text:
    NATIONAL BANK OF COMMERCE IN ST. LOUIS v. HENRY CLAY PIERCE, Appellant.
    Division Two,
    March 22, 1920.
    ]. APPELLATE PRACTICE: Action at Law. In a review of an action at law tried without a jury in the circuit court, wherein the judgment is assailed on the ground that it was contrary to the facts developed at the trial, the chief concern of the appellate court is to ascertain whether there is any substantial evidence to support the judgment.
    2. EVIDENCE: Admission Without Objection. In an action at law appellant cannot on appeal complain of the admission of a memorandum in evidence which was admitted without objection.
    3. PLEDG-E: Surrender of Collateral: Substantial Evidence. Where the trial court, sitting as a jury in a law ease, has found that the ten thousand shares of stock, which is the subject of the controversy, were pledged to the plaintiff bank as collateral security for a loan and that the bank had never surrendered its lien thereon, and there is substantial evidence in the record to support the finding, the appellate court is not at liberty to rule that the evidence to support the finding was not sufficient. In such case it is of small concern with the appellate court whether, if it were' trying the case cLe novo, it would have made the same or a different finding.
    4. LIMITATIONS: Conversion: Finding of Fact. Where there is substantial evidence that the stock, pledged to plaintiff to secure a loan, was delivered to defendant within five years before the suit was brought and that he did not convert it to his own use until after its delivery to him, it cannot be ruled on appeal that the action for damages for the wrongful conversion of the stock was barred by limitations.
    5. CONVERSION: Nominal Damages. Testimony by defendant in a deposition on a former occasion, introduced in evidence by plaintiff and uncontradicted by him, th&t the properties of- a railroad company, whose entire capital stock was pledged to plaintiff to secure a loan of $700,000, was worth one million dollars, is sufficient to support a judgment for seven hundred thousand dollars in a suit for damages for the wrongful conversion of said stock to his own use.
    6. AMENDED ANSWER: Discretion of Court: After Judgment. The question of permitting amended pleadings to be filed is one resting largely within the discretion of the trial court; and where defendant did not ask permission to file his second amended answer until about three months after the court, sitting without a jury, had rendered judgment for plaintiff, and the answer, as offered, set up new matters of defense not pleaded in the answer upon which the case was tried, the court did not abuse its discretion in refusing to permit the answer to be filed, although at the time permission was asked a motion for a new trial was still pending.
    Appeal from St. Louis City Circuit Court. — H'on. William M. Kinsey, Judge.
    Affirmed.

      Boyle é Priest, Judson, Green & Henry and Fordyce, Holliday é White for appellant.
    (1) There was no evidence of a pledge, (a) When a note is paid, the object of any pledge therefor- has been performed, and the pledge contract and lien ceases to be operative, and the whole beneficial interest therein becomes vested in the hands of the pledgor. Southward v. Lamb, 82 Mo. 242; Story on Bailments, secs. 365, 364, 361, 359; Wilkinson v. Misner, 158 Mo. App. 551. (b) To establish a pledge for- the $709,000 notes, it devolves upon plaintiff to show that the owner, the Tennessee Construction Company, consented to the stock being held after the $500,000' note was paid; and such consent cannot be inferred from silence, unless it were shown there was knowledge and acquiescence, (c) The burden of proof is upon the plaintiff in this case to show by preponderance of the evidence that there was a valid contract of pledge duly executed, and with possession thereunder, to secure the notes in question. Cantwell v. Johnson, 236 Mo. 605'; Jones v. Hubbard, 193 Mo. 147. (d) Independent of a new agreement to that effect, the pledgee cannot withhold the pledge as collateral for a debt other than that to which the pledge was originally made. Southward v. Lamb, 82 Mo. 242; Wilkinson v. M'isner, 158 Mo. App. 551; Taylor v. Jones, 3 N. D. 235. (e) A void pledge creates no lien and gives no right of possession. Smith v. Becker, 192 Mo. App. 597. (f) “Where two constructions are equally available, that one ought not to be adopted- which is most favorable to the pledgee.” Dibert v. D’Arcy, 248 Mo. 644. (2) The delivery of the certificates by the bank was a surrender of any rights of pledge, if the pledge existed, (a) The admitted delivery in this ease of the certificates for the Terminal stock by the bank to the alleged pledgor, the Construction Company, for it to dispose of for its own benefit, without any promise whatever of a return of the certificates, in the event of a failure to make the sale, was, in law, a surrender of any right of pledge, if any existed. Kellogg v.' Thompson, 142 Mass. 76'; Jones on Pledges, secs. 40, 86, 87; Casey v. Cavaroe, 96 U. S. 467, .24 L. Ed. 779; Harding v. Eldridge,. 186 Mass. 39; 22 Am. & Eng. Enc. (2 Ed.) 860; 31 Cye. 817; Thompson v. Dolliver, 332 Mass. 103. (b) The delivery by the bank to the Construction Company of the stock was in no sense a delivery for a temporary purpose within the meaning of the law. The bank officials admit that they 'considered the sale an absolute one and they did not expect a return of the stock. If the bank desired to protect itself in the contingency of a failure of the purchase at the end of three years’ option, it could have done.so by taking a receipt for the stock, as it did in the case of the bonds delivered at the same time and deposited with the Trust Company, (c) The option contract expressly provided that the Terminal stock should be redelivered to the Construction Company (pledgor) and not to the bank (pledgee); this is in sharp contrast with the provisions of the option contract which stipulate for the return of the bonds directly to the depositors of the bonds, who were given receipts by the Colonial Trust Company. Kellogg v. Thompson,. 142 Mass. 76. (d) The defense of surrender i,s available to defendant without proof of facts showing an estoppel, or that Pierce was misled to his prejudice and without proof of any consideration for the surrender. The mere voluntary loss of possession extinguishes the pledge, for possession is an essential requirement of a valid pledge. Kellogg v. Thompson, 142 Mass. 76; Thompson v. Bolliver, 132 Mass. 103 ; Walker v. Staples, 5 Allen, 34; Holmes v. Crane, 21 Pick. 607; .22 Am. & Eng. Enc. (2 Ed.) 860; 31 Cyc. 817; Jones on Collateral Securities, sec. 40; Story on Bailments, sec. 364; Dobie on Bailments and Carriers, p. 239. (e) However, the bank is estopped by its conduct, contracts and long-continued acquiescence in the surrender, to deny which would be to the great prejudice of Pierce; and the mutual stipulations in the option contract on which the bank acted, and the stipulations in Pierce guaranty as to the collateral, are sufficient' considerations, if any were needed. (3) Plaintiff’s alleged cause of action, if any, dates more than five years prior to the filing of this suit, and the alleged cause of action is therefore barred by the Statute of Limitations. The stock was surrendered to the Construction Company in July, 1905, and then passed out of the possession of the plaintiff, actual or constructive, without any receipt therefor evidencing any right or continued control, and said stock continued under the dominion and control of the Construction Company while it was in the hands of the Trust Company.’ There was no change in this dominion and control during the three years from 1905 to 1908, and there was, of course, no such change of dominion and control from 1908 to 1913. The suit was filed April 12, 1913. R. S, 1909, sec. 1889. (a) The court below sought to escape this bar by dating the alleged conversion in December, 1908, but there is no warrant whatever for this distinction. The stock was in the possession of the Construction Company and under its control from the time of its delivery to Senator Bailey as its attorney and agent in July, 1905. It was deposited for the benefit of the Construction Company with the Standard Trust Company under the express undertaking to redeliver the same to the Construction Company when the purpose of the deposit was performed, (b) It is a general and fundamental rule that the Statute of Limitations may be invoked by a successor in right or title. As Pierce claims title under the alleged pledgor, the Tennessee Construction Company, the question is whether the latter first acquired posession; and it is admitted by plaintiff that this was on July 27, 1905, for on that date Senator Baileyits attorney and representative, acquired possession of the stock and delivered it to the Trust Company in New York on behalf of the Tennessee Construction Company, and thereafter delivered the receipt therefor to the Construction Company. The test is, not when Pierce acquired possession, but when the plaintiff lost possession to defendant’s predecessor in title. 25 Cyc. 1009; Wood on Limitations, sec. 41. • (c) While the bar of the statute is complete on the undisputed testimony, dating from the surrender of the stock to Bailey in July, 1905, it must not be overlooked that the actual loss of lien on the stock by the bank dates back to June 24, 1904, when the $600',000! note, for which it was specifically pledged, was paid. Assuming that this stock remained in the possession of Van Blarcom, who occupied a dual position of officer of the bank and also of the Construction Company, in this anomalous condition the burden is clearly on the bank to show by satisfactory proof the specific pledge of the stock for the $700,000' debt. (4) Even if plaintiff’s action can be considered one in trover, all that defendant would be liable for, -if at all, would be nominal damages and under some circumstances a return of the Terminal stock. Since the Terminal stock has remained in statu quo, and since it. came into the hands of Mr. Pierce, without knowledge of the interest of the plaintiff, or without willful wrong, it must be accepted .by plaintiff in complete acquittal of damages, assuming that plaintiff is liable. Ward v. Moffett, 38 Mo. App. 395; Hart v. Skinner, 10 Vt. 138, 42: Am. Dec. 500'; Atkins v, Cambie, 42 Cal. 86, 10 Am. Rep. 282. (5) If there should be a recovery, it should be for nominal damages, for there was an entire failure to show that this stock had any substantial value. Deck v. Feld, 3'8 Mo. App. 680; 4 Sutherland on Damages (4 Ed.), sec. 1113, p. 4223. It is a fundamental principle in the measure of damages in trover that long-continued acquiescence by pledgee in the pledgor’s possession with á knowledge of the latter’s claim of right will, in an action of trover, bar plaintiff’s right to damages that would not have been suffered but for such acquiescence. 38 Cyc. 2104; Rogers v. Brittain, 39 Mich. 477. In this case, this acquiescence continued not only from 1905 to 1908, but from 1905 to 1910. (6) The memorandum claimed to have been made by Matthews was not admissible in evidence. (a) The alleged pledge is a special contract, and entries in books or records are not admissible to prove such contracts. Smith v. Blakely, L. R. 2 Q. B. 325; Lackey v. Schreiber, 17 Mo. 146; Hall v. Woolen Co., 187 Pa. 18, 52 L. R. A. 711, note 6; Jeffries v. Castleman, 68 Ala. 432; Griesheimer v. Tanebaum, 26 N. E. 957; Anchor Company v. Walsh, '108 Mo. 2|77; 3 Jones’s Commentaries on Evidence, sec. 574. (b) Matthews had no authority from the bank either to demand additional security from the Construction Company or to enter into any agreement with the Construction Company for further security, (c) It is not the best evidence. No record of the action of the Board of Directors of the bank in regard to the pledging of .the stock was in evidence, and no record of the Construction Company, authorizing the pledge', was shown, (d) The making of the memorandum was not a part of the res gestae between the parties to the action. Greisheimer v. Tanebaum, 26 N. E. 957. (e) The memorandum is purely self-serving. A party to a contract, the terms of which are in dispute, cannol give in evidence his own statements, either oral or written, made subsequent to the alleged contract, in corroboration of his version of the contract, nor can such statements be used in evidence to prove the existence of a contract. The memorandum was made subsequent to the transaction and after the controversy arose. Rndd v. Robinson, 126 N. T. 113; Greisheimer v. Tanebanxn, 26i N'. E. 957; Wharton on Evidence (S' Ed.), sec. 662; 'Angelí & Ames on Corporations (11 Ed.), sec. 679; 2 Jones on Evidence, sec. 270a (272). (f)- The memorandum is not signed by the Construction Company, nor by Mr. Pierce, who are the parties sought to. be charged by the memorandum. The memorandum was not even known to them until after suit was filed and the testimony being taken.

