author: RAILEY, C.

text:
    JASON M. HUGGINS et al. v. ELLSWORTH DAVIDSON et al., Appellants.
    Division One,
    March 29, 1918.
    1.EXCHANGE OE LANDS: Forged Abstract: False Representations. ' The exhibition of a general warranty deed in which the name of the grantee was left blank, conveying Nebraska land which defendant asserted he owned, and which he offered to exchange for Missouri lands by writing in plaintiff’s name as the grantee, and an exhibition of an abstract showing title in the grantors named in said deed and which defendant represented to be reliable, and which was a forgery, authorize a court of equity to set aside the deed conveying the Missouri land in exchange for said Nebraska land, made by plaintiff in reliance upon said false representations.
    2. -: -: Delivery for Purposes of Examination. The placing by the vendor, who claims to be the owner of the land, of the abstract of title in the hands of the attorney of the prospective purchaser, with the view of having said attorney examine it and determine whether it shows good title in the vendor, is to be considered as having been done for the purpose of inducing the purchaser to rely upon it as a true and correct abstract of the title; and if the last slip of said abstract, showing a transfer from the real owner to said vendor, is a forgery, the vendor’s act in thus inducing the vendee to rely upon the abstract and exchange his land for the land described therein, is a false representation that amounts to fraud in law, unless the vendor shows he was wholly ignorant of said forgery and that the vendee obtained a good title notwithstanding said forgery.
    3. -: Subsequent Mortgage 'to Innocent Lender: Monetary Judgment. Plaintiffs made a deed of their Missouri lands in exchange for Nebraska lands which defendant claimed to own. Within a few days defendant made a mortgage on the Missouri land to a bank, for money borrowed. Defendant did not own the Nebraska land, but by false representations induced plaintiffs to exchange theirs for it. Plaintiffs bring suit to rescind their deed to defendant, and ask that the mortgage to the ban,k, which is made a party, be cancelled, and for general relief. The trial court set aside the deed, but refused to cancel the mortgage on the ground that the bank was an innocent holder for value of the mortgage note. Keld, that the judgment should be that the plaintiff’s deed be set aside, subject to the bank’s mortgage, but that judgment should also be rendered against defendant for whatever amount is due on the note, and that plaintiffs execute a quit-claim deed to defendant . for the Nebraska lands, to be held in escrow by the clerk and to be delivered to defendant upon the payment within sixty days of the amount of the note, otherwise to be destroyed.
    4. EQUITY: Omission of Evidence from Abstract. In an equity suit exhibits attached to a deposition, although excluded by the trial court, should be set out in the abstract or their substance stated, in order that the appellate court may determine their relevancy and competency.
    Appeal from Texas Circuit Court.- — • Hon. L. B. Wood-side, Judge.
    Reversed and remanded {with directions).

      Lftmar & Lamar for appellant.
    (1) Cancellation or recession is an exercise of the most extraordinary power of a court of equity, and will not be exercised except in a clear case on strong and convincing evidence. 9 Corpus Juris, p. 1254, sec. 195; Jackson v. Wood, 88 Mo. 76; Bryan v. Hitchcock, 43-Mo. 527; Haydon v. Railroad, 222 Mo. 140; Cohron v. Polk, 252 Mb. 281. (2) The evidence in such cases must he clear, cogent and convincing. 9 Corpus Juris, p. 1255, sec. 195; Jackson v. Wood, 88 Mo. 76; Cohron v. Polk, 252 Mo. 281. (3) And where proof of a negative allegation is a material part of plaintiff’s case the burden is on him, to prove such negative allegation, unless the proof of such' negative facts lie peculiarly within the knowledge of defendant. If such proof is equally available to both parties, then the burden is on the plaintiff. 16 Cyc. 297, note 15; Swinhart v. St. L. & Sub. Ry., 207 Mo. 434; Cummings v. Dent, 189 S. W. 1162; McGinnis v. Railway, 198 S. W. 115; Wolf v. United Railways, 155 Mo. App. 125, 130; Marshall v. Ferguson 94 Mo. App. 175; O’Kane v. Miller, 29 N. E. (Ind.) 439; New Albany v. Endres, 42 ,N. E. (Ind.) 687; Gas. Co. v. Small, 50 N. E. (Ind.) 479. And the rule is the same in cases for cancellation and rescission. Jackson v. Wood, 88 Mo. 76. (4) The courts will not decree rescission of an executed contract for the sale of land except on the ground of actual fraud. Mere failure of title in the grantor will not authorize' such a decree. Hart v. Railway, 65 Mo. 509; Florida v. Morrison, 44 Mo. App. 438. The petition in this case does not charge actual fraud when stripped of its surplus verbiage. It simply charges that neither Nichols nor the plaintiff had the title to the Nebraska land, and that the title and the posession thereof was in a third party, one P. Gunderson. (5) The finding of the trial court is not binding on this court in equity cases. Such cases are substantially tried ele novo by this court and the evidence will be received. Cohron v. Polk, 252 M|o. 281; Rlount v. Spratt, 107 Mo. 408.

      Barton & Im/pey for respondents.
    (1) An ansAver in which defendants simply “deny each and every allegation in plaintiff’s petition contained except such as are hereinafter stated and set forth” is neither the general nor special denial required by statute; and hence the ‘ ‘ defendants ’ defense rested upon the particular allegations of the other defenses.” Dezell v. Fidelity Co., 176 Mo. 253; Pace v. Ins. Co., 173 Mo. App. 506; Brickell v. Williams, 180 Mo.'App. 576; Cooper v. Ins. Co., 139 Mo. App. 581. This being the law and no assignment of error being made to any ruling of the court “upon the particular allegations of the other defenses” set forth in the answer, the judgment should be affirmed. (2) The legal effect of the answer is to raise but one' issue, i. e. whether the false representations alleged in the petition, and specifically admitted in the answer, were believed when made. While the evidence abundantly shows guilty knowledge, bad faith, and moral turpitude on the part of the defendant Ellsworth Davidson, yet none of these are necessary elements In plaintiffs’ cause of action. Cook v. Smith, 184 Mo. App. 566, 28 L. R. A. (N. S.) 204, note. Plaintiffs were entitled, therefore, to judgment on the pleading's below, and hence to an affirmance here. Dezell v. Fidelity Co., 176 Mo, 279. This rule has been applied to a case where the allegations that the abstract failed to show title in the vendor were not denied. Horn v. Butler, 39 Minn. 515. (3) The objection to the depositions of Elder and Yost “were too general, vague and indefinite — imposing npon the court the burden which belonged to the counsel of sifting and scrutinizing the proof to ascertain what portion came within the scope of the exceptions.” Donnell v. Jones,. 48 Am. Dec. 66; Bank v. Hutton, 224 Mo. 50; Simpson v. Van Laning-ham, 267 Mo. 298; Armstrong v. Henley, 182 Mo. App. 323; Hilburn v. Insurance Co., 140 Mo. App. 364; Coombes v. Knowlson, 193 Mo. App. 559. ' With this tesimony in, to -which there was neither reviewable exception nor motion to strike out, even appellants’ counsel does not contend the evidence insufficient and the judgment should be affirmed for that reason. Farber v. Railway, 139 Mo. 284. (4) “A false statement as to the character of title to real estate, when made as a fact, or without regard to its truth or falsity, for - the-purpose of inducing another to purchase the same, constitutes actionable fraud, where a sale is induced thereby in reliance thereon, and injury results therefrom, and will entitle the vendee to- maintain an action for the fraud and deceit, or a rescission of the sale, if he acts with reasonable promptness after the discovery of the fraud.” 28 L. R. A. (N. S.) 202; Herman v. Hall, 140 Mo. 280; Cook v. Smith, 184 Mo. App,. 566. (5) An abstract may be used as evidence against the one who furnishes it. 1 Ency. Evidence, 67. This is especially true here, where he said it was correct, and made by a reliable and bonded abstracter. When in evidence it should be interpreted according to its manifest meaning, although the meaning is not expressed by a full statement in words. Evans v. Foss, 9 L. R. A. (N. S.) 1039. The title thus admitted in Gunderson is presumed to have continued. Zwisler v. Storts, 30 Mo. App. 163; Janssen v. Stone, 60 Mo. App. 402; Jones on Evidence in Civil Cases (2 Ed.), see. 58. (6) The palming off on plaintiff of the falsified abstract, even if defendant had passed a good title, is sufficient ground for rescission. Taylor v. Williams, 2 Colo. App. 5-59; Stave Co. v. Gardner, 154 Fed. 805; Boas v. Farrington, 85 Cal. 5351.
   RAILEY, C.

