Wilson v. Parke
| Decision Date | 22 May 1906 |
| Parties | WILSON et al., Respondents, v. PARKE et al., Defendants; HEWITT and DAVIS, Interveners and Appellants |
| Court | Missouri Court of Appeals |
Appeal from Greene Circuit Court.--Hon. James T. Neville, Judge.
REVERSED.
Judgment reversed.
R. H Davis and W. Cloud for appellants.
A title acquired under foreclosure of a first mortgage will not inure to the benefit of a second mortgage, if the second mortgage is expressly made and taken subject to the first mortgage. 1 Jones on Mortgage (4 Ed.), sec. 679; Hizzley v Heffernan, 9 N.E. 570; 2 Washburn, Real Prop. (5 Ed.) pp. 117-217. Hewett was interested in the property covered by plaintiffs' mortgage, and under chancery practice was a proper party defendant in an action of foreclosure. 9 Ency. Plead. & Prac., p. 320; 2 Jones on Mortgages, sec. 1425. And it was proper to permit him to intervene upon request. 9 Ency. Pl. & & Pr., 352.
C. V. Buckley and H. S. Miller for respondents.
(1) The evidence clearly showed that plaintiff Wilson went to Pierce City on the morning of the 14th day of December, 1903, for the express purpose of protecting plaintiffs' deed of trust. He met A. L. White, president of said bank and was told by him that Parke wanted an extension of time and that the bank had refused to grant him the extension but would give him ten days or two weeks' time in which to redeem the property and in the event Parke failed to redeem within that time then Wilson would be permitted to pay the bank the amount due it and thus protect his mortgage. We submit the following authorities on the question of fraud and its manners of proof: Hough v. Dickinson, 58 Mich. 89, Kaine v. Weighey, 22 Pa. 179; Hildreth v. Sands; 2 Johns. Ch. 35; Sands v. Hildreth, 14 Johns. 493; Deval v. Brandt, 53 N.Y. 462; Cooley on Torts, 557; Rea v. Missouri, 84 U.S. 17 Wall. 532; Kemper v. Churchill, 75 U.S. 362 (Wall.) ; Gregg v. Sayre, 33 U.S. (8 Pet.) 244; Vance v. Phillips, 6 Hill 433; Hennequin v. Naylor, 24 N.Y. 139. Cooley on Torts, 557; Ziekel v. Douglass, 88 Mo. 382; Hopper v. Gladden, 75 Ga. 532. Bigelow on Fraud, p. 476; 118 Ill. 334; Parker v. Phetteplace, 68 U.S. (1 Wall.) 684. (2) Means and opportunities of acquiring knowledge of fraudulent transactions inducing the sale of land are equivalent to knowledge. Lee v. McClelland, 120 Cal. 147; Wren v. Monsean, 95 Va. 369; Lawson v. Floyd, 124 U.S. 108; Bank v. Tobacco Co., 155 Mo. 602; State ex rel. v. Purcell, 131 Mo. 317, 33 S.W. 13; Appel v. Eaton & Prince Co., 97 Mo.App. 438, 71 S.W. 741; Deere Plow Co. v. Sullivan, 158 Mo. 448, 59 S.W. 1005; Stephenson v. Kilpatrick, 166 Mo. 269, 65 S.W. 773.
--In December, 1901, H. B. Parke, under the trade name of Wentworth Lead & Zinc Mining Company, acquired a mining lease by assignment, on a parcel of land in the southeast quarter of the southwest quarter section 1, township 26, range 29, in Lawrence county, Missouri, upon which he erected a reduction plant and placed mining machinery, etc., for the operation of the mine. On August 16, 1902, the Wentworth Lead & Zinc Mining Company, H. B. Parke and wife, by their deed of trust, duly acknowledged, conveyed the leased premises and machinery and tools thereon situated to W. R. Scheldrup, trustee, to secure the payment of the promissory note of said Parke, of even date therewith, for the sum of twenty-five hundred dollars, to the Pierce City National Bank, the beneficiary named in the deed of trust; deed recorded September 8, 1902. On September 30, 1903, the Wentworth Lead & Zinc Mining Company, Parke and Wife, executed a second deed of trust on the same property, subject to the prior one, to A. L. White, trustee, to secure the payment of several sums of money due from Parke to N. U. Wilson and the other plaintiffs' aggregating $ 2,691.21; deed recorded September 12, 1903. The trustees in these two deeds of trust were given power to advertise and sell the property conveyed in case of default of payment of the sums secured thereby, and provided that in the event of the death, or the refusal of either of the trustees to act, the acting sheriff of Lawrence county should be authorized to advertise and sell. Default was made in the payment of the bank's note and deed of trust, and by direction of the managing officer of the bank, trustee Scheldrup duly advertised the property for sale under the deed of trust, and on the fourteenth day of December, 1903, sold the same in accordance with the terms of said deed. The bank became the purchaser of the entire property at the sale, for the sum of two thousand dollars. On the following day the trustee made and acknowledged a deed, as such, conveying the property to the bank; deed recorded September 30, 1903. On December 20, 1903, the bank by its deed duly executed and acknowledged, conveyed the property to John S. Cooke, of the county of Passiac, in the state of New Jersey, as trustee. This deed was recorded March 16, 1904. On April 22, 1904, John S. Cooke, trustee, by his deed, duly executed and acknowledged, conveyed the property to the Jovis Zinc Mining Company, a New Jersey corporation. This deed was recorded April 26, 1904. On April 22, 1904, the Jovis Zinc Mining Company, at the county of Passiac, in the State of New Jersey, made and acknowledged its deed of trust conveying the property to R. H. Davis, trustee, to secure the payment of two thousand dollars to William Hewitt, the beneficiary named in said deed of trust. This deed was also recorded. Default was made in the payment of the two thousand dollars secured by said deed of trust, and by direction of Hewitt, Davis, as trustee, advertised the property for sale under the terms of said deed.