      Geo. L. Edivards for respondent.
    (1) The deposit of the Nashville Terminal Stock with the Bank on the 18th of July, 1904, as additional collateral to secure the notes of the Tennessee Construction Company, aggregating $700,000', constituted a pledge of this stock to the Bank for that purpose. The proposition is elementary. Trust Co. v. McMillan, 188 Mo. '569; Wilkinson v. Misner,*158 Mo. App. 561; Jones on Collateral Securities and Pledges (3 Ed.), sees. 4 and 5. (2) It is Avell settled that “where the pledgor secures the possession from the pledgee for a special purpose only, the pledgee does not part with the legal possession, and his rights in the property are not lost. There may be a re-delivery by the pledgee to the pledgor for a temporary purpose, without surrendering the pledge. ’ ’ The certificates of stock involved were sent to Bailey to be delivered to the Standard Trust Cofnpany for the sole purpose of having them deposited to meet the conditions of the option contract. If the option contract should not he exercised, the stock was to he returned to its proper holder. This obviously did not amount to a surrender of the pledge. Hording v. Eldridge, 186 Mass. 3-9; Jones on Collateral Securities and Pledges (3 Ed.), sec. 40'. (3) In the-absence of a contrary showing, and there was no. contrary showing in this case, the Nashville Terminal stock as a matter of law, is presumed to be worth its face value. Trust and Savings Co. v. Home Lumber Co., 118 Mo. 461; Moffitt v. Hereford, 132 Mo. 521. (4) Where a jury is waived and the issues of fact submitted to the judge, his findings are as binding upon the appellate court as is the verdict of a jury. Butler County v. Boatmen’s Bank, 143 Mo. 13; Trust Co. v. McMillan, 188 Mo. 567.
   WILLIAMS, P. J.

This is an action at law tried without a jury in the Circuit Court of the City of St. Louis, by which action the plaintiff sought and recovered a judgment in the sum of $700,000 as damages, for the alleged conversion, by defendant, of ten thous- and shares of the capital stock of the Nashville Terminal Company. Prom the above judgment defendant has duly perfected an appeal.

Plaintiff’s theory of the case is that this stock was deposited with it on July 18, 1904, as collateral, upon certain notes of the Tennessee Construction Company, totaling $700,000 ; that the bank never surrendered its lien on said stock, but that the defendant in December, 1908, obtained possession of said stock and thereafter converted the same to his own use and to plaintiff’s damage in the aforesaid sum.

Defendant’s theory of the case is: (1) that the stock was never pledged to the plaintiff bank as security for this loan; (2) if said stock was ever so pledged the bank thereafter surrendered or waived its right as pledgee of said stock; (3) even though it be found that defendant did convert the stock, the plaintiff suffered only nominal damages; and (4) if. plaintiff ever had any cause of action, the same has become barred under the five-year Statute of Limitations.

Several days were occupied in the trial of this case and we have before us a very large printed record. Counsel in their briefs, do not seem to have been able to agree entirely upon the facts. We have therefore made a careful review of the entire record for ourselves.

This is an action at law and one of our chief concerns .upon this review is to ascertain whether there is any substantial evidence to support the judgment of the trial court. It will therefore be unnecessary to set out in tiresome detail all of the testimony, as though we were reviewing the case as a court in equity, but it will be sufficient' to confine our statement of facts very largely to that portion of the evidence which will throw light upon the ^question of whether there was substantial evidence to support the judgment below.

The evidence tending to support plaintiff’s theory of the case may be summarized as follows:

The Tennessee Construction Company, a Missouri corporation, with a capital stock of only $2,000', was used, by one J. C. Van Blarcom and associates, as a corporate organization, through which said Van Blarcom and associates constructed several million dollars worth of railroad property in the State of Tennessee. Said Construction Company made contracts with railroad co'mpanies to do certain railroad construction work, and in payment for such work generally took all the capital stock of the railroad company and the mortgage bonds which were issued upon the properties thus constructed. Van Blarcom was vice-president of said Construction Company and up to May, 1911, was largely in control of said company, and was apparently its sole financial agent, negotiating’ loans for the same by using the stock and bonds as collateral.

One of the railroad properties which the Construction Company built was the Nashville Terminal Company. This consisted of about fifteen miles of terminal railroad in the southern portion of the City of Nashville, Tennessee, and certain switch tracks to local industries. This was constructed as a terminal property to he used in connection with a railroad afterwards known 'as the Tennessee Central Railroad Company, part of which was being built by Van Blarcom and associates through the Coristruction Company.

As part payment for its work in constructing the Nashville Terminal, the Construction Company acquired all of the capital stock of the Nashville Terminal Company, amounting to ten thousand shares, of the total par value of one million dollars. This is the stool? which forms the basis of this law suit.

This same Yan Blarcom was a large stockholder in and a director of the plaintiff bank. Up until December, 1905, he was vice-president, and thereafter and until his death on October 24, 1908, he was the president of said bank. During all of this time defendant Pierce was one of the large stockholders of the bank and one of its directors. Pierce was also financially interested with Yan Blarcom and others in the various railroad enterprises above mentioned.