This is a proceeding in equity, commenced by plaintiffs in the circuit court of Tesas County, Missouri, on October 24, 1914. The petition charges that on or about August 26, 1914, plaintiffs and defendant Ellsworth Davidson entered into an agreement, by which the latter was to convey, or cause to be conveyed, to plaintiffs, by general warranty deed, th'e northeast quarter of Section 27, Township 13, Range 33, located in Lincoln County, Nebraska, containing 160 acres more or less, in exchange for the southeast quarter of the southwest quarter of Section 2, and the east half of the northwest quarter and the southwest quarter of the northwest quarter of Section 11, all in Township 2.8 north, of Range 8 west, located in Texas County, Missouri; that at the time of said agreement, said defendant had in his possession a general warranty deed, purporting to convey said Nebraska lands, from one Mary E. Nichols and her husband, James M. Nichols, duly acknowledged in Montgomery County, Kansas, on July 31, 1914, in which said deed there was a blank space for the name of the grantee, no name having been inserted therein; that in part performance of said agreement, said defendant filled in, or caused to be filled in, the names of these plaintiffs as grantees in said deed, and delivered the same to them; that in performance of plaintiffs’ said agreement, they made, executed and delivered their warranty deed to said Ells-worth Davidson, by which they conveyed to him the Texas County lands aforesaid, which said deed was recorded in Texas County aforesaid, in Book 104, at page 609, of the Recorder’s office of said county.

It .is further alleged that at the time of said agreement and exchange, the defendant Ellsworth Davidson, for the purpose of inducing the same, positively, and with intent that it be relied upon, stated and represented to plaintiffs, that he was the owner of said Nebraska lands; that said deed would convey to plaintiff's the fee simple, absolute title thereto; that for the purpose of confirming and supporting Ms statement and representation as aforesaid, lie exhibited and delivered to plaintiffs what purported to be an abstract of title to said Nebraska land, and positively, with the intent to have the same relied upon, stated that it was a true abstract thereof, made by a reliable and bonded abstract- or in the county where said* Nebraska land is located; that upon examination of said abstract plaintiffs were convinced of the perfection and goodness of the title to be conveyed by said deed, and relying upon the representations of said defendant, as to such abstract, and being deceived thereby, they were induced to, and did, make and enter into said contract of exchange; whereas in truth and in fact, neither the said Mary E. Nichols, James M. Nichols, nor tlie defendant Ellsworth Davidson then, or at any other time, had, or held, a good, sufficient fee simple title, or any other kind of title, to said Nebraska lands; nor was the abstract so exhibited by said defendant a true or genuine abstract to said lands, made by a competent, reliable or bonded abstractor of the county in which said real estate was located, or elsewhere ; but on the contrary, the title to said real estate, as well as possession thereof, was then vested in, and held by, one P. Gunderson, of Lincoln County, Nebraska; that said abstract, although originally made by a reliable and bonded abstractor, after the making thereof, and before the same was exhibited or delivered to plaintiffs, had been altered by entering the name of said P. Gunderson, as one of the grantors in a deed, shown in said abstract, and under which said deed the said Mary E. Nichols claimed by mesne conveyances; whereas in truth, and in fact, the said P. Gunderson did not join in said deed, nor did the records of Lincoln County, Nebraska, show such joinder ; nor did the abstract as originally prepared and certified to by said abstractor show such joinder.

The petition further alleges that on the 5th day of September, 1914, defendants, Ellsworth Davidson and Annie Davidson, his wife, executed and delivered to the American State Bank of Coffeyville, Kansas, their promissory mote, for $275, due six months after date, ■with, ten per cent interest from date of same, and for the purpose of securing same, executed a mortgage on the Texas County lands aforesaid, which said mortgage is duly recorded in said county, in Book 108, at page 54, of the Recorder’s office.

It is averred that on or about October' 20, 1914, plaintiffs first learned of their entire lack of title, and of the worthlessness of said deed to the Nebraska lands, and instantly offered to return said deed to defendant Ellsworth Davidson, or any other proper party, and demanded a return of their Texas County lands, which said offer and demand were refused; “and now in court plaintiffs tender said deed and offer to make any conveyance or do anything necessary to place defendants in the position they occupied prior to such exchange, and to restore anything they have received by reason of the transaction.” They allege that-they, the defendants, and said Nichols and wife, are residents of Montgomery County, Kansas; that said agreement and deeds were made in said county; that it is located about 300 miles from the Nebraska land, and the records pertaining to its title; that defendant Davidson and wife, and Nichols and wife, are insolvent, and that an action at law against them would be useless in a, suit on the covenants of said deed; that plaintiffs have no adequate remedy at law.

The petition concludes, by asking the court to cancel the deed of the Texas County lands to Ells-worth Davidson, and the mortgage aforesaid- given to defendant bank. They ask, in addition to> foregoing, general relief.

Defendant Davidson and wife answered in said cause with a general denial, except as to such matters as are afterwards admitted.

It is. admitted that Ellsworth and Annie Davidson are husband and wife; that Mrs. Davidson had nothing to do with said trade, and has no interest in this controversy, except as the wife of said Ellsworth Davidson. They allege that Mrs. Davidson told Jason M. Huggins she did not want her husband to trade the Nebraska land, but wanted to keep it; that said Huggins traded for said land within one hour after said conversation.

It is alleged that Ellsworth Davidson, on or about the 26th of August, 1914, entered into an agreement with the plaintiff, Jason M. Huggins, to exchange the Nebraska land aforesaid for said Texas County lands; that he notified said Huggins that he had procured the title to said Nebraska land, from said Mary E. Nichols and husband; that the deed was in blank as to the second party; that he had the authority from said Nichols and husband to fill in the names of the grantees in said conveyance to whomsoever he might sell or trade the same.

Defendant Ellsworth Davidson further avers that he did not guarantee the title to said Nebraska land, but he believed then and now, that the title to same was vested in said Nichols and her husband, who exhibited to him an abstract of title, which he had had examined by an attorney; that said attorney stated the abstract seemed to show a merchantable title in said Mary E. Nichols and her husband.

Said defendant further avers that he stated all the facts within his knowledge with reference to the title of said property to said Jason M. Huggins, who seemed to be negotiating the trade for himself and his son, Charles W. Huggins; that he gave to said Jason M. Huggins the abstract of title; that the latter had said abstract examined by one A. C. Bowman; that the latter, in his presence, stated to said plaintiff that the abstract, in his judgment, showed a merchantable title to said Nebraska land. He avers that he told plaintiff Jason M. Huggins that he would not guarantee the title; that he did not know anything about it, only what was shown by the abstract, and what was told him by said Jamies M. Nichols, which was communicated to said plaintiff; that said plaintiff, in the presence of Bowman and others, stated that he expected he was stung, but that he was going to make the trade any way, and proceeded to close the deal; that the names of Jason M. Huggins and Charles W. Huggins were written in the blank left for that purpose, the names of the grantees having been left blank by said Nichols and husband; that plaintiffs, with full knowledge of all the facts, jointly and severally, accepted saN deed thus executed without any warranty or covenants of warranty on the part of these defendants, hut succeeded to all the rights of ownership that were possessed by the said Mary E. Nichols, and James M. Nichols, to the said Nebraska land. It is alleged that the deed to the Missouri land was then delivered to these defendants with the name of the grantees blank, in exchange for the Nebraska land.

Said defendants further aver that they made no false or fraudulent representations to said Jason Huggins, to induce him to trade for said land; that he acquainted said Huggins with all the facts, as far as they had come to his knowledge; that said plaintiffs acted on their own judgment in trading for said Nebraska land; that said Ellsworth B'avidson suggested to said Jason M. Huggins, to not close the deal for said land, at that time, but to wait and investigate the title fully; that he would leave the trade open until such time as said plaintiff could satisfy himself about the title to the Nebraska land, but said plaintiff preferred not tó delay the closing of the trade, accepted the deed as it was, without any guaranty of title on the part of said defendant, but stated he was going to close the trade and “take a chance on it any way,” and further stated that he had traded for a part of the Missouri land without looking at it, and that he was going to trade for the Nebraska land “sight unseen;” that there was no fraud or deception of whatsoever nature or kind practiced on the part of this defendant on said plaintiffs or either of them; that if the title to said Nebraska land should not be good, “this defendant, Ellsworth Davidson, was deceived by the representations made by the said Mary E. Nichols and James M. Nichols, and by the abstract exhibited to him to the same extent that these plaintiffs are deceived;” that this defendant should not be charged with any fraud or misrepresentations, for the reason that plaintiffs had all the avennes to obtain information that the above defendant had; that the latter, at the time said conveyance was made by said Nichols and husband to him, believed the title to said Nebraska land was good, and believes so yet; that if plaintiffs are in any way defrauded, in accepting the title to the Nebraska land, as stated in the petition, it is by reason of the lack of judgment of said plaintiffs and not the fault of this defendant; that the loss, if any, should be borne by said plaintiffs.

