Sewell v. Schooler

• Decision Date: 03 March 1928
• Docket Number: No. 4260.,4260.
• Citation: 4 S.W.2d 491
• Parties: SEWELL v. SCHOOLER et al.
• Court: Missouri Court of Appeals

4 S.W.2d 491

SEWELL v. SCHOOLER et al.

No. 4260.

Springfield Court of Appeals. Missouri.

March 3, 1928.

Appeal from Circuit Court, Jasper County; Grant Emerson, Judge.

Action by W. J. Sewell against Alice J. Schooler and another. Judgment for plaintiff, and defendants appeal. Affirmed.

J. D. Harris, of Carthage for appellants.

Howard Gray and B. H. Esterly, both of Carthage, for respondent.

BRADLEY, J.

This is an action to set aside an alleged fraudulent satisfaction of the record of a deed of trust. Judgment was for plaintiff, and defendants Alice J. Schooler and I. N. Schooler appealed.

The cause was filed against Alice J. Schooler and I. N. Schooler, Samuel McReynolds, Edwin Gerkey, recorder of deeds of Jasper county, Josie Wheeler and C. B. Wheeler, William R. Heathcoat and Minnie M. Heathcoat. The facts out of which this cause grew are as follows: September 8, 1908, Josie Wheeler and her husband, C. B. Wheeler, gave to one John C. McGee, a real estate and loan broker, their note for $750, drawing 7 per cent. interest, payable semiannually, said note being due in three years. To secure this note, Josie Wheeler and her husband gave a deed of trust on a certain described residence property in the city of Carthage, Mo., which deed of trust was duly recorded. In a few days after the execution of the above-mentioned note and deed of trust, McGee sold, indorsed, and delivered said note, together with the deed of trust, to plaintiff. In November, 1908, the Wheelers sold and conveyed the residence property, upon which they had given the deed of trust, to R. M. Sweatt, who assumed and agreed to pay the $750 Wheeler note. March 16, 1915, Sweatt sold and conveyed the property to William R. and Minnie Heathcoat, who also assumed and agreed to pay said note.

September 7, 1917, the Heathcoats sold and conveyed the property to Harry F. and Georgia M. Wideman. Out of the purchase money paid by the Widemans, $1,001.20 was paid to McGee for the purpose of paying the principal and interest on the Wheeler note, which the Heathcoats had assumed. September 13, 1917, McGee presented to the recorder a forged note, representing that the note presented was the genuine $750 note given by the Wheelers September 8, 1908, and the recorder, being deceived, permitted McGee to satisfy the record of the Wheeler deed of trust. September 5, 1918, the Widemans sold and conveyed the property to Grace B. and Ed Lanyon. February 23, 1922, the Lanyons sold and conveyed said property to defendant Alice J. Schooler. All the transfers from the Wheelers to the Schoolers were by warranty deeds duly recorded. At the time the Widemans purchased, they secured a loan on the property from a building and loan association, and from the proceeds of this loan the $1,001.20 was paid to McGee to take up the Wheeler note which the Heathcoats had assumed. The Wheelers and their grantees did not know, until after McGee's death, that plaintiff was the owner of the genuine $750 Wheeler note and deed of trust.

The judgment of the trial court, so far as material here, was that the release and satisfaction by McGee of the record of the Wheeler deed of trust be set aside, and that all transfers subsequent to said deed of trust be subject thereto, and that plaintiff be entitled to foreclose. The Schoolers are the only defendants who resisted plaintiff's suit; hence hereinafter, where we use the term "defendants," we have reference to the Schoolers.

Defendants sought to defeat plaintiff's suit on the theory that McGee was the agent of plaintiff, and had authority to collect for plaintiff, not only the interest on the Wheeler note, but also the principal, and that, under the facts, plaintiff was estopped to deny McGee's authority. It is conceded that McGee had authority to collect the interest on the Wheeler note, but it is denied that he, under any theory, had authority to collect the principal. Hence the question is: Did McGee have authority to collect the principal of the Wheeler note? Or, to state it otherwise, should plaintiff, under the facts, be estopped to deny such authority?

There were 25 credits of $26.25 each indorsed on plaintiff's note the last one under date of September 8, 1924. And the inference is that, in addition to these interest payments, six interest coupons of the same amount attached to the note were paid prior to March 11, 1912, the date under which the first interest payment was indorsed on the note itself. Plaintiff testified that he received all these interest payments from McGee; that the note and deed of trust were never out of his (plaintiff's) possession, and that he himself credited the note with all the interest payments; that he never received from McGee anything on the note, except the interest payments, and that he did not authorize McGee to collect the principal or to satisfy the record, and did not know until after McGee's death that he (McGee) had collected the principal of the note, and had attempted to satisfy the record. Plaintiff further testified that he had no knowledge of any of the transfers here mentioned, except the transfer to Sweatt, until after McGee's death; that he regarded his note as well secured by the deed of trust, and, since he was regularly receiving his interest, just let the matter run along without demanding payment of the principal. In addition to the payment of the interest on the Wheeler note, McGee looked after other loans of plaintiff, and on these loans sometimes made extension agreements for plaintiff. But on the Wheeler note no extension agreement was ever made. Plaintiff testified that as to the Wheeler note McGee preferred that no extension agreement be made; that McGee represented to him that the note was good without an extension, and that he just "let it go." Plaintiff further testified that McGee reported that the...