Court Opinion

ID: 3536502
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:49:13.23017+00
Date Added: 2024-06-11T13:34:39.092447
License: Public Domain

I think a fundamental error inhering in the majority opinion in this case is the fact that it quotes from a part of the "conclusions of law" and mistakenly designates the quotation as from the findings of law and fact. The chancellor stated his conclusions of facts separately from the conclusions of law and the quotation found in the majority opinion is from the "conclusions of laws" and these conclusions are so headed in the abstract. However, under the heading "Findings of Fact by the Court," I find the following:
". . . The said deed recited a consideration of one dollar ($1) and other valuable consideration. The real consideration was the surrender of the $2800 note to Mrs. Eiman and the bank receiving the property subject to the liens of record.
"There was considerable controversy as to whether or not the defendant bank agreed to assume all the indebtedness against the property, or whether or not they bought it subject to other indebtedness. The deed recites that it was subject to all encumbrances of record and the court will take that view of it."
Under the findings of fact the court clearly found that the agreement made between Mrs. Eiman and defendant, when the deed dated October 30, 1922, was executed, was that the property was taken by defendant subject to all encumbrances of record as recited in the deed, and that there was no verbal agreement wherein defendant agreed to assume the indebtedness against the property.
The chancellor in his conclusions of law evidently labored under the same misapprehension that plaintiff has always done in this case by assuming that as the deed recited that the property was conveyed subject to all encumbrances, the legal effect of the instrument was to make the grantee liable on the theory that the encumbrances thus became a part of the purchase price. This is borne out by what was said by the chancellor in his conclusions of law, in addition and subsequent to that part first quoted in the majority opinion and in connection with an entirely different matter, as follows: "In other words, the defendant bought the property subject to liens of record and all *Page 509 
he expected or had a right to expect was what was left, if anything, after said liens were satisfied." I think that the finding of the chancellor that the contract between Mrs. Eiman and defendant was that the property was conveyed "subject to all encumbrances of record" and that there was no agreement on its part to assume the indebtedness, is borne out by the decided weight of the testimony. However, as this is an equity case we should defer to the findings of fact made by the chancellor, even though the weight of the evidence might seem to be slightly against such findings or we ourselves might have found otherwise. [Hunnell v. Zinn, 184 S.W. 1154, 1157.]
What the chancellor said in his conclusions of law is not important in this case, it is the findings of fact that should govern us, and the facts having been determined, we should arrive at our own conclusion as to the law. In a law case tried before the court where a request is made of the court to make findings of fact, under section 1402, Revised Statutes 1919, such findings so made by the court amount to a special verdict and is binding upon the appellate court the same as the verdict of a jury. [Rausch v. Michel, 192 Mo. 293; Barnett v. Hastain, 256 S.W. 750.]
Findings of fact and conclusions of law must not be confused for the reason, as before stated, conclusions of law are not binding upon the appellate court even though the court attempts to make some findings of fact therein. In a law case the findings of fact alone are binding. When the facts have been found by the trial court, the appellate court will arrive at its own conclusion as to the law of the case, if the findings of fact support the judgment, it will be affirmed, if not, the judgment will be reversed. [Nichols v. Carter, 49 Mo. App. 401; College v. Dockery, 241 Mo. 522, 560.] In equity cases findings of fact by the chancellor are not conclusive but are advisory only (Patterson v. Patterson, 200 Mo. 335; Walther v. Null,233 Mo. 104, 110), as the appellate court has a right to arrive at its own conclusions as to the facts in such cases. But, as before stated, the appellate court will defer to the findings of the chancellor upon questions of fact if the evidence is disputed, but the conclusions of law of the chancellor are no more binding upon us in an equity case than such conclusions on the part of a judge in a law case. [Beyer v. Sechlenker, 181 S.W. 69, 71.] The finding by the chancellor that the agreement between Mrs. Eiman and defendant made when her deed to it was executed on October 30, 1922, was that the latter agreed to take the property merely subject to all encumbrances of record, seems to have been finally acquiesced in by plaintiff for in oral argument plaintiff's counsel stated, in answer to questions propounded by the court, that they stood squarely upon the recitals in the deed and were not relying upon anything else, it being the contention of plaintiff's counsel that a deed reciting that the property is taken subject to all encumbrances *Page 510 
of record is equivalent, in a court of equity at least, to a recitation that the property is taken by the grantee subject to all encumbrances which the grantee assumes to pay. Counsel for plaintiff stated in oral argument that unless the deed in this case was to be construed as obligating defendant to pay plaintiff's mortgage, that plaintiff had no case. From what I shall hereinafter say, it will become apparent that the deed from Mrs. Eiman to defendant, dated October 30, 1922, does not obligate defendant in terms to pay this mortgage.