In 1906, Henry C. Pierce and J. C. Van Blarcom, as plaintiffs, instituted a suit in the Circuit'Court of the City of St. Louis, against the executor of the estate of William H. Thompson, deceased, for an accounting. This petition, among other allegations, contained the following:

“And plaintiffs state further, that on or about the 1st day of February, 1902, the said William H. Thompson and the plaintiffs herein entered into an oral agreement, whereby they mutually undertook and agreed to promote and finance the Tennessee Central Railway, a corporation organized under the laws of the State of Tennessee, which was then and there constructing and operating line or lines of railway located in said State, and to promote and finance other incorporated companies allied with the said Tennessee Central Railway, to-wit: the' Nashville & Clarksville Railway Company, the Tennessee Central Railway Company, the Nashville & Knoxville Railway Company, the Brier Hill Collieries — all incorporated under the laws of the State of Tennessee; the Cumberland River Coal Company, incorporated under the laws of the State of Maine, and the Tennessee Construction Company, incorporated under the laws of the State of Missouri; and to acquire and hold jointly, either directly in their own names, or through the said Tennessee Construction Company, stocks and bonds of the said several corporations, and it was then and there agreed by and between the said parties that they would respectively, in equal shares, provide and advance all necessary cash, credit, discounts and securities for the purpose of promoting, financing and carrying on the said Tennessee Central Railway and completing the construction of the railroad, then and there being constructed and operated by the Tennessee Central Railway, as well as of the said Nashville Terminal Company, for the purpose of ultimately disposing of their joint holdings and interest in the said several corporations so as to realize a profit out of the same — which profits, as well as any losses that might be incurred, were to be shared equally by them. ’ ’

During the year 1902 the Construction Company, through its vice-president, Van Blarcom, negotiated with the plaintiff bank, three promissory notes, in the aggregate sum' of $)700>,000. This loan will hereinafter be referred to as the $700,000 loan. This loan has never been paid and it is the loan which plaintiff bank claims this stock was pledged to secure. At the time this loan was negotiated it was secured by 750 general mortgage bonds of the Tennessee Central Railroad Company of the par value of $750,00G and 250 bonds of the Nashville Terminal Company of the total par value of $250,000. (It is not even claimed by the bank that the stock in question was placed with the bank as collateral when the loan was first made, but that the stock was depositéd as collateral to secure this loan on July 18, 1904).

In October, 1903, the Terminal Company placed •these ten thousand shares of stock with the plaintiff bank as collateral security for a loan of $500,000'. This loan was paid off on January 24, 1904. What became of this stock immediately after the loan was paid the evidence is silent.

Plaintiff offered in evidence a memorandum (referred to hereafter as the Matthews memorandum) which was shown to have been in the handwriting of one Matthews, now deceased, and who in July, 1904, was the man in charge of the discount department of the plaintiff bank. The evidence tends to show that it was the duty of Matthews to keep track of the col-laterals of the bank; that at that time the bank kept no collateral register; that most of the bank’s loans upon collateral were evidenced by a collateral-form of note which would give a description of the collateral offered with the note, but when the bank loaned money on collateral on a plain note (as was the kind of note used in the $700,000 loan), it was the. custom of the clerks in charge of that department to make a smal' memorandum concerning the collateral connected therewith and to pin said memorandum to the note. It appears that it was the custom to keep the collateral itself in envelopes and in a place apart from the notes.

The memorandum (mentioned above) in Matthews handwriting is’ set forth in the respondent’s supplemental abstract of the record as follows:

$750,000 bonds Tenn .Cent. R. R.
250,000 bonds Nashville Term. R. R.
10,000 shares Nashville Term, R. R.
x Dep. 7/18 ’04
(In pencil)
A/c loans 700.

One of plaintiff’s witnesses was permitted, without objection to interpret the above memorandum as follows:

“Q. Now, I will ask you to interpret to the court what that memorandum means in connection with those notes. A. It means to convey the information that there was $750,000 bonds of the Tennessee Central Railway Company, $250,000 of the bonds of the Nashville Terminal Company was deposited with, these notes and afterwards 10,000 shares of the Nashville Terminal Association was added to it.
“Q. When? A. July 18, 1904.
“Q. As collateral security for those three notes? A. Yes, sir.”

One witness, who was once assistant cashier of plaintiff bank, testified that many times as he looked over the bank’s papers he saw this Matthews memorandum attached to the notes representing this $700,000 loan, and that in October, 1904, he saw the 10,000 shares of stock down in the bank’s vault among the collateral, which the bank held, securing these notes.

Some time prior to M'ay, 1906, the defendant Pierce, who was closely associated financially with Van Blarcom and others in financing these railroad enterprises through the Tennessee Construction Company, seems to have become dissatisfied with the manner of Van Blarcom’s management and apparently was unable to get from Van Blarcom an accurate detailed statement of the financial status of the properties and of the exact financial relationship which each person interested bore to the other. It seems to have been the desire • of all parties interested to bring about a sale of all the railroad properties which were under the control. of the Tennessee Construction Company and the persons financing the same. On May 11, 1906', a contract was entered into between Van Blarcom and defendant Pierce. One of the provisions of this contract provided as follows: “that the Tennessee Construction Company and the Tennessee Railway Company which it controls be placed under the control and management of a directory or a committee to be selected by the said H. C. Pierce and in which the said W. TI. Thompson and said J. C. Van Blarcom and the creditors of both companies shall be fairly represented.” By this contract Van Blarcom also agreed to immediately furnish to defendant Pierce an accurate statement of the financial affairs of the enterprises, and among other things a statement as to “the location of the securities belonging'to the Railroad Company and to the Construction Company and the debts or obligations for which said securities have been pledged.” Van Blarcom did not furnish Pierce with the information mentioned in the above. contract and the record is silent as to what further efforts, if any, Mr. Pierce made to acquire this information.

Shortly after this contract was made turning the management of the Construction Company over to the direction of defendant Pierce, the Construction Company procured the services of Hon. Jos. W. Bailey to negotiate a sale of the two railroad properties (The Nashville Terminal Company and Tennessee Central Railroad Company properties) and shortly thereafter and on, to-wit, July 7, 1905, the Tennessee Construction Company gave a written option of purchase on the two railroad properties to the Standard Trust Company of New York. The option provided that the purchaser pay certain fixed sums for the first mortgage bonds of the Terminal Company and the general mortgage bonds of the Railroad Company. The capital stock of the Terminal Company and the greater portion of the capital stock of the Railroad Company were to pass as a bonus with the purchase of said mortgage bonds. The option provided that the capital stock of the Terminal Company and a majority of the stock of the Railroad Company should be deposited with the Standard Trust Company of New York on or before September 1, 1905, and that the mortgage bonds of the two railroad properties should be deposited with the Colonial Trust Company of New York- The option was to run for a period of three years from July 1, 1905'. At the time this option was entered into it was considered by all as merely a deferred purchase, and it was expected by all that the purchase would be ultimately closed and enough money realized to settle all of the outstanding obligations created by the construction of these two railway properties. Under this option the purchaser was given the right to operate the railway properties during the life of the option, and in turn wás required to make certain payments of money which would carry the interest on the bonds during that time. On July 27, 1905, Yan Blareom forwarded by express to Hon. Joseph W. Bailey at New York City the 10,000 shares of the Nashville Terminal Company stock (the stock now in controversy) and said stock was deposited with the Trust Company under the terms of said optional agreement. It does not appear from the evidence whether or not other officers or directors of the plaintiff bank at that time knew that this stock was being forwarded by Yan Blareom. The attorney for the bank testified in this case that shortly after this date it was called to his attention that the 10,000' shares of the Nashville Terminal Company stock were not in the hank and that he took the matter up immediately with Van Blarcom and asked him if the hank should not have a receipt for this stock. Van Blarcom replied to him that he thought the sale would go through, and that since under the option contract the stock did not particpate in the distribution of the purchase money, hut that the money was to he paid out on the bonds, it would not he necessary to have a receipt for the stock. This witness further testified that in order that the hank might have some record of the transaction he prepared and Van Blarcom signed the following instrument:

