Ricketts v. Finkelston

• Decision Date: 17 February 1919
• Docket Number: No. 13109.,13109.
• Citation: 211 S.W. 391
• Parties: RICKETTS v. FINKELSTON et al.
• Court: Missouri Court of Appeals

211 S.W. 391

RICKETTS v. FINKELSTON et al.

No. 13109.

Kansas City Court of Appeals. Missouri.

February 17, 1919.

[211 S.W. 932]

Appeal from Circuit Court, Jackson County; R. B. Middlebrook, Judge.

"Not to be officially published."

Action by Annie Ricketts against Herman 3. Finkelston and others. From the decree rendered, plaintiff and defendant named appeal. Affirmed.

Sebree, Conrad & Sebree, of Kansas City, for appellant Finkelston.

E. Wright Taylor, Ball & Ryland, and Joseph S. Rust, all of Kansas City, for appellant Ricketts.

J. H. Hawthorne, of Kansas City, for respondent Cox.

Johnson & Lucas, and James E. Goodrich, all of Kansas City, for respondent Wylie.

TRIMBLE, J.

At the trial of this action in equity the controversy was between three persons, each holding a note identical in terms and purporting to be secured by a certain deed of trust. Said deed of trust, however, described and secured but one note, and the question for the chancellor to determine was: Which of the three holders is entitled to the security of the deed of trust?

The trial was concluded, the cause was submitted, and the same was taken under advisement on October 4th of the September term, 1916. Ten days later, while it was then under advisement and at the same term, plaintiff filed a motion to reopen the case for further testimony. This motion was overruled, and thereafter, on the same day, October 14, 1916, the chancellor entered a decree in favor of the defendant Minnie H. Wylie, declaring that her note was the true and only note secured by the deed of trust, and that neither of the other two notes, held, respectively, by the plaintiff, Ricketts, and the defendant Charles A. Cox, were entitled to the security thereof. Both of these lastnamed parties filed their respective motions for new trial and in arrest, and the cause went over to the January term, 1917. At this term, and on January 20th, plaintiff filed affidavits in support of her motion for new trial, and also filed a motion that the court consider said affidavits and certain testimony then offered in connection with plaintiff's motion for new trial. The motion to consider said affidavits and the proffered additional testimony was overruled, and, on motion of defendant Wylie, the affidavits were stricken from the files.

The case then went over to the March term on the motions for new trial and in arrest heretofore mentioned. At the March term, and on April 7, 1917, plaintiff's motion for new trial was overruled, but the chancellor sustained the motion of defendant Cox "because the court erred in not adjudging his note to be a lien on [describing the property in the deed of trust] subject to the prior lien of Minnie H. Wylie." On April 13th, at said March term, plaintiff's motion in arrest was overruled, and she was allowed until on or before the next term to file bill of exceptions.

On May 12, 1917, but still at the March term, Cox filed a motion to modify the judgment so as to give him an equitable lien on the property described in the deed of trust, subject to the prior lien of the defendant Wylie. Thereupon, on said May 12th, the court, of its own motion, set aside the orders overruling the motions for new trial and in arrest filed by plaintiff, and reinstated said motions, and also, of its own motion, set aside the order granting a new trial to the defendant Cox and reinstated said motion, and thereupon took all of said motions under advisement; and the cause was then continued to the May term, 1917.

At said last-named term, and on May 29th, defendant Cox's motion to modify the judgment was sustained, and the court rendered a decree adjudging that Miss Wylie's note was the true and the only note secured by the deed of trust; that an equitable lien on the real estate therein described, subject to Miss Wylie's lien, be declared in favor of defendant Cox ; that the property be sold, subject to the Wylie lien, to satisfy Cox's equitable lien; and that plaintiff's bill be dismissed. On the same day, May 29th, the court overruled the aforesaid motions for new trial and in arrest. Thereupon, on the same day, plaintiff filed motions for new trial and in arrest, and so did defendant Finkelston, the owner of the property covered by the deed of trust. These motions were overruled, and the plaintiff, Ricketts, and the defendant Finkelston each separately appealed. The questions for determination now are: (1) Should the decree have gone in Miss Wylie's favor awarding to her note the security of the deed of trust? (2) Should the chancellor have declared an equitable lien on the property in favor of Cox, especially when the same was awarded by a mere modification of the judgment at a different term from that at which the original judgment was rendered? It is manifest from the evidence, as well as from the implication arising from Cox's motion to modify, that his note is out of the contest for the security afforded by the deed of trust.

