Seibel v. Higham

• Decision Date: 15 December 1908
• Citation: 115 S.W. 987,216 Mo. 121
• Parties: SEIBEL et al. v. HIGHAM et al.
• Court: Missouri Supreme Court

115 S.W. 987

216 Mo. 121

SEIBEL et al. v. HIGHAM et al.

Supreme Court of Missouri, Division No. 1.

December 15, 1908.

Rehearing Denied January 14, 1909.

1. DEEDS (§ 54)—DELIVERY—NECESSITY.

Delivery being the final act that consummates a deed of land, a delivery by the grantor, personally or through an agent, with intent to pass title and acceptance by the grantee personally or through an agent, are essential to the execution of a deed.

2. DEEDS (§ 58) — DELIVERY — SUFFICIENCY— TO THIRD PERSON.

Where a deed is delivered by the grantor to a third person for delivery to the grantee without condition, and the grantor intends that the deed shall take effect as a present transfer, a delivery to the grantee by the third person, even after the death of the grantor, will pass title and the transfer of title will take effect as of the date of the delivery to the third person.

3. DEEDS (§ 61) — DELIVERY — AFTER GRANTOR'S DEATH.

Where a deed is delivered to a third person to be delivered to the grantee on the death of the grantor, and the third person so delivers it, title passes.

4. ESCROWS (§ 1)—NATURE AND REQUISITES —"DELIVERY IN ESCROW."

The delivery of a deed in escrow is the delivery thereof to a third person to await the performance of some condition, whereupon it is to be delivered to the grantee, and the deed is ineffectual until the condition is performed.

For other definitions, see Words and Phrases, vol. 3, pp. 2464-2467; vol. 8, p. 7633.]

5. ESCROWS (§ 8)—RELATION OF DEPOSITARY TO TRANSACTION.

One receiving a deed from the grantor for delivery to the grantee on the performance of specified conditions is a trustee of an express trust, with duties to perform for the grantor and grantee which neither can forbid without the consent of the other.

6. ESCROWS (§ 14)—UNAUTHORIZED DELIVERY —EFFECT.

One holding the legal title in trust for himself and others executed and delivered a deed to a third person for delivery to the grantee on his exercising his option to purchase within a specified time. The grantor died, and the grantee declined to purchase. One of the beneficiaries, concealing the death of the grantor, demanded and received the deed from the third person, and induced the grantee to execute a quitclaim deed. The beneficiary receiving the deed thought he had a right to do so because of his interest in the property. Held, that no title passed to the grantee, and hence his quitclaim deed passed no title.

7. VENDOR AND PURCHASER (§ 224) — BONA FIDE PURCHASERS—CONSENT OF GRANTOR TO DELIVERY OF DEED.

One received from the grantor a deed of land for delivery to the grantee on his electing to purchase within a specified time. The grantee declined to purchase, and the deed was delivered to a third person who appeared to be acting for the grantor and interested only in the destruction of the deed. The depositary of the deed believed that it was of no validity. The grantor was dead. The grantee quitclaimed the land to the third person. Held, that one claiming through the quitclaim deed was not an innocent purchaser on the theory that the depositary of the deed was the agent of the grantor, and that, if a wrong was done, it was his fault in selecting a careless agent.

8. VENDOR AND PURCHASER (§ 229)—BONA FIDE PURCHASER—NOTICE.

B., holding the legal title in trust for himself and S., M., and H., delivered a deed in escrow for delivery on the grantee electing to purchase. B. died, and the grantee declined to purchase. H. obtained the deed from the depositary, and the grantee quitclaimed to M. H. and M. gave G. an option to purchase. G. knew that M. held in trust for himself, and H. and S., and B.'s heirs. G. surrendered his right to purchase, and gave C. the right to purchase at the price fixed in the option. Held, that C. was not an innocent purchaser, for he stood in the place of G.

9. EQUITY (§ 65)—JURISDICTION—FRAUD.

Equity will not permit a party to commit a fraud, but will look into the very spirit of the transaction involved and decide whether a cause otherwise meritorious is based on such a dishonest purpose as to justify a refusal to entertain a suit involving such a transaction.

