The Commerce Trust Company v. Foulds

• Decision Date: 25 May 1925
• Parties: THE COMMERCE TRUST COMPANY, APPELLANT, v. CHARLES L. FOULDS, ET AL., RESPONDENTS. [*]
• Court: Kansas Court of Appeals

273 S.W. 229

221 Mo.App. 317

THE COMMERCE TRUST COMPANY, APPELLANT, v. CHARLES L. FOULDS, ET AL., RESPONDENTS. ^[*]

Court of Appeals of Missouri, Kansas City

May 25, 1925

Appeal from the Circuit Court of LaFayette County.--Hon. Robert M Reynolds, Judge.

AFFIRMED.

Judgment affirmed.

Kenneth W. Tapp and Henry C. Chiles for appellant.

Osborn & Osborn and Lyons & Ristine for respondent.

ARNOLD J. Bland, J., concurs. Trimble, P. J., absent.

OPINION

ARNOLD, J.--

This is an action to recover damages for alleged breach of statutory covenants contained in the words "grant bargain and sell" appearing in certain warranty deeds.

The facts disclose that in November, 1911, one George H. Foulds died testate, seized of approximately 336.25 acres of land in LaFayette county, Missouri. By the terms of his will he devised said land to his wife, Mary E. Foulds for life, and at her death to his children, Charles L., Abigail and others named therein, and in case any of his children named in the will should die before the death of their mother, leaving heirs, then the heirs of such deceased child should receive the part of the estate which otherwise would have gone to said deceased child; and in the event any of the testator's children should die before the division should be made, without having married, the share of said deceased child should be divided among the other children or their heirs.

The estate was finally administered under the terms of the will. The widow entered into possession of said real estate on the death of her husband and ever since has remained in possession thereof. Since the death of George H. Foulds, the widow has intermarried with one Albert Foulds.

At his death, George H. Foulds left nine children, among them Charles L. Foulds, one of the defendants herein and Abigail, who afterwards married Eugene Doty and who died on April 4, 1922, leaving two children, Vivian and Maxine, aged twelve and eleven respectively.

In April, 1917, Eugene and Abigail Doty borrowed from Mary E. Foulds the sum of $ 1500, but the latter having on hand but $ 750 cash, borrowed from her son Charles L. Foulds the sum of $ 750 to complete the loan. On April 17, 1917, Abigail Doty and her husband executed and delivered to Mary E. Foulds a warranty deed conveying their undivided one-ninth interest in and to the real estate above mentioned; the said deed described such interest as "our entire undivided one-ninth interest in, of and to" (the land described). The said deed contained the following provision: "The above being the interest of Abigail Foulds, now Abigail Doty, in the estate of her father, George H. Foulds, deceased."

Eugene Doty agreed to pay the amount of the loan within a reasonable time, not to exceed two or three months, and at his request the said deed was not placed of record at that time. The amount was not paid and Mary E. Foulds and her husband Albert Foulds, on payment to them by Charles L. Foulds of an additional $ 750 on August 24, 1917, deeded to the latter, under the same terms and conditions, the same undivided one-ninth interest as had been deeded to Mary E. Foulds by Abigail and Eugene Doty. And it was agreed that Charles L. Foulds was to hold said deed as security for the money his mother had loaned to Abigail and her husband and which had been loaned to his mother by Charles L. Foulds. This deed contained the following provision: "The above interest being the interest of Abigail Foulds now Abigail Doty, in the estate of her father George H. Foulds, which interest she transferred by warranty deed to Mary E. Foulds, on April 17, 1917." This deed was filed for record with the recorder of deeds on August 27, 1917, and at the same time the deed from Abigail Doty and her husband to Mary E. Foulds also was filed for record.

On January 15, 1918, Doty and his wife instituted suit in the circuit court of LaFayette county against Mary E. and Charles L. Foulds for the reconveyance to them of the property they had conveyed to Mary E. Foulds, as above stated--the petition therein alleging that their warranty deed of April 17th to Mary E. Foulds, although absolute in form, in fact, was a mortgage given to secure the payment of $ 1500 loaned by Mary E. Foulds to Eugene Doty. On February 23, 1918, this suit was settled by payment to Charles L. Foulds by Doty and his wife of the sum of $ 1500 with interest and costs; whereupon Charles L. Foulds and wife executed and delivered to Abigail Doty their warranty deed to the said real estate, which recited that they were conveying "the same interest in said real estate conveyed by Abigail Doty and husband to Mary E. Foulds by deed dated April 17, 1917, and subsequently conveyed by Mary E. Foulds to Charles L. Foulds by deed dated August 24, 1917." This document was filed for record and recorded February 28, 1918.