A proper understanding of the issues involved calls for a somewhat detailed statement of the facts.

In 1909 the defendant Finkelston and wife bought the real estate herein involved from the Chick Investment Company subject to an incumbrance thereon. This was a deed of trust securing a note for $2,500 dated November 26, 1906, due November 26, 1911, executed by one Ford to the Chick Investment Company. At the time of Finkelston's purchase, this note had not quite three more years to run, and, as Finkelston wanted full five years' time in which to pay the incumbrance, the Chick Investment Company agreed that upon the maturity of the note they would extend or renew it for another five years without additional expense to Finkelston. Pursuant to this arrangement, after the note matured, an extension agreement was executed between the Finkelstons and the Chick Investment Company ; and the latter, through the manager of its loan department, F. E. Colvin, about the latter part of April, 1912, put a "blind" advertisement in the paper offering a loan for sale. Miss Wylie answered the advertisement, and was thereby brought into contact with Colvin, from whom she learned that the company was offering for sale a past-due Ford note secured by a, deed of trust and extended as aforesaid. She examined the property, and was willing to take the loan provided her stepfather, Col. L. H. Waters, approved the legal formalities. Col. Waters approved the Finkelston title, but refused to advise his daughter to take the extended note, and so informed the Chick Investment Company. The president of said company, J. S. Chick, who in boyhood had been a pupil of Miss Wylie's in the public school, then suggested that the Finkelstons make a new loan, and went with Miss Wylie to see them and to again examine the property. Miss Wylie finally agreed with Chick to accept a new loan upon her father's approval of the papers.

Chick thereupon notified the Finkelstons that it was necessary to make a new loan in place of the extension, and, in the latter part of May, had them to come to his office for that purpose, telling them the papers were all ready. They went, and for reasons best known to himself, and in some way without the Finkelstons being aware of it, save only that they signed whatever papers were said to be necessary for the renewal, Chick had them to convey the property to one James Kelley. This deed was dated May 24, 1912, but was acknowledged on May 27th. On May 28th Kelley executed a note payable to the Chick Investment Company, dated May 24, 1912, for $2,500, due five years after date, with ten interest coupons of $75 each attached, representing the semiannual interest thereon at 6 per cent., and also executed a deed of trust on the property, dated the same as the note and to secure the same. On the same day, May 28, 1912, Kelley also executed a warranty deed back to the Finkelstons conveying the property subject to said deed of trust.

On May 29, 1912, the three deeds were filed for record, first, the deed to Kelley, next, the deed of trust to the Chick Investment Company, and then the deed from Kelley to the Finkelstons; the deeds being filed one minute apart. The abstract, brought down so as to show the recording of these instruments, was again presented to Col. Waters, who approved the same with the requirement that the Ford deed of trust be released of record, and that a tax bill on the property be taken care of. On the Saturday before June 3, 1912, Miss Wylie called at the office of the Chick Investment Company and advised them that she was ready to make the loan as soon as the requirements were complied with. She was told they would be complied with promptly, whereupon Miss Wylie told the company she would come in on the following Saturday (that not being a school day) and pay over the money.

On June 3, 1913, Chick satisfied the Ford deed of trust upon the margin of the record. The recorder certified that, "except the eighth, ninth, and tenth maturing interest notes, all the notes described herein were presented and canceled in my presence." As to the above missing interest notes, Chick and Mrs.: made the necessary affidavits accounting for their absence. The abstract, showing the release, was again submitted to Col. Waters, and he approved the title subject to his requirement concerning the tax bill.

On Saturday June 7, 1912, Miss Wylie, at the office of the Chick Investment Company, gave her check for the amount of the Kelley note and paid a small amount of accrued interest and received from Colvin his cheek for $100 to indemnify her against loss on account of the tax bill. She was also handed the Kelley note she now holds, together with all of the ten interest coupons thereto attached, and was also given the theretofore existing insurance policies duly transferred so as to secure the note, and was told the deed of trust would be delivered as soon as the same was returned from the recorder's office. Thereupon a loan sales report was made and filed...