Tate v. Sanders

Decision Date09 May 1912
Citation149 S.W. 485
PartiesTATE v. SANDERS et al.
CourtMissouri Supreme Court

A broker being engaged in real estate transactions for M. purchased certain property in the name of D., who was a mere straw man to hold the title. D. executed a safety deed to M., and thereafter executed and left with the broker certain blank deeds which later the broker filled up, conveying the property to V., a representative of plaintiff. Held that, notwithstanding D. testified that the broker had no authority to use such blanks in conveying any tract for which D. had previously made a deed, the deed so executed, though invalid as a deed, was sufficient to constitute an estoppel.

4. LIS PENDENS (§ 11)—NOTICE—TERMINTION.

Where a lis pendens was filed in a suit to restrain the erection of certain flats contrary to a restriction agreement, and the Court of Appeals reversed a judgment requiring their demolition, holding that plaintiff's only remedy was an action for damages, the lis pendens became functus officio, and was insufficient to subordinate a deed of trust to a subsequent judgment recovered for the damages sustained.

5. FRAUDULENT CONVEYANCES (§ 69)—INVALIDITY.

A. broker acting for M. purchased certain real property in the name of D. subject to a building restriction against flats. D. having executed safety deeds to M. which were not recorded, flats were constructed on the property, whereupon suit was brought to restrain such construction and to compel demolition and for damages. This having been decreed, the decision was reversed; the court holding that the plaintiff's only remedy was for the recovery of damages, whereupon the broker, in order to prevent the premises from being subjected to a judgment for damages, filled up a blank deed which had been executed by D. and left with the broker conveying the property to V., a straw man for T., and, after a judgment for damages had been recovered, the property was sold by a sheriff's deed to the judgment creditor. Held, that the conveyance to V. for T.'s benefit was fraudulent and void as to D. and T., and that as to them the sheriff's deed passed the title.

6. EXECUTION (§ 281)—PURCHASE OF REAL PROPERTY—RENTS AND PROFITS.

A judgment creditor purchasing real property under an execution sale is only entitled to rents and profits from the date be acquired title under his sheriff's deed.

7. FRAUDULENT CONVEYANCES (§ 182) — FRAUDULENT GRANTEE—MORTGAGE.

Where a fraudulent grantee places any incumbrance on property to a bona fide mortgagee, such fraudulent grantee is liable to the creditor defrauded for the amount of the incumbrance.

On Motion for Rehearing.

8. FRAUDULENT CONVEYANCES (§ 182)—LIABILITY OF GRANTEE—RENTS AND PROFITS.

Where an alleged fraudulent grantee taking without any secret trust claims against both the creditor and the debtor, his liability for rents and profits accrues only from such time as the debtor himself would have been liable bad the property remained in his hands.

9. EXECUTION (§ 272) — SALE — PRIORITY OVER DEED.

Whenever title to real property passes from the debtor to an innocent purchaser prior to the lien of the creditor's judgment, the conveyance defeats a title acquired under execution on that judgment, provided the purchaser under the execution knows at the time of his purchase that such title has passed; the rule being that a deed antedating a judgment is good against the judgment if recorded before execution sale thereunder.

10. EXECUTION (§ 272)—PURCHASER—EQUITIES.

Where an execution creditor purchased land under execution with knowledge of outstanding equities, he takes subject to such equities.

Appeal from St. Louis Circuit Court; Daniel G. Taylor and Hugo Muench, Judges. Suit to quiet title by Charles H. Tate against Lon Sanders and others. Judgment for plaintiff, and defendant Sanders appeals. Reversed and remanded, with directions.

