Scott v. Hill

• Citation: 50 S.W.2d 110,330 Mo. 490
• Decision Date: 27 May 1932
• Docket Number: 29689
• Parties: Alonzo E. Scott v. J. Frank Hill, Anna Laura Hill, and J. L. Bishop, Appellants
• Court: United States State Supreme Court of Missouri

50 S.W.2d 110

330 Mo. 490

Alonzo E. Scott v. J. Frank Hill, Anna Laura Hill, and J. L. Bishop, Appellants

No. 29689

Supreme Court of Missouri

May 27, 1932

Appeal from Monitean Circuit Court; Hon. Walter S Stillwell, Judge.

Affirmed.

Irwin & Bushman for appellants.

(1) That the finding, decree and judgment of the court sitting as chancellor in equity was for the wrong party. (a) Because the preponderance of the evidence shows that plaintiff had actual notice of the existence of the mortgage of defendant Bishop and had constructive notice thereof, the mortgage having been recorded. A purchaser is charged with constructive notice of everything in prior recorded deeds which go to make up the chain of title under which he holds. Sec. 3040, R. S. 1929; Garrett v. Wiltse, 252 Mo. 713; Case v Goodman, 250 Mo. 115; McDonald v. Quick, 139 Mo. 498. (b) Because the release by plaintiff of his mortgage brought about a situation, the result of a mistake of law; and a court of equity will not relieve against a mistake of law. Kleimann v. Gieselman, 114 Mo. 445; Price v. Estill, 87 Mo. 386; City of St. Louis v. Priest, 88 Mo. 614; Norton v. Highleyman, 88 Mo. 624; Schaffner v. Schilling, 6 Mo.App. 45. A court of equity will not aid a volunteer. Strickler v. Consolidated School District No. 1, 291 S.W. 138; Kleimann v. Gieselmann, 114 Mo. 444. (c) Because the plaintiff is seeking equitable relief from his own carelessness and it is the rule that the party who seeks equitable relief must show that he is without negligence in the matter. Equity does not interfere to relieve men of the consequences of their own carelessness. 27 C. J. 88; Miller v. St. L.-K. C. Ry. Co., 162 Mo. 441; Thompson v. Lindsay, 242 Mo. 76. (d) Because the evidence shows that the only mistake, if any there was, was on the part of plaintiff and equity will relieve only for mutual mistake, proof of which must be clear, cogent and convincing. Norton v. Bohart, 105 Mo. 630; Benn v. Pritchett, 163 Mo. 572. (2) That the evidence adduced by the plaintiff was insufficient; it does not meet the burden assumed by plaintiff and does not support the judgment of the plaintiff. In equity cases the appellate court, will not be bound by the chancellor's findings, but will review the whole evidence and pronounce the proper judgment. Collier v. Porter, 16 S.W.2d 58; Farmers Bank v. Handly, 9 S.W.2d 891; Krug v. Bremer, 292 S.W. 704; Harwood v. Toms, 10 Mo. 232; Vannoy v. Duvall Trust Co., 29 S.W.2d 696.

Embry & Embry for respondent.

(1) The finding of the court in this case, although not binding, will be given weight by appellate court. The findings of the court in this case, when the testimony of witnesses, equally interested in the result, is in conflict, is entitled to greater deference. Aude v. Aude, 30 S.W.2d 771; Smith v. Lore, 29 S.W.2d 91. (2) The points and authorities made and cited in the first division of appellant's brief are not in point in this case. The true rule in cases of this nature is this: "Where the fact misrepresented or matters which are concealed, are peculiarly within the representor's knowledge and the representee is ignorant thereof, it is generally held, that, although the real facts appears on the public records, the representee is under no obligation to examine the records and his failure to do so does not defeat his right of action. 26 C. J. 1155, 1156. (3) Again it is said by the same authority, "The other elements of fraud being present relief may be had for misrepresentations relating to the title of property, or as to facts collateral to and affecting the title. False and positive statements, as to title and encumbrances, are usually regarded as actionable misrepresentations of fact, which may be relied upon without investigation, where there exists a relation of confidence or inequality of knowledge, and for which redress can be had, notwithstanding, that the hearer, failed to exercise prudence in preliminary investigation and had means of ascertaining the truth. 26 C. J. 1211-1212. (4) The above rule has been followed in this State. The negligence of plaintiff in failing to examine records, if such is induced by reliance upon the alleged false representations will not defeat recovery. Judd v. Walker, 215 Mo. 312; Kelley v. Peoples, 192 Mo.App. 435; Conroys, Inc., v. Ratz, 14 S.W.2d 465. (5) There is not a particle of evidence, that the plaintiff's situation was brought about, through a mistake of law. The plaintiff testified he understood the law in regard to release and second mortgages, and the reason he released was on account of Hill's statement that there was no other mortgage or deed of trust. False statements as to encumbrances are regarded as actionable misrepresentations of fact, which may be relied upon without investigation. 26 C. J., sec. 109, pp. 1211 and 1212; Clark v. Edgar, 84 Mo. 106; Stacy v. Robinson, 184 Mo.App. 54; White v. Reitz, 129 Mo.App. 307; Kerwin v. Friedmeyer, 127 Mo.App. 519.

