Court Opinion

ID: 8018240
Source: CourtListenerOpinion
Date Created: 2022-09-09 02:07:22.22327+00
Date Added: 2024-06-11T16:36:29.586478
License: Public Domain

DISSENTING OPINION.
WOODSON, J.
My learned associate who wrote the opinion in this case, has in my opinion, misconceived certain portions of it, as appears from the evidence, which is practically undisputed, and practically all of which is in writing, and need not be here re-stated, since the substance of it has been fully and fairly stated by my associate and by the learned judge who wrote the opinion in the case of Barrie v. United Railways Company, 138 Mo. App. 557.
That misconception in my opinion, has caused my learned associate to give undue weight and prominence to certain facts and to unduly minimize the importance of certain other facts appearing in the record.
In a nutshell, the question here presented for determination, after being stripped of all verbiage and removed from the cobwebs spun about it, is this: Has a judgment creditor, in tort, the legal right to subject property, previously and legally mortgaged to a third party as security for the payment of a valid obligation, to the payment of said judgment, where the property is left in the possession of the mortgagor and lessee, and while there it constituted one of the instrumentalities by which the injury to the judgment creditor was inflicted?
In other words, where the owner of a farm, a residence or a business house or the owner of a manufacturing plant or a country or city newspaper, for instance, has leased said farm, house, manufacturing plant or newspaper to another, for a stated period, in consideration of certain covenants to improve and *371repair and an agreement to pay certain monthly or annual rents f'or the use of the premises, and has taken hack from the lessee a mortgage upon the leasehold estate, also upon all the income, issues and profits thereof, as security for the faithful performance of said covenants and for the prompt payment of said rents, and while said property is being so used according to terms of the lease hy the lessee, a third party should he injured through the negligence of the. former, has the injured party the right to subject to the payment of his damages the corpus of the property which belonged to the lessor, or the leasehold estate or the income, issues and profits thereof, which of course under the terms of the lease belonged to the lessee though covered by the mortgage to the payment of a judgment recovered by the injured party against the lessee, especially after the lease had been forfeited and the mortgage foreclosed, by assent or otherwise, and especially where the leasehold estate and all the income, issues and profits thereof were confessedly insufficient to pay off and discharge the debts and covenants secured by the mortgage?
Clearly not; nor do I apprehend that any lawyer of recognized ability, or a judge who is worthy of the ermine, would so contend for a moment.
Now there is, in my opinion, not one whit of difference in principle between that case and the case at bar.
Here the United Railways Company, a corporation, owned and operated certain street railways in the city of St. Louis with all the property necessarily incident thereto, and by virtue of and in pursuance of certain ordinances of said city, said United Railways Company leased all of its said roads and other property to the Transit Company, for a period of forty years, in consideration of certain covenants and agreements made and entered into by and between them, to improve and repair, and for an annual ren*372tal of five per cent upon the capital stock of the former company.
In order to secure the faithful performance of those covenants and the prompt payment of said rents,, the Transit Company executed in due form a deed of trust to the United Railways Company conveying all of its leasehold interest in and to said roads and other property together with all the income, issues and profits thereof.
The Transit Company having become wholly unable to comply with the terms of the lease, and being ' unable to meet the payment of several millions of dollars of its indebtedness secured by said deed of trust', which would fall due and become payable in a short time, thus seeing bankruptcy and ruin staring it in the face, with no hope of relief in sight, with the concurrence and assent of the United Railways Company, the trustee in the deed of trust, and all parties interested thereunder, surrendered its lease and turned back to the United Railways Company all of said mortgaged roads and other properties, together with the income, issues and profits thereof, then on hand, all of which clearly was inadequate to pay the mortgage debts due the United Railways Company, much less the unsecured claims outstanding against it, such as those owned by the plaintiff and the intervenors.
There is no evidence of actual fraud in this case, and if I correctly understand counsel for plaintiff, no such contention is made by them, but their contention is that the facts of the case constitute a fraud in law upon the unsecured, rather all subsequent, creditors.
This contention is untenable and has no more foundation upon which to rest than had the claim of the injured party mentioned in the supposed case before stated.
*373In that case the owner and lessor of the farm, upon the forfeiture of the lease, received back from the lessee nothing more nor less than the leasehold estate created by the lease, the same being the property covered by the mortgage. And in the case at bar, when the Transit Company, the lessee, was confronted with the fact that it had several millions of dollars of debts which would fall due shortly, with no means with which to pay them, and no hope of procuring any, it voluntarily' did that which the lessor, ■the United Railways Company, had the right to compel it to do under the terms of the lease and mortgage, namely: to declare the lease forfeited and sell, under the mortgage, all the interest of the Transit Company in the leased property, namely, the franchises, railroad tracks, cars, poles, wires, powerhouses, etc.; also to take possession of and use in the payment of its debts all income, issues and profits thereof earned by the Transit Company in pursuance to the terms of the lease.
In other words, the United Railways Company received nothing from the Transit Company except what it had leased to the latter, and which the latter had mortgaged back to the former.
If the opinion in this case correctly expounds the law, then no mortgagee of property is secure in his property rights therein, for the simple reason that this case clearly holds that where the mortgagor or lessee retains possession of the property, and while using it, a third party is injured thereby in conjunction with the negligence of the mortgagor or lessee, the mortgaged property may be subjected to the payment of a judgment secured by the injured party against the mortgagor or lessee, notwithstanding the fact that the mortgage antedates the injury. The opinion is supported by neither law, reason nor precedent.
*374In my judgment the opinion of my learned associate is not a correct enunciation of the law governing the facts of this case, and for that reason I respectfully dissent therefrom.
ON MOTION TO MODIFY JUDGMENT.
PEE CUEIAM.
The second paragraph of the motion is stricken out.
As to the first-paragraph of the motion suggesting that the judgment of the intervenor Moon has been reversed and cause remanded since the judgment of this court. In Banc was rendered, it is ruled that the judgment of this court affirming the judgment of the circuit court be modified by eliminating the amount of the Moon judgment, $8794.58, and the interest, if any, calculated thereon up to the date of the rendition of the judgment below, and with this modification the judgment heretofore rendered by this' court In Banc at this term remains in full force. Nothing herein to be to the prejudice -of the Moon claim in pending suit.
The motion overruled.