Ridings v. Hamilton Savings Bank , 281 Mo. 288 ( 1920 )

Appeal from the Circuit Court of Caldwell County.

This is a suit to partition certain lands amongst the heirs of T.D. George, Sr., deceased (two of whom are the married women named in the title to the case), and the defendants, Hamilton Savings Bank and Virgil Cash, who acquired the right, title and interest of T.D. George, Jr., the other heir.

T.D. George, Sr., the father, died intestate November 7, 1913. Ella George, his widow, was appointed administratrix November 15, 1913. She seems also to have been a party to this suit, but whether plaintiff or defendant, does not appear from the abstract of record. T.D. George, Jr., is also a party defendant. At the time of the father's death, the son owed him a promissory note, which was never paid, and, at the date of the decree, amounted to $1,461.50. The father had also signed notes for his son as security and on joint account, all of which were duly presented, proved and allowed as claims against the estate, and amounted to $8,389.43, which was paid by the administratrix. On September 3, 1915, T.D. George, Jr., and his wife, made a deed of trust to William H. McAfee, trustee, to secure the note of said George of that date to the defendant Savings Bank for $4,965.26. This note was given in renewal of a prior note for that amount then due. The new note, secured by the deed of trust, was payable six months after its date. The granting clause of the deed of trust was, "grant, bargain and sell, convey and confirm unto the said party of the second part, the following described real estate, situate in the County of Caldwell in the State of Missouri: All of his undivided right, title, share and estate in and to the following described property, to-wit: [here describing it]."

The deed of trust contained no express covenants of warranty or of title. The note not being paid when due, there was a trustee's sale, at which the defendant, Cash, became the purchaser, as trustee for the bank. The granting clause in the trustee's deed was, "bargain, sell and convey unto him, the said Virgil V. Cash, the real estate in said deed described, situate in the County of Caldwell and State of Missouri, to-wit: All the undivided right, title, share and estate of the said T.D. George, and Hazel George, his wife, in and to the following described property, to-wit: [here describing the property]."

To raise the money to pay the debts of the estate (there being insufficient personal estate), including those proved against the estate, for which the son was the principal debtor and primarily liable, the heirs of the estate, including the son, sold and conveyed certain other lands of the estate and paid over the money received therefor to the administratrix, who applied the same to the payment of the demands proved against the estate, including those for which the son was primarily liable above mentioned. The administratrix having thus fully paid all the obligations of the estate, filed a final settlement, which was duly made, and approved by the probate court August 12, 1915, when the administratrix was discharged. In October, 1915, the plaintiff Harry E. Ridings was appointed administrator de bonisnon.

This suit was then commenced, returnable to the November Term, 1915 (or afterwards) of said court. The petition prayed, among other things, that the above sums paid by the administratrix on account of debts of the son proved against the estate should be charged against and deducted from his share of the estate in the hands of the defendants, Hamilton Savings Bank and Virgil Cash.

The answer pleaded that administration was duly had upon said estate and all claims against it paid. That Ella George, the administratrix, made final settlement, which was approved and said administratrix was discharged. That no assets were discovered after said final settlement, and there were no unpaid demands against said estate. That therefore the appointment of plaintiff Harry E. Ridings as administrator de bonis non was void, and he had no capacity to sue. That said sale by the heirs of other lands of the estate to raise money to pay the debts of the estate and their payment by the administratrix out of such moneys, was a voluntary payment by them, and thereby said debts were fully discharged and paid, and if said T.D. George, Jr., was ever chargeable with any sum as advancements or as distributions already received by him, such obligation was discharged by such voluntary payment. The answer also alleged the making of the deed of trust to said bank by said T.D. George, Jr., and wife, and that he thereby conveyed to the trustee "all his undivided right, title and interest" in said property to secure its note against him, and that subsequently the deed of trust was foreclosed and the property bought by defendant Cash, at the trustee's sale.

The court decreed that plaintiffs Ora Lee Ridings and Bertha George Rentschler, out of the proceeds of the sale of the property in partition (which was ordered), should each first receive the sum of $8,389.43, with interest, subject to the widow's claim of dower, before the defendants, the bank and Cash, received anything, and that if anything then remained of such proceeds, it should be equally divided between said plaintiffs and defendant Cash, as trustee for the bank.