OPINION

Frank, J.

Appellants J. Frank Hill and Anna Laura Hill are husband and wife. Appellant J. L. Bishop is the father-in-law of J. Frank Hill. Prior to September 4, 1924, J. L. Bishop was the owner of certain real estate which he sold and conveyed to J. Frank Hill and Anna Laura Hill on September 4, 1924, for a consideration of $ 4,500. Hill and wife borrowed $ 3,250 of the purchase price from respondent Scott, executed to him their promissory note for that amount and secured the payment of same by a first deed of trust on the land. Bishop took a note secured by a second deed of trust on the land for $ 1,250, the balance of the purchase price. Both deeds of trust were recorded on September 4, 1924, the one securing Scott's $ 3,250 note being filed for record first. It later developed that Hill and his wife were unable to pay the $ 3,250 note to Scott or keep up the interest thereon, so on August 4, 1928, pursuant to an agreement to that effect Hill and his wife deeded the land to Scott in consideration of which Scott cancelled the $ 3,250 note and released the deed of trust securing it. Thereafter and about October 1, 1928, Scott discovered that Bishop held a second deed of trust on the land for $ 1250. He then brought this suit in which he asks that the lien of his first deed of trust be reinstated -- that is, he asked judgment for the amount due on his $ 3,250 note; that same be adjudged a first lien on the land and that said lien be foreclosed.

The decree below was for plaintiff and awarded him the relief prayed for in his petition. Defendants appealed.

The pleadings are not challenged. They sufficiently present the issues.

Appellants' first contention is that at the time respondent released his deed of trust he had knowledge of the existence of the second deed of trust and for that reason he is not entitled to a reinstatement of the lien. In this connection it is claimed (1) that the record of the second deed of trust charged respondent with constructive knowledge thereof, and (2) that the weight of the evidence showed that he had actual knowledge thereof.

In this character of a case, it cannot be said as a matter of law that respondent knew of the existence of the second deed of trust because it appeared of record, and for that reason had no right to rely on representations as to encumbrances. Where fraudulent representations in respect to the title to land or encumbrance thereon are of such a character as to induce a reasonably prudent person to rely thereon and refrain from an examination of the record, the party aggrieved by such representations is entitled to relief. This question was decided in the case of Clark v. Edgar, 84 Mo. 106, 111. We there said:

" Nor can it be announced as a correct proposition of law, that because an examination of the records would have disclosed the true state of the property, as respects this prior incumbrance, he had no right to rely upon these alleged representations. The fact that this information was at hand and could have been ascertained by an inspection of the records is entitled to its weight, in determining whether the representations were such as would impose upon one of ordinary prudence, but it does not constitute a full answer to the charges made in the petition. Fraudulent representations in respect to title to land will entitle the injured party to relief. [Holland v. Anderson, 38 Mo. 55; Langdon v. Green, 49 Mo. 363; Bailey v. Smock, 61 Mo. 213.] But the misrepresentation must be as to something material, unknown to the injured party, relied upon by him, and such as to induce him to refrain from an examination of the records, when accessible."

We have held that where a vendor represents to the vendee that the title to land is good and the land is free from encumbrances, and the vendee relies on such representations and by reason thereof is induced not to examine the records, he is entitled to relief from the consequences of such representations. In Bailey v. Smock, 61 Mo. 213, 217, we said:

"In reference to the first instruction for the plaintiff, the principle is unquestionably established that fraudulent representations in respect to the title of land, will entitle the aggrieved party to relief; but the misrepresentations must be concerning something unknown to the party injured, who has been induced to act or abstain from examination from some special confidence reposed in the other party, as in this case, where the vendor prevents the vendee from making an examination of the records in regard to the title by assurances that the title is perfectly good and the property is free from encumbrances, and upon the faith of such assurances and representations the vendee abstains from making the proper examination." (Italics ours.)

It is true that if respondent had...