author: BROWN, C.

text:
    WILLIAM J. JOHNSTON, Appellant, v. L. ANNA GRICE et al.
    Division One,
    December 3, 1917.
    1. JURISDICTION: Of Circuit Courts: Accounting: Trust Fund: Suit Against Executors. A petition, filed by plaintiff in his individual capacity, having for its object an accounting in respect to a trust, under which he held certain property, both real and personal, conveyed to him by a testator under separate contract, to be held, managed and disposed of by plaintiff for the purpose of reimbursing himself for money advanced and services performed by him for the benefit of said testator, and naming the executors of a residuary legatee named in said testator’s will as defendants, states a cause of action for equitable cognizance in the circuit court, and the jurisdiction to' take the accounting does not reside in the probate court.
    2. -: -: -: Converse of Proposition. The probate court has no jurisdiction .to entertain a petition filed by executors under a will, asking for a decree declaring that an absolute conveyance made by testator be adjudged an equitable mortgage,, and that the grantee be required to account for his stewardship as trustee thereunder; and the converse of said proposition, were the situation of the parties reversed, must be true.
    3. -: Of Probate Court; Equitable Matters: Accounting. The probate court is not a court of general equitable jurisdiction, although it may, like other courts of law, consider and determine questions of an equitable nature incident to the exercise of its statutory jurisdiction. It may settle the accounts of executors and administrators made by them in the performance of their duties as such, but not their accounts involved in transactions in other capacities, whether as trustees or as individuals.
    4. — -: - — : Death of Beneficiary of Trust: Trustee Named as Executor.^ Plaintiff was a surety on the bond of a guardian, and upon his default paid a large sum of money for him, and by way of reimbursement the guardian conveyed to him certain real estate, whereupon he promised the guardian that he would return to him whatever he could save above the debt he had been required to pay and the cost of maintenance and compensation for his service. For six years he administered the trust, after which the guardian died leaving a will in which plaintiff was appointed executor and two 'other persons were designated as residuary legatees. One of these persons assigned his interest to the other, and died leaving a will in which he named a third person as legatee and appointing two of the defendants as executors. The trustee sues in his individual capacity for an accounting of the trust estate, naming the surviving legatee under the guardian’s will and the executors under the other legatee’s will as defendant?. Held, that the death of the guardian had no effect upon the plaintiff’s rights or duties under the terms of the trust, al though he himself was the beneficiary holding and managing the property for the purpose of paying a debt due him from the guardian, and he was subsequently named by the guardian as executor of . his will, and two of the defendants are executors of the will of one of the residuary legatees named in the guardian’s will. The probate court has no jurisdiction to settle the account pertaining to the trust estate, but it is one of equitable cognizance in the circuit court, since the account pertains to the execution .of the trust, and not to the execution of the guardian’s will or the will, of said residuary legatee, neither of whom had power by will to change the terms of the trust.

      5. TRUSTEE: Compensation for Services. For services rendered by a trustee under a trust which had its origin in a contract made by the testator under a will naming the trustee executor, no compensation can be allowed to him as executor.
    6. PLEADING: Demurrer: Exhibits. In determining whether the petition states a cause of action exhibits attached to the petition constitute no part of the petition. ^

    7. TRUST ESTATE: Equitable Mortgage: Trustee as Executor: Listed in Inventory: Title. The fact that the trustee under a contract by which certain real estate was conveyed to him to reimburse him for moneys paid for the grantor, inventoried, as a part of the grantor’s estate, a residuary interest in all the unsold property, upon his qualification as executor under the grantor’s will, which named certain persons- as residuary legatees, did not affect either the existence or character of the - trust, or amount to a transfer of the fee.
    Appeal from St. Louis City Circuit Court. — Hon. Wilson A. Taylor, Judge.
    Reversed and remanded.
    P. A. Griswold for appellant.
    (1) This ease is within the jurisdiction of the circuit court. Sec. 22, art. 6, Constitution; Secs. 1727,1794, 2535, R. S. 1909; Santer v. Leveridge, 103 Mo. 622; State v. Dearing, 180 Mo. 64; Hope v. Blair, 105 Mo. 92; Mc-Quillin’s Missouri Practice, sec. 206. (2) The prohate court has no jurisdiction to determine the title to property. Sec. 34, art. 6, Constitution; Sec. 4056, R. S. 1909; In re Estate of Strom, 213 Mr. 6; State v. Bird, 253 Mo. 579;.In re Wood Estate, 138 Mo. App. 262; 2 Woerner’s Am. Law of Administration, p. 1033.