The ease was tried as though a reply had been filed. Although this is an action in equity, instructions were asked, given and refused, which are not set out or considered by us in passing upon the merits of the case. The facts-, as far as necessary, will be considered in the opinion. The trial court found the issues in favor of plaintiffs as against defendants Ellsworth Davidson and Annie Davidson, and for the defendant American State Bank of Coffeyville, Kansas, to the extent of the mortgage aforesaid, upon the ground that said bank was an innocent holder for value of the note aforesaid, described in said mortgage, sought to be cancelled. The court further found that the deed from plaintiffs to the Texas County lands was without consideration, and was given as the result of fraud and misrepresentations upon the part of said defendant Ellsworth Davidson, and that said defendants have’ no right, title or interest in said real estate. The decree cancelled said deed from plaintiffs to Davidson, and declared the former the owners of said Texas County lands, subject to the mortgage of the bank aforesaid, etc.

Defendants Ellsworth Davidson and Annie Davidson filed their motion for a new trial, which was overruled, and the cause was duly appealed by them to this court.

I. It is contended by respondents that as an inducement for the exchange of the lands aforesaid, the defendant Ellsworth Davidson represented to the plaintiff Jason M. Huggins, that be (D'avidson) was the owner of the Nebraska land and that the abstract of title to said land delivered to plaintiffs was reliable. Plaintiffs further contend that they relied upon said representations, believed them to be true and made the trade accordingly.

What are the facts with respect to this matter?’ The two principal witnesses who testified on this subject are Jason M. Huggins, and defendant Ellsworth Davidson. Their testimony, in some respects, is in irreconcilable conflict, with regard to the material facts of the case. "In considering the evidence, by way of convenience, we will designate Jason M. Huggins as plaintiff, and Ells-worth Davidson as defendant.

The former testified that about the 25th of August, 1914, defendant came to his place of business at Coffeyville, Kansas, and opened up negotiations in regard to the exchange of said lands. The plaintiff' had never seen the Nebraska lands, which were located about 300 miles from Coffeyville, Kansas, nor. does it appear from the evidence that defendant had ever seen the Texas County land. Plaintiff testified that during the above talk, defendant advised him that he could call upon a certain barber in Coffeyville and talk with him! about the Nebraska land. Plaintiff says he did so> and the barber disclaimed any personal knowledge of the Nebraska land, but said he had husked corn up and down the river bottoms, and thought it was good country. Plaintiff says he then went to defendant’s little hotel to see him, but did not find him; that on his way back up town, he met defendant and talked with him again about the Nebraska land; that he asked defendant if he had a good clear abstract for it, and ¡he said he had. Plaintiff says he then told him if he had that he would trade with him.' .He says defendant then asked him, if he (plaintiff) had an abstract for the Missouri land, and he told him he did. They were then to meet at Bowman’s office the next day''to finish the trade.

The defendant in his testimony does not refer to the above conversation, nor did any other person testify as to what then occurred, except the plaintiff. This is an important matter to be considered in weighing the testimony as a whole, in respect to what defendant said to plaintiff, about the abstract of title.

It appears from the evidence that plaintiff and defendant met at Bowman’s office on the morning of August 26, 1914, to close the exchange. Plaintiff says that defendant, after stating what he gave for the Nebraska land, produced a deed from Nichols, with the name of grantee blank; that he said to defendant, “I thought you owned this land,” and defendant said: “I do, it belongs to me, but I expect to trade it .again and I just took the deed in blank. ’ ’ Plaintiff' then asked Bowman if that was customary, and was advised by him that it was frequently done.

Plaintiff identified “Exhibit A” as the abstract of title which defendant gave him, and testified that he relied upon it. He said when he received the abstract, at Transfer No. 10 thereon, the words “ And P. Gunderson, single” were there. Plaintiff also testified, as follows:

“I objected to taking the deed to the Nebraska land in blank and having my name placed in it, I wanted a deed from Davidson and he (Davidson) says, ‘There’s a good reliable abstract, made by a bonded abstractor and what more do you want?’ ”

Plaintiff testified that he had Bowman examine the abstract; that he was willing to take chances- on the quality of the Nebraska land, but that he relied on the abstract.

Defendant Davidson testified that he did not change the abstract after he got it; that there'was not much said, about the abstract at the time of the trade. He said plaintiff asked him if he (defendant) had had the abstract examined. He answered in the affirmative, and told plaintiff Mr. Campbell had examined it. Defendant further testified as follows, in regard to the abstract':

“I did not tell him [plaintiff] whether it was a correct abstract or not. I said I did not know anything about the abstract, that I had had it passed on and had traded for it with the understanding• that it was all right. I never told him it was a correct abstract.” (Italics ours.)

Mr. Bowman testified in substance that while plaintiff and defendant were in his office, the latter told plaintiff he wouldn’t guarantee anything in connection with the transaction; that defendant then told plaintiff he didn’t know whether the abstract was correct or not, that he was simply transferring what he had. Witness gave it as his opinion that the abstract, as shown to him with P. Gunderson appearing as grantor in No. 10, showed a good title. On cross-examination, Biowmian testified as follows:

“I don’t recollect hearing Mr. Davidson say that there was a good abstract made by a bonded abstractor and what more did he want.”

We have the unchallenged testimony of plaintiff as to what occurred when he and defendant met on the street and the latter told him he had a good clear abstract df title to the Nebraska land. The testimony of defendant, in regard to the abstract, heretofore set out, shows he was inducing the plaintiff to rely on its correctness.

Here was a trader, with a deed for Nebraska land, with the name of the grantee left blaiih; with an abstract of title containing a forgery as to the name of one of the necessary grantors in the chain of title, seeking to exchange his “stock in trade” for Missouri land. No explanation was ever made as to the forgery, except that defendant denies he committed it. He does not even offer to show that Nichols and wife had any title to the Nebraska land, nor that P. Gunderson, whose name was forged, was not the real owner of said land.

The trade was made on August 26,1914, and on September 5, 1914, the mortgage for $275 was executed by defendant and wife to tfie bank aforesaid on the Texas County land. This was the excuse he offered for refusing -to rescind, when plaintiff told him he had no title, and demanded a rescission.

Without further consideration of this question, we find from the record that defendant represented to plaintiff he was the owner of the Nebraska land; that the abstract of title which he delivered to plaintiff was reliable; that plaintiff relied upon said representations, believed them to be true, and by reason thereof made the exchange of lands aforesaid.

II. It is clear from the evidence that defendant claimed to be the oivner of the Nebraska land which he traded to plaintiff. According to his own testimony, he délivered the abstract of title to plaintiff, knowing that the latter was having Bowman examine the same with the view of determining whether or not it showed a good title in Nichols and wife. What other inference can be legitimately drawn from the delivery of the abstract of title to plaintiff under the foregoing circumstances, except that defendant was attempting to induce him to rely upon the correctness of said abstract?

In Cnrwen on Abstracts of Title, section 36, it is said:

“The object of the abstract is to furnish the buyer and his counsel with a statement of every fact, and an abstract of the contents of every deed on record, upon which the validity and marketableness .of the title depend; so full that no reasonable inquiry shall remain unanswered; so brief that the mind of the reader shall not be distracted by irrelevant details; so methodical that counsel may form an opinion on each conveyance as he proceeds in his reading; and so clear that no new arrangement or dissection of the evidence shall be required. The buyer has a right to demand a marketable title. He has a right to demand that the abstract of title shall disclose such evidence of that title, as will enable him to defeat any action to recover, or incumber, the land.”

The above quotation is cited with approval in several of the authorities hereafter-mentioned.

In Attebery v. Blair, 244 Ill. l. c. 369, it is said:

“An abstract of title is, in a legal sense, a summary or epitome of the facts relied on as evidence of title, and it must contain a note of all- conveyances, transfers or other facts relied on as evidences of the claimant’s title, together with all such facts appearing of record as may impair the title. [Heinsen v. Lamb, 117 Ill. 549.] It should contain a full summary of all grants, conveyances, wills, and all records and judicial proceedings whereby the title is in any way affected, and all encumbrances and liens of record, and show whether they have been released or not.”

In Fagan v. Hook, 134 Iowa, l. c. 386, the Supreme Court of Iowa said:

“The object of an abstract is to enable the vendee to pass upon the validity of the title, and to enable him to do so it should contain everything material concerning its sources and conditions.”

In 1 Cyc. 213, the law upon this subject is clearly stated as follows:

“The abstract should contain whatever concerns the source and condition of the title. It should contain a note of all conveyances and transfers or other facts relied on as evidences of the title,’ together with all such facts appearing of record as may impair the title. ’ ’

To the same effect are Kane v. Rippy, 23 Pac. (Ore.) 180; Taylor v. Williams, 2 Colo. l. c. 562; Smith v. Lander, 106 S. W. (Tex.) l. c. 704; Bruce v. Wolfe, 102 Mo. App. 384, 386-7; St. Clair v. Hellweg, 173 Mo. App. l. c. 666.

Turning to the abstract of title delivered to plaintiff by defendant, we find from the undisputed evidence in the case, that it contains a forgery as to the name of one of the grantors and without whose name the abstract would not have shown that either Nichols or defendant was the real owner of the Nebraska land.