There were other issues involved below, but they are not involved on this appeal.

From said decree, defendants, the bank and Cash, appealed to this court.

I. The deed of trust and trustee's deed simply purported to convey whatever interest T.D. George, Jr., had at the time the deed of trust was made, and not the land itself, nor any definite portion thereof, divided or undivided. While the deed of trust contained the statutory words, "grant bargain, sell,Conveyance. convey and confirm," they did not purport to convey or warrant the land itself or any particular interest therein, but only such right, title, interest or estate, as the said T.D. George, Jr., had, whatever that interest might be.

In Stoepler v. Silverberg, 220 Mo. l.c. 267, where the same statutory words were used in the same connection in a deed, this court said: "The instrument must be read and construed in the light of all its parts and when this is done, it is obvious that it does not attempt or purport to convey and warrant the lot itself, but only `all such right, title and interest,' that Frederick Stoepler, at the date of the deed, had in and to said house and lot."

Even express covenants of warranty, not only do not enlarge, but are themselves restrained by the estate granted. [Bogy v. Shoab, 13 Mo. l.c. 380-1; Hanrick v. Patrick, 119 U.S. l.c. 175-6; Blanchard v. Brooks, 12 Pick. 47, opinion by SHAW, C.J.] Indeed, the answer, itself, in this case, expressly admits and alleges that in and by said deed of trust said T.D. George, Jr., "conveyed to William McAfee, trustee for defendant, Hamilton Savings Bank, all his undivided right, title and interest in and to" said real estate.

II. As the bank or Cash, as trustee for it, simply acquired what right, title and interest the son had, its title is subject to all equities the other heirs had against the share or interest of the son, T.D. George, Jr., in said property. [HopeInnocent v. Blair, 105 Mo. l.c. 95; Mann v. Best, 62 Mo. 491;Purchaser. Schradski v. Albright, 93 Mo. 42; Campbell v. Gas. Co., 84 Mo. 352; Starr v. Bartz, 219 Mo. 47.]

It is true the bank was a purchaser for value, because it extended the payment of the debt owing it by said T.D. George, Jr., at the time said deed of trust was made. [Smith v. Richardson, 77 Mo. App. 431; and cases cited; Gate City National Bank v. Elliott, 181 S.W. l.c. 28; Cass County v. Oldham,75 Mo. 50.]

But, it is not sufficient to shut out equities of third parties that the purchaser of real estate be a purchaser for value, he must also be a bona-fide purchaser, that is, a purchaser without notice, actual or constructive, of the equities of such third persons, which he cannot be when he simply takes a quit-claim deed, or deed simply conveying the grantor's interest (authorities first above cited). Appellants therefore were not innocent purchasers and they can claim no immunity or defense on that ground, as against the equities, if any, of the said Cora Lee Ridings and Bertha George Rentschler.

III. It is said, however, by appellants, that Mrs. Ridings and Mrs. Rentschler, in joining with their brother in selling other lands to pay off the debts of the estate, thereby, in effect, voluntarily loaned their brother or the estate the money to pay his debts to the estate. Therefore the brother wasVoluntary entitled to his full share of the land, and hisSale of Other sisters' claim against him was that of a generalLands. creditor, without any lien or charge or set-off of any kind against his undivided share of the remaining real estate. We cannot consent to this view. The sisters were forced to either consent to a sale of the land and join in it to raise the money to pay off the debts allowed against the estate, including those for which the brother was primarily liable, and the estate liable only as surety for him, or it would have been necessary for the administratrix to sell such land or other lands for that purpose under an order of sale of the probate court. They acted under a sort of duress brought about by their brother's delinquency, and neither he, nor the Bank claiming his interest, could take advantage of a situation brought about by his own wrong.