      Edwin S. Puller and Watts, Gentry & Lee for respondents.
    (1) The demurrer to plaintiff’s -amended petition was properly sustained. It shows that plaintiff was then acting as executor under the will of Alexander Largue and that his administration had not been completed; nor had his final settlement been approved. The jurisdiction of plaintiff’s accounts is vested in the probate court. Plaintiff voluntarily submitted himself to such jurisdiction when he qualified as executor and continued to act as such for eleven years,.from 1906 down to this date, lie cannot now be heard to assert that the probate court has no jurisdiction. Constitution, art. 6, sec. 34; R. S. 1909, sec. 4056. (2) The title to the real estate mentioned in this suit is not in question. Johnston, as executor, inventoried the real estate in the probate court as the property of Alexander Largue. The equitable title thereto immediately vested in Largue’s devisees under his will, L. Anna Grice and John Grice. There are no adverse claimants and no adverse claim has ever been asserted as to either the real or personal property by anyone. Plaintiff’s petition shows that Largue, by his will of which plaintiff is executor, devised and bequeathed all his real and personal property to L. Anna Grice and John Grice; that John Grice transferred his interest to Mathilde Largue; that Mathilde Largue by her will named Mathilde Puller as her residuary legatee and devisee. These claimants are not adverse and no adverse claimant has ever appeared. The sole issue in this caso is whether Johnston is entitled to excessive commissions, charges and expenses in his dual capacity as “trustee” and as executor. In certain instances he claims fifteen per cent commissions as “trustee” and also five per cent commissions as executor on the same items. He has hopelessly commingled his accounts as trustee and as executor. He now denies the jurisdiction of the probate court over his accounts as executor, in the hope that the circuit court will allow him commissions as trustee in excess of the amount which the probate court, under the law, would allow him as executor. (3) Plaintiff claims double commissions as trustee and as executor. Judson v. Bennett, 233 Mo. 607.
   BROWN, C.

The amended petition was filed April 3, 1914, against L. Anna Grice and Mathilde A. Puller in their personal capacity, and William B. Thompson and Edwin S. Puller as executors of the will of Mathilde Largue, deceased. The averments, so far as they are important to the questions here, are that Alexander Largue was guardian of two infants, and plaintiff, at his solicitation, was on his bond; in the year 1900 Largue was, by the probate court of the city of St. Louis, in which the guardianship was pending, removed, and William B. Thompson appointed in his stead; that he was found to be in default in his accounts $8,324.16, which the plaintiff was compelled to and did pay as his surety, in consideration for which Largue transferred and conveyed to him three notes, two of which were secured by deeds of trust on separate tracts of land in St. Louis County, together with five pieces of real estate in the city of St. Louis. The two deeds-of trust were foreclosed, and plaintiff became the purchaser.

While these transfers and conveyances were absolute, the plaintiff afterwards voluntarily promised Largue “that if he could save anything out of said property after payment of said liability and the cost of administering said estate, including a charge for his services, he would return same” to him.

Largue died on October 6, 1906, leaving a will in which John Grice and Anna Grice were made the residuary legatees, and plaintiff the executor.' Plaintiff qualified, and inventoried, as a part of the estate, a residuary interest in all the said real estate remaining unsold. John Grice died in 1908, having assigned his interest in the estate to Mathilde Largue, and leaving a will in which defendant Mathilde Puller is named as residuary legatee, and defendants William B. Thompson and Edwin S. Puller as executors.

Plaintiff took charge of said property in 1900 and administered it for thirteen years, selling portions thereof, and applying the proceeds to the liability for which he held it, collecting rents, paying taxes and interest, for repairs and the costs and expenses of prosecuting and defending suits, and for commissions on sales and loans negotiated on the property, for all of which he has charged in the account exhibited in connection with his petition $2,142.22 as compensation, and alleges that there still remained in his hands the' sum of $1,174.53, and three pieces of the real estate to which he still holds the title subject to a deed of trust for $2,000 and interest thereon.

The petition further states, in substance, that plaintiff has filed in the probate court his final settlement as executor of the estate of Alexander Largue in which he has charged himself with said sum of $1,174.42, and that the defendant executors have filed exceptions thereto, claiming that they ought to have the further sum of about $2,000 in addition thereto. That each of the defendants Grice and Puller claims an im crest in the remaining lands, the exact nature and extent of which plaintiff does not know, and that the defendant executors claim an interest in the said cash balance in his hands.