“St. Louis, Mo., October 19tb, 1905.
“For and in consideration of value received from The National Bank of Commerce in St. Louis, I hereby guarantee to said bank the payment of the following notes executed to it by the .Tennessee Construction Company.
“One note for three, hundred and fifty-two thousand dollars ($352,-000) due on demand, dated July 1st, 1902, and payable to said bank or order.
“One note for one hundred and forty-eight thousand dollars ($148,000) due on demand, dated July 9th, 1902, and payable to said bank or order.
“One note for two hundred thousand dollars ($200,000) due on demand, dated October 15th, 1902, payable to B. F. Edwards, Cashier, or order.
“Said bank has agreed with the Tennessee Construction Company not to demand or require payment of said notes, or any of them, prior to June 1st, 1907, on condition that the interest thereon be promptly paid as agreed, and all of which said notes are secured by the following collateral:
“750 general mortgage 5.% bonds of the Tennessee Central Railroad Company, of the denomination of one thousand dollars ($1,000) each.
“250 first mortgage 5% bonds of the Nashville Terminal Railroad Association of the denomination o'f one thousand dollars ($1,000) each.
“10,000 shares of the capital stock of the Nashville Terminal Railroad Association of the p(tr value of one hundred dollars ($1D0) each.
“I hereby request that of the above collateral, you forward to, and deposit with, the Colonial Trust Company of New York, the following:
“750 general mortgage 5% bonds of the Tennessee Central Railroad Company of the denomination of one thousand ($1,000) dollars each; also 250 first mortgage 5% bonds of the Nashville Terminal Railroad Association of the denomination of one thousand ($1,000) dollars each, and hereby approve your action upon my request, in delivering said 10,000 shares of the capital stock of the Nashville Terminal Railroad Association of the par value of one hundred dollars ($100) each to the Standard Trust Company of New York; all as provided in a certain contract entered into between the Tennessee Construction Company and the Standard Trust Company of New York and dated the 27th day of July, 1905.
“Notice to the undersigned of the acceptance of this guarantee is hereby expressly waived.
“In Witness Whereof, I have hereunto subscribed my name on this 19th day of October, A. D. 1905.
J. C. VanBlarcom.”

The purchaser after operating the property for nearly three years, failed to exercise its rights under the option agreement and the deal fell through. " The Trust Company notified the Tennessee Construction Company to this effect in July, 1908.

The death of Mr. Yan Blarcom occurred October 24, 1908.

On November 18, 1908, the Tennessee Construction Company through its president, Geo. O. May, issued a written order to the Standard Trust Company of New York, authorizing said Trust Company to deliver to defendant Pierce or order on demand all of the 10,000 shares of the capital stock of the Nashville Terminal Company. The Trust Company delivered this stock to Mr. Eben Richards, son-in-law and agent of defendant Pierce, on December 8, 1908.

Thereafter defendant Pierce held said shares of stock as collateral security for a debt which the Tennessee Construction Company owed him for past advancements as evidenced by a note of the Tennessee Construction Company dated November 17, 1908, in the sum of $600,000 due one day after date. Sometime in 1910 the plaintiff made repeated demands upon defendant for the return of the stock, which demands were refused.

About January, 1913, defendant notified the Construction Company that he intended to sell all the securities pledged him by that company (this would include the stock of the Terminal Company, now in controversy, and other securities). The Construction Company in order to avoid a foreclosure sale made an arrangement with Mr. Pierce whereby he received all of the equity of the Construction Company in said stock. ,

The $700,000' indebtedness of the Tennessee Construction Company to the plaintiff bank has never been-paid. It appears from the evidence that the estate of Van Blarcom, who had become guarantor of the indebtedness, is insolvent.

The evidence as to the value of this stock (which it is alleged defendant converted) was substantially as follows:

The Nashville Terminal Company owns about fifteen miles of terminal tracks in or near the City of Nashville, Tennessee, and also owned switch tracks leading therefrom to local industries." There was also some evidence that the Terminal Company owned the capital stock and bonds of the Brier Hill Collieries Company, and also a franchise upon certain streets of the City of Nashville. It appears that the company had outstanding bonds to the amount of 'two million dollars. The first million dollars of bonds were issued and disposed of. Later an issue of three million dollars of bonds was authorized by the officers and stockholders of the company.

The deposition of defendant Pierce was offered in evidence by plaintiff as an admission against interest. In that deposition the defendant was being interrogated concerning the authorization of the increase of the bonded indebtedness of the Nashville Terminal Company to three million dollars, and in part he replied as follows:

“I was satisfied that the property (meaning the property of the Nashville Terminal Company) was worth $3,000,000' from representation made to me; otherwise, I should not have consented to the issue of the increased amount of bonds.”

It was planned that out of this last issue the first was to be taken up, but it appears that this was never done, and only one million dollars on the last issue was ever issued, and it was issued to defendant Pierce to secure him for money advanced to the company. The remaining portion of the second mortgage bonds were never issued.

There was further evidence to show that this terminal property was very necessary to the proper operation of the Tennessee Central Railway Company; that the value of each of said railway properties depended more or less upon the right to use the other in connection therewith.

On February 11, 1913, an attorney-at-law representing the defendant Pierce wrote a letter to the private secretary of Mr. Pierce, which letter contained the following language: “It (Nashville Terminal Company) has also outstanding one million capital stock on which dividends have been paid. The dividend was paid in October, 1912. The property of the Nashville Terminal Company is absolutely essential to the operation of Tennessee Central or N. O. and St. L. Railway, both of which companies now operate in Nashville.' We had been given to understand that the physical property of the Nashville Terminal Company is worth at least three million dollars. Mr. Hi. C. Pierce owns the entire capital stock of the company and owns or controls the majority of the first mortgage bonds.”

For a year or two before this suit was brought the bank was trying to get defendant Pierce to surrender this stock to it on the theory that it was entitled to hold the same as pledgee for the security of the $700,000 loan, of the Construction Company. During this controversy and on July 10, 1911, the personal attorney of defendant Pierce wrote a letter to the plaintiff bank refusing to surrender the 10,000 shares and in that letter used the following language: “I refer personally to its (meaning the bank) demand that Mr. Pierce must surrender the Nashville Terminal stock. This stock is well worth its par value of one million dollars and constitutes by far the greater part in value of the securities held by Mr. Pierce for his enormous financial guarantees and endorsements of the Tennesse Construction Company indebtedness.”

The author of this letter, testifying as a witness, stating that he desired-to explain that letter, said: “I don’t believe in the first explanation to the court I explained the relations between the two properties, as far as Mr. Pierce personally is concerned. I said at the time that my opinion was that the stock was worth a million dollars, and in my opinion it was worth that then to Mr. Pierce, because of the fact that he controlled both of the companies, and inasmuch as he controlled both companies it was up to him to conserve his interest in the proposition, and neither one of the properties would do anybody any good unless the whole •thing was sold. The control of both properties was in his own hands, that is, in a way; and I stick to my idea of what that would be worth to the person who controlled the Tennessee Central, he would have to have the Nashville Terminal because that is a property that consists of terminal facilities leading off of the belt line that belongs to the Railroad Company. Sandwiched in there, there is a bridge in between two sections of the Tennessee Central Railroad tracks. Now, the Terminal property isn’t worth anything except in connection with the Tennessee Central.”

The defendant did not offer any contradictory evidence upon the value of the stock, but upon other points defendant’s evidence tends to contradict much of the evidence offered by the plaintiff. It tends to show that plaintiff never had actual knowledge that the shares of the Terminal Company were ever deposited with the bank as collateral; that the bank did not notify the Trust Company in New York at the time the shares were deposited with the option contract, that it claimed any interest - therein. The bank examiner of the St. Louis Clearing House examined plaintiff bank on April 13, 1918, and on July 8, 1909, aid stated that no one connected with plaintiff hank mentioned that the hank had an interest as pledgee in the capital stock of the Terminal Company; that he does not think that he saw the memorandum in the handwriting of Mir. Matthews attached to the $700,000.loan; that one of the officers of the hank told hirn that the $700,000' loan would have to depend upon the collateral held hy the hank. This witness stated that he did not assume to say that the Matthews memorandum was not there when he examined the hank, hut merely that he had no recollection of the same. The cashier of the plaintiff hank on December 5, 1909, wrote defendant Pierce a letter concerning certain financial matters then pending between the hank and Pierce. Said letter contained the following language:

‘ ‘ Second: The hank will not require the payment of the notes of the Tennesse Construction Company, aggregating $700,00 the payment of interest on which is guaranteed hy you, prior to January 1, 1911, upon the deposit of all of the capital stock of the Nashville Terminal as additional collateral to this loan, and the prompt payment of interest now due thereon, and quarterly thereafter, in the meantime.” , ' •

That the plaintiff hank did not make any claim for this stock until about May 10, 1910'. Defendant Pierce told the hank, after the controversy had arisen, that if they would convince his attorney that the hank was morally entitled to this stock he would surrender the same. The attorney went to the hank and examined all of the evidence which the hank showed him concerning its claim to this stock and he examined the notes representing the $700,000 loan, but the Matthews memorandum was not pinned to the notes at that time and the attorney never heard of the existence of said memorandum until depositions were taken in this case.

