Rehm v. Alber

• Decision Date: 03 December 1917
• Docket Number: No. 18851.,18851.
• Citation: 272 Mo. 452,199 S.W. 170
• Parties: REHM v. ALBER et al.
• Court: Missouri Supreme Court

199 S.W. 170

272 Mo. 452

REHM v. ALBER et al.

No. 18851.

Supreme Court of Missouri, Division No. 1.

December 3, 1917.

Appeal from Circuit Court, Jackson County; Frank G. Johnson, Judge.

Bill in equity by Jacob Rehm against Emil G. Alber and others to set aside release of a deed of trust. Decree for plaintiff, and two of the defendants appeal. Reversed and remanded, with directions.

On July 30, 1912, plaintiff filed in the circuit court aforesaid 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, Mo., covering lot 10 in block 11 of Howard and Scott's addition to Kansas City, Mo., 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, Mo., 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, Mo., 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, of 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 above defendants in the sum of $700; that on August 20, 1909, these defendants filed suit in the circuit court aforesaid at Independence, Mo., 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 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 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 18, 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 canceled 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.

Wm. R. Thurmond and James M. Chaney, both of Kansas City, for appellants. Charles S. Owsley and Roland Hughes, both of Kansas City, for respondent.

RAILEY, C. (after stating the facts as above).

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 incumber 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 Independence, Mo., on August 20, 1909, for $700.

It appears from the evidence that defendant Lydia L. Alber was the only child of plaintiff, and that she married Emil G. Alber about 1895. Plaintiff's wife died about 1904. Since 1909, and before that time, plaintiff says he commenced boarding with Mrs. Alber, and paid his board regularly every week. He claims to have bought the lot in suit in 1884. He testified that he deeded said lot to Alber about 14 or 15 years after his daughter married. He fixed the date as 1807, but it must have been about 1897 or 1907. He says Alber built a house on the lot before he received a deed for same. Plaintiff testified that the $1,000 note, secured by said deed of trust, was made up of money which he had loaned Alber from time to time, and $300 which he claims represented the purchase money of said lot. The testimony in chief of plaintiff, on this subject, reads as follows:

"Q. Did you just give it to him, or did he buy it from you? A. Well, that is, I gave him the lot. Q. You gave him the lot? A. Yes, sir; I deeded it to him. Q. For nothing, or did he pay you anything? A. I deeded him the lot in consideration of $300. Q. The consideration for the deed was $300? A. Yes, sir. Q. Did he pay you the $300? A. He never did."

Emil G. Alber testified that he was married 16 years before the trial in 1914, which would be about 1898; that he bought the lot, and was to pay plaintiff $300, but never paid for same. Witness testified:

"He [plaintiff] loaned me money from time to time for different things and to live on, and at last it came to so much, that suit was coming up and I wanted some more money. I needed $300, and I told him the fix I was in."

But he said plaintiff refused to let him have more money without a mortgage to secure it and what he had previously received. Witness, after saying he did not expect to pay plaintiff, testified:

"Q. Did you say that you never expected to pay it back? A. Well, yes; I expected of course when I got it to pay it back, but it was all a sort of a family affair, and I didn't pay it back, for I never got fixed so I could pay it back, because I didn't have the money."

On August 20, 1909, appellants sued Alber in the circuit court at Independence, Mo., for $700, and afterwards got judgment against him for said sum. Just 12 days after said suit was filed the deed of trust was executed, and bears date of September 2, 1909. It appears from the testimony of Mr. L. W. Byrum, a witness for plaintiff, that Alber got him to prepare the deed of trust and also the deed which he made to plaintiff. Witness testified that he had never seen plaintiff until the day of trial.

The dealings between relatives of this character where the rights of creditors are involved as a rule should be closely scrutinized. Barrett v. Foote, 187 S. W. 70; Ice & Cold Storage Co. v. Kuhlmann, 238 Mo. 697, 142 S. W. 253; Cole v. Cole, 231 Mo. 236, 132 S. W. 734; Bank v. Fry,...