The prayer for equitable relief is as follows:

“Wherefore, the premises considered, plaintiff prays the court, first, to approve . plaintiff’s account herein set forth and to award to plaintiff a reasonable compensation for his services in managing and caring for said property, and, second, to ascertain the parties entitled to whatever cash may remain in the hands of plaintiff out of the proceeds of the sale of said property, and their respective interests therein, and third, to ascertain and determine the parties entitled to said three pieces of real estate still held by plaintiff, and their respective interests therein, and for such further orders and relief as to the court may seem just and equitable.”

To this petition the defendants, with the exception of Thompson, filed a demurrer, upon the ground that the petition does not state a cause of action, which demurrer was sustained and the plaintiff declining to plead further, judgment was entered for the defendants.

I. While the petition may be inartificial, both in its charges and its prayer, it is plain that it has for its object an accounting in the circuit court with respect to a trust under which the plaintiff held certain property, both real and personal, conveyed to him by Alexander Largue to be held, managed and disposed of for the purpose of reimbursing the trustee on account of money advanced and services performed for the benefit of the beneficiary. The respondents do not question this in the brief and argument before us. On the contrary, the interest which they assert is not a legal interest, but one arising in equity out of property to which the plaintiff is invested with the legal title. Their only contention is that the jurisdiction to take the accounting resides in the probate court and not in the circuit court. They are perfectly willing to admit the, trust and receive its fruits.

The demurrer admits the existence of the trust so far as it is well pleaded in the petition.

Were the situation of the parties reversed, so that these defendants, as plaintiffs, were asking for a decree declaring the absolute conveyance under which plaintiff holds the property involved . to be an equitable mortgage, and for an accounting of his stewardship in relation thereto, he could not interpose the defense that he should be sued in his capacity of executor and not as an individual, and the probate court would clearly have no jurisdiction over the issues. Nothing is better settled than that the probate court is not a court' of equitable jurisdiction, although it may, like other courts of law, consider and determine questions of an equitable nature incident to the exercise of its statutory jurisdiction. [State ex rel. v. Bird, 253 Mo. 569.] .It may settle the accounts of executors and administrators, but this refers only to such accounts as are made in the performance of their duties as such. It has no reference to their accounts involving transactions in other capacities, whether as trustees or as individuals in their business relations.

On the other hand the execution of trusts and supervision of trustees constitute a peculiar branch of equity jurisprudence and the circuit courts of this State are clothed by statute with large jurisdiction in the matter of their appointment, removal and supervision. [R. S. 1909, chap. 122.]

The plaintiff is not a testamentary trustee. His appointment and duties had no connection with any of the duties or powers within the jurisdiction of the probate courts as conferred by the'Constitution. [Constitution, art. 6, sec. 34.] They were incident to. the title of lands conveyed to him by Alexander Largue, and which, are, by his admission in this pleading, subject in his hands to certain uses which are admitted by the demurrer. After he had been holding them for about six years and managing them in accordance with the trust agreement, his grantor died. His death had no effect upon either his rights or duties under the terms of the trust, because he was himself a beneficiary holding and managing the property for the purpose of paying his debt. His appointment by the grantor as executor of the will and statutory qualification thereunder had no effect upon his title or powers' as trustee, but he stood in precisely the same position as if another had been appointed executor, with the exception that in that case it would have been his duty to account to the latter for the money or securities in his hands resulting from the execution of the trust, as well as to the heirs or devisees for the lands remaining, and might have an- accounting in equity for that purpose, to which all these would be necessary parties, because it would involve the interests of those entitled to the real estate as well as to the personalty, and determine the conditions upon which the title should be reinvested. It is evident that any adjudication would be incomplete, if not futile, unless it should reach this final conclusion of the entire matter. While the petition is indefinite, there are matters suggested in it with reference to the dealings of plaintiff with the securities held by him under the trust that might call for the serious consideration of a court of equity having jurisdiction to hear and determine them.

We are of the opinion that the matters stated in the petition are clearly cognizable in a court of equity and that they do not pertain to the execution of the will of Alexander Largue, who had no power- by his testamentary act to affect the terms of the trust pleaded in this case. Although he might have made such testamentary provisions as would have called upon the plaintiff to determine whether or not he could consistently act as executor of the will, no such question has yet been presented in this case and we must presume that the testator, in the appointment, acted prudently, and consistently with the trust agreement existing between himself and the plaintiff.

