Williamson v. Frazee

• Decision Date: 08 June 1922
• Docket Number: No. 22892.,22892.
• Citation: 294 Mo. 320,242 S.W. 958
• Parties: WILLIAMSON et al. v. FRAZEE et al.
• Court: Missouri Supreme Court

242 S.W. 958

294 Mo. 320

WILLIAMSON et al. v. FRAZEE et al.

No. 22892.

Supreme Court of Missouri, Division No. 2.

June 8, 1922.

Appeal from Circuit Court, Scotland County; James A. Cooley, Judge.

Action by William L. Williamson and another against Daniel A. Frazee and others. Judgment for plaintiffs, and defendants appeal. Affirmed.

This is an action under section 1970, R. S. 1919. The issues tendered by the pleadings are equitable in their nature, and hence it is a proceeding in equity.

Plaintiffs sought to have a warranty deed, absolute on its face, declared a mortgage. They prevailed below and some of the defendants have prosecuted their appeal to this court.

The petition alleged that plaintiffs (husband and wife, respondents here) were the owners in fee simple of 556 acres of land in Scotland county; that on the 14th day of January, 1918, they made, executed, and delivered to defendants Daniel A. Frazee, Nick Davis, and Charles Kiefer an instrument of writing whereby they conveyed to the said defendants all of said lands, subject to an incumbrance of $25,000 in favor of the said State Savings, Loan & Trust Company of Quincy, Ill., dated the 20th day of January, 1915; that also they had on the 29th day of September, 1916, executed and delivered to the Citizens' Bank of Gorin, Mo., a deed of trust to secure their promissory notes for $14,000, which deed of trust was second and subordinate to the deed of trust for $25,000; that plaintiffs had defaulted in the payment of their promissory notes to the said Citizens' Bank of Gorin, and that the trustee named in said deed of trust had at the instance of the holder of said notes proceeded to advertise said property for sale, and that the sale was to occur on the 15th day of January, 1918; that plaintiffs were in straitened financial circumstances, and applied to the defendants Frazee, Davis, and Kiefer, who were neighbors and friends, to assist them in preventing a sale; that thereupon an arrangement was made by plaintiffs with the said defendants whereby it was agreed that the said defendants would advance to plaintiffs a sum sufficient to pay off said notes, interest, and deed of trust and other debts owing by plaintiffs and growing out of said loans on said real estate, conditioned that the plaintiffs would convey to the said defendants all of said real estate to be held by the said defendants as agents and trustees of plaintiffs.

It was further alleged that said defendants would utilize the productivity of said property, and apply the proceeds toward the liquidation of the indebtedness, including all sums advanced by the defendants and all taxes due and accruing on said land, and would apply any surplus to the liquidation of the principal indebtedness, and that for the discharge and liquidation of said principal indebtedness the said defendants were further authorized and empowered to sell a portion of said real estate and execute deeds therefor, and that upon accomplishing the purposes of said trust or agency the said defendants would reconvey to plaintiffs all that remained of said real estate; that at all times it was understood the said defendants would reconvey said property to plaintiffs upon payment by plaintiffs of the sums advanced by defendants in the payment and discharge of the notes above described, and other items of indebtedness of plaintiffs, and that in such event defendants would faithfully account to plaintiffs for all sums of money received by them from the rentals of said lands.

Plaintiffs alleged that, reposing full confidence in the said defendants, they executed and delivered a warranty deed to said property in accordance with the foregoing agreement and which deed was duly recorded in the office of the recorder of deeds in Scotland county, but plaintiffs averred that while said warranty deed purported on its face to have been executed for a consideration of $39,000 and appeared to be an absolute conveyance of said real estate to defendants, yet in truth and in fact it was intended by all of said parties at the time to be only a mortgage and security to the said defendants to secure them in the sums of money advanced or to be advanced by them to prevent a foreclosure of the deed of trust securing $14,000, and for the further purpose of enabling said defendants to make a sale of a portion of said property to raise funds to reimburse themselves and to discharge existing indebtedness.

It was further alleged in the petition that defendant Charles Powers claimed an interest in a portion of said land arising from a contract of purchase entered into between him and the other defendants, whereby for a stipulated consideration the other said defendants had agreed to transfer to him 236 acres of said real estate. Plaintiffs further alleged that during the years 1918 and 1919 the said defendants Frazee, Davis, and Kiefer received over $13,000 on account of tin rentals of said property, and that said sum, under the contract between plaintiffs and said defendants, should have been applied toward the payment of the interest due on the first deed of trust, and on such sums as were advanced by defendants, including all taxes paid by them, that they desired to redeem said property, or such portion thereof remaining unsold, and that they were ready and willing, and by their petition they offered to pay the said defendants whatever sum or amount might be found to be due them, together with interest, and plaintiffs offered to comply with all the terms and conditions of the contract as pleaded by them. There was a further allegation that at the time of the transaction in question the property was reasonably worth $60,000, and at the time of the suit had advanced to a reasonable market value of $80,000, and they further averred that the said defendants Frazee, Davis, and Kiefer were claiming that the plaintiffs had no interest in said real estate, and were asserting that the warranty deed above mentioned was intended as an absolute conveyance, and not as a mortgage, and that otherwise the said defendants were refusing to comply with the terms and conditions of said contract, and asserted absolute ownership of said property.

The prayer of the petition was that the court ascertain the amount of money furnished by defendants Frazee, Davis, and Kiefer; ascertain and determine the amount of money received by them from rentals on said land; ascertain and determine the respective rights and interests of all the parties; adjust the equities of all, and to declare the warranty deed executed by the plaintiffs on the 14th day of January, 1918, to the said defendants, to be a mortgage; that plaintiffs be adjudged and decreed the right to redeem said real estate therefrom; and that the said defendants be ordered and directed to execute a reconveyance of such lands, or such portion thereof as remains unsold, to plaintiffs, and upon failure to divest all the right, title, and interest therein out of the defendants, and vest same in plaintiffs; and for general relief.

The answer of defendants Frazee, Davis, and Kiefer was a general denial, with the allegation that they were the absolute owners of said property, and that they claimed title under the warranty deed mentioned in plaintiff's petition, and that pursuant thereto they had taken possession of said premises and held and enjoyed the use thereof, and that plaintiffs became their tenants, and thereby were estopped to assert an adverse interest.

The separate answer of defendant Charles Powers admitted that plaintiffs were the owners in fee of said property on and prior to January 15, 1918, but said that whether the deed of that date to the other defendants conveyed an absolute estate or was intended as a mortgage he did not know, but that, whatever the terms, he averred that the grantees were given full power and authority to contract with him with respect to the purchase and sale of a portion of said premises, and that accordingly he had purchased 236 acres of said real estate, for which he had contracted and agreed to pay $29,500; that he had paid a portion thereof, and stood ready, willing, and able to complete the terms of his agreement, and he prayed for specific performance, or that the consideration already paid be restored to him.

Plaintiffs by their replication admitted that defendant Powers had purchased 236 acres of said land; that the other defendants had the power, under the terms of the agreement, to convey to him; and that he was entitled to specific performance of his contract in accordance with the terms thereof.

The testimony on the part of the plaintiffs tended to support the allegations of the petition, and there was no controversy over the interest of Charles Powers as to the 236 acres of said property and his right to complete the purchase thereof and secure deed by paying the $29,500 or such portion thereof as remained unpaid. The testimony on the part of the...