The petition alleged, in substance, that the deed from the bank to Cooke, the one from Cooke to the Jovis Zinc Mining Company, and the deed of trust from the Mining Company to Davis, trustee, for the benefit of Hewitt, were all made and entered into for the purpose of defrauding the plaintiffs; that in truth and in fact, Parke furnished the money to make the purchase from the bank and procured the deed made to Cooke, his brother-in-law, for the purpose of concealing the real title to the property; that the deed from Cooke to the Jovis Mining Company was made for the same purpose, and the deed from it to Davis, as trustee, for a like purpose, and all with the fraudulent intent to defeat the lien of the plaintiffs upon said property. The petition alleged that Parke is the real owner of the property and asked that plaintiff's deed of trust be declared a first lien upon said property, and that it be foreclosed and the property sold to satisfy the debts due the plaintiffs. The petition further alleged that White, the trustee named in the deed of trust made for the plaintiff's benefit, refused to act as such, and that defendant Connor, the acting sheriff of Lawrence county, also refused to sell under said deed.
Pending the suit a supplemental petition was filed, praying for an order to enjoin Davis and Hewitt from selling the property under the Davis and Hewitt deeds of trust. A temporary injunction was granted, which was made perpetual on the final hearing.
Defendants Davis and Hewitt filed their joint answer, denying the allegations of the petition and alleging the bona fides of the Hewitt deed of trust and of the other deeds charged by plaintiffs' petition to have been fraudulently executed.
The suit was commenced in the Lawrence Circuit Court but was removed by change of venue to the Greene Circuit Court, where it was tried, resulting in a finding by the court in favor of the plaintiffs, and a judgment awarding the relief prayed for in the petition. Davis and Hewitt appealed.
The only connection Davis, who resides in Lawrence county Missouri, is shown to have had with any of the transactions set forth herein is that he, without his knowledge, was named as trustee in the deed of trust given to secure Hewitt, and when requested by Hewitt to act as trustee, consented and at Hewitt's request advertised the property for sale. It appears from the evidence that Parke and wife were residents of the state of New Jersey; that the leased property did not prove to be a paying mine while in the hands of Parke and he became involved in debt in the operation of the mine. A. L. White was president of the Pierce City National Bank, in 1901, 2 and 3, and was on intimate terms with Parke, and on account of his friendship for him and his wife used his influence to postpone the foreclosure of the bank's deed of trust as long as he could, and succeeded at one time in having a sale called off which had been advertised to take place. It was at White's suggestion that Parke and wife executed the second deed of trust to secure Parke's indebtedness to the several plaintiffs and by agreement of parties he was named as trustee and made the depository of the deed. Wilson, who had been superintendent of the mine while it was in the possession of Parke, was the active creditor among the plaintiffs. Wilson testified that he went to Pierce City on Sunday evening, December 13, 1903, to see White, president of the bank, about the sale that was to take place under the bank's deed of trust, at Mount Vernon on the following day; that White was not at Pierce City and did not arrive until eleven o'clock that night, when he met him at the depot and White invited him to come around to the bank the next morning at nine o'clock; that he did so and White showed him two telegrams, one from Parke and one from Parke's wife, who were both in New Jersey at the time; that Parke's telegram read: The one from Mrs. Parke was an appeal to White to try to protect their...
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