II. The respondent seems fearful that the exercise of the jurisdiction of the circuit court in this case may result in the payment of double compensation for services performed in the capacity of trustee. This subject was thoroughly discussed by this court in Judson v. Bennett, 233 Mo. 607, in which we said: “A person may act under a wül in the dual capacity of executor and trustee. But he is not entitled to double commissions for some services performed in one capacity, and others performed in the other capacity, during the same period.” We have taken the liberty to italicize three words because of the suggestion they contain that one person may act as testamentary trustee and at the same time execute the will. In this ease, as we have seen, no such question arises, as the trust had its origin in a contract made six years before the death of the testator, and provided for the necessary expenditures and services incurred and rendered in its execution, and for these ho compensation can be allowed as executor. As to the line of demarcation between these services we cannot now speak, as nothing but the petition is presented. It may be that the exhibit filed with it might contain some suggestions applicable to that question, but only the petition is before us, and the exhibit constitutes no part of it for the purpose of this demurrer.

III. In the decision of this case we have avoided reference to any question other than the question of jurisdiction upon the theory that a trust exists. A careful reading of the respondents’ brief and argument leaves no doubt that it is not their purpose to deny this, although its terms may be questioned upon the coming in of the evidence. We do not see how the statement in the inventory can affect either its. existence or character. It was the duty of the executor to show the condition of the estate both real and personal. The inventory truly stated that it was entitled to a residuary interest in this land, but this was a mere statement of fact, and did not amount to.a transfer of the fee, which is.still held by the plaintiff in his own right.

The judgment of the circuit court is reversed and the cause remanded for- further proceedings.

Railey, C., concurs.

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

All the judges concur; Bond, P. J., in result.


source: Caselaw Access Project

author: BOND, P. J.

license: Public Domain

text:
    J. C. W. CROUCH, Appellant, v. FREDERICK W. HOLTERMAN.
    Division One,
    December 3, 1917.
    1. QUASHING EXECUTION: Grounds. An execution can be quashed only on grounds that go to the integrity of the judgment, the jurisdiction of the court or defects in the process itself.
    2. -: In Ejectment: Homestead. After judgment in an action of ejectment, in which defendant was personally served and made default, an execution, issued after the adjournment of the term and levied upon the same land, cannot be quashed on the mere ground that the premises constitute defendant’s homestead. That defense was appropriate in the action of ejectment, and not having been made defendant is concluded by the 'judgment therein.
    3. -; — :-: -: As to Defendant’s Wife. But if defendant’s wife was not a party to the action of ejectment, neither the judgment therein nor process issued thereon is conclusive as to her, nor are her homestead rights affected thereby, nor is she precluded by either from asserting them in a proper proceeding..
    Appeal from St. Louis City Circuit Court — Hon. W. B. Homer, Judge.
    Reversed and remanded.

      Hugh D. McCorkle for appellant.

      (1) A motion to quash an execution, which does not specify any infirmity in the judgment, nor in the pro-, ceedings leading up to it, as want of jurisdiction, fraud in its ohtention, nor any defect, irregularity, or insufficiency in the execution, and filed by one who was duly served with process, cannot be sustained. State to use of Bond v. Berry, 9 Mo. App. 42; Buzzard v. Robertson, 107 Mo. App. 557; Cope v. Snider, 99 Mo. App. 496. (2) Errors or irregularities preceding the rendition of a judgment will not justify the quashing of the final process issued thereon. These can only be corrected by appeal or error, and not by a collateral attack, as by a motion to quash the execution. Johnson to use v. Greve, 60 Mo. App. 170; Brackett v. Brackett, 53 Mo. 265; Adams v. Tracy, 13 Mo. App. 578; Gregory v. Gregory, 10 Mo. App. 589; Harbert v. Darden, 116 Mo. App. 516; Dubrosky v. Bingelli, 167 S. W. 999. (3) As to what issues are barred, see: Donnell v. "Wright, 147 Mo. 646; Lynch v. Ry. Co., 168 S.' W. 244, and Mayo v. Chiles, 11 Ky. 237. (4) As to judgment concluded from collateral attack after the term, •see: Ewart v. Peniston, 233 Mo. 965, and Higgins v. Higgins, 243 Mo, 164. (5) That homestead exemption is proper’defense in ejectment, see: Barton v. Walker, 165 Mo. 25, and Farra v. Quigley, 57 Mo. 284.