O. E. Elder, who made the abstract in controversy, lived in North Platte, Nebraska, .and had been engaged in the abstract business for about twenty years. He certified to above abstract in June, 1914, and at that time, mailed the same to James M. Nichols, of Oklahoma City, Oklahoma, and received a draft therefor. Among other things, he testified as follows:

“The abstract Exhibit ‘A’ is the one I made, a part of it. There is missing from said abstract a history, of the foreclosure proceedings on which the sheriff’s deed shown at entry No. 9 was based. I did not see the abstract any more until a few days ago. At this time the history referred to was not in the abstract. I made this abstract from the county records of Lincoln County, Nebraska, and data which I have in my office consisting of a complete brief of all the records in the county clerk’s office in this county. Upon examination of said abstract Exhibit £A’ at this time I also note that Entry No. 10' there has been added to tfye names of the grantors the following: ‘and P. Gunder-son, single.’
“I examined this abstract after it was completed and before it was mailed to Mr. Nichols, and on the same day I sealed the abstract in the envelope arid attended to the mailing of it myself and the words ‘and P. Gunderson, single’ at Entry No. 10, were not in the abstract. ... I do not know by whom these words were inserted in the abstract.”

R. E. Woodside, official stenographer of the Texas Circuit Court, after an examination of said “Exhibit A,” gave it as his opinion that the words “and P. Gunderson, single,” at Transfer 10 were made with another typewriter.

No testimony was offered by defendant to contradict either Elder or Woodside. Sheet No. 9 of said abstract, shows a conveyance of .the Nebraska land by the sheriff of Lincoln County, Nebraska., to P. Gunderson, as grantee. It was dated and acknowledged July 18, 1902, and recites a considertion of $215. This is the transfer referred to by Elder, from which', he says, the history of the sheriff’s foreclosure proceedings are missing from the aibstract. Sheet No. 10 of said. abstract now shows, as grantors, John Thomas and wife, Maud Thomas “and P. Gunderson, single.” The above words underscored, according to the undisputed testimony of Elder, were placed there after the abstract toas sent to Nichols.

As this is a proceeding in equity, the exhibits from P> to I, inclusive, which were attached to the deposition of Elder, although' excluded by the trial court, should have been set out or the substance of same stated, in the record, in order that we might determine their relevancy and competency.

It therefore stands uncontradicted in the record, that some one, after the aibstract left the hands of Elder, was guilty of spoliation of' same, by eliminating therefrom, the historical facts in regard to the sheriff’s sale of said land to P. Gunderson. It is likewise undisputed that some one, after Elder parted with said abstract, was guilty of forgery, in placing thereon, in Transfer No. 10, the words ‘‘and P. Gunderson, single.” The defendant Ellsworth Davidson was in possession of the above abstract containing said spoliation and forgery, .and by the use of same induced plaintiffs to< part with, the title to the Texas County land. He received his deed to the Nebraska land from Nichols, to whom the abstract was sent a.s made by Elder. This spoliation and forgery must have occurred while Nichols and wife* were the owners of the Nebraska land, or after it had been conveyed by them and delivered to defendant, with the names of the grantees left blank therein.

The defendant, although in possession of said abstract, under the circumstances aforesaid, and after using the same to acquire title to plaintiffs’ land, stands mute in court, without even attempting to justify his conduct by offering to show that plaintiffs had obtained a good merchantable title to the Nebraska land regardless of the spoliation and forgery aforesaid. The plaintiffs, under the circumstances, were neither required’ nor called upon to show that the title to the Nebraska lands had failed by reason of said spoliation and forgery. It would be a travesty upon the law and a mockery of justice, to permit the defendant to retain the Texas County land on the facts presented in this record. The conclusions above announced are in accord with the views of this court as expressed in Woolum v. Tarpley, 196 S. W. 1127; Johnson v. Jines, 193 S. W. 15, and Wilson v. Henderson, 191 S. W. 72.

We accordingly reverse and remand the cause with directions to the trial court;' to set aside the decree heretofore entered by it and to enter a new decree in lieu thereof, finding th*f issues in favor of plaintiffs, as against said Ellsworth Davidson and wife, and setting aside the deed from plaintiffs to said defendants for the Texas County lands, subject to the mortgage of the defendant bank heretofore mentioned; to entel-as part of the decree, that defendants Ellsworth Davidson and wife be divested' of any and all interest they may have had in said Texas C-ounty lands, and that the title thereto, subject to said mortgage, be vested in said plaintiffs.

The trial court is further directed to enter, as a part of said decree, in favor of plaintiffs, a personal judgment against said defendant Ellsworth Davidson, for the unpaid portion, if any, of the mortgage and interest due thereon to the defendant bank; and also, to enter a judgment against said defendant for the costs of this litigation. It is further ordered that plaintiffs shall execute a proper quit-claim deed to defendant, Ellsworth Davidson, for the Nebraska lands aforesaid, and file the same with the clerk of the circuit court of Texas County, Missouri, to be held by him in escrow as hereafter stated; and if said Ellsworth Davidson, shall pay off and satisfy said mortgage of record, within sixty days after the filing of our mandate in th’e circuit court of Texas County, Missouri, then said quit-claim deed shall be delivered to said defendant or his attorneys of record. If said mortgage, with the interest due thereon, is not paid off and satisfied of record, within sixty days of the filing of our mandate as aforesaid, then said' quit-claim, deed shall he destroyed by the clerk, and the title, if any, to said Nebraska lands, remain where the deed from Nichols and wife placed it.

Brown, C., concurs.

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

All of the judges concur.


source: Caselaw Access Project

author: BLAIR, J.

license: Public Domain

text:
    THE COMMERCE TRUST COMPANY v. H. G. BLAKELY et al., Appellants.
    Division One,
    March 29, 1918.
    1. BENEFIT ASSESSMENT: According to Area: Gross Inequalities. An assessment in proportion' to area which distributes a local tax in grossly unequal proportions, not because of special considerations applicable to the parcels taxed, but in blind obedience to a supposed charter rule, is invalid.
    2. -: -: -: Blocks. Where the charter requires the costs of grading a street to be charged as a special tax on all lands on both sides of the street in case the land be laid off in lota or blocks, a theory that the land was laid off in lots and blocks as shown by a plat made many years previously when the lands lay outside the limits of a rapidly growing city, made with no idea of conforming the lots and blocks to the size and shape of those usually found in plotted portions of the city, but laid out in large and irregular tracts for suburban rather than urban purposes, is not correct.
    3.-: -: -: -: Further Division. If the large tracts on one side of thte street, laid out originally by a recorded plat into large lots and blocks for suburban purposes, are not only susceptible of further division, but such sub-division is necessary if they are to develop like other city property in the vicinity, an assessment, made according to blocks and apportioned according to area, which results in a benefit district several times wider on one side of the street to be improved than on the other, itf - grossly unequal and unjust.

      Appeal from Jackson Circuit Court. — Hon. Daniel E. Bird, Judge.
    REVERSED AND REMANDED.

      R. J. Porter for appellants.
    (1) To arrive at a proper construction of any particular provision when its meaning is not clear, all sections of tlie .charter hearing on related subjects, mil he consulted and all such provisions construed together, and the results and consequences of any proposed interpretation may properly be considered as a guide to the probable intent of its language. Verden v. St. Louis, 131 Mo. 166; State v. Public Service Comm., 259 Mo. 704; Collier v. Paving Co., 180 Mo. 362. (2) In construing the word “block” as used in said charter it is evident from the context and the meaning of the word itself, that it does not mean the block designated by the person filing the plat, which term so used often embraces several streets, nor does it refer to any body of ground, however large, surrounded by streets, but it means the ordinary city block, included by four streets as located by the systein or scheme of streets, alleys and avenues prevailing generally in that portion of tlie city and which makes the lots available for the ordinary city purposes and in which case the land is presumed to be benefited- to the center of the block, if platted, or a distance of 150 feet one-half the distance of the ordinary block if unplatted. The distance from Wyandotte to Main Street constitutes two,blocks and must be so construed. Baltimore Avenue which is opened both north and south of this tract and is required to be opened up through it, to make if available for city purposes must be considered as extended for the purpose of assessing for this improvement. 1 Page and Jones’s Taxation by Assessment, sec. 628; 28 Cye. 1124; Bowlus v. Iola, 82 Kan. 774; Springer v. Avondale, 35 Ohio St. 620; Olson v. City of Topeka, 42 Kan. 709; MoG-rew v. Kansas City, 64 Kan. 61; Dameshel v. Shanks, 30 S. W. 654; Louisville v. Asphalt Co., 102 S. W. 806; Caldwell v. Rupert, 73 Ky. 179; State y. Natal, 42 La. Ann. 612; Gilsonite Co. v. St. Louis, 231 Mo. 601; Barber Asphalt Co. v. Watt, 51 La. Ann. 1345; Cooper v. Nevin, 90 Ky. 85; Preston v. Roberts, 12 Bush (Ky.), 570; City of Ottawai v. Burney, 10 Kan. 270 ; Siver & Sons Co. v. Spokane, 77 Wash. 282; Railway v. Tulsa, 145 Pac. 398; Realty Co. v. Schneider, 240 U. S. 55>. (3) Under a proper construction of the charter, where land fronting on the street is laid out in lots and blocks, no property back of these lots can be assessed. The charter only authorizes assessments against land on the street in such case and it cannot be extended by construction to other land not on or adjoining the street. Pbwer to tax must be conferred in unambiguous terms before it can be exercised and if there is a reasonable doubt as to the 'existence of the power it must be resolved in favor of the taxpayer, and assessing a tax bill of $268 on lot 4, which fronts on 31st Street 440 feet from, the street graded and 240 feet distant at its nearest point, is clearly without authority under a proper construction of this charter. 4 Dillon on Municipal Corp. (5 Ed.), sec. 1377; Crane v. French, 50 Mo. App-. 367; People v. Railroad, 21 Ill. App. 23; Railroad v. Baldwin, 77 Miss. 788; State v. Chillicothe, 237 Mo. 486; Chilíicothe v. Henry, 136 Mo. App. 473'; Wabash v. Zeigler, 108 Ill. 304; Chambers Appeal, 159 Pa. St. 20; Wilber v. Springfield, 123 Ill. 395; St. Louis v. Realty Co., 259 Mo. 126; Albers v. St. Louis, 188 S. W. 83; 1 Page and Jones on Taxation by Assessment, sec. 627; Ottawa v. Barney, 10 Kan. 270; Collier v. Paving Co., 180 Mo. 383. (4) The only principal on which a special tax on property is justified is that special benefits are conferred or at least presumed to be conferred on the property. 4 Dillon, Municipal Corp. (5 Ed.), sec. 1440; Construction Co. v. Haussler, 201 Mo. 410.