I. Much is said in appellant’s brief about the inadmissibility of the Matthews memorandum which is set forth in the foregoing statement of. facts. Concerning this point it is sufficient to say that this memorandum was admitted in evidence without objection and the point is therefore • not properly saved for appellate review.

, II. After carefully reviewing this entire record we have reached the conclusion that the trial court did not err in refusing to give defendant’s instruction in the nature of a demurrer to the evidence.

As we understand appellant’s position under this head it is: (1)' that there was not sufficient evidence to support the finding that the stock in question was deposited as collateral with the plaintiff to secure the $700,000' loan; (2) even though the stock was so pledged, yet by subsequent action, upon the part of the bank it surrendered whatever lien it theretofore held.

It must be borne in mind that this is an action at law and that the finding of the trial court if supported by substantial evidence is binding upon the appellate-court. We have set forth much of the evidence in the foregoing statement and it is unnecessary to repeat the same here. We are of the opinion that the evidence set forth in the foregoing statement is sufficient to warrant the trial court, sitting as a jury, to find both that there had been a pledge of this stock to the bank and that the bank had never surrendered its lien thereon. -Both of these questions presented issues of fact. It is of little concern whether this court, if it had the opportunity, would have found the facts the same or different from those found by the trial court. We are not at liberty upon this review to find the facts do novo, but are concerned (on the question now being discussed) merely with the problem of whether there was substantial evidence fo support the findings which the trial court made. We are of- the opinion that there was such evidence and we are therefore not warranted in interfering with the judgment rendered below. .

III. Neither are we able to agree with appellant’s contention that the court erred in holding that this action was not barred by the five-year Statute of Limitations. The evidence shows that this stock was not delivered into the possession of defendant until December 8, 1908. This action was instituted April 12, 1913. There was sufficient evidence to warrant a finding that the conversion of this stock did not occur until after it was delivered to defendant, or at least until within five years of the institution of this action. This being an action at law and there having been a general finding of facts for plaintiff we are justified in presuming (where, as here, there is' substantial evidence to support such finding), that the court found to exist all necessary facts, and therefore in the present instance that the court found that the conversion occurred within the five years next prior to the institution of this suit. [4 C. J. 7)78. Title: Appeal and Error, par. 2728 (7) and numerous cases therein cited.]

IY. It is further contended that there was an entire failure to show that this stock had any substantial value and for this reason the recovery, if any, should have been limited to nominal damages. Defendant’s own testimony shows that in 1909, at the time the bonded indebtedness of the Nashville Terminal Company was increased from one million to three million dollars, he was satisfied the property of that company was worth three million dollars. The attorney for defendant in a letter written in 1911 to the officers of the plaintiff bank, stating reasons why defendant should not surrender this stock to plaintiff, among other things said: “This stock is well worth its par value of one million dollars.” This attorney testifying later in the case said that he was still of the opinion that this stock was worth one million dollars to defendant Pierce at the time he wrote the letter. Defendant offered very little evidence on the question of the stock’s value.

Upon this and "the other evidence mentioned in the foregoing statement the trial court was certainly justified in finding that the stock was worth at least $700,000'. We therefore disallow appellant’s present contention.

V. It* is further contented tha.t the court erred in refusing permission to defendant to file a second amended answer.

Defendant did -not ask leave to file his second amended answer until about three months after the court had rendered judgment in the case. This was at a time, however, when the motion for a new trial was still pending. This second amended answer sets forth new matters of defense which were not pleaded in the answer upon which the case was tried.

The question of permitting amended pleadings to be filed is one resting largely within the discretion of the trial court. [Gale v. Foss, 47 Mo. 276; McGinnis v. McGinnis, 274 Mo. 285, l. c. 300.]

Whether an amended answer setting up new defenses should ever be permitted to -be filed after the court has announced judgment and while the motion for a new trial is pending we need not decide, because unnecessary to a decision of the case, but we have no hesitancy in saying that the present record does not disclose any facts which would go to show that the trial court exercised other than a very sound discretion in refusing permission to file the amended answer under the conditions presented in the case at bar.

VI. Some abstract questions of law are discussed in the briefs of learned counsel, but we are of the opinion that the questions above discussed are the only ones raised in the briefs which have to do with the question of whether error was committed by the trial court.

From the foregoing it follows that the judgment should be affirmed.

It is so ordered.

All concur.


source: Caselaw Access Project

author: SMALL, C.

license: Public Domain

text:
    W. A. GLENN, Appellant, v. COUNTY COURT OF WRIGHT COUNTY et al.
    Division One,
    October 10, 1919.
    PUBLIC BO AD: Jurisdiction: Becitals in Judgment. It is not sufficient that the petition for a public road recite that it was.signed by at least twelve freeholders of the municipal township and that at least three of them were of the immediate neighborhood. Those things are jurisdictional, and must affirmatively appear in the face of the record of the county court ordering the establishment of the road; and unless they do so appear, it is the duty of the circuit court to which the proceeding is appealed, to sustain appellant’s motion to set aside and annul the proceedings of the county court.
    Appeal from Douglas Circuit Court. — Eon. John T. Moore, Judge.
    Reversed and remanded (with directions).

      L. O. Neider and N. B. Wilhinson for appellant.
    (1) The petition is fatally defective in that it does not describe any definite termination of such proposed highway; gives no legal description of the land where such road is to end; neither does it describe legally any of the land through which it is proposed to locate such road. And it wholly fails to describe the land of appellant. These are jurisdictional requirements, and all proceedings thereafter are without law, unless the record shows that they were followed. There is no finding by the county court that any twelve of the persons who signed the petition were resident freeholders of the municipal township of Gasconade, or that any three of them were of the “immediate neighborhood” of the proposed road, and no evidence of such facts except the naked recital found in the petition. This is fatally defective. Nor is there any finding, of established fact, that notice of the intended road had been given by hand bills, etc., twenty days, etc., required by the law. Chicago, R. I. & Pac. Ry. v. Young, 90 Mo. 39'; Blackenstoe v. Railroad, 80 Mo. 492; Mitchell v. Railroad, 82 Mo. 106; King v. Railroad, 90 Mo. 520; Anderson v. Pemberton, 89- Mo. 61; Ziebold v. Foster, 118 Mo. 349 ; Lingo v. Burford, 112 Mo. 155; Daugherty v. Brown, 91 Mo. 30; Jefferson County v. Cowan, 54 Mo. 237; Whiteley v. Platte County, 73 Mo. 30; Zimmerman v. Snowden, 88 Mo. 220'; Colville v. Judy, 73 Mo. 654; Williams v. Kirby, 169 Mo. 622; Hughes v. Mermod, 121 Mo. 98; St. Louis v. Glasgow, 254 M!o. 252. (2) Proceedings to open a public highway over a man’s land objecting to them:, are, in' derogation to common law and common right, always regarded as “strictissimi juris” and receive no help from intendments. Ellis v. Railroad, 51 Mo. 2Ó0; Railroad v. Campbell, 63 Mr. 585.

      J. W. Jackson for respondent.
   SMALL, C.

This is a proceeding instituted in the County Court of Wright County, to open a public road through land belonging to the appellant. The appellant claimed damages in the county court, but -was allowed none, and judgment was rendered establishing the road. He appealed the case to the circuit court of said county, from which a change of venue was awarded him to the Circuit Court of Douglas County. In that court appellant moved to set aside and annul the judgment of the County Court of Wright County, because the record -failed to show that said court had obtained jurisdiction of the subject-matter. This motion being denied, appellant duly appealed to this court.

The petition for the road states that it is signed by at least twelve duly qualified and competent adult petitioners, residents of, and in their own right owners of, land in the municipal township through which the road is to pass, and that three of them reside in the immediate neighborhood of the proposed public road. It purports to be signed by W. F. Borders and fifteen others, but appellant is not one of the signers.

