Whetsel v. Forgey

• Decision Date: 06 August 1929
• Docket Number: 27304,27305
• Citation: 20 S.W.2d 523,323 Mo. 681
• Parties: H. J. Whetsel, Appellant, v. William Stark Forgey, Minnette S. Forgey and Eva M. Forgey, Appellants; and George N. Davis, Defendant
• Court: Missouri Supreme Court

20 S.W.2d 523

323 Mo. 681

H. J. Whetsel, Appellant, v. William Stark Forgey, Minnette S. Forgey and Eva M. Forgey, Appellants; and George N. Davis, Defendant

Nos. 27304, 27305

Supreme Court of Missouri

August 6, 1929

Rehearing Denied October 4, 1929. Motion to Transfer to Banc Overruled October 10, 1929.

Appeal from Pike Circuit Court; Hon. Edgar B. Woolfolk Judge.

Reversed and remanded (with directions).

May & May, Ed. S. Jones and George N. Davis for plaintiff.

(1) The date of the instrument, the consideration for the note, the signatures of Eva M. Forgey and Minnette S. Forgey and the venue of the acknowledgment being all in red ink and conforming to the consideration of the note, together with the signature of Minnette S. Forgey to the note being also in red ink, is a very strong circumstance to show that these various parts of the instruments were all made with the same pen, out of the same bottle of ink, at the same time and place and as a part of the same transaction. Proof to satisfy the court of one of these necessary changes to complete this instrument was an alteration, without the consent of the other parties, must be clear, convincing and overwhelming leaving no room for reasonable doubt. Childers v. Pickenpaugh, 219 Mo. 454; 2 C. J. 1288, sec. 210. Especially should this be true where one of the parties benefited by having the deed declared void claims to have made the alteration and the grantee admittedly had nothing to do with it and knew nothing about it for years afterwards. 2 C. J. 1289, sec. 211. (2) It is admitted in this case that after the deed of trust had been made up in the condition in which it was delivered to plaintiff Whetsel, it was acknowledged by each of the three Forgeys without the knowledge of Whetsel and before he had ever seen it; thus the alteration was made before execution and delivery. Bank v. Worthington, 145 Mo. 91. A change in the deed of trust before the execution of the deed or with the knowledge and consent, actual or implied, of the grantors, does not invalidate the deed. Coney v. Laird, 153 Mo. 408; Evans v. Foreman, 60 Mo. 449; First Natl. Bank v. Fricke, 75 Mo. 178; Morrison v. Garth, 78 Mo. 430; Koons v. Car Co., 203 Mo. 227; Powell v. Banks, 146 Mo. 620; Williams v. Jensen, 75 Mo. 681; Carson v. Woods, 177 S.W. 623. (3) Where the relationship of confidence and trust and agency existed, as the testimony shows existed in this case between Eva M. Forgey, mother, Minnette S. Forgey, wife, and William Stark Forgey, who was transacting the business for them, the acts of the agent bind the principal; especially so where, as in this case, they have held the agent out to the plaintiff as possessing general powers over the matter in hand; and if he exceeds his powers, which the plaintiff denies in this case, the equitable doctrine applies that "where two innocent parties suffer, the injury must be sustained by the one who puts it in the power of the other to do the injury." King County v. Ferry (Wash.), 19 L. R. A. 500. (4) The mistake in the description of the note in no way affects the deed of trust, the note itself and the debt intended to be secured being the controlling feature in the case. Thus, any alteration made in the description of the note to make the deed of trust conform to the true description of the note, is an immaterial alteration and the pure correction of a typrographical error, if, in fact, such alteration was made. Aull v. Lee, 61 Mo. 160; Williams v. Natl. Bank, 72 Mo. 292; Mandel v. Horspool, 198 Mo.App. 649; Stephens v. Hampton, 46 Mo. 410; Winn v. Inv. Co., 125 Mo. 528; Deuser v. Walker, 43 Mo.App. 625. (5) One who has by his subsequent action recognized a deed of trust as a valid and subsisting lien and has derived benefits therefrom against the mortgagee, will not be permitted thereafter to deny the validity of such deed of trust. Coney v. Laird, 153 Mo. 408; Evans v. Foreman, 60 Mo. 449. Nor does the fact that some of the subsequent transactions amounting to ratification, according to the testimony of Eva M. Forgey, were carried on by William Stark Forgey as her agent relieve her from the effect of such acts constituting a ratification. Merchants Natl. Bank v. Lovett, 114 Mo. 519; 21 R. C. L. 838; Henry v. Sneed, 99 Mo. 407; Hickman v. Greene, 123 Mo. 165; Barlett v. McAllister, 289 S.W. 814; In re Linn Co. Bank, 1 S.W.2d 208. (6) In this case, the defendant, Eva M. Forgey, has asked and received relief in equity at the hands of the court. There is no tender offered by her of any sort to make the plaintiff whole for the money received by her in this transaction and used to relieve the premises of the $ 5800 first lien discharged with the proceeds of the transaction involved, which was a lien against all of her part of the land, of which $ 2,000 was her own indebtedness. 10 R. C. L. 392. The rule that he who seeks the cancellation of an instrument must restore whatever he received under it, is one of justice and equity and must be reasonably construed and applied. 4 R. C. L. 511; Bell v. Campbell, 123 Mo. 1. (7) The law is clear that in the absence of an agreement to the contrary, a pledge of shares of stock as collateral security carries with it as an instance of the pledgee's special ownership the right to receive dividends as declared to be applied on the debt. 6 Thompson on Corporations, sec. 3704, p. 6151; Gaty v. Holliday, 8 Mo.App. 118; McLaren v. Mill Co., 117 Mo.App. 40; Mo. Baptist Sanatarium v. McCune, 112 Mo.App. 332. The case of Williams v. Everett, 200 S.W. 1045, in no way conflicts with the theories of appellant in this case, but, on the contrary, upholds them.