      John B. Dempsey for respondent.
    The purpose was not to attack a judgment or the sale of the fee under the execution, but to have the court declare that a homestead being established the right of shelter thereunder to the defendant and his family shall not be taken away from them. Judgment is a lien upon the land subject to the homestead right.- And the deed or fee can be sold on execution subject to such right, and the purchaser has the absolute right (of possession) when the homestead right ceases. Black v. Curran, 81 IT. S. 463. The sale under the execution conveyed the fee to the purchaser, but his right of possession and enjoyment must be deferred until the right of homestead ceases to exist either by abandonment or death, or by the execution and delivery of a conveyance to the holder of the fee title. This applies only to the defendant. As to his wife and children, exemption in the homestead is not a mere right, but a vested estate. Black v. Epstein, 221 Mo. 307. Homestead rights do not protect the debtor from his obligations. It only protects the homestead — the family domicile, from the debts of the head of the family. In Missouri, as in most of the States, the protection is afforded simply by excepting the homestead from general judgment liens for ordinary debts. Sec. 6704, R. S. 1909. No valid writ can be issued or executed against the favored property. The family cannot be disturbed or deprived of its home. The husband cannot by any act of his deprive his wife or children of their right of homestead. So even if it is contended that the silence of the husband when he should have claimed his homestead forfeits his right, it cannot destroy the homestead which still remains in his family. Houf v. Brown, 171 Mo. 207. And this is true as to the ejectment judgment, for the stronger reason that the wife was not made a party to the action. Tepley v. Ogle, 162 Mo. 197.
   BOND, P. J.

I. In 1900 Frederick W. Holterman. the defendant herein, executed á promissory note to H. J. Holdenreid, upon which the latter afterwards obtained judgment before a justice of the peace. In 1903 said judgment was revived in the sum of $107.37 and a transcript filed in the circuit court. Under an execution ordered and issued thereon a levy was made on certain real estate in City Block 5583 by the sheriff of the city of St. Louis, and the property was sold under said levy to J. C. W. Crouch for $62.70. Thereafter Crouch instituted this action in ejectment against defendant Holterman for possession and damages, and defendant, though personally served with process, made default, whereupon judgment was rendered in favor of plaintiff for possession, for rents in the sum of $39.60 and for costs. After the lapse of the term, execution issued on this judgment, directing the sheriff to oust defendant and deliver possession of the property to plaintiff. Defendant thereupon filed a motion to quash the execution, claiming that said premises constituted his homestead and as such were exempt from levy and sale under execution.

The motion, was sustained on the theory that the premises were the homestead of defendant Holterman and that the judgment for possession in ejectment was void.- Plaintiff appealed to the St. Louis Court of Appeals.

When the cause was argued before the Court of Appeals no question was raised as to its jurisdiction, but that court, upon taking the case up for consideration, held that as the motion to quash had been filed in an action of ejectment, it had no jurisdiction and transferred the cause to- this court for final determination.

II. It appears that the motion to quash the execution filed by defendant fails to specify any infirmity in the judgment, or prior proceedings or any defect or imperfection on the face of the process of execution. It was not in terms or by intendment a proceeding to set aside the judgment for any ground on which a bill in equity might be sustained. It is simply a motion by defendant in an execution following a judgment in -an action of ejectment wherein he was personally served with process to set aside the execution for a matter of defense which he might have interposed in the action of ejectment. [Barton v. Walker, 165 Mo. 25; Farra v. Quigly, 57 Mo. 284.] In these two cases the defense of homestead exemption was interposed in an action of ejectment. In the present case the defendant did not make any defense to the suit in ejectment, but after execution, sought to quash the execution on the judgment against him on the ground that he was a homesteader. All defenses which he might have interposed prior to the judgment in ejectment are concluded by. that judgment, since it was not appealed from, leaving the defendant therein only the right to quash the execution upon proper grounds which are, in substance, any which go to the integrity of the judgment, the jurisdiction of the court or defects in the process itself. [Buzzard v. Robertson, 107 Mo. App. 557; State to use v. Berry, 9 Mo. App. 42.]

As far as the defendant is concerned the judgment is conclusive as to the matters relied on in the motion to quash, although not conclusive against his 'wife, for she was not a'party to the judgment nor any of the proceedings upon which it was based. Nor are her homestead rights precluded by judgment nor subject to deprivation through process issued thereunder, and she may assert them in any proper proceeding.

It necessarily follows that the action of the trial court in this case, sustaining the motion to quash filed by defendant, in the ejectment suit, was erroneous. It is therefore reversed and the cause remanded for such other proceedings as ' the parties may see fit to take.

