Case Name: THOMAS BERRY et al. v. WILLIAM STIGALL and WILLIAM A. WILSON, Administrators of Estate of THOMAS L. KING, Appellants
Court: Supreme Court of Missouri
Jurisdiction: Missouri
Decision Date: 1913-12-24
Citations: 253 Mo. 690
Docket Number: 
Parties: THOMAS BERRY et al. v. WILLIAM STIGALL and WILLIAM A. WILSON, Administrators of Estate of THOMAS L. KING, Appellants.
Judges: Woodson, J. Lamm, G. J., Woodson, Brown and Walker, JJ., concur — Woodson, J., in a separate opinion in which Lamm, G. J., Brown and Walker, JJ., concur, and Brown, J., in a separate opinion. Graves, Bond and Faris, JJ., dissent — Bond, J., in a separate opinion in which Graves and Faris, JJ., join. They also dissent to the concurring opinion of Woodson, J.
Reporter: Missouri Reports
Volume: 253
Pages: 690–724

Head Matter:
THOMAS BERRY et al. v. WILLIAM STIGALL and WILLIAM A. WILSON, Administrators of Estate of THOMAS L. KING, Appellants.
In Banc,
December 24, 1913.
1. EQUITY: Paying Debt of Another: Motive. Equity seeks to prevent the unearned enrichment of one at the expense of another, and will apply the principle to aid those who have paid the debt of another under circumstances in which equity will imply a sufficient motive, whether such motive consists in the protection of an interest in the person invoking it, the performance of a fiduciary relation, or the invitation of the public or of him whose debt is paid.
.2 -: Paying Debt -of Testator. Equity will protect a. payee of a note and the beneficiary of a deed of trust given to secure its payment who furnished the money to pay off a debt and mortgage upon land left by a testator to his wife as trustee to use and control for the support, maintenance and education of his children until the youngest arrived at age, and she dying, her successor, who was also guardian of the persons and estates of the minors, as such trustee, borrowed of said payee the money to pay off the existing debt, and used the rents to support and educate the minors.
3. -: Retaining Proceeds of Void Sale. It would be unjust to permit a-person to give a mortgage on land and take the borrowed money and then because the conveyance happens to be informal or void to allow him or his heir to have the mortgage declared void and keep both land and money.
A. SUBROGATION: Substituted Mortgagee: Invalid Incumbrance on Minors’ Estate: Retention of Fund. Testator, the owner of land on which there was a deed of trust to secure an existing debt, by his will gave his wife power to sell the •personal estate to pay his debts, his real estate to her to use and control and to use the rents and profits to support :and educate his children until the youngest reached legal age, .and thereafter to said five children. The wife died and one of the defendants, who had been appointed guardian of the persons and estates of the four minors, was appointed trustee to take charge of the estate and rent the same and apply the proceeds of the rents to “the purposes set out in the will.” The trustee borrowed from the other defendant sufficient money to pay the existing deed of trust, and as trustee made a new ■one securing the. loan. There are no intervening interests, ■either legal or equitable, to be considered. Held that, although the trustee exceeded the limit of his authority in attempting to mortgage the land, the money was for the benefit of the children’s estate, and enabled the trustee to use the rents for their support and maintenance, and as they ask both- to retain the money and to have the deed of trust declared invalid, the payee of the note will be held to be a substituted mortgagee in the incumbrance which his money discharged. Meld, by BOND, X, dissenting, with whom GRAVES and
PARIS, XT., concur, that there is no element of subrogation in the case; that the trustee had not a trace of title or Vestige of estate in the land, and did not attempt to obtain an order of court authorizing him to incumber the land to .secure a loan of money to pay the existing deed of trust; and there is no ground for an equitable lien. The whole transaction was due to a mistake of law, for which, though both the trustee and the lender participated, there is no relief.