Nat M. Lacy and Holstetter & Haley for William Stark Forgey and Minnette S. Forgey.

(1) One-third of the $ 25,000 increase in the capital stock amounting to 83 shares, belonged to William Stark Forgey. The president of the corporation under the evidence wrongfully and tortiously refused to issue and deliver the stock to William Stark Forgey, although repeatedly requested so to do, but converted it to his own use and to the enhancement of his own interest in the corporation. In such instance he is liable. Williams v. Everett, 200 S.W. 1045. (2) William Stark Forgey and Minnette S. Forgey, his wife, have no interest therein for the reason that their interest in the Pike County farm (sought to be foreclosed) has been acquired by Eva M. Forgey and was acquired before the institution of this suit. However, the court in its decree renders judgment in favor of the plaintiff and against the defendants Williams Stark Forgey and Minnette S. Forgey for "all his costs expended in this cause under and by virtue of said sale under said deed of trust." The sale referred to evidently means the sale ordered by the court in its decree with reference to the undivided one-half interest in the farm. In view of the fact that neither William Stark Forgey nor Minnette S. Forgey had or owned any interest in the farm at the time of the institution of this suit, this portion of the decree of the trial court is erroneous even though this court should uphold the trial court, in its judgment in respect to the undivided one-half interest in the farm referred to.

J. W. Matson for Eva M. Forgey.

(1) The deed of trust as originally prepared by Geo. N. Davis, the attorney for appellant Whetsel, did not describe any note that has ever been in existence, or that was ever contracted to be in existence, and that deed of trust, as so prepared was afterwards altered and changed, without the knowledge or consent of Eva M. Forgey, after she had executed the same, and even in its present condition, as admitted by the bringing of this suit, it does not describe any note in existence, and therefore by virtue of the alteration, the deed of trust was then and there immediately void, as to Eva M. Forgey, and by virtue of the condition it was in, at the time it was recorded, it only then gave constructive notice to any one who purchased the interest of Wm. Stark and Minnette S. Forgey in the real estate described in the deed of trust of record, and therefore, when Eva M. Forgey purchased said interest of said Wm. S. and Minnette S. Forgey at private sale, and afterwards at public sale, as shown by the sheriff's deed, she acquired their interest relieved from any lien of said deed of trust, plaintiff's Exhibit 2. Secs. 2199, 2200, R. S. 1919; Donaldson v. Donaldson, 278 S.W. 686; Terrell v. Andrew, 44 Mo. 309; Cass Co. v. Oldham, 75 Mo. 50; White v. Spender, 217 Mo. 242, 129 Am. St. 547, 16 Ann. Cas. 598. By reason of the alteration in the said deed of trust in the manner and at the time in which it was made, that deed of trust then and there became void, and you cannot enforce or reform a void instrument. Ostrander v. Messmer, 223 S.W. 438; Carson v. Woods, 177 S.W. 623; David Plant Securities Co. v. Cooper, 258 S.W. 458; Bank of Moberly v. Meals, 295 S.W. 73; Kelly v. Thuey, 143 Mo. 422; Grafeman Dairy Co. v. Bank, 288 S.W. 362. (2) On the question of the right to reform under any circumstances under the evidence in this case, see: Dougherty v. Dougherty, 204 Mo. 228; Wall v. Mays, 210 S.W. 871; Emerson Brantingham Imp. Co. v. Rogers, 229 S.W. 779; Wilhite v. Wilhite, 224 S.W. 448; Ford v. Delph, 220 S.W. 719; Stephens v. Stephens, 183 S.W. 572. (3) Eva M. Forgey was only intended to be a surety on the deed of trust, in the condition that it was in at the time she executed the same; therefore she occupies that favorite position that is guaranteed by the law to sureties and requires a much stronger case, as against her and her interest, than it would be if it had been agreed that she should not only execute the deed of trust but the note as therein described, at the time that she did execute that deed of trust. W. T. Rawleigh...