All concur, except Woodson, J., who dissents.


author: BROWN, C. PER CURIAM.

text:
    J. V. DENNY et al. v. JEFFERSON COUNTY et al., Appellants.
    Division One,
    December 3, 1917.
    1.. COUNTY DEPOSITARY: Rejection of Best Bid. A selection of the lowest of two bidders to become county depositary, which is the result of bad faith, partiality and favoritism on the part of the county court, each bidder being solvent,' doing a safe and lawful banking business and of good reputation, is against the best interests of the taxpayers, illegal, and fraudulent within the meaning of the law.
    2. -: -: Trust Company:. Doing General Banking Business. The powers of a trust company' embrace the whole field of legitimate banking, with the one exception of receiving money on deposit without the payment of interest; and if .it uniformly pays interest on deposits and otherwise observes legal prescriptions, the county court is not justified in rejecting its bid to become the county depositary on the sole ground that it is engaged in a general banking business.
    3. -: -: -: Loaning Money to Director. A loan of money by a trust company to one-of its officers or directors in excess of ten per cent of its capital stock and surplus is. not illegal if approved by a majority of the other directors.
    4. -: -: Discretion of County Court: Good Faith. The county court, in determining which is the best bid made by banking institutions to be selected as couhty depositary, does not exercise judicial discretion, but is a mere administrative agency of the county; and while its official acts carry with them the presumption that it has done its duty, the presumption applies only to acts within its administrative powers done in pursuance of the legislative purpose, and if the power depends on specific facts their existence may always be controverted, and in so far as it is founded on the exercise of judgment it must be exercised in . good faith, reasonably and with regard to the legislative purpose.
    5. -: -: -: Proviso to Statute: Power to Reject All Bids. The purpose of the statute authorizing the county court to contract with a banking institution for the. deposit of county ' funds (Sec. 3805, R. S. 1909) is to obtain for the public the largest available income from those funds, consistent with their safety and ample security; and the purpose of the proviso, giving to the court the “right to reject any and all bids,” was not to give to the court the power to do whatever it might desire to do, but to save from defeat the legislative purpose by preventing combinations of bidders and a division of the funds among tfiemselves in accordance with private agreements, and for use in many other, ways in safeguarding the funds; it cannot be used-to thwart the legislative purpose and the exercise of good faith' which the statute imposes.
    6. -: Judgment: Awarding Funds to Unsuccessful Bidder. In an injunction brought by taxpaying citizens to set aside an order of the county court designating the lowest of two equally solvent and competent bidders as the county depositary, and to restrain the county treasurer from depositing the county funds with- such bidder, in which neither the State nor any of its prosecuting officers intervene," the circuit court can, for good grounds established, set aside the order and cancel the consequent contract entered into by the county court in pursuance thereto, but having done so it cannot go further and' designate the other bidder as county depositary and award to it the county funds.
    Appeal from Jefferson Circuit Court. — Hon. E. M. Dearing, Judge.
    Reversed (in part) and remanded.

      B. E. Kleinschmidt, H. B. Irwin and Ernest A. Green for appellants.

      (1) Every presumption is in favor of the county court acting from proper and right motives and the burden is upon the plaintiff to overthrow such presumption by a greater weight or preponderance of the evidence. Beardon v. Miller, 54 Mo. App. 201; State ex rel. v. Flemming, 147 Mo. 10; Martin v. Stoller, 107 Mo. 317; State v. Brown, 75 Mo. 317; State ex rel. v. Weatherby, 45 Mo. 17; Agan v. Shannon, 103 Mo. 661. (2) Quo warranto would lie to declare a forfeiture of the Trust Company’s charter for misuser and nonuser of its franchise, in doing a general banking business instead of a trust' company business, in loaning money without real estate or collateral security and in paying no interest on daily balances. Secs. 1124, 2631, R. S. 1909; State ex inf. v. Oil Co., 218 Mo. 1; 32 Cyc. 427; State ex rel. v. Social Club, 169 Mo. App. 149; State ex inf. v. Jockey Club, 200 Mo. 51; State v. Trust Co., 144 Mo. 562. (3) The statute authorized the county court to exercise its reasonable discretionary powers. The county court did exercise a reasonable and wise dicretion and, under such circumstances, the court will not interfere by mandamus, injunction, prohibition or in any other manner. State ex rel. v. Hawkins,' 130 Mo. App. 41; State ex rel. v. Gregory, 83 Mo. 137; State ex rel. v. Fort, 180 Mo. 108; High on Extra. Leg. Rem., secs. 24, 92, 94; Mechera on Pub. Officers, sec. 991. (4) Where discretion is vested in a public officer the courts will not direct how it shall be executed or what conclusion or judgment shall be reached. State ex rel. v. Jones, 155 Mo. 576; State ex rel. v. McGrath, 91 Mo. 386; State ex rel. v. Francis, 95 Mo. 44; State ex rel. v. Harris, 176 S. W. 9. (5) The fact that the successful bidder must file a bond for the faithful performance of its duty does not deprive the county court of a discretionary power or preclude it from rejecting any bid, and the' court may, in its discretion, make the award to the lowest bidder to avoid litigation. State ex rel. v. Hawkins, 130 Mo. App. 41; Commonwealth v. Smith,' 92 Pa. St. 349; People v. Dorsheimer, 55 How. Pr. 118. (6) The circuit court has no - authority to select a depositary. It can only direct the county court as to its duties in making the selection. State ex rel. v. Harris, 176 S. W. 9; Sec. 3805, R. S. 1909.