As before stated, I am of the opinion that the finding by the trial court that the agreement between Mrs. Eiman and defendant was that the latter took the property subject to all encumbrances of record is borne out by the weight of the testimony. It appears from the testimony that after Mrs. Eiman and her husband gave to plaintiff its mortgage, and defendant received information of this fact, defendant sought to have such deed set aside either in a direct suit based on the insanity of Mr. Eiman or that undue influence was practiced upon him, or, in effect, so far as Mrs. Eiman was concerned, by bringing a proceeding in bankruptcy against her on the theory that she had given a preference to plaintiff within four months. It evidently was the idea of defendant that should this conveyance from Mrs. Eiman to plaintiff be successfully attacked, that the remaining equity in the property could be subjected to the payment of defendant's claim arising by reason of the existence of its unsecured note of $2800 signed by Mrs. Eiman and her husband.
Mr. Shackelford testified that Mrs. Eiman stated in the conversation, when defendant's mortgage was executed, that her husband had signed a deed of trust to plaintiff late one night and that she in order to relieve her husband —
". . . in that condition from the pressure that that bank (plaintiff) was bringing upon him, also signed it with him. I advised her that under those circumstances that she could have the deed of trust set aside, that it was obtained under duress. Well, she said that she entertained such feeling for her husband that she didn't want those matters gone into in court, and she said, `Now, I will give you this deed in satisfaction of my note if you won't file a petition in bankruptcy and if you won't bring any suit to set aside the deed of trust to the Platte Valley Bank,' and that was agreed to."
It will be borne in mind that her husband committed suicide the day after he signed plaintiff's mortgage. Mrs. Eiman testified that she did not think that her husband was caused to commit suicide directly by plaintiff's requiring him to sign its mortgage but it "may have worried him;" that her husband was not "crazy" but committed suicide as the result of melancholia; that when she signed the mortgage to defendant, "I didn't want them to set the mortgage aside. They tried to make out that he was insane, but he was not *Page 511 
insane, he was melancholy. . . . He (Shackelford) tried to get me to say that he was crazy and that was the grounds that they was going to have to set this mortgage aside. That was what he told me down at the office."
It is true that she testified that there was a verbal agreement between herself and Cornelius that defendant should pay all debts against the property including plaintiff's mortgage. She further testified that Cornelius, on the advice of Shackelford positively refused to sign the deed prepared by her attorneys and brought by her to the defendant bank because it recited that defendant assumed the payment of plaintiff's mortgage; that Cornelius and Shackelford told her that defendant would take a deed from her reciting that the property was conveyed subject to all encumbrances of record and that such a deed was finally signed by her at the request of the defendant; that Cornelius said the two deeds were practically the same. Vogel corroborated Mrs. Eiman's testimony to the effect that the verbal agreement was that defendant was to pay plaintiff's mortgage, but that Cornelius refused to insert this clause in the deed because such a deed with such a recital would create a cloud on the title to the property, but that the two deeds, that is, the one providing that defendant assume to pay all mortgages including that of plaintiff, and the one which was finally signed merely reciting that the property was taken subject to mortgages "meant practically the same."