Trabue v. Henderson, 180 Mo. 616, is a case in point. There the son owed the estate a sum practically equal to the value of his share. There was no adminstration, but all the heirs, including the son, conveyed the land to their mother. As a part of the same transaction, they joined their mother in a power of attorney to one of the sisters, authorizing her to manage the property and pay off the debts. This was done to avoid the expense of adminstration. The sister took possession and operated the farm for several years so successfully that she paid off the debts of the estate, including the son's debts for which the estate was liable. Another creditor of the son obtained judgment against him, sold out his interest in the land conveyed to his mother, and bought it in at the sheriff's sale. He then brought suit to set aside the deed to the mother, as fraudulent and void as to creditors, because she paid no consideration to the son. But this court held that the deed to the mother was good, not only as against the son, but as against his creditors, because at the time the deed was made the son's share was subject to application in the regular course of adminstration to the payment of his obligations to the estate, and for the debts for which his father went his security, and the estate was liable; that such obligations amounted to the full value of the son's share when he conveyed to the mother, therefore the creditors lost nothing, because in the regular course of administration, nothing would have been coming to the son. The court said, page 626: "That is, in neither event would the plaintiff [the creditor] get anything. And the plaintiff would get nothing, because John [the son] would get nothing. And John would get nothing because he was entitled to nothing, for the reason thathe owed the estate more than his inheritance amounted to." (The italics are ours.)

In Hopkins v. Thompson, 73 Mo. App. 401, the court, per SMITH, J., elaborately reviews the authorities, and it is there clearly shown that a debt of an heir to the ancestor reduces his share by the amount of such debt, and the other heirs not indebted (page 409), "`are entitled to have the sum due from one who is so indebted collected from him, or, failing in this, they have a right to share in the assets as if such collection had been made and the debtor distributee share in the estate only upon the like assumption of payment by him. So that if his debt is equal to or greater than the value of one share in the distributable estate, . . . he is never entitled to anything from the estate. . . . It cannot be doubted that this right of the administrator in behalf of the heirs and of such heirs themselves to set off the distributive interest of the debtor heir in the lands of the ancestor, or to subject such interest to the payment of the debt of the estate as against third persons claiming as judgment creditors of the heir, is of equitable cognizance.'" (The italics are ours.)

In other words, an heir indebted to the ancestor's estate by reason of the ancestor's suretyship for him or otherwise has in equity as against the other heirs no definite share or interest in the ancestor's estate, unless he pays such indebtedness, and failing to do so, his interest or share as heir is cut down to the extent of the sum he owes the ancestor's estate. If there is no difference, or his indebtedness exceeds the value of what would otherwise have been his share, his interest or share is nothing. Having nothing, he can convey nothing to others, or if anything remains, after deducting his indebtedness, he could convey what remains, but nothing more. So that the bank in this case by its deed of trust from T.D. George, Jr., and its purchase thereunder, could get nothing except one-third of what remained, if anything, after giving each of the two other heirs, as was done in this case, as much out of the estate, as he had already received by the payment of his debts. Having received his share or part of it once, neither he nor his grantee, the bank, is entitled to receive it again. In holding that the bank took subject to the equities of the other heirs, because it took a deed from the son conveying simply his estate and interest, whatever that was, we do not mean to hold that, if it had taken a warranty deed for "an undivided one-third interest" from him, as a bona-fide purchaser for value, the result would have been any different. We do not pass on that question, as it is not before us.

IV. It is also said by appellants that, because the sisters assisted the administratrix in raising the money, as they did, to pay the debts of the estate, whereby the administratrix was enabled to make a final settlement showing all the debts paid, the bank was deceived andEstoppel. led to believe the son's share was clear of all claims of the other heirs, and they ought now to be estopped, under the rule that where one of two innocent parties must suffer, the one to suffer should be the one whose conduct caused the loss. We do not agree to this, for several reasons: 1st, The bank was not an innocent party or purchaser, as we have already seen; 2nd, The fact that the estate appeared to be settled and all debts paid, indicated only that there were no unsatisfied creditors of the estate who might appropriate the land for their claims. It in no way related to or indicated anything as to the rights of the heirs against each other at law or equity; 3rd, The conduct of the sisters complained of was not voluntary, as we have already determined, but forced upon them to protect their own interests and that of the estate, and cannot therefore be said to be the culpable cause of the bank loaning its money to or taking its deed of trust from the brother. We must rule this point, too, against the appellants.

V. Whether or not the appointment of Harry E. Ridings, as administrator de bonis non, was void or valid, we need not determine, because he was not a necessary party toAdministrator this suit. The real parties in interest wereDe Bonis Non. before the court, and all matters could be adjudicated without his presence.

The judgment of the lower court appealed from was without error. It is therefore affirmed. Brown and Ragland, CC., concur.