      Clyde Williams for respondents.
    (1) Powers and management and control of hanks and trust companies. Secs. 1094:, 1124, 1098, 1099, 1129, 1125, 1106, 1132, 1111, 1126, 1131, 3002, 3003, 3004, 3006, 9972, 10001, R. S. 1909; Laws 1911, p. 151; Bank v. Hill, 148 Mo. 380; 'Bank v. Leyser, 116 Mo. 51; Muth v. Trust Co., 88 Mo. App. 596; State ex rel. v. Trust Co., 144 Mo. 562; Stone v. Trust Co., 150 Mo. App. 331. (2) The duty of the county court in the selection of a depositary. Secs. 3729, 3803-3805, 3813,10886, R, S. 1909; Reagan v. County Court, 226. Mo. 79; Barrett v. Stoddard County, 246 Mo. 501; State ex rel. v. Hawkins, 130 Mo. App. 41; State ex rel. v. Bourne, 151 Mo. App. 104; State ex rel. v. Public School, 134 Mo. 306; State ex rel. v. Adcock, 206 Mo. 556; State ex rel. v. Roach, 23Ó Mo. 446.
   BROWN, C.

This is an injunction suit brought by 450 taxpaying citizens of Jefferson County to set aside an order of its county court designating the Bank of Hillsboro as depositary of the county funds, and to enjoin the county treasurer from depositing such funds or the district or capital school funds thereof in said bank under and by virtue of such order, and to require him to withdraw all such funds as may have by him been deposited in said bank, and to restrain the county court and judges thereof from further recognizing such order, and to require the court to accept the bid of the Jefferson Trust Company, or proceed under- the statute to select some depositary of such funds.

The petition states that the county court caused due notice to be given that sealed proposals would be received by it at its May term, 1913, until noon of the first day of said term, from banking corporations, associations or individual bankers in said county, for the deposit of the county funds for the two years next ensuing after the date of such proposals, and that for the purpose of letting said funds the court divided them into two equal parts. That.there were,••on the date named in the notice, two bids accompanied by the deposit required by law, one from the Jefferson Trust Company, offering to pay three and one-fourth per cent per annum upon daily balances upon all the funds, and two and three-fourths per cent on one-half the funds" should one-half be awarded it; also one bid from the Bank of Hillsboro offering to" pay two per cent on daily balances for all the funds. That the county court selected the Bank of Hillsboro as the depositary. It states that the county court gave no consideration to the bids of the Jefferson Trust Company, and took an insufficient' bond from the Bank of Hillsboro; that in making its award and approving the bond the court did not act in good faith and with due regard of the best interests of Jefferson County and was actuated and controlled by improper motives. That the injury is irreparable and no adequate remedy exists at law. All this is set out with much detail. The cause was tried on an amended answer which denies generally and specifically the allegations of the petition and states that the Bank of Hillsboro was selected because it was safer, sounder and more responsible and reliable than the Jefferson Trust Company, and that the selection of the Bank of Hillsboro as the depositary was in good faith, without partiality, prejudice or favoritism, and with due regard for the best interests and welfare of Jefferson County and its taxpayers. It also alleged that the Jefferson Trust Company, while incorporated as a trust company, was doing a general banking business, and was guilty of such misuser and non-user of its corporate franchises as to.render it unsafe as a depositary of the public funds. The testimony showed that both corporations were of good reputation and solvent. The two judges of the county court who testified in the cause testified freely to those facts.

Certain business acts and practices on the part, of the Trust Company were shown in evidence, which are alleged by appellants to be improper and in violation of its charter. These will be noticed under the proper heads in the opinion.