10. TRUSTS (§ 362) — ENFORCEMENT—DEFENSES —FRAUD OF COMPLAINANT.

B., H., M., and S. were the directors of a corporation, and it gave its note to S. secured by deed of trust, and he executed an agreement to devote the proceeds of a sale under the deed to pay pro rata all claims of creditors, including himself and B., M., and H. He purchased at the foreclosure of the deed, and agreed to hold the premises in trust for all the creditors. Nearly nine years later he transferred the premises to B. pursuant to an agreement that B. should hold the premises in trust for himself and H., M., and S., to the exclusion of the other creditors. Prior to the conveyance to B., the directors had expended in taking care of the property more than the amount of the claims of the excluded creditors. B. executed and deposited in escrow a deed to be delivered on the grantee's exercising an option to purchase, which he later declined to do. After B.'s death, H., concealing that fact, obtained the deed from the depositary and induced the grantee to quitclaim to M. to clear the title, who then recorded both deeds and later conveyed the land through mesne conveyances to a corporation, the price paid being divided between H. and M. Held not to show such fraud against the creditors, other than B., H., S., and M., as to defeat an action by S. and B.'s heirs against the corporation for an equitable division of the property.

11. IMPROVEMENTS (§ 4) — COMPENSATION — KNOWLEDGE OF DEFECT IN TITLE.

One who takes possession of real estate under a void title with knowledge of the interest of a third person, and who makes improvements on the premises, is not entitled to have the improvement taken into account in the adjustment of the equities between the parties, unless the improvements cannot be removed without injury.

12. TRUSTS (§ 145)—MUTUAL RIGHTS OF CESTUI QUE TRUST.

B., holding the legal title to mining property in trust for himself and H., M., and S. equally, executed a deed for delivery to the grantee on his electing to purchase. B. died, and the grantee declined to purchase. H. obtained the deed executed by B., and the grantee therein quitclaimed to M. H. and M. obtained the price on a sale of the property to a corporation which had made improvements and had been in possession for several years. The property had originally been held to secure the claims of B., H., M., S., and other creditors, but S. had obtained the legal title, and had conveyed it to B. in trust for B., H., M., and S., to the exclusion of the other creditors, who made no claim to the property. Held, that S., B.'s heirs, and the corporation were on an equal footing in the equitable division of the property, but S. and B.'s heirs were not entitled to any benefit from the improvements made by the corporation, and it was liable to account for the profits, the corporation being entitled to two fourths, and S. and B.'s heirs to one fourth each, in the division of the property.

Appeal from Circuit Court, Crawford County; L. B. Woodside, Judge.

Action by Phillip Seibel and others against Charles C. Higham and others. From a judgment of dismissal, plaintiffs appeal. Reversed and remanded.

Ed. L. Gottschalk and A. H. Harrison, for appellants. Xenophon P. Wilfley, and Harry Clymer, for respondents.

VALLIANT, P. J.

This is a suit in equity to set aside certain deeds to land in Crawford county alleged to have been procured by fraud. There is little, if any, dispute as to the facts. The land in question is mining property. The Copper Hill Mining & Smelter Company, a corporation, is the source of title. The affairs of that corporation were under the management of a board of directors composed of Phillip Seibel, John Boepple, Conrad H. Meyer, and Charles C. Higham. John Boepple has since died, and his widow, Christine, and two children, Emma and John, are, together with Phillip Seibel, the plaintiffs in this suit, and Meyer and Higham are two of the defendants. The other defendants are Douglas, Thompson, Barnard, Scoble, and the Missouri Copper Mining Company; their respective interests will be shown in the course of the opinion. August 9, 1892, the corporation executed its promissory note for $12,500.59, payable to Phillip Seibel, and secured it by deed of trust on the land in question. The note was made to cover various sums of indebtedness, among which were 36 items of small amounts aggregating $1,234, owing to persons not parties to this suit, also one note held by the Lafayette Bank for $1,724.90, one note to Meyer, $3,207.84, one to Higham, $1,567.37, one to Boepple, $1,877.41, one to Seibel, $1,516.53, and three for smaller sums to persons not parties to this suit. When the $12,500.59 note matured it was not paid, and the deed of trust was foreclosed. At the foreclosure sale the property was bought in by the plaintiff Phillip Seibel, under an oral trust agreement (so the petition says) that he would hold it for the sole use and benefit of himself and of Boepple, Meyer, and Higham, but there was no proof of that alleged agreement; on the contrary, the proof shows that the agreement was that he would hold it in trust for the benefit of all the creditors whose debts were covered by the deed of trust, and when the note secured by the deed of trust was delivered to him he agreed in writing to "devote the proceeds of said note when paid, or all that may be realized upon a sale of the property" under the deed of trust, to the payment pro rata of all the several debts which the note was designed to cover and which were enumerated in the agreement. The deed from the trustee to Seibel bears date October 15, 1892. It recites a consideration of $1,700, but in fact it was merely nominal. March 8, 1901, Seibel conveyed the title to John Boepple by deed of that date, wherein the...