Shackelford's testimony flatly contradicted that of Mrs. Eiman and Vogel in which they said that there was a verbal understanding that defendant was to pay plaintiff's mortgage. I do not regard Shackelford's testimony as evasive or lacking in clarity or definiteness and, as I view it, Shackelford positively denied any verbal understanding such as testified to by Mrs. Eiman and Vogel. He stated that the sole and only "side agreement" was that defendant would not file a petition in bankruptcy and would not bring suit to set aside the deed of trust to plaintiff; that the agreement that no attack should be made upon the mortgage of plaintiff "was the only consideration that I heard referred to at all, and that was referred to in my presence;" that he explained to Cornelius in the presence of Mrs. Eiman, and apparently in the presence of Vogel, the difference between the recital in the proposed deed reciting that defendant would assume to pay the mortgages, and the one that was actually executed reciting that the property was to be conveyed subject to the encumbrances; that he explained that if the deed read in the former manner, the bank would have to pay plaintiff's mortgage but if in the latter, it would not be obligated to pay it. Shackelford denied that he said that if the proposed mortgage to defendant specifically named the debt and mortgage to plaintiff that a cloud on the title would be created. Shackelford testified "there is no such law as that. I did not" make such a statement. *Page 512 
It would appear from the testimony that Mrs. Eiman was insolvent and that she had no interest of a substantial pecuniary nature in seeing that plaintiff's mortgage was paid. Of course, being solvent, a nonpayment of her note of $2800 to defendant was not of moment to her of a material nature, but it may be assumed from this record that she had a certain sense of pride and that she did not want the deed to plaintiff attacked in court on the ground that her husband was insane or that undue influence was exercised over him by plaintiff, because "she entertained such feelings for her husband that she did not want those matters gone into in court." Neither did she want bankruptcy proceedings brought against her. It is quite evident that she desired plaintiff's mortgage taken care of and paid but there is nothing in the record to suggest that this desire was brought about by any feeling on her part of friendliness to plaintiff but the payment of all of the indebtedness of herself and husband was no doubt a matter of pride with her. It would appear that she executed the deed to defendant to avoid any contest in court involving a dispute over the sanity of her husband and that she did not want to be thrown into bankruptcy. Bankruptcy is regarded as a disgrace by many people.
I think beyond any question that Mrs. Eiman wanted defendant to assume the payment of plaintiff's mortgage and so expressed that desire to defendant. I am firmly of the belief that defendant refused to enter into such an agreement. If defendant had been willing to make such a contract, there appears to me to be no reasonable explanation of its refusal to express such an agreement in the deed. Mrs. Eiman did not offer any such explanation and the explanation of Vogel does not seem convincing. Both of them positively testified that defendant refused to accept a deed reciting that it agreed to pay plaintiff's indebtedness. Shackelford positively testified that the only consideration for the deed was that expressed in the deed and the further agreement which he fully explained, that defendant would not bring any proceeding attempting to void the legal effect of the giving of the deed by Mrs. Eiman and her husband to plaintiff. I think that the testimony clearly sustains the findings of fact by the chancellor that the agreement was that the property was conveyed subject to all encumbrances of record and there was no express agreement that defendant assume the indebtedness against the property. It is true Cornelius did not testify but I think it should be stated that his deposition was taken and counsel for defendant drew the attention of the court and opposing counsel to this fact at the trial and stated that they had no objection to the deposition being read.
The agreement being that the deed was taken "subject to all encumbrances of record" the only question to be determined is as to the legal effect of such recital. Such an agreement does not, by itself, *Page 513 
obligate the grantee to pay existing encumbrances. I think that this question was fully settled in the case of Brooks v. Owen,112 Mo. 251, 252, and cases cited. [See, also, Hiemanz v. Starck, 198 S.W. 447, 449.] The case of Landau v. Cottrill, 159 Mo. 308, is not in point for the reason as stated by the court, l.c. 319, in reference to the facts in that case, "and the amount of thatsecurity was in fact a part of the purchase price for thepremises." In the case at bar, as before stated, there was no agreement that plaintiff's mortgage should be paid as a part of the purchase price of the property or otherwise. Consequently, defendant, through its agent, Bird, had a perfect right to shut out plaintiff's mortgage by bidding in the property at the foreclosure sale. Even though Bird had been acting for himself alone in bidding in the property, under the theory of this case adopted in the majority opinion, defendant would have been liable to plaintiff. So, assuming that plaintiff would not have discovered the agency of Bird, what difference would it make? I am, therefore, at a loss to understand the allusion, in the majority opinion, to "collusion" and "tortuous course of conduct" of the defendant and Bird.
In my opinion the judgment should be reversed and the cause remanded with instruction to the chancellor to dismiss the bill.