The order of the county court, upon the hearing of the petition, recites as follows: “In the matter of the petition of W. F. Borders et al. Petition for a public road. Now on this day, the court having taken up and fully considered the above named cause, hereby orders that W. R. Wood, County Highway Commissioner, proceed to view, survey arid mark out such road thirty feet in width, described in the petition,” etc. There is no finding or recital in the said order, or any other order, of the county court that the petition was signed by at least twelve or any freeholders of the municipal township or townships through which the proposed road was to run, or that three of them are of the immediate neighborhood. There are other recitals and statements omitted from the order of the court, which it is not necessary, in the view we take of the case, to consider.

It was not sufficient that the petition itself recited that it was signed by at least twelve freeholders of the municipal township, and that at least three of them were of the immediate neighborhood, as required by the statute under which the proceeding was brought (Laws 1913, p. 653). But the order of the county court made at the time or prior to the granting of the petition should show on its face that the court found that the petition was so signed. This was jurisdictional to the power of the county court- to take the initial step of ordering the county engineer to mark out the road, and must affirmatively appear upon the face of the record of the county court. [Chicago Ry. Co. v. Young, 96 Mo. 39; St. Louis v. Glasgow, 254 Mo. 262.]

Many other defects in these proceedings are urged by appellant, which are unnecessary for us to review, as we have no doubt that if the proceedings are instituted again the law in all respects will be carefully complied with.

Judgment reversed and cause remanded with directions to the Circuit Court of Dbuglas County to sustain appellant’s motion to set aside and annul the judgment and proceedings of the County Court of Wright County.

Brown and Ragland, GC., concur.

PER. CURIAM’: — The foregoing opinion of Small, O., is adopted as the opinion of the court.

Blair, P. J., and Woodson and Graves, JJ., concur.


text:
    A. H. CROSS et al., Appellants, v. SUSIE HUFFMAN et al.
    Division One,
    December 20, 1919.
    1. QUIETING TITLE: Suit in Equity: Finding of Facts: Appellate Practice. If tbe petition to ascertain and determine the title to land states facts which show that defendants hold the title in trust for plaintiffs, that the alleged deed under which defendants’ claim constitutes a cloud upon plaintiffs’ title, and otherwise presents equitable issues and asks for equitable relief, the suit should be regarded as one in equity, and any finding of facts by the trial court is not binding upon the appellate court.
    2. RESULTING TRUST: Deed by Entirety: Purchased With Wife’s Money: Coparceners. Held, by Graves and Goode, JJ., that a deed made to husband and wife, as joint tenants, or tenants by the entirety, conveying land fully paid for with the wife’s money or property, and of which she had previously entered into possession, invests no estate in the husband, but invests the entire estate in the wife, even though she directs that the deed be made to her and him jointly.
    3. -: -: By Wife’s Direction: Estoppel. Held, by Graves - and Goode, JJ., that where the wife has purchased and paid for property and is in possession of it, having become thereby the equitable owner, the vendor’s deed conveying the legal title to her and her husband vests him with no more title and her with no less than would a friendly partition of her ancestor’s land setting off to her as cotenant her share therein by a deed purporting to convey the same to her and him. In both cases, the property is hers, and she conveys nothing to him, and consequently, even though the deed is so made by her direction, she has done nothing to estop herself from claiming her own.
    ■4. -: -: Limitations. To constitute title by limitations the possession must be exclusive. Where land was purchased with the wife’s money only, and the deed was made to her and her husband jointly, at a time when she was already in possession, subsequent occupation of the same by them during her life for thirteen years, and by him after her death for seven years and during the remainder of his life, did not bar a suit brought soon after his death, by her children against his, to have the deed removed as a cloud upon the legal title. He was not in exclusive possession during the life of the wife. Besides, under the Married Woman’s Act of 1889 the right to possession of the wife’s real estate is in her, and not in her husband, and though they occupied the premises jointly she was in law in exclusive possession, and his adverse possession did not begin to run until her death, and to bar recovery by her .children must have been continuous for ten years before their suit was brought.
    5. RESULTING TRUST: Deed by Entirety: [Wife’s Lands: Limitations. A deed to- a husband and wife, his name being inserted without the wife’s knowledge or consent, conveying land bought and paid for by her money or property, is as to him an absolute nullity, just as if his name had nowhere been inserted therein, and can be annulled as a cloud upon her title. But the result would be the same if it were ruled that he took the legal title with her and held it as a resulting trust for her, as would have been the case had the deed named him alone as grantee. In either case, if she was in possession during their joint lives, whether she permitted him to occupy the premises with her or not, his adverse possession did not begin to run until her,death. [Distinguishing Reed v. Painter, 145 Mo. 341.]
    Appeal from Jasper Circuit Court. — lion. R. A. Pearson, Judge.
    Reversed (with directions).

      Owen <& Davis for appellants.
    (1) Mrs. Middaugli was, at the time of the execution and delivery of the deed to her and her husband, George Middaugli, the equitable owner of the real estate therein conveyed, and said deed did not create in them an estate by the entirety. 13 R. C. L. 1110; Sprinkle v. Spainhour, 25 L. R. A. (N. S.) 167; Moore v. Moore, 12 B. Mon. (Ky.) 644; Harrison v. McReynolds, 183 Mo. 533; Snyder v. Elliott, 171 Mo. 362. (2) The evidence is conclusive ^that Mr. Middaugli furnished no part of the consideration for the purchase of the real estate in question, and the burden was on defendants to prove by affirmative evidence that Mrs. Middaugh intended a gift or advancement to her husband, and the fairness thereof. Denny v. Denny, 23 N. E. 519; King v. King, 57 N. E. 275 ; Parrett v. Palmer, 35 N. E. 713; 13 Ency. Ev. 131; 39 Cyo. 154; Ilgenf ritz v. Ilgenfritz, 116 Mo. 436; Fogle v. Pindell, 248’ Mo. 74; Lins v. Lenhardt, 127 Mo. 287; Gay v. Gillilan, 92 Mo. 264; Hovorka v. Havlik, 110 Am. St. 387. The consent of Mrs. Middaugh to the making of the deed to herself and husband, and the fairness of the transaction, cannot be proved by loose declarations which she may have made. 2 Ency. Evidence, 224; Ringo v. Richardson, 53' Mo. 394; Ferguson v. Robinson, 258 Mo. 1. o. 137; Pitts v. Weakley, 155 Mo. 138; Smith v. Smith, 201 Mm 547. Furthermore, ‘ her consent would have to be in writing. Powell v. Powell, 267 Mo. 125. (3) The land in question was used and occupied by Mr. and Mrs. Middaugh as a home, and there could not, in the very nature of the situation, be an adverse possession on the part of the husband, and hence the Statute of Limitations could not and did not run against her. 21 Cyc. 1208, 1209; 1 R. C. L. 755; Carpenter v. Booker, 130 Ga. 546, 127 Am. St. 241; Davis v. Cummins, 195 S. W. 756; Poynton v. Miller, 144 Mo. 688, 79 Am.- Dec. 73, 7 L. R. A. 568; Gafford v. Strauss, 18 Am. St. Ill; Wells Am. Mort. Co., 109 Ala. 430; Brader v. Dyer, 68 Am. St. 332; Hovorka v. Havlik, 110 Am. St. 387; Stiff v. Cobb, 126 Ala. 381, 85 Am. St. 38; Hinton v. Farmer, 121 Am. St. (Sea.) 63. (4) Plaintiffs’ cause of action was not barred under Sec. 1883, R. S. 1909, unless there was an adverse possession by Middaugh prior to the death of Mrs. Middaugh, which together with the time intervening between her death and the commencement of this suit would make ten years. De Hart v. Edmonds, 200 Mo. 246; Rutter v. Carothers, 223 Mo. 631.

      J. H. é W. E. Bailey for respondents.
    The trial court held that the rights of George Middaugh under the Richardson deed constituted a resulting trust in favor of Elizabeth Middaugh. The Statute of Limitations commenced to run against her right to enforce such trust February 12, 1896'. This- suit was not brought until more than seven years after the death of Elizabeth Middaugh and is therefore barred by the three-year Statute of Limitation, Sec. 1883, R. S. 1909. Reed v. Painter, 145 Mo. 341; McKee v. Downing, 224 Mo. 132; Robinson v. Allison, 192 Mo. 367. The Statute of Limitations runs against implied or constructive trusts. Hudson v. Cahoon, 193 Mo. 562; Landis v. Saxton, 105 Mo. 489; Reed v. Painter, supra. The cause of action having accrued to Elizabeth Middaugh in 1896, this suit, instituted in 1916, is clearly barred under the rule that in any event ten years must elapse. Rutter v. Carothers, 223 Mo. 631; Gray v. Yates, 67 Mo. 601; Smelser, et al. v. Meiel, 271 Mo. 178.
   SMALL, C.