This is a proceeding to quiet title brought in the circuit court of the city of St. Louis. The petition alleges that the plaintiff is the owner subject to a deed of trust given to secure the payment of $12,500 and interest to Deacon & Lambert, trustees, who are made parties. The defendant Sanders answered, and by counterclaim sought to have the title of plaintiff and the deed of trust to Deacon & Lambert declared invalid. The trial court held that the deed of trust was valid, and that the title of Tate was subject to that deed of trust and subject to a judgment lien held by the defendant Sanders, who has appealed. In 1885 Clemens place in St. Louis was laid out, and the plat filed with building restrictions providing that not more than one dwelling should be erected on any one lot therein. Those restrictions, by their own terms, were to expire August 2, 1905. On January 4, 1901, one Davidson conveyed to Charles Dixon lot 55 in Clemens place. Ella Manning was the real purchaser. In making the purchase she acted through her agent, M. P. Hynson, who used Dixon as a "straw man." Dixon was an employé of Hynson and insolvent, and was used by Hynson as a straw man in many transactions in which Mrs. Manning was the real owner, and in other transactions in which other parties were the real owners. Dixon, for a small consideration, would take the record title to property in his own name, though he had no real interest therein. He would then execute deeds of trust on the property or convey it just as Hynson might desire. Dixon would execute "safety deeds" in blank as to the grantee, dates, and even as to the description of the property, and deliver them to Hynson to be used in any way he chose. Mrs. Manning fully understood that Dixon was being used in that way by Hynson in buying and selling property for her. The deed from Davidson to Dixon was recorded February 7, 1901. On January 22, 1901, Dixon executed to Mrs. Manning a safety deed for the property, which deed was kept from the record by Hynson and Mrs. Manning with the intention that it should not be recorded until the end of the Sanders litigation hereafter explained, and with the further intention that Dixon should appear to the world as the record owner of the property until the end of such litigation. That deed was never recorded, and was subsequently lost. On February 7, 1901, Hynson closed a deal by which Nicholls & Ritter loaned $10,000 on the property, for which Dixon executed a note and deed of trust. At that time Nicholls & Ritter knew that the money was loaned to be used in the erection of a double fiat building on the lot.

As soon as it became apparent that such a building was to be erected, the appellant herein, Sanders, and others who severally owned lots in Clemens place adjacent to the lot in controversy, on February 18, 1901, began a suit, without bond, praying for three different kinds of relief: First, an injunction to prevent the erection of the flats as in violation of the building restrictions; second, a decree ordering the removal of the flats in the event of their erection pending the litigation; third, damages for the breach of said restrictions. In that suit Dixon, Hynson and the contractor, Hunter, were made defendants. Notice of lis pendens in said suit was filed in the recorder's office on February 26, 1901, and on the same day Sanders served notice in the form of a letter to the defendants in that suit and to G. It. Manning, the husband of Mrs. Manning, and to Nicholls & Ritter, telling them of the institution and purposes of that suit, and warning them against the erection of such building. All of the money loaned by Nicholls & Ritter on that deed of trust was paid over by them in closing the loan on dates beginning August 2, 1901, and ending November 13, 1901. Of that money the sum of $1,545 went to pay a prior lien on the property. The flats were finished some time in 1901 at a cost of $13,000. Mrs. Manning testified that she bought and built on the property as an investment, and that she gave Hynson no authority to sell it. On February 1, 1902, Dixon and his wife executed two safety deeds to Mrs. Manning, conveying the property in controversy, and differing only in a recital not material to this discussion. Both these deeds were intentionally withheld from record by Hynson and Mrs. Manning until one was recorded as hereafter stated. On February 3, 1902, a decree was entered in Sanders v. Dixon et al., ordering the flats to be torn down, and a great deal of newspaper notoriety was given to the fact. An appeal was taken to the St. Louis Court of Appeals; and an appeal bond was given. On October 17, 1905, the Court of Appeals reversed the decree of the circuit court in an opinion in which it was held that, as the restrictions on the building rights in Clemens place had expired, the flats should not be torn down, but that the damages sustained by the plaintiffs therein should be assessed and judgment given therefor. The mandate was filed in the trial court November 1, 1905. In May, 1905, Dixon was intending to leave St. Louis, and he and his wife attached their...

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