Stafford v. McDonnell
| Decision Date | 14 November 1949 |
| Docket Number | 41276 |
| Citation | 224 S.W.2d 951,359 Mo. 925 |
| Parties | James O. Stafford and Emily D. Stafford, Plaintiffs, and W. S. Richardson, Intervenor, Appellants, v. Leo T. McDonnell, Defendant, Respondent |
| Court | Missouri Supreme Court |
Motion to Modify Opinion and Mandate Sustained in Part and Opinion Modified December 12, 1949.
Appeal from Sullivan Circuit Court; Hon. G. Derk Green Judge.
Reversed and remanded (with directions).
Plaintiffs sue to have two absolute deeds declared conditional sales, and the intervenor claims rights under a purchase contract with plaintiffs covering part of the property. The trial court erroneously found in favor of defendant, but the disputed issue as to the amount of the repurchase price is determined in favor of defendant, the Statute of Frauds not preventing evidence by defendant on this issue. The deeds are declared equitable conditional sales, subject to the rights of the intervenor and any rights or equities which may have arisen between the parties during the pendency of the appeal.
Leman E. Atherton for appellants James O. Stafford and Emily D. Stafford and Frank H. Backstrom for appellant W. S. Richardson.
(1) Under all the evidence in this case the lower court erred in finding that the conveyance was not a mortgage but an unconditional sale of property. Considering the testimony on behalf of the plaintiffs and of the defendant there is no substantial variance as to the intention of the parties concerning the nature of the agreement entered into at that time. Snow v. Funck, 41 S.W.2d 2; Robinson v. Field, 117 S.W.2d 308, 342 Mo. 778; Tibeau v. Tibeau, 22 Mo. 77; Sharkey v. Sharkey, 47 Mo. 543; Constant v. Simon, 259 S.W. 424; Citizens Bank of Pleasant Hill v. Robinson, 117 S.W.2d 263; Reilly v. Cullen, 159 Mo. 322, 60 S.W. 126; Mosley v. Cavanagh, 125 S.W.2d 852; Sheppard v. Wagner, 240 Mo. 409, 144 S.W. 394; Powell v. Huffman, 213 S.W.2d 473. (2) Assuming that defendant's testimony evidences some intent that the agreement entered into was a conditional sale and not a mortgage, certain circumstances surrounding the transaction which tend to fix and determine the real purpose and intent of the parties should be considered. In general. 59 C.J.S., sec. 10, p. 35. (3) The continued existence of the debt. Sheppard v. Wagner, 144 S.W. 394; Bobb v. Wolff, 148 Mo. l.c. 344, 49 S.W. 998; Powell v. Huffman, 213 S.W.2d 473. (4) Inadequacy of price. 41 C.J. 289, sec. 27. (5) Financial circumstances of the grantor. 41 C.J., sec. 24, p. 288. (6) Assuming that under defendant's testimony a doubt exists as to whether defendant intended the agreement to be a conditional sale or a mortgage, the instrument should be considered a mortgage for such construction will prevent fraud and oppression. 41 C.J., sec. 28, p. 289; Williamson v. Frazee, 242 S.W. 958, 294 Mo. 320; 57 C.J.S., sec. 53, p. 95. (7) Assuming that Stafford did agree that, if the defendant loaned the money to stop the foreclosure that he (Stafford) would pay the $ 10,000 obligation which Newcomer owed defendant, the statute of frauds applies and such oral contract is not enforceable. The statute of frauds applies under the facts of this case. Sec. 3354, R.S. 1939; 37 C.J.S., sec. 16, p. 522; sec. 21, p. 529; sec. 21, p. 521; 49 Am. Jur., secs. 73, 74, 75, pp. 424-30; Moore v. McHaney, 178 S.W. 258; First Natl. Bank of Dexter v. Crutcher, 15 S.W.2d 888. (8) The part performance of the agreement by McDonnell is not sufficient to take the agreement out of the Statute of Frauds. 37 C.J.S., sec. 248, p. 755; Roth v. Roth, 104 S.W.2d 315; Ver Standig v. St. Louis Union Trust Co., 129 S.W.2d 905; 49 Am. Jur., sec. 555, p. 861; Franklin v. Matoa Gold Mining Co., 158 F. 941; 144 A.L.R. 1114; 49 Am. Jur., sec. 551, p. 856; Hackbarth v. Gibstine, 182 S.W.2d 113. (9) The court erred in not finding that the appellant W. S. Richardson had an interest in a portion of the Spangler farm and upon the compliance with the terms of the escrow agreement, he was entitled to have his interest in the farm determined and adjudicated.
Waldo P. Goff and P. M. Marr for respondent.