      B. G. Howard and Clarence S. Palmer for respondent.
    (1) Words are to be construed in their ordinary sense. Sec. 8057, R. S. 1909. Provisions regarding special assessments are to be construed with fairness. Gist y. Construction Co., 224 Mo. 379. (2) Under the charter a block is a block. Sec. 3, Art. 8-, Charter, p. 315; Estate Co. v. Paving Co., 180 Mo. 375; State ex rel. v. St. Louis, 183 Mo. 236; Paving Co., v. Fleming, 251 Mo. 210; Construction Go. v. Shovel Co., 211 Mo. 524. (3) If the charter includes in the, taxing district land not abutting on the street improved, such land may 'be assessed if it is near enough to the street so that it may be reasonably benefited. “Fronting on” in the .Kansas City charter means abutting. Moberly v. Hogan, 131 Mo. 19; Sec. 3, Art. 8, Charter; Collier Est. v. Paving Co., 180 Mo. 377.
   BLAIR, J.

Kansas City caused a part of Wyan-dotte Street to be graded, and this is an action by the assignee of special tax-billsi issued in part payment for the work. A demurrer to the -answer .was sustained and judgment entered on appellants ’ refusal to, plead -further.

Wyandotte Street runs almost north, and south between Thirty-first and Thirty-third Streets (running east and west) but not in a direct line. The two blocks graded lie between the two' last-named streets. The territory for several hundred feet on each side of Wyan-dotte Street was laid out in 1873, when still nearly a mile south of the city limits. -A plat was then filed, designated “Amended Plat of McGee’s Summit.” In 1897 this territory and much other was taken into the city. Subsequently, most of that part of McGee’s Summit west of Wyandotte Street was replatted as “Amended Plat of Greystone,” and a small portion! of that part east of Wyandotte and just north of Thirty-third Street was replatted as Ross’s Subdivision. The portion of M-cGee’s Summit designated as blocks and lying east of Wyandotte Street were much larger than ordinary city blocks-. Block 2 contained over ten acres, and Block 1 over eight acres. These blocks were divided into portions designated as lots, of which the area far exceeded the ordinary city lot, ranging from three-fourths of an acre to more than one and three-fourths acres. Ordinary city blocks are admitted to be about 330 feet from east to west, and ordinary lots. about 25 or 50 by 130 or 140,feet. The lots and blocks as laid out in ‘ ‘ G-reystone ” conform in size, generally, to ordinary city lots and blocks. In “Greystone” Central Street was opened west of Wyandotte and almost parallel to it. It runs north and south. The block or parcel between Central and Wyandotte is about one hundred and sixty-five feet wide at Thirtydhird Street, on the southland runs almost to a point where Central and Wyandotte meet. This is about-150 feet south of Thirty-first Street. On the east side of Wyan-dotte and just south of Thirty-first Street lies a tract designated as “Block 1” on the plat of McGee’s Summit. Its north' boundary extends from Wyandotte ort the west 901 feet to Main Street on the east. Its south boundary, between the same streets, is 721 feet in length. Its length from north to south is about 440- feet. On the west side of this tract, from north to south, along Wyandotte Street, lie parcels designated as lots 8, 7 and 6. On the east side, on Main Street, from north to south, lie parcels designated as lots 1, 2 and 3. Between the rear line of 8, 7 and 6 and the rear line of 1, 2, 3 lie parcels designated lots 4 and 5. Lot 4 adjoins the rear, of lots 8, 7 and 6. These two-parcels (4 and 5) occupy the center of Block 1, extend through it from north to south, are 125 feet in width and front on Thirty-first Street on the north and Spring Street on the south. Along the south line of Thirty-first Street the distance of the northwest corner of lot 4 from Wyandotte Street is 368 feet. Its southwest corner is 240 feet from Wyandotte Street. It is 263 feet from Wyandotte Street to the northeast corner of lot 6 and the southeast corner of lot 7. From the same street, the northeast corner of lot 7 and the southeast corner of lot 8 are distant about 315 feet.

Through blocks 1 and 2, from north to south, there is no street between Wj^andotte on the west and Main on the east. Approximately half way between Wyandotte and Main, Baltimore is opened from the north to Thirty-first Street and from the south to Thirty-third Street — the southern boundary of block 2, Baltimore is about to be opened through the blocks mentioned. Ordinances have been introduced for that purpose.

Property was assessed .on the west side of Wyan-dotte half way to Central. The depth of the district on the west side of Wyandotte varies from 93 feet on the south to 54.5 feet on the north. On the east side of Wyandotte th$*prop.erty was assessed as far back as 425 or more- <fePt on the north side of Block 1 and 365 feet on they1 south side of Block 1. Three and one-third times as much property, by area, was assessed east of Wyandotte Street as was assessed west of it. Nearly two-thirds of the total amount 'assessed was assessed against property east of Wyandotte.

The city charter provides that the cost of grading “shall be charged as a special tax on all lands on both sides of the street . . . graded, within the following limits, viz.: In ease the land fronting on the street . . . graded be laid off in lots or blocks, property so laid off from the line of the street . . . graded back to the center of the block or blocks, shall be so charged, whether fronting on the street ... or not; nevertheless, the Common Council shall have power by ordinance to prescribe that such lands shall be not charged beyond the alleys in such blocks, if deemed .just and equitable, and in case any land fronting on such street . . . graded be not laid off into lots or blocks, then the land not so laid off, and the land in the rear thereof on the line of the street . . . graded, back one hundred and fifty feet, shall be so charged, whether fronting on the street or not; and land liable for such grading shall be charged according to the value thereof, exclusive of improvements thereon, as herein provided.”

The. cost of grading involved was' charged on the theory that the land was laid off in lots and blocks. Appellant contends this theory was incorrect and that the result of the assessment is the violation of his constitutional rights; that his property is taken without due process of law, and that the assessment is so arbitrary and so grossly unequal and unfair that it is invalid within the rule announced in Gast Realty Co. v. Schneider Granite Co., 240 U. S. 55.

It is contended that part of McGee’s Summit lying east of Wyandotte Street is not laid off in lots and blocks within the meaning’1 of the charter.

A usual'definition of “block” is that it is a portion of a city surrounded by principal streets. Ordinarily this is correct. It is apparent that tfeei application of this definition might be unjustifiable in a particular case. In Gast Realty Co. v. Schneider Granite Co., 240 U. S. 55, the court held invalid an ' assessment in proportion to area which distributed “a local tax in grossly unequal proportions, not because of special consideration applicable to the parcels taxed, but in blind obedience to a rule that requires the result.” The city charter of St. Louis was involved. It is clear the parcels denominated blocks 1 and 2 are of a character frequently found in rapidly growing cities like Kansas City. It is also clear the plat was made with no idea of conforming lots and blocks to the size and shape of those usually found in the platted portion of Kansas City. These blocks and lots obviously are laid out for suburban rather than urban uses. Their sizes and shapes and distance from the city in 1873 demonstrate this.