One of the county judges did not testify. The others were present and upon the stand and failed to testify that they knew or believed anything derogatory to the character and financial soundness of the Jefferson Trust Company. One of them testified that he came to the court, on the morning bids were received, ignorant as to who the bidders would be. He did not vote because the other judges voted for the Bank of Hillsboro. Had it been necessary he would have voted the same way.. The Presiding Judge had been a stockholder, director and vice-president of the bank when he was elected as judge for the term beginning January 1, 1911, soon after which he sold his stock and resigned as vice-president and director. One of the reasons he giave for voting for the Bank of Hillsboro was that it had always taken care of the warrants when the money was not immediately available in the funds upon which they were drawn. Mr. Williams said that the Presiding Judge (Winer) had told him that he had promised Mr. Donnell, one of the directors of the Bank of Hillsboro, before the election, to give him the money. Judge Winer denied this by saying, “If Mr. Williams says so, I might have done it.” Mr. Kidd testified that Judge Winer advised him not to take stock in the Jefferson Trust Company, saying, “It was a Republican scheme, and damned if they could fool him for a moment.” George Russel testified that in speaking of his action in awarding the funds to the Bank of Hillsboro, Winer said: “If you ever expect the.Republicans to elect you to office, you are left; they will never do it.” Other similar statements were in evidence, none of which were denied by Judge Winer. Judge Kerckhoff, the other member of the court, although a defendant, did not testify. The district and capital school funds, not at the disposition of the county except to loan, amounted to $50,000. The findings and judgment of the court are as follows:

“Now this day come the parties, plaintiffs and defendants, both in person and by attorney, and submit this cause to the 'Court upon the pleadings and proof adduced, and the court being fully advised doth find that at the May term, 1913, of the county court of Jefferson County, Missouri, said county court advertised for bids, as by law provided and required, for the deposit of all the funds belonging to said county for the purpose of selecting a county depositary; that as a result of said advertisement the Bank of Hillsboro, a banking corporation, filed its bids to become the depositary, and its bid- was two per cent per annum on daily balances; that the Jefferson Trust Company, a corporation doing a general business, also bid to become the depositary for the funds of said county and its bid was three and one-quarter per cent per annum on daily balances; that no other bid or bids were made; that on the same day the bids were filed they were opened by the county court and the award was then and there let to the Bank of Hillsboro, the lowest bidder; that the Bank of Hillsboro was a solvent institution and its business methods safe and sound; that the Jefferson Trust Company was solvent, its management in the hands of reputable and responsible men, its business methods were safe and sound, and its bid to become the depositary was materially higher than the bid of its only competitor, the Bank of Hillsboro; that both the Bank of Hillsboro and the Jefferson Trust Company are conveniently located for a depositary of the county, both secured against burglary losses, both equally well equipped and equally well managed as banking institutions; that this action was brought by fifty and more reputable, responsible resident taxpaying citizens of said Jefferson County; that the action of the county court in the selection of the depositary was the result of bad faith, partiality and favoritism on the part of said county court, and against the best interest of the taxpayers of Jefferson County; that the action of said court was illegal, without authority of law or warrant of facts and was fraudulent within the meaning of the law; that the contract entered into by the county court with the Bank of Hillsboro in selecting it as the depositary under the law and the facts is a fraud on the petitioners and the taxpayers of the county; wherefore, the court finds all the issues for the plaintiffs and that petitioners are entitled to the relief prayed for in their petition.
“It is, therefore, ordered and adjudged by this court that the order of the county court awarding and designating the Bank of Hillsboro as depositary be set aside and for naught held; that the county court of Jefferson County select and designate the Jefferson Trust Company of Jefferson County, Missouri, as the depositary, for the county funds, in pursuance to its bid to pay three and one-quarter per cent on daily balances on all money belonging to said county, and that it accept from the said Jefferson Trust Company and approve a good and sufficient bond in the amount required by said court for the faithful performance of its duties as depositary for said county, with the proper conditions, and that upon compliance with the judgment herein, the funds of said county be immediately paid over and deposited in the said Jefferson Trust Company as the depositary for said funds of said county. It is further ordered that the defendant, the Bank of Hillsboro, transfer said funds in it's possession to-the Treasurer of Jefferson County, or upon the order of the county court of said county.”

I. This action is brought with special reference to the provision of section 3729, Revised Statutes 1909, by 450 resident, solvent and-responsible taxpaying citizens of Jefferson County. It is directed against the contract by which the county court of that county at its May term, 1913, selected the Hillsboro Bank as the depositary of the county funds during the . succeeding two years. It. is asserted by the petitioners and found by the court in its judgment that the act complained of was the result of bad faith, partiality and favoritism on the part of the court, and against the best interest of the taxpayers of Jefferson County, and was illegal, without authority of law or warrant of facts, and was fraudulent within the meaning of the law, and adjudged that the order of the court designating the Bank of Hillsboro as the depositary in consideration of the payment of two per cent interest on daily balances be set aside and the Jefferson Trust Company be designated as the depositary in pursuance of its bid to pay three and one-fourth per cent. The Jefferson Trust Company and the Bank of Hillsboro were the only bidders.

We think that the finding of the court as we have stated it was fully justified by the evidence. The members of the county court, both by their statements as witnesses and by their silence, demonstrated to the trial court that in