, 53 Iowa 574; Morgan v. Hamit, 23 Wis. 30; Barnes v. Mott, 64 N.Y. 397; Seiberling v. Tipton, 113 Mo. 379. (2) The satisfaction of the deed of trust on the margin of the record possessed no more sanctity nor conclusive force than a receipt for the money. Christy v. Scott, 31 Mo.App. 337; Land Co. v. Rhodes, 54 Mo.App. 129; Chappel v. Allen, 38 Mo. 223; Valle v. Iron Mt. Co., 27 Mo. 455; Homer v. Grasholz, 33 Md. 525; Seiberling v. Tipton, 113 Mo. 373. (3) Mistake in such connection is nothing more than "that result of ignorance of law or of fact which has misled a person to commit that which if he had not been in error, he would not have done." Story, Equity, sec. 110, note 1; Christy v. Scott, 31 Mo.App. 337; Bruce v. Nelson, 35 Iowa 157; Stinson v. Pease, 53 Iowa 574; Hutchinson v. Schwartsweller, 31 N.J.Eq. 205; Young v. Morgan, 89 Ill. 205; Shaver v. Williams, 87 Ill. 472. (4) A purchaser at an execution sale is not an innocent purchaser without notice. He buys only such interest as the judgment debtor has; if that interest is subject to equities, even totally unknown to the buyer, the title is subject to the same equities. Martin v. Nixon, 92 Mo. 26; Mann v. Best, 62 Mo. 496; Davis v. Briscoe, 81 Mo. 27.
On July 30, 1912, plaintiff filed in the circuit court at Kansas City, a bill in equity to set aside a release of a deed of trust entered by him upon the margin of record of said deed of trust, recorded in the Recorder's office of Jackson County, Missouri, covering lot 10 in block 11 of Howard and Scott's Addition to Kansas City, Missouri, and to have said deed of trust established as a lien superior to the title of appellants, Hiram H. and Pearl E. Severance, who acquired title to said lot at an execution sale.
The petition alleges that Emil G. Alber, on September 2, 1909, while the owner of above lot, executed, in conjunction with his wife, a deed of trust thereon, to secure a note of $ 1,000, in favor of plaintiff, due five years after date, and representing a former indebtedness; that on April 22, 1910, defendants, Hiram H. and Pearl E. Severance, obtained in the circuit court at Independence, Missouri, a judgment against said Emil G. Alber for $ 700, which became a lien upon said lot, subject to the lien of said deed of trust; that on June 6, 1910, Alber made default in the payment of the interest due on said note and failed to pay the taxes on said lot; that plaintiff thereupon exercised his right to declare the whole of the note aforesaid due and payable; that Alber informed plaintiff of his inability to pay said indebtedness, and in order to save costs and expenses, offered to deed plaintiff his equity of redemption in said lot; that, pursuant to said offer, he and his wife, executed and delivered to plaintiff, on June 6, 1910, a warranty deed for said lot, which was recorded in said county on June 7, 1910, in Book "B" -- 1312, at page 376, of the records of the Recorder's office. The petition further alleges: "That the consideration for the said conveyance was the agreement of this plaintiff with the said Emil G. Alber to surrender his obligation upon the said note; and that this plaintiff, by mistake and inadvertence and in ignorance of his rights and the legal effect of so doing and in ignorance of the fact that a judgment had been rendered against the defendants Emil G. Alber and Lydia L. Alber, in favor of Hiram H. Severance and Pearl E. Severance, and in ignorance of the fact that said judgment was a lien upon the said property, entered satisfaction of the said deed of trust on the margin of the record where same was recorded in the office of the recorder of deeds of Jackson County, Missouri, aforesaid;" that the legal effect of above action was to leave the record showing said judgment to be a first lien on said lot, etc; that Hiram H. Severance and Pearl E. Severance, at the time said judgment was rendered, knew of the existence of plaintiff's deed of trust as a first lien upon said property. The petition then avers that appellants, after learning of the satisfaction of said deed of trust on April 30, 1912, had an execution issued upon said judgment, and caused said lot to be sold at sheriff's sale thereunder, on June 3, 1912; that they became the purchasers of said lot at the sheriff's sale, received a deed from the sheriff therefor, and recorded the same on June 18, 1912, in Book "B" -- 1426, at page 312, in the Recorder's office aforesaid. The petition prays the court to cancel and set aside the entry of satisfaction on the margin of said deed of trust, and to establish by its decree said deed of trust as a first lien on said lot, and to cancel said sheriff's deed, as a cloud on plaintiff's title, etc.
Defendants Alber and wife filed no pleadings in the cause. The appellants demurred to the petition, but their demurrer was overruled, and they filed a joint answer and cross-bill. They admit that on September 2, 1909, Emil G. Alber was the owner of said lot, but deny that he was indebted to plaintiff. They allege that on August 20, 1909, and for a long time prior thereto, said Emil G. Alber and Walter Kennedy were indebted to the above defendants in the sum of $ 700; that on August 20, 1909, these defendants filed suit in the circuit court aforesaid at Independence, Missouri, for the recovery of said sum, and on September 2, 1909, said Alber executed to plaintiff -- his father-in-law -- the note and deed of trust described in the petition. They allege that said note was executed without consideration and for the purpose of fraudulently covering up said real estate, to prevent them from subjecting the same to the payment of their indebtedness; that on April 22, 1910, they obtained a judgment in the circuit court aforesaid, against said Alber and Kennedy for $ 700; that in continuation of the scheme of said Alber to defraud them, he and his wife executed and delivered to plaintiff, but without consideration, the warranty deed described in the petition. They admit that they bought the lot in controversy at the execution sale on June 3, 1912, received a sheriff's deed therefor, and that the same was duly recorded as heretofore stated on June 3, 1912; that they paid to said sheriff the amount of their bid, etc. They deny that they had any knowledge of the fact that said deed of trust was a first lien on said lot, but aver that it was given without consideration, etc. They deny that plaintiff was ignorant of the rendition of their judgment, and allege that the warranty deed was given to him by Alber and wife to defraud these defendants. The answer then prays for judgment; that the title to said lot be declared to be in them, and that the interest of said plaintiff and the other defendants be cancelled and terminated, etc.
The reply is a general denial of the new matter pleaded in the answer.
In order to avoid repetition, we will consider the evidence, as far as necessary, in the opinion.
The decree below was in favor of plaintiff. The defendants, Hiram H. Severance and Pearl E. Severance, filed their joint motions for a new trial and in arrest of judgment, both of which were overruled, and the cause duly appealed to this court.
I. It becomes necessary, at the outset, to determine from the record, whether the deed of trust given by Alber and wife to Leander W. Byrum, as trustee, on the real estate in controversy, to secure a note of $ 1,000, given by them of even date therewith to plaintiff, represented a bona-fide indebtedness of said amount from Alber to plaintiff, or whether it was executed to enable Alber to encumber said property for its value and thereby place it beyond the reach of the demand of appellants, as evidenced by their suit against Alber, brought in the circuit court at...
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