(1) The warranty deeds in this case are absolute, unconditional conveyances, and are presumed to be just what they purport to be, absolute conveyances of land; and the burden is cast upon the grantor to overcome this presumption and establish it as a mortgage by evidence, unequivocal and convincing, otherwise the natural presumption must prevail. Bobb v. Wolff, 148 Mo. 335, 49 S.W. 996; Mosley v. Cavanagh, 344 Mo. 236, 125 S.W.2d 852; Wright v. Brown, 177 S.W.2d 506. (2) One claiming that a deed absolute on its face was intended as a mortgage must prove his allegation beyond a reasonable doubt. Worley v. Dryden, 57 Mo. 226; Gerhardt v. Tucker, 187 Mo. 46, 85 S.W. 552; Rinkel v. Lueke, 246 Mo. 377, 152 S.W. 81; Hutchings v. Securities Co., 175 S.W. 905; Groff v. Longsdon, 239 S.W. 1087. (3) Where the issue is whether a deed absolute on its face is a deed or mortgage, doubts should be resolved in favor of the letter of the conveyance. King v. Grieves, 42 Mo.App. 168. (4) It is the rule of this court to defer to the findings of the chancellor before whom the witnesses appeared. Snow v. Funck, 41 S.W.2d 2; Price v. Morrison, 291 Mo. 249, 236 S.W. 297; Cuthbert v. Holmes, 14 S.W.2d 444.
Bohling, C. Westhues and Barrett, CC., concur.
James O. and Emily D. Stafford, husband and wife, instituted this declaratory judgment suit on April 23, 1948, to have their two certain warranty deeds, absolute on their face, to Leo T. McDonnell declared mortgages and security for a debt if payment be made on or before March 1, 1949, and for general relief. W. S. Richardson, who had a contract for a deed from the Staffords to part of one of the tracts of land, intervened and asked like relief. The chancellor found defendant to be the owner of said lands, subject to the right of plaintiff James O. Stafford to occupy a portion thereof until March 1, 1949, and entered a decree and judgment accordingly. Plaintiffs and intervenor appeal.
The land is located in Sullivan county, Missouri. One tract contains approximately 703 acres and is known as the Shatto farm. The other tract, known as the Spangler farm, contains approximately 670 acres. The Sulmo Land Company conveyed the Spangler land to O.R. and Leona Newcomer on November 9, 1946; and the Metropolitan Life Insurance Company conveyed the Shatto land to O.R. Newcomer on November 13, 1946. Cancelled revenue stamps in the amount of $ 18.70 and $ 20.35 were on the respective deeds. The cancelled revenue stamps indicate the lands had a value in excess of the encumbrances, mentioned infra, against them. Stafford testified it took some cash to buy the farms; that, accounting for some of the cash, he paid $ 1,000 on one farm and his daughter paid $ 850 on another; that $ 1,500 was "off" for commission due him; and that Newcomer and he had $ 1,500 profit on the sale of a house, which Newcomer said he applied on the purchase.
The Newcomers executed a deed of trust against the Spangler land to secure a $ 12,000 note payable to the Trenton Trust Company, and a deed of trust against the Shatto land to secure a $ 13,800 note payable to the Metropolitan Life Insurance Company.
On March 25, 1947, Newcomer and wife conveyed said lands by separate deeds to James O. and Emily D. Stafford, subject to the outstanding indebtedness. Thereafter the Newcomers instituted suit against the Staffords, and W. S. Richardson intervened therein. Richardson was in the real estate business. That suit was settled by a stipulation dated February 6, 1948, wherein, among other things, Richardson agreed to execute a $ 5,000, 4%, sixty day, note payable to Newcomer; and a judgment was to be entered adjudging James O. and Emily D. Stafford owners of said lands, free and clear of any claims by the Newcomers, but subject to the encumbrances of record which the Staffords agreed to pay.
Stafford and Richardson entered into a separate agreement on said February 6, 1948, whereby Stafford agreed to deed to Richardson all of the Spangler farm, except approximately 70 acres, and Richardson agreed to deliver five notes executed by Stafford in the total amount of $ 21,200 -- the deed and notes to be delivered in escrow to L. E. Atherton. Stafford's deed to Richardson was subject to the $ 12,000 note and deed of trust and Richardson, who assumed and agreed to pay said note, was the one principally interested in discharging the debt. The deed and all the notes, except one $ 5,000 note which Richardson never delivered, were deposited in escrow. There was testimony on behalf of plaintiffs that Newcomer and McDonnell knew of this transaction between Stafford and Richardson; but each of said persons, as well as others connected with them, strenuously denied any knowledge of this situation until Richardson intervened in the instant suit.
Richardson defaulted in a payment on the $ 12,000 note in March, 1948, and the Spangler farm was advertised under the deed of trust for sale at Milan on April 17, 1948. Payments were also due on the Metropolitan Life Insurance Company's note sometime in April, 1948.
On April 12, 1948, Stafford went to St. Joseph to seek assistance. Newcomer was prosecuting attorney and Stafford called at his office. Newcomer called McDonnell to his office. McDonnell testified that he then first learned of the foreclosure proceeding; that he had furnished Newcomer with the money to purchase the farms; that he informed them he had $ 10,000 tied up; that he would take care of the obligations then due for payment on the Spangler and Shatto farms, including taxes, in consideration of a deed to the Spangler farm, subject to the indebtedness thereon. Stafford testified a...
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