To hold these tracts are “lots or blocks” within the sense of the charter is to ignore all these considerations. [Sivyer & Sons Co. v. Spokane, 77 Wash. 282, In re Smith’s Estate, 51 Minn. 316.] It is beyond question these tracts are not only susceptible of further division, but that such subdivision is necessary if this territory is to become a harmonious part of the usual scheme of improvement. Further, the extension of Baltimore Street is not merely to be expected. Steps looking to the extension of it through blocks 1 and 2 had been taken when these proceedings were had. Besides the force of all these facts, we are confronted with tire insistence that the application, to this property, of the block rale of apportionment violates the principle of the Oast case. It is true, exact equality in apportioning the burdens of improvements is beyond human wisdom, and no lieed will be given complaints against a rule which approximates justice as nearly as reasonably may be. Exceptional oases of hardship in the natural and ordinary application of a principle of apportionment generally fair and just “must be borne as one of the imperfections of human things” (L. & N. R. R. v. Barber Asphalt Co., 197 U. S. l. c. 434); nor can the fact that lots and blocks differ somewhat in size always render the rule invalid, any' more than it would be rendered invalid by an apportionment not exactly commensurate with the proportion of benefit to the tract affected. A liberal view must be taken of inequalities resulting from the application of any rule of apportionment. Exact equality is humanly impossible. Nevertheless, when all this is given its proper weight a rule of apportionment cannot be upheld in a particular case like this if it results in gross inequality and arbitrarily distributes the burden without regard to “special considerations applicable to the parcels taxed.” [Gast Realty Co. v. Schneider Granite Co., supra.]

In this case, there is no obstacle, natural or artificial, precluding the extension of Baltimore Street, nor is there an occupancy of such character as to warrant an inference that this property will not be developed like other city property in the vicinity. Th'e application of the term “block” to the property in question and the apportionment according to that definition results in a benefit district on the east side of Wyandotte nearly nine times as wide at one point as one part of the district on the west side of Wyandotte. The district on the east averages more than six times the width' of that on the west. We are loath to give the term “block” a definition which so clearly brings it, in its application to this case, within the condemnation of the constitutional principle announced in the Gast case.

The demurrer to the answer should have been overruled. The judgment is reversed and the cause remanded.

All concur, except Bond, P. J., absent.


text:
    THE STATE at Relation and To The Use of JOHN T. BAY, Collector of the Revenue of Shannon County, v. CITIZENS STATE BANK, Appellant.
    Division One,
    March 29, 1918.
    1. TAXATION: Against Banks: Tax Bill. If it appears from the tax hill filed with the petition that the assessment was made against the bank and not against the stockholders, the State cannot recover in a suit against the bank alone on the facts disclosed by ✓ such tax bill.
    2. -:-: Assessment Against Stockholders: Tax Bill Not Conclusive. The tax bill, while prima-facie evidence that the amount of taxes designated therein is just and correct, is not conclusive in respect to its recitals. Although the tax bill attached to the petition shows that the assessment was made against the bank, it may be shown by the assessment list that the assessment was properly made against the stockholders, and not against the corporation.
    3. -: Assessment Against Stockholders: Liability of Bank. The State may recovfer in a suit against a bank for taxes assessed against its stockholders, unless the bank has no funds or property under its control with which to pay them.
    4. -: Assessment and Payment: Banks. The statutory intention was to place national and state banks on the same plane as to the matter of taxation, and to require the corporations in each instance to pay the taxes assessed against their real estate, and to require their personal property to be assessed against their stockholders, as their interests may appear, from statements furnished the assessor by their chief officers, and to require the taxes assessed on the shares of stock to be paid by the corporation, which is authorized to recover from the owners of the shares the taxes so paid.
    5. -: Liability of Assignee. A bank which acquired by purchase all the assets of another bank, among other things $6,064 in “reserve funds, undivided profits, premiums and earnings,’’ becomes a creditor of the State for the taxes assessed against the stockholders of the assignor, then due, though not delinquent, and the amount of such taxes may be recovered by suit - against the as-signee bank.
    6. -: -: Valdity of Sale: Estoppel. The bank which by purchase acquired all the assets of another bank, when sued for taxes which the law required such other bank to pay, is estopped to assert the invalidity of the sale by which it acquired such assets.

      Appeal from Shannon . Circuit Court. — Hon. W. N. Evans, Judge.
    Affirmed.

      S. A. Cunningham for appellant.
    (1) Failure of the petition to state a cause of action is available to the defendant at .any time in any conrt, while the ease is pending, either in the trial or appellate oonrt, and whether raised by demurrer or not. R. S. 1909, sec. 1804; Hudson v. Cahoon, 193 Mo. 557. (2) The assessor may obtain of the hank a list of the shareholders, as provided by the statute, but he should make the assessment against the shareholders personally, and has no right to collect the taxes by selling the property of the bank or the shares of other stockholders, or other property belonging to~ them, except that of delinquent. Bank v. Meredith, 44 Mo. 500; Springfield v. Bank, 87 Mo. 445. Taxes should be assessed in the name of the owner of the stock, and not against the corporation or the property which the shares represents. State ex rel. v. Catron, 118 Mol 280; State ex rel. v. Bank, 180 Mlo. 717; State ex rel. v. Shryack, 179 Mo. 424; State ex rel. v. Bank, 160 Mo. 640. The shares of stock are personal property of the stockholders, and the corporation has not and cannot have any interest in them. R. S. 1909, sec. 2984; Watson v. Printing Co., 56 Mo. App. 151; State v. Railroad, 37 Mo. 269. (3) The court should not have admitted the tax bills in evidence, for the reason that they show the delinquent personal tax to have been assessed against the Birch Tree State B^nk, a corporation, and not against the stock of the shareholders as- is required by law. R. S. 1909, sec. 11357. (4) The petition for back taxes against the bank drawn on the theory that the-bank is the agent of the shareholder for the payment of his taxes must allege and prove that the bank had in its possession, money or property of the shareholder out of which the taxes could be paid. Hershire v. Bank, 35 Iowa, 272; Bank v. Huffman, 61 N. W. 418. It is not every promise made by one to another, from the performance of which a benefit may ensue to a third, which gives a right of action to snob, a third person; lie being neither privy to the contract nor to the consideration. The contract must be made for his benefit, as its object, and he must be the party intended to be benefited, and it "will not be so far extended as to give to a third person who is only indirectly and incidentally benefited by it a right to sne upon it. Porter v. Woods, 138 Mo'. 564; Bank v. Chick, 170 Mb. App. 350; Howsmon v. Water Co., 110 Mo. 304; Beattie Mfg. Co. v. Clark, 208 Mo. 89; Uhrich v. Surety Co., 166 S. W. 845; Burton v. Larkin, 36 Kan. 246*. A tax is not a debt in the ordinary sense of that term, as it is not founded upon contract, and as a general thing a debt can not be created in any other way. State ex rel. v. Snyder, 139 Mo. 553; Carondelet to use v. Picot, 38 Mo. 130. (5) The power to sell the property, both real and personal, of the corporation, when not expressly vested in the stockholders by the statute, is one which the directors alone can carry into effect. This is done by a resolution duly passed at a meeting called for that purpose, or at a regular meeting when a sale of the property of the corporation maybe authorized. Magee on Banks and Banking (2 Ed.), sec. 90, p. 104; Hill v. Mining Co., 119 Mo. 29; secs. 1084, 1112, R. S. 1909; Miles v. Bank, 187 Mol App. 247. The court should have given defendant's declaration offered at the close of all the evidence, there being no evidence on which' to base his finding for plaintiff. State ex rel. .v. Bank, 160 Mo. 640.

      ■John H. Chitwood and L. B. Shuck for respondent.
   RAILEY, C.

This action was. brought in the name of the' State, by John T. Bay, Collector of the Revenue in Shannon County, Missouri, to recover of defendant, the sum of $127.69, being the balance due as taxes, assessed in June, 1913, against the stockholders of the Birch Tree State Bank, the latter having formerly done a banking business in said county. The tax statement filed with petition indicates on its face that the taxes sued for were assessed against the Birch Tree State Bank, a Missouri incorporated bank, but the assessment list for 1913 was offered in evidence by respondent, and it shows that the cashier of said Birch Tree State Bank made ont and certified to the.assessor of said county the statement required by Section 11357, Revised! Statutes 1909, showing the list of stockholders in said bank, with the name of each inserted,, and the number of shares owned by them respectively. Said statement gives the total number of shares held by the fourteen shareholders named, as one hundred, of the face value of $100 each, making $10,000. The amount of reserve funds, undivided profits, premiums or earnings, and all other values belonging to said corporation, are mentioned therein as amounting to $6064. The value of the real estate is placed in said statement at $4000', and 'the total value of the remaining property, at $16,064. The assessor, as shown by the list, deducted from the last named amount the value of the real estate, which left the total net value of the stock of said bank (at $120.64 per share) $12,064. The net value of the stock was then assessed at $6032, and the real estate aforesaid assessed at $1600.

It is fair to assume that the taxes levied on the above real estate were paid by the Birch Tree State Bank, as they are not included in the tax statement filed with the petition. Said tax statement likewise ' shows that J. W. Holden and W. A. Mclntire, two of the stockholders of said Birch Tree State Bank, owned four shares each in said bank; that on January 19,'1915, they each paid the taxes on their assessment of stock, amounting to $5.52; that the remainder of taxes due on stock assessment, after deducting the $11.04 paid by the above stockholders, was $125.17. The latter sum, plus $2.52 interest, constituted the balance of $127.60 sued for in this action.