It is claimed by respondents that this deed from Charles L. Foulds to Abigail Doty, while absolute in form was in fact only a deed of release made in pursuance of the contract between Abigail Doty and husband and Mary E. and Charles L. Foulds and that it was intended to, and did, convey only such interest as Abigail Doty originally had conveyed to Mary E. Foulds, and the only consideration for said deed was the $ 1500 loan above stated, and the assignment by Mary E. to Charles L. Foulds of said interest.

The evidence shows that on August 21, 1918, Eugene Doty and wife Abigail executed and delivered to W. B. Lathrop their negotiable promissory note for $ 4,000, interest at six per cent, and that this note afterwards was assigned to the Commerce Trust Company, plaintiff herein. To secure the payment of said note the makers executed and delivered their certain deed of trust conveying an undivided one-ninth interest in and to the lands in question. There was default in the payment of this note, and under the terms of the deed of trust the land was sold on February 4, 1922, and plaintiff herein became the purchaser thereof, receiving a trustee's deed therefor, pursuant to the foreclosure.

Afterwards plaintiff instituted a partition suit in the circuit court of LaFayette county, against defendants herein. The decree in said suit recited, among other things: "That the said widow, defendant herein, Mary E. Foulds, is still living and is now in possession of the real estate described in plaintiff's petition, wherefore it is considered, adjudged and decreed by the court that under the provisions of the will of said George H. Foulds, deceased, no partition of said real estate can be had during the lifetime of said widow, Mary E. Foulds, and this cause is dismissed at the cost of the plaintiff."

On May 24, 1923, the petition herein was filed, alleging the execution by Eugene and Abigail Doty of the note for $ 4000 and the deed of trust securing the same; default and sale of the land under the deed of trust and that plaintiff received a trustee's deed to the land; the execution and delivery of the deed from Mary E. and Albert Foulds, her husband, wherein for a valuable consideration they did grant, bargain and sell the said lands to Charles L. Foulds, thereby covenanting for their heirs and assigns that they were seized of an indefeasible estate in fee simple in the land conveyed; that said real estate was free from any encumbrances done or suffered by them or any person under whom they claimed, and further assurances.

The petition further alleges that the deed from Charles L. Foulds and wife to Abigail Doty, the person who, with her husband, executed the note and deed of trust mentioned, did thereby covenant that they were seized of an indefeasible estate in fee simple in the lands conveyed, and further assurances to said grantee.

Further the petition alleges that by reason of said deed of trust and trustee's deed, plaintiff became the assignee of, and entitled to the benefit of the covenants contained in said deeds; that the grantors in said deeds were not seized of an indefeasible estate in fee simple to said land and that said premises were not free from encumbrances done or suffered by them, or any person under whom they claim; but that on the dates of said deeds, Mary E. Foulds was seized of a life estate therein, under the provisions of the will of her former husband, and that said land was at the time, and still is, so encumbered; that by reason thereof the security, as represented by the deed of trust, was and is lost to plaintiff, and that it took nothing under the trustee's deed aforesaid; wherefore plaintiff asks judgment in the sum of $ 4000 and interest.

Defendants Mary E. and Charles L. Foulds filed answer setting forth the facts as above stated and stating that the warranty deeds were mortgages given to secure the said loan of $ 1500; that the covenants in the several deeds mutually cancelled and extinguished each other, and that plaintiff is estopped to assert a right of action on covenants in defendants deed to Mrs. Doty by reason of like covenants in the deed of Mrs. Doty to defendants. The other defendants filed general denials.

The trial was to the court without the aid of a jury and, after hearing all the evidence, the court found that the covenants of warranty in the conveyance of Abigail Doty and her husband to Mary E. Foulds, and the conveyance by Mary E. Foulds and husband to Charles L. Foulds, and the reconveyance by Charles L. Foulds to Abigail Doty were mutually cancelled by the last-named conveyance, and that plaintiff, as assignee of Abigail Doty and husband, was estopped to assert a right of action against defendants on covenants of defendants' deed to Abigail Doty, by reason of like covenants in Mrs Doty's deed to defendants; that all of the aforesaid conveyances shown of record were...