;5. -: Trust Estate: Right of Trustee to Borrow Money. The'executor of the will having made final settlement of the estate without paying the existing mortgage, and there being no funds on hand with which to pay it, and the will creating a trust, the appointed trustee should have borrowed money to pay off the incumbrance, and save the land to the children; but he should have applied to the circuit court for an order authorizing him to do that, but that informality should not prevent the court from applying the rule of subrogation in favor of the lender and foreclosing the mortgage, since the money was faithfully applied to the purposes for which it was borrowed. [GRAVES, BOND and PARIS, XT., dissenting.]
Appeal from DeKalb Circuit Court. — Ron. Alonzo D. Busrnes, Judge.
! Reversed and remanded (with directions).
W. H. Haynes for appellants; Hewitt & Hewitt of counsel.
(1) Defendant was entitled to be subrogated to the right of the mortgagee of John Berry and Clarissa Berry, his wife, under the doctrine of equity jurisprudence. Subrogation does not 'depend upon privity of contract, either express or implied, only in so. far as the known equity may be supposed to be imported into the transaction and thus raise the implication of a contract. In other words it is founded upon the facts and circumstances of each particular case, and on the principles of natural justice. Founded on the dictates of refined justice; of grace, and npt of force. 27 Am. & Eng. Ency. Law (2 Ed.), p. 203; 37 Cyc. 363; Furnold v. St. Bank, 44 Mo. 336; Moore v. Lindsay, 52 Mo. App. 479; Levi v. Martin, 48 Wis. 198; Chaffee v. Oliver, 39 Ark. 531. (2) The fact that the mortgage was paid and intended to be paid is immaterial. Equity will consider it as yet alive so long as the rights of the parties require. Cobb v. Dyer, 69' Me. 494; Barnes v. Mott, 64 N. Y. 397; Crippen v. Chappel, 35 Kan. 495. (3) If a mortgagor request a third party to pay the debt secured by the mortgage he becomes entitled in equity to the benefit of the mortgage; and in such case a court of equity will subrogate him to all the rights of the creditor. Wolff v. Walter, 56 Mo. 295. If the position taken by us as to the powers of trustee under the will is correct, then the request of Stigall to King to pay the mortgage debt is as good and binding as if John Berry had made it, and the above rule will apply.
L. F. Henry and Kendall B. Randolph for respondents.
(1) The defendants in their answer do not pretend that the mortgage in question is a valid mortgage, neither do they in their brief, nor pretend that Stigall had any authority whatever to execute it, but they ask for relief in the alternative; that, if the court does- not find that they have a lien on the land, the court will adjudge that they be subrogated to the rights of William Q. Mintern, and that the old Mintern deed of trust be revived and be declared to be a lien. None of the authorities cited by the appellants would authorize such a finding. (2) William M. Stigall was wholly without any power whatever to execute the mortgage to Thomas L. King, and his act is void and of no effect. Price v. Courtney, 87 Mo. 387; Sampson v. Mitchell, 125 Mo. 217; Garland v. Smith, 164 Mo. 14; Roberts v. Best, 172 Mo. 67; Waldermeyer v. Loebig, 183 Mo. 372; Capen v. Garrison, 193 Mo. 335. (3) There is no such thing as an equitable lien in favor of a person who has voluntarily paid the debt of another. In fact subrogation is the only equitable lien which can arise upon the payment of one person of another’s debt, and there can be no subrogation except where the person making the payment has an interest in the property and the payment becomes necessary, to protect his own interests. Capen v. Garrison, 193 Mo. 335; Waldermeyer v. Loebig, 183 Mo. 372; Garland v. Smith, 164 Mo. 14; Roberts v. Best, 172 Mo. 67; Corn-well v. Orton, 126 Mo. 355. In this connection we desire to call the court’s attention to the fact that Thomas L. King did not pay off the Mintern mortgage, but that it was paid by Stigall with money borrowed from King on a void mortgage. As to the right of subrogation the following authorities are also directly in point. Sampson v. Mitchell, 125 Mo. 217; Klaeimann v. Geishelmann, 45 Mo. App. 497, 114 Mo. 437; Evans v. Ilalleck, 83 Mo. 376; Wooldridge v. Scott, 69 Mo. 669; Wade v. Beldmeir, 40 Mo. 486; Bunn v. Lindsay, 95 Mo. 250; Price v. Estill, 87 Mo. 381; Price v. Courtney, 87 Mo. 387. (4) The will conferred no authority on Stigall to execute a mortgage, or any other person for that matter. The judgment appointing him trustee conferred no snch. power on Mm by its terms. Said judgment was void, as none of the interested parties were brought into court. Said judgment by its terms restricted the powers of the trustee and gave him only the power to rent the farm, pay taxes, insurance and repairs and apply balance of proceeds from rent to the purpose of the will. No mention of a mortgage or even of the payment of interest on a mortgage. Stigall had no power either to sell or mortgage.