It 'appears from the record, that on October 21, 1913, W. I. Marshall, P. D. Gum,' John F. Budd, J. W. Holden and E. T. Pate, representing themselves as directors and stockholders of the Birch Tree State Bank,' sold and conveyed to the defendant bank, the assets of said Birch Tree State Bank. The defendant, in the contract of sale, assumed and agreed to pay all amounts due from said Birch Tree State Bank, to its depositors, and all other creditors, ‘ ‘ except stockholders from their stock representing the capital of the Birch Tree State Bank.” The contract recites that W. I. Marshall, and the other directors and stockholders representing the Birch Tree State Bank, warrant that said bank has no other liabilities than those mentioned in “Exhibit B” attached to and made part of said contract of sale; and that they .will hold the defendant harmless from the payment of any claims that may be brought against it by any of the creditors of the Birch Tree State Bank, other than those mentioned in said “Exhibit B.” The taxes sued for are neither specifically mentioned, nor referred to, in either’ the contract of sale, or exhibits attached thereto.

C. L. V. Randall, a stockholder in defendant bank, was sworn as a witness in behalf of respondent. He testified that the defendant bank never bought the capital stock of the Birch Tree State Bank, and that it never assumed any of the liabilities that might 'have groivn out of the capital stocle; that the only liabilities which his bank did assume were set out in the contract, and that all such liabilities were paid.

Such other facts, if any, as may be deemed important, will be referred to in the opinion.

At the conclusion of the above testimony, the appellant interposed a demurrer to the evidence, which was overruled, and judgment entered by the trial court on M'ay 15, 1915, for $127.60 and costs, in favor of respondent, and against defendant. The latter in due time filed its motion for a new trial, and motion in ¡arrest of judgment. Both motions were overruled, and the cause duly appealed by it to this court.

I. At an early date the ¡General Assembly of the State of Maryland passed an act authorizing the taxation of national banks in said State. In McCulloch v. State of Maryland, 17 U. S. (4 Wheat.) l. c. 436-7, Chief Justice Maeshabl, in construing the above act, said:

“We are unanimously of opinion, that the law passed by the Legislature of Maryland, imposing a tax on the Bank of the United States, is unconstitutional and void.
“This opinion does not deprive the States of any resources which they originally possessed. It does not extend to a tax paid fay the real property of the hank, in common with the other real property within the State, nor to a tax imposed on the interest which the citizens of Maryland may hold in this institution, in common with other property of the same description throughout the State. But this is a tax on the operations of the hank, and is, consequently, a tax on the operation of an instrument employed by the Government of the Union to carry its powers into execution. Such a tax must he unconstitutional. ’ ’

Subsequently, Congress passed that which is -now known as Section 5219, United States Compiled Statutes 1901, Chapter Three, Volume Three, page 3502, which reads as follows:

“Nothing herein shall prevent all the shares in any association from being included in the valuation of the personal property of the owner or holder of such shares, in assessing taxes imposed by authority of the State within which the association is located; but the Legislature of each State may determine and direct the manner and place of taxing all the shares of national banking associations located within the State, subject only to the two restrictions, that the taxation shall not he at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such State, and that the shares of any national banking association owned by non-residents of any State shall be taxed in the city or town where the bank is located, and not elsewhere. Nothing herein shall be construed to exempt the real property of associations from either state, county or municipal taxes, to the same extent, according to its value, as other real property is. taxed.” [See Act, June 3, 1864, ch. 106, sec. 41, 13 Stat. Ill; also Act Feb. 10, 1868, ch. 7, 15 Stat. 34.]

In Home Savings Bank v. Des Moines, 205 U. S. l. c. 516-17, Mr. Justice Moody, in behalf of the Supreme Court of the United States, said:

“The right to tax the shares of national banks arises by Congressional authority, hut the right to- tax shares of State banks exists independently of any such' authority, for the State requires no- leave to tax the holdings in its own corporations. The right of such-taxation rests upon the theory that shares in corporations are property entirely distinct and independent from the property of the corporation. The tax on an individual in respect to his shares in a corporation is not regarded as a tax' upon the corporation itself.” '(Italics ours.)

The law as announced in the above authorities has been clearly recognized and followed from an 'early date in this State, as shown by the following cases: Lionberger v. Rowse, 43 Mo. 67; First National Bank of Hannibal v. Meredity, 44 Mo. 500; City of Springfield v. The First Natl. Bank of Springfield, 87 Mo. 441; State ex rel. v. Catron, 118 Mo. l. c. 284-5; City of Stanberry v. Jordan, 145 Mo. l. c. 377-8; State ex rel. v. Bank, 160 Mo. l. c. 647-8; State ex rel. v. Shryack, 179 Mo. 424; State ex rel. v. Bank of Carterville, 180 Mo. 717; State ex rel. Wilson v. Miners’ Bank of Joplin, 181 Mo. 1; State ex rel. v. Bank of Tipton, 196 Mo. 516; State ex rel. v. Lesser, 237 Mo. 310; State ex rel. Campbell v. Brinkop, 238 Mc. 298; National Bank of Commerce v. Allen, 211 Fed. l. c. 746-7; National Bank of Commerce v. Allen, 223 Fed. l. c. 475-6.

Considered in the light of foregoing authorities, no-recovery can be sustained on the facts disclosed in the tax bill filed with the petition, because it appears therefrom that the assessment of 1913 was made against the Birch Tree State Bank, and not against the stockholders thereof.

II. While the tax bill, by virtue of Section 11498, Revised Statutes 1909, is prima-facie evidence that the amount claimed in the suit is just and correct, yet it is not conclusive in respect to these matters. [State ex rel. v. Vogelsang, 183 Mo. l. c. 22; State ex rel. v. Cunningham, 153 Mo. 642; State ex rel. v. Fullerton, 143 Mo. 682.] The assessment list, referred to in the preceding statement, was introduced in evidence by respondent, and it shows that the assessment on which the taxes; in controversy are based, was properly made against the stockholders of the Birch Tree State Bank, and not against the corporation. The case as it now stands before us, is an action by the Collector of the Revenue, in the name of the State, against the defendant, as the purchaser of the assets of said Birch Tree State Bank, to recover $127.69 on account of taxes past due, levied upon an assessment made in 1913 against the stockholders of said Birch Tree' State Bank.

It is manifest from the former rulings of this court, in connection with the previous and present legislation! upon that subject, that-it was the intention of our lawmaking power in the enactment of Section 11357, Revised Statutes 1909, to place national and state banks upon a common plane; to require the corporations in each instance to pay the taxes assessed against their real estate, and that the personal property of such institutions shall be assessed against the respective stockholders thereof, as their interests may appear from the statement furnished the assessor by the chief officers of said banks. The purpose, in having the stockholders of banks assessed with the payment of taxes upon the personal property of said institutions, instead of assessing the banks direct^ was to- meet the obstacles presented by Chief Justice Marshall in the Maryland tax case supra, in which it was held that the National Bank could not be legally assessed with the payment of taxes like those in controversy here. It therefore becomes important at the outset, to ascertain and determine whether the Birch Tree State Bank could have been held liable for these taxes, had no sale of its assets been made, and it had been sued therefor.

The Legislators of this State evidently contemplated that a large portion of the stock in both state and national hanks might be held by non-residents of the State; that in seme of the1 banks there might be a large number of shareholders, whose respective interests were small; that it would be both inconvenient and expensive for the collector to recover the tax from the delinquent stockholders as provided in Sections 11461, 1146-3, and in the Laws of 1913, at pages 739 and 740'. Hence, Section 11359, Revised Statutes 1909, was enacted to meet the above difficulties. Said section reads as follows:

“The taxes assessed on shares .of stock embraced in such list [referring to Section 11357, supra] shall be paid by the corporations, respectively, and they may recover from the owners of such shares the amount so paid by them, or deduct the same from the dividends accruing on such shares; and the amount so paid shall be a lien on such shares, respectively, and shall be paid before a transfer thereof can be made.”