Appeal from the Jasper County Circuit Court. Elizabeth Cross was a widow with two children. Said children are plaintiffs in this cause. They lived in Jasper County, and on the 6th day of October, 1894, at a trustee’s sale, under a deed of trust, which had been made to secure a note for money loaned by her to one DeCocq and wife, she purchased the east half of Lot Five of the northeast quarter of Section Six, Township nine, Range twenty-two, in said county, for •which she received the trastee’s deed, and thus became the owner. On the 10th day of January, 1895, Elizabeth Cross entered into a bond for.deed, by which she bound herself to George W. Richardson to convqy her said land to him in exchange for certain lands described in said bond owned by said Richardson, and which is the property in controversy in this case. Said bond further recited that ‘ ‘ until she made a warranty deed of her said property to Richardson,” he might “occupy and improve her land for his own use.” It seems to have been part of the trade, although not mentioned in the bond, that Elizabeth Cross should also, until Richardson conveyed his property to her, move onto and take possession of the property of said Richardson. Accordingly, we find from the evidence that on the 12th day of January, 1895, Elizabeth Cross moved onto the Richardson place. She had lots of young" stock and some horses, cows and hogs, which shq took with her. She probably had some money, how much does not appear. She was a woman of advanced years and uneducated. Her grandson,'who was a good-sized boy, the son of the plaintiff, Mrs. Alyea, . lived with his grandmother awhile, and helped milk the cows and do other work for her. Shortly after moving onto the Richardson place, she met George Middaugh. He was a widower, also advanced in- years, with grown-up children. His children, by his first wife, are the defendants in this case.- One of his daughters lived near Elizabeth Cross’s newi home, and it was at her home that she first met George Middaugh. The result was that George Middaugh and Elizabeth Cross were married in May, 1895'. His property consisted of a black horse, that died soon after the marriage. On September 12, 1896, George W. Richardson, who, it seems, had gone to Colorado for his health, had returned to Carthage, and was ready to close up the contract for exchange of properties entered into in January of the preceding year. But Elizabeth Middaugh was sick, and unable to go herself, and sent her husband to Carthage ■ to eomsummate the contract and get her deed. Instead, however, of having the deed made to her alone, as the. contract with Richardson called for, he had the deed made to himself and his wife, as joint tenants, or as tenants by the entirety. Up to this point, there is no dispute of consequence in the testimony.

The plaintiff, Mrs. Alyea, testified, among other things, and she is corroborated by Nora Shire, an apparently disinterested witness, that when her mother found out that the deed had been made to her husband and herself, she strenuously objected, and told him that the place belonged to her children, that their father had made the money with which she had purchased it, and that she was going to Carthage to have it changed and put in her name, but she was weak and sick, and death overtook her before the change was made. Plaintiff, Mrs. Alyea, and several other witnesses for plaintiffs, also testified, that George Middaugh frequently promised his wife that he would go to Carthage with her, when she was able, and change the deed to her name. On the other hand, the defendants, Susie Huffman and Lydia Scott, testified to several conversations with their step-mother, after the deed to her husband and herself had been made, in which she stated that she was satisfied to have the deed stand as it was, and that she wanted her husband to have the property in case she died first. J. C. Ross also testified to such conversation. But the plaintiff, Mrs. Alyea, testified that she had a lawsuit with Ross, about a line fence. The rental value of the property was ten dollars per month.

Elizabeth Middaugh and her husband continued to reside on the property, as husband and wife, until her death, on July 22, 1909, and thereafter the said George Middaugh continued to live thereon until his death in September, 1916, and thereafter the defendants were in possession until suit was filed December 27, 1916.

The petition is in two counts. The first count being a count to quiet title, sets up substantially the facts as claimed by the plaintiffs above narrated, and prays the court to determine the title, and to declare the defendants hold the title in trust for the plaintiffs, and by its decree divest said defendants of all title and invest it in the plaintiffs, to award plaintiffs possession, and that the court take' an account of the rents and profits, and that plaintiffs have judgment against the defandants therefor, and for all other relief that plaintiffs may be entitled to under the pleadings and evidence. The second count in the petition is an ordinary count in ejectment. ' ’

The answer admits the ownership of Elizabeth Cross of the land that she agreed to convey to George W. Richardson in exchange for the land in controversy. It alleges “that on the 10th day of January, 1895i, she, the said Elizabeth Cross, entered into a contract with oiie George W. Richardson, to trade the land above described for the land described in plaintiffs’ petition; that after the execution of said contract, the said George Middaugh and Elizabeth Cross intermarried on the — day' of--, 1895. ’ ’ The answer further alleges that said deed of September 12', 1896, from said Richardson and wife to Elizabeth Middaugh and George Middaugh, was made to them as husband and wife with the intent to create an estate by the entirety, at the request of and by the direction of said Elizabeth Middaugh. That since the death of said Elizabeth Middaugh, George Middaugh under and by virtue of said deed held the possession of said land, and claimed.all of the right, title and interest therein. “Defendants further answering say that the cause of action in the petition mentioned did not accrue within three years before the commencement of this suit.” The answer to the second count of the petition was a general denial.

The reply was a general denial.

The court made a finding of facts at the request of plaintiffs, which included most of the facts we have-recited, and stated that the deed from Richardson and wife “was caused by said George Middaugh to be made to said George and Elizabeth Middaugh, as husband and wife, on the 12th day of September, 1896, and on[ the following day said George Middaugh delivered said deed to said Elizabeth Middaugh, who knew and was fully informed and advised of the manner and form of said deed, and who thereafter caused the same to be recorded in the office of the recorder of deeds of Jasper County, Missouri; that said George Middaugh never, at any time, disputed or denied the right and interest of said Elizabeth Middaugh, by reason of the said property having been purchased with her means and property, and that such right and interest as said George Middaugh had or held under and by virtue of said deed to himself and wife, were a resulting and constructive trust for the said Elizabeth Middaugh; that said George Middaugh lived in said county from and after said conveyance until the time of his death in 1916, and that said Elizabeth Middaugh during that time brought no action to have such trust established and declared, and that these plaintiffs, the heirs of said Elizabeth Middaugh, have brought no action for said purpose, and did not file this action until the 27th day of December, 1916, or more than seven years after the death of said Elizabeth Middaugh, and they are precluded under the Statute of Limitations from maintaining this action.” We have been unable to find any evidence in the record that George Middaugh delivered the deed to Elizabeth Middaugh the day following September 12, 1896, the date of the deed, or that she caused it to be recorded, or knew the contents thereof before it was recorded, as stated in said finding. And we find no evidence that she directed or authorized said deed to be made to herself and husband in the first instance, as stated in the answer, nor does the lower court so find.

The judgment of the lower court being for defendants, the plaintiffs appealed. -

I. The facts set up in the petition present equitable issues, and there being a prayer for equitable relief, the suit may be regarded as an equitable suit to quiet ^e> divest title from defendants and remove any claim they assert, as the heirs of George Middaugh under the alleged deed to George Middaugh and Elizabeth Middaugh, as a cloud upon plaintiffs’ title. Equitable issues being present, we must consider the testimony in the case, as the findings of facts by the lower court are not binding upon us. [Koehler v. Rowland, 275 Mo. 573, and cases cited.]

II. We rule that the deed in question conveyed no title to George Middaugh. Elizabeth Middaugh was in possession of the land, and was the equitable owner of it, when she married George Middaugh. She had then obligated herself to George W. Richardson to make Mm a deed to the property she formerly owned in exchange for the land in suit, and in part performance of the contract had .given him possession of her land, with the right to occupy and improve the same for his own use and benefit until she delivered him a warranty deed thereto. She had also moved onto and taken possession of the land in controversy owned by said Richardson, in part performance of his obligation to- convey to her. Since the Married Woman’s Act of 1889, a married woman may employ her husband, as agent, to transact business for her. When George Middaugh delivered her deed to George W. Richardson to consummate the contract of exchange, she thereby fully paid for the land Richardson was to convey to her, and she was in possession thereof. Her equitable title to the land was then complete. The fact that her husband and agent fraudulently, and without her consent, as we must hold, caused his name to be inserted in her deed jointly with her name as grantee, conveyed him no title as against her.