Opinion:
BROWN, C.
On the first of June, 1888, John. Berry, then the owner of the 117 acres of land in DeKalb county, Missouri, involved in this proceeding,, borrowed from William Q. Mintern $1100, due in five years, and to secure the payment thereof executed a deed of trust on said lands. He died in said county in January, 1891, leaving a wife and eight cMldren,, and having first executed his will containing the following three clauses, and constituted his wife and his eldest son, the plaintiff Thomas Berry, executors thereof.
"Sec. 1. To my beloved wife, Clarissa Berry, I give and bequeath all of my personal, estate, with full power to sell and dispose of the same, for the purpose of paying all of the debts owing and contracted by me.
"Sec. 2. To my said wife I devise and bequeath full power and control of all lands and real estate of which I may di'e seized, until our youngest child shall become of legal age, and from the issues, rents and profits of said lands, to support and maintain and educate our minor cMldren.
"Sec. 3. Upon our youngest child living becoming of legal age, I give and bequeath all the remainder of my estate, real, personal and mixed, in equal proportion, share and share alike, to the heirs of my body and hers, viz.: Thomas, Louisa, James, Maida, Killian, Charles, Carey and Carrie, and my said wife."
In June, 1893, the date of the maturity of the aforesaid note, Thomas Berry, then sole executor, his mother having previously died, paid $200 on the principal, and executed an extension agreement whereby the payment of the balance of said note, to-wit, $900, was extended for five years, making its maturity the first of June, 1898. On the first of June, 1894, the executor also paid $140 on the principal of said note. Thereafter the interest on said note was regularly paid until six months before its final maturity, to-wit, June 1,1898, at which time it amounted to $782,801 On February 9, 1898, W. M. Stigall, who was the guardian and curator of the persons and estates of the four children of said John Berry who were still minors, together with Louisa Masoner, one of the adult heirs, filed in the DeKalb Circuit Court their petition for the appointment of some suitable person as trustee under the will to succeed Mrs. Berry, and Mr. Stigall was duly appointed. None of the other children were joined in that proceeding. The order of appointment contained a direction to said Stigall, as trustee, "to take charge of the aforesaid estate of John Berry, deceased, and rent the same to the best advantage; and after paying all taxes and insurance and paying for necessary repairs on said real estate, to apply the balance of proceeds from said rent to the purposes set out and mentioned in said will;" and required him to-give a bond of $600. A few months after this appointment, the said note matured, and Stigall, the trustee, borrowed $782.80, being the amount then due on said note, from one Thomas L. King, who applied the same to the payment thereof and the cancellation of the said note and the deed of trust securing the same. He executed a note to the said Thomas L. King for the same amount, signed by him as trustee; and to secure the payment of this latter note, executed as such trustee, a mortgage on the said land of John Berry, deceased, which was duly recorded. The note was. due one year after date. On December 5, 1902, the payee of said note, nothing having been paid thereon, demanded a new note and mortgage for the amount then due, both of which were duly executed by the trustee, the new mortgage recorded, and the former note and mortgage cancelled. On February 5, 1904, the trustee filed a settlement, showing a balance of $124.95 of rents collected after taking credit for certain disbursements. Pie had been previously sued by the plaintiffs for an accounting and praying his removal as trustee. That suit on appeal went to the Kansas City Court of Appeals (Berry v. Stigall, 125 Mo. App. 264), where the judgment of the lower court confirming the settlement made by the trustee was affirmed. The present action was afterwards brought by all the children who survived John Berry, except one, who is represented by its assignee, and was a'gainst Thomas L. King, for the purpose of annulling and declaring void the last mortgage executed to him by the trustee, W. M. Stigall, as before recited. One of the children was still a minor and sued by his guardian. Thomas L. King since the institution of this suit died, and it is revived against W. M. Stigall and W. A. Wilson, his administrators. Upon a hearing in the circuit court there was a decree entered annulling and cancelling the mortgage described in the petition, from which the defendant executors have appealed to this court.
That equity seeks to prevent the unearned enrichment of one at the expense of another is the motive for an important part of its jurisprudence. [2 Pomeroy's Equitable Remedies, sec. 920.] This same idea is expressed in the maxim of the common law: , Nemo debet locupletan ex <üteri/us incommodo," and more fully in the maxim of the civil law: "Jure naturae aequum est, neminem cum alterius detrimento et injuria fieri locupletiorem." The principle is applied to aid those who have paid the debt of another under circumstances in which equity will imply a sufficient motive, whether such motive consists in the protection of an interest in the person invoking it, the performance of a duty pertaining to a fiduciary relation, or the invitation of the public, or of him whose debt is paid. While it does not extend its assistance to a mere volunteer who either foolishly or for charity's sake pays the debt of another, it relieves those whom the learned author already cited has divided into the three following classes: "First, those who act in performance of a legal duty, arising either by express agreement or by operation of law; second, those who act under the necessity of self-protection; third, those who act at the request of the debtor, directly or indirectly, or upon invitation of the public, and whose payments are favored by public policy." [Ibid., sec. 921.] Judge Story in his work on Equity Jurisprudence (vol. 1 [13 Ed.], p. 615), characterizes this principle as a doctrine belonging to an age of enlightened policy and refined, although natural, justice.
In this case the defendants' intestate furnished the money to be used, and which was used, to pay off a mortgage on the farm of which the plaintiffs were the beneficial owners, one of them, Mr. Thomas Berry, being the executor of his father's will, through which they all derive their title. They now not only desire to keep the money but they claim that the gift was made in a bungling way, and ask the aid of this court to compel the representatives of the benefactor to put the finishing touches to it by cancelling the mortgage which he received as his security, believing it to be valid. The case presents itself in two questions: (1) Will the defendants be permitted to keep the money, and (2) if they keep it, will the court perfect their title by cancelling and removing the mortgage as a cloud upon it?
There is no intervening interest either legal or equitable to consider. The defendants seek reimbursement out of the same security which was released by the payment of the debt, and which was available to the original creditor. He simply asks back the same fund which he advanced and which the debtor still holds intact. A majority of the present owners who are plaintiffs in this same case were then infants. It will not be claimed that their disability on that account protects them, for, had they themselves borrowed the money for the payment of the debt and made the mortgage, they could, upon becoming of age, have disaffirmed it only by returning the money .which they received and had invested in the land, which would represent the fund for that purpose. [MacGreal v. Taylor, 167 U. S. 688.] It seems to me that, in equity, this case stands upon exactly the same foundations. Mr. Stigall was trustee under the will of Mr. John "W. Berry for the minor heirs of the testator who were the only beneficial owners until the arrival at age of the youngest of them. Until that time he had the absolute control of the land subject to the duty to keep it and make it earn the best income he could for the benefit of the minors. The order of court appointing him the successor of the original trustee named in the will expressly required this. In doing it he had the right, as held in Berry v. Stigall, 125 Mo. App. 264, to borrow money for this purpose and to repay it, with interest, from the income of the land, which was entirely devoted by the will to their support, maintenance and education during their minority, and was then, and then only, to pass by the terms of the devise to these plaintiffs and their mother to whose rights they have succeeded by her death. He was also guardian of the persons and estates of the minors, although his power with reference to the land came from the appointment under the will. He took it subject to a mortgage made by the testator in his lifetime which would become due years before the expiration of the trust estate, and it cannot be denied that it was his duty, so far as he could, to preserve it from that mort gage, for the benefit of the trust. That he would do this- was necessarily assumed by the testator, and the creation of the trust amounted to a direction to do that which was essential to its execution.
I do not understand it to be questioned that had Mr. Stigall been, in his own right, the owner of the same interest in these lands that he held as trustee for the minor heirs of Berry, he would have had the right to protect himself by paying off the incumbrance and charging the amount so advanced against the land. The plaintiff contends that however kindly equity might look upon the act, if done for himself, and from purely selfish motives, it has no'regard for one who does the same thing in the performance of a duty toward others — that, although he would have acquired merit in equity by protecting himself, he became an intermeddler when he attempted to protect the children whose •only means of sustenance and education had been placed by the law in his keeping. This naturally revolts the sense of right and justice out of which equity jurisprudence proceeds, and lends its remedies to the enforcement of trusts, and the protection of children and others under disability to care for themselves. It is natural that we should expect it to vindicate itself from the aspersion, and we are not disappointed.
It is immaterial in what form the equity in such cases is administered, or what name we adopt to describe it. In a case like the present, when no-intervening interest exists, its object is simply to recover compensation for the.money advanced, out of the estate or property benefited. In cases where interests have intervened paramount at law to the debt of the person so paying an incumbrance, the latter will, under circumstances calling for such rfelief, be revived or considered in force in equity for his benefit, and he will he substituted or subrogated to its lien. The right, as we have seen, will not arise in favor of a mere' volunteer or intermeddler, but it exists in all cases where the payment is made at the invitation of the public, or is favored by public policy. It is upon this principle that purchasers at void judicial and quasi-judicial sales are protected, as in Valle v. Fleming, 29 Mo. 152. The same principle applies to void execution sales, the reason in all such cases being that public policy demands that such purchases should be encouraged by giving equitable relief to purchasers whose money has been honestly applied to the purposes to which the property has been devoted, although, on account of the insufficiency of the proceedings they have failed to obtain title. The same public policy protects those having charge of the interests of minors and persons of unsound mind in their efforts to protect their estate, and the courts have not been slow to recognize equities growing out of such transactions. A few instances of their practical treatment of this particular phase of the question will illustrate the principles applied by them in administering remedial equity in such cases.
In Coleman v. Frazer, 3 Bush (Ky.), 300, the wrongdoer in obtaining a note and mortgage from a person of unsound mind was the applicant for relief on the ground that a part of the money represented by the security had been applied by an attorney representing the lunatic in relieving his lands from certain proper charges and incumbrances. In holding that such relief should be given the court said: "If it is true, as the evidence conduces to prove, that the appellants, or one of them, furnished money which was used by an attorney, acting as such for Frazer, to relieve his estate of an incumbrance, such advancement was not only a sufficient consideration for an implied promise to repay the money advanced, but, by subrogation, at least, entitled the party making the advancement to a charge on the estate, upon the well-established principle that lunatics, like infants and married women, are chargeable as for necessaries, for whatever may be furnished them which is reasonably necessary and beneficial to them."
In Cutter v. Burroughs, 100 Me. 379, the guardian of a minor sold land which had been devised to another as trustee for the maintenance and education of the ward out of the rents and profits, and in case these were not sufficient out of the items of the estate in the order named. The trust failed by the death of the trustee, but the guardian proceeded to sell certain parcels of the land for the purposes of the trust. These sales were, of course, held to be without authority and void. A part of the purchase price, was, however, applied to the purposes of the trust, and on one of the lots valuable improvements were made by the purchaser. The suit was brought by the purchasers for the purpose of charging the amounts so expended upon the land. In granting the relief asked, the court, quoting from Valle v. Fleming, supra, said: "Nothing could be more unjust, we may repeat, than to permit a person to sell a tract of land and take the purchase money and then because the sale happens to be informal and void, to allow him, or, which is the same thing, his heir, to recover back the land and keep the money.".
In Donohue v. Daniel, 58 Md. 595, a guardian executed a mortgage on the land of his wards to secure the payment of a loan for $1000, a large portion of which was expended for the payment of taxes, ground rents and other incumbrances due and owing upon the property at the time, and was borrowed for that purpose. It was held, at the suit of the lender, that he was entitled to be subrogated to the benefit of the liens which his money discharged. The Court of Appeals said: "Notwithstanding the mortgagor may not have been properly authorized to execute the mortgage so as to bind the remainder interests of his children and wards, yet if he did remove those incumbrances existing against his wards and their property in his hands, he would have a just and legitimate claim, against them, and he would be entitled to the benefit of the lien which he raised." I see no ground for distinction between that case and this except that in. this case Mr. Stigall, the borrower, in addition to his obligation as guardian to apply the property in his hands under the supervision and direction of the court to the support, maintenance and education of his wards, was charged by the terms of the will of Berry,, independently of any'action of the probate court, with the management of the lands, the collection of the-rents and profits and their application for that purpose. Without violating the duty so imposed and assumed he could not permit this control to be taken from him by foreclosure and sale under the existing incumbrances. In preventing this he is entitled to the commendation of the court instead of its condemnation. Although, in his attempt to obtain the money, he exceeded the limit of his authority in attempting to mortgage the land, so that that act gave no other strength to the position of the lender than as an expression of the intention that he was to be substituted to the security of the incumbrance which his money was to discharge, yet the court will give effect to the transaction to the extent of making the substitution. While it does not come with good grace from any of these plaintiffs to ask a stranger to contribute the money used by the guardian to preserve their patrimony, such a claim comes with peculiarly bad grace from those who were of full age at the time, and stood by, giving the efforts of the guardian in their behalf the approval of their silence. This is especially true of the plaintiff Thomas Berry, the executor of the will, who had in his control whatever means there was, if any, to prevent the sacrifice of the land, and is now not only accepting the resultant estate as a gratuity, but is seeking the aid of the court to remove from the record the evidence of the gift.
We have been able to find bnt a single adjudicated case which tends to support the position' of the plaintiffs. The case referred to is Capen v. Garrison, 193 Mo. 335, decided by this court in 1906. It does not go to the extent to which we are asked to go here, as no trust was involved other than the general duty of a guardian with respect to the estate of his ward. It does not, however, accord with the equitable doctrine applied by courts in such cases, and, in so far as it holds that the right to subrogation can only be founded in a purely selfish motive and cannot rest upon the attempted performance of a duty like that which results from the relation of the guardian to his ward, I do not think it should be followed.
For the reasons given I think that the judgment of the circuit court, which seems to have been founded upon the case last cited, should be reversed, and the cause remanded with directions to proceed to the entry of judgment in accordance with this opinion.
PER CURIAM IN BANC. — This cause coming into Banc and being reheard there the opinion of Brown, Commissioner,.is adopted as that of the court; the directions to the lower court being modified as indicated in the concurring opinion of
Woodson, J. Lamm, G. J., Woodson, Brown and Walker, JJ., concur — Woodson, J., in a separate opinion in which Lamm, G. J., Brown and Walker, JJ., concur, and Brown, J., in a separate opinion. Graves, Bond and Faris, JJ., dissent — Bond, J., in a separate opinion in which Graves and Faris, JJ., join. They also dissent to the concurring opinion of Woodson, J.