The language used in this section is. plain, unambiguous and mandatory in its terms. It should receive a reasonable construction at our hands, and unless the Birch Tree State Bank, without any sale of its assets having been made, in a suit against it for these taxes, could have shown that it had under its control no-funds or property with which to- pay the same, the collector, on the récord before us, would have been entitled to a judgment against said bank for the taxes aforesaid. [State ex rel. v. Shryack, 179 Mo. l. c. 440; National Bank v. Commonwealth, 76 U. S. (9 Wall.) 353; Cummings v. National Bank, 101 U. S. 153; New Orleans v. Houston, 119 U. S. 265; Aberdeen Bank v. Chehalis County, 166 U. S. l. c. 446; Merchants’ Bank v. Pennsylvania, 167 U. S. l. c. 465-6; Carstairs v. Cochran, 193 U. S. 10; Citizens Natl. Bank v. Kentucky, 217 U. S. l. c. 450-2; Clement Natl. Bank v. Vermont, 231 U. S. l. c. 140; Hawley v. Malden, 232 U. S. l. c. 9; Carstairs v. Cochran, 95 Md. 488; The Commonwealth v. Gaines & Co., 80 Kentucky, 489; Commissioners’ Court v. State ex rel., 172 Ala. l. c. 253-4, 56 So. 627; Union Bank v. City of Richmond, 94 Va. l. c. 319; Railroad v. Morrow, 87 Tenn. l. c. 427; Eyke v. Lange, 90 Mich. 592, s. c., 104 Mich. 26; St. Johns Natl. Bank v. Tp. of Bingham, 113 Mich. l. c. 206; City of Boston v. Beal, 51 Fed. 306; Charleston Natl. Bank v. Melton, 171 Fed. 743; City of Muskegon v. Lange, 104 Mich. 19.] A recovery is not permitted on the theory that the hank is primarily .liable' for the taxes assessed against the shareholders, bnt upon the principle that the latter have been legally assessed with the payment of same; that .the bank is required by Section 11359, supra, to pay the taxes thus assessed; that it has refused to pay the same, although having in its possession funds or property applicable to the payment 'thereof.

On the facts above stated, the Birch Tree State Bank could have been held as garnishee for the taxes assessed against the respective stockholders. In order to avoid a multiplicity of proceedings against the stockholders, the Legislature saw fit to provide a more direct way of dealing with the subject, by the passage of Section 11359, which requires the bank to pay the tax, and to become reimbursed as therein provided. We are of the opinion that there is neither hardship nor injustice under the circumstances aforesaid, in requiring the bank to pay the tax, nor in holding it liable therefor, in case of its neglect or refusal to pay the same.

In State ex rel. v. Shryack, 179 Mo. l. c. 440, we said: “After the assessment is thus made against the shares of stock in the names of the shareholders, it is legal to malee the bank pay the tax and recover it from the stockholders. [Sec. 9155, R. S. 1899; National Bank v. Commonwealth, 9 Wall. 353; Aberdeen Bank v. Chehalis Co., 166 U. S. 440.] ” (Italics ours.)

In National Bank v. Commonwealth, 76 U. S. (9 Wall.) 353 and following, the Supreme Court. of the United States had under consideration the construction of a Kentucky statute which required the cashier of the bank to pay the taxes assessed against the shareholders of same. The National Bank aforesaid failed to pay the tax assessed against its stockholders, and was sued therefor. Judgment went in favor of the Commonwealth, and the hank carried the ca.se to the Supreme Court of the United States on writ of error. The judgment of the Kentucky Court of Appeals in favor of the Commonwealth was affirmed. Mr. Justice Miller, upon pages 359-60, said: ,

“There are, then, but two questions to he com sidered in the case before us:
“Does the law of Kentucky, under which this tax is claimed, impose a tax upon the shares of the bank, or upon the capital of the bank, which is all invested in government bonds?
“2. If it is found to be a taw on the shares, can the bank be compelled to pay the tax thus levied on the shares by the State?” (Italics ours.)

Mr. Justice Milled., on p¡aige 362, in discussing national banks, said: <•

‘ ‘ They are ? subject to the laws of the State, and are governed in their daily course of business far more by the laws of the State than of the Nation. All their contracts are governed and construed by State laws. Their acquisition and transfer of property, their right to collect their debts, and their liability to be sued for debts, are all based on State law. It is only when the State law incapacitates the hanks from discharging their duties to the Government that it becomes unconstitutional. We do not see the remotest probability of fhqs, in their being required to pay the tax which their stockholders oioe to the State for the shares' of their capital stock, when the law of the Federal Government authorises the tax,T
“If the State of Kentucky had a claim against a stockholder of the bank who was a non-resident of the State, it could undoubtedly collect the claim by legal proceeding, in which the bank could be attached or garnished, and made to pay the debt out of the means of its shareholder under its control. That is, in effect, what the law of Kentucky does in regard to the tax of the State on the bank shares. It is no greater interference with the functions of the bank than any other legal proceeding to which its business operations may subject it, and it in no manner hinders it from performing all the duties of financial agent of the Government. ”

The other authorities cited, either in principle or in direct terms, sustain the conclusions reached by Mr. Justice Mtlli-e in the Kentucky case, supra, in respect to the question under consideration.

We are therefore of the opinion that the Birch Tree State Bank, on the facts disclosed in the statement made by its cashier, on June 16, 1913, to the county assessor, heretofore mentioned, could have been held liable, had no sale of its assets been made to defendant, for the taxes in controversy.

III. Under the pleadings; and on the record before us, is the defendant liable for the taxes sued for in this action?

It is clear, as heretofore shown, that the above taxes were properly assessed against the shareholders of the Birch Tree State Bank, according to their respective interests. It is equally as clear, that it was made the mandatory duty of said bank by Section 1135.9, Revised Statutes 1.909, to pay the above tax, or to show, when summoned into court, that it had in its possession, or under its control, neither funds nor property applicable to the payment óf same. The statement furnished the assessor by the cashier of the Birch Tree State Bank, on June 16, 1913, discloses on its face that said bank, at that time, owned real estate of the value of $4000'; that over and above its capital stock of $10l,000| it had on hands “reserve funds, undivided profits, premiums or earnings and all other values belonging to said corporation, $6064.”

It appears from the evidence that on October 21, ' 1913,- defendant acquired by purchase, all the assets of said Birch Tree State Bank, under an agreement, “to assume and pay all amounts dne from the said Biroh Tree State Bank to its depositors and all other creditors, except stockholders from their stock representing the capital of the Birch Tree State Bank.” It further appears from the testimony that all the liabilities of last named hank have been paid, except the taxes sued for in this action. The defendant still retains the assets of said hank, including funds and property held by the latter which were applicable to the payment of said taxes.

When the sale of said assets was made in October, 1913, the State had a valid and existing demand against the Birch Tree State Bank for the taxes in controversy, although suit could not be maintained to collect the same until they 'became delinquent under the law. When due, Section 11359 aforesaid, in express terms, required said bank to pay the same; its failure to pay said tax as required by law, made the State a creditor of said hank to the extent of the taxes due a,s aforesaid.

■ Section 17, Chapter 3, United States Compiled Statutes 1901, Supplement of 1907, page 1026, reads as follows:

“A discharge in bankruptcy shall release a bankrupt from all of his provable debts, except such as (1) are due as a tax levied by the United States, the State, county, district, or municipality in which he resides.”

Section 190, Revised Statutes 1909, reads as follows:

“All demands against the estate of any deceased person shall be divided into the following classes:
“I. Funeral expenses.
“II. Expenses of the last sickness, wages of servants and demands for medicine and medical attendance during the last sickness of the deceased. ';
“III. All debts, including taches due the State or any county or incorporated city or town; and it shall be the duty of the executor or administrator to pay all such taxes without any demand therefor being presented to the court for allowance.”

It will thus be seen, that Congress, as well as our own Legislature, ha,s placed obligations of this character upon a high plane.

Regardless of the technical definition of a “debt,” as applied to taxes, heretofore mentioned in former cases, we are of the opinion, in -view of the foregoing, that the Birch Tree State Bank should be considered as indebted to the State of Missouri, for the taxes in controversy, at the time its assets were Sold and delivered to defendant. Tbe taxes now sued for, stood a,s an indebtedness against said bank, which defendant assumed to pay, when purchasing its assets. [State ex rel. v. Trust Co., 209 Mo. l. c. 490-1.]

TV. It is contended by appellant that the sale by the Birch Tree State Bank of its assets to it is invalid, because of certain alleged irregularities. The contract of sale appears to have been made by certain stockholders and directors of the Birch Tree State Bank, and there is nothing in the record to indicate that they did not have full authority to consummate the deal. The State is not complaining of said transaction, nor are any of the stockholders or creditors of said bank seeking to have the sale set aside. The defendant acquired all tbe assets of said bank, is still holding possession thereof, and is now estopped from asserting the invalidity of the sale under which it acquired said assets. [Austin v. Loring, 63 Mo. 19; Railroad v. Bridge Co., 215 Mo. l. c. 296; Proctor v. Nance, 220 Mo. l. c. 116; Hector v. Mann, 225 Mo. 228; Railroad v. Second St. Imp. Co., 256 Mo. 386; St. Joseph v. Railroad, 268 Mo. l. c. 55-6; Lyon v. City of St. Louis, 178 S. W. (Mo.) l. c. 97-8; State ex rel. v. Ellison, 191 S. W. (Mo.) l. c. 52.]

Y. We are of the opinion, that the pleadings and facts in the ease before us, are sufficient in form and substance, to warrant a recovery upon the part of plaintiff, for the taxes described in the petition.

The judgment below was for the right party, and is accordingly affirmed.

Brown, G., concurs.

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

All concur; Bond, P. J., in paragraph 3 and result.