In this State it is the settled law,' that if the wife is a tenant in common, and there is a voluntary partition of the common estate, a deed made to the husband and wife, as joint tenants, or tenants by the entirety .conveys no estate to the husband and invests the entire estate in the wife, even though the wife directed the deed to be made to her husband and herself jointly. This, for the reason that the wife really owned the title before the deed was made, and the only effect and purpose of the deed was to sever the possession of the property between the coparceners. In such case, the land is the wife’s by virtue of being a coparcener and not by virtue of the deed. [Powell v. Powell, 267 Mo. 117; Starr v. Bartz, 219 Mo. 47; Whitsett v. Womack, 159 Mo. 14; Palmer v. Alexander, 162 Mo. 127; Propes v. Propes, 171 Mo. l. c. 416 et seq.] In Powell v. Powell, supra, l. c. 125, the court also ruled that “the statute relating to married women would require such a direction to be in writing.”

In the ease before us, however, there is no evidence and no finding that the wife ever directed that the deed should be made to herself and husband. We see no reason why, when the wife has purchased and paid for property, jmd is in possession of it, and she is thus the equitable owner of it, if the formal deed or document conveying’ the legal title should be made to her husband and herself, without her consent, instead of to her alone, that he should receive any more title, and she any less title, than if she had been a tenant in common, and in making partition, her share was set off by a deed purporting to-convey the-same to herself and her husband. The substance and very right of the matter is the same in each case. In neither case has the wife conveyed anything to her husband and she has done nothing to estop herself from claiming her own. Accordingly, it has been held that where a guardian purchases property at the instance of his ward, and for her benefit, and pays for it with her means, but it is conveyed to the ward and her husband jointly, the title was vested in the ward alone, the husband being vested with no interest therein. [Moore v. Moore, 12 B. Mon. l. c. 664; Simmons v. McKay, 5 Bush. 25; 13 R. C. L. p. 1110, and cases cited.] Also, where a wife has a perfect title to land, a deed executed by a third party to her husband and herself, and accepted by them, does not preclude the wife from setting up her original title. [Jackson ex dem. White v. Cary, 16 Johns. 302.] “It is one of the essentials of the peculiar estate by entireties sometimes enjoyed by husband and wife that the spouses be jointly entitled as well as jointly naméd in the deed. Hence, if the wife alone be entitled to a conveyance, and it be made to her and her husband jointly, the latter will not be allowed to retain the whole by survivorship.” [Sprinkle v. Spainhour, 25 L. R. A. (N. S.) l. c. 169; Moore v. Moore, 12 B. Mon., supra.]

We hold, therefore, that under the circumstances in this case, the deed of September 12, 1896, made by George W. Richardson and wife to Elizabeth Middaugh and George Middaugh, her husband, conveyed no title whatever to the husband, but vested the sole legal title in said Elizabeth Middaugh.

III. Nor does the Statute of Limitations in any way deprive the plaintiffs, as the heirs of their mother, of the title to their property. There is ah utter absence of evidence- of adverse possession by George Middaugh during the life time of Elizabeth Middaugh. The lower court finds, and we agree to that finding, ^at, ]1G; ap times during her life, recognized the equitable right of his wife in the property, lie, therefore, did not claim to be in possession adversely to her. Furthermore, she was, herself, in possession of the property. In order to perfect title by adverse possession, the possession must not only be adverse and hostile, but it also must be exclusive and under claim of right, as against the owner. [Lumber Co. v. Craig, 248 Mo. 319; McCune v. Goodwillie, 204 Mo. 339; Long v. Coal Co., 233 Mo. l. c. 739; Buford v. Moore, 177 S. W. l. c. 869; Norfleet v. Hutchins, 68 Mo. l. c. 600.]

Since the Married Woman’s Act of 1889 went into effect, the husband has no right, in cases governed by that act, as this case is, to the possession of his wife’s real estate during the marriage. The right to possession of the wife’s real estate, in such cases, is in the wife and not in the husband at all.

In Powell v. Powell, 267 Mo. l. c. 128, quoting with approval from Arnold v. Willis, 128 Mo. l. c. 150, this court, per Graves, J., says: “The Married Woman’s Act as it now stands, in so far as the marital rights of the husband to the possession of land belonging to the wife are concerned, materially changed his common law rights, and in legal contemplation has completely deprived him of all the right to the possession or control of the increased and profits, as if it belonged to some other person.”

So, in Teckenbrock v. McLaughlin, 246 Mo. l. c. 717, this court, per. Blair, C., said: “So far as concerns the right of the husband in lands of the wife acquired since 1889, the common law has been much modified by statute. In such lands, under the statute (Secs. 8309, 8304, R. S. 1909; Vanata v. Johnson, 170 Mo. l. c. 274-5) the husband has no right of possession during the life of the wife, and she alone can sue therefor.”

In State v. Sinclair, 250 Mo, l. c. 288, this court said, of Section 8309, Revised Statutes 1909; “This section has been construed to give the wife the exclusive control of her real estate, regardless of whether she is living with or apart from her husband, and regardless of whether she is faithful or unfaithful to her marital obligations. [Woodward v. Woodward, 148 Mo. 241.] However, she may voluntarily permit her husband to remain in her home and enjoy the use of her propertv without paying rent. [Donovan v. Griffith, 215 Mo. 149.]”

But, the mere fact that by his wife’s permission he lives with his wife, as her husband, without paying rent in a home which belongs to her, gives him no joint, nor any control, or rights whatever, in the possession of her home. This is the extent of the possession we find the evidence shows that George Middaugh had of his wife’s property during her life. There is no evidence, and no allegation in the answer, that he ousted his wife from the possession of her property in any manner.

We, therefore, find that George Middaugh was not in possession, nor in control of the property in controversy, either jointly with or separately from his wife, but that she was in the exclusive possession of it until her death. Consequently, the Statute of Limitations never started to run in favor of said George Middaugh against his wife in her life time, and there was never any adverse, nor any possession on his part until after her death. She having died July 22, 1909, and this suit having been brought December 27, 1916, the ten years required to vest title by adverse possession had not expired when this suit was instituted. [DeHatre v. Edmonds, 200 Mo. 246; Snyder v. Elliott, 171 Mo. 362; Rutter v. Carothers, 223 Mo. 631; Davis v. Cummins, 195 S. W. 752.]

IV. We have held that, under the circumstances in this case, the fraudulent or unauthorized insertion by the husband of his name in his .wife’s deed, as a grantee with her, was an absolute nullity, and, therefore, left the sole legal title in her, just as if his name had never been inserted in the deed. But the result of this case would be the same, if he took legal title with her, and held it as a resulting trust for her, as held by the learned court below, and as would have been the case had the deed been made to him alone. [Fogle v. Pindell, 248 Mo. l. c. 75, and cases cited.] She was in exclusive possession during her life, and the husband was not in any manner in adverse possession during, that time. She, being in possession, and her husband not in adverse possession, her equitable rights in her property were in no manner impaired by the mere lapse of time during her life (Goltermann v. Schiermeyer, 125 Mo. 304; Davis v. Cummins, 195 S. W. l. c. 756); and as this suit was brought within less than eight years after her death, assuming that the husband’s possession was adverse during that period, the plaintiffs, her children,, are not barred by the Statute of Limitations, because ten years’ adverse possession had not run against them prior to the filing of this suit. [Authorities, supra.]

V. Reed v. Painter, 145 Mo. 341, is relied upon by respondents. That case is not to the point. It differs in essential features from this. Mrs. Painter was not in possession during her life time, and the husband wa's. Mrs. Painter did not have' an equitable title to the land, before the deed was made, and the deed named the husband alone as grantee. It is, therefore, not necessary for us "to determine whether the ruling in that case, is out of harmony with the subsequent rulings of this court, as most earnestly pressed upon us by learned counsel for appellant.

Conclusion VI. The result is the judgment is reversed with directions to the lower court to set aside its judgment herein and enter judgment on the first count of the petition for the plaintiffs, declaring the plaintiffs are the owners in fee of the property described in the petition, and the defendants have no title thereto, and that the monthly rent of the property, since the institution of this suit, is ten dollars per month, which plaintiffs -are entitled to recover from defendants. The circuit court is also directed to enter judgment for plaintiffs against defendants on the second count of the petition, for possession of the property, and damages and monthly rent, at the rate of ten dollars per month, as found due plaintiffs by the decree upon the first count.

Brown and Ragland, GC., concur.

PER CURIAM: — The foregoing opinion of Small, C., is hereby adopted as the opinion of the court.

Graves and Goode, JJ., concur; Blair, P. J. and Wood-son, J., concur in paragraphs 1, 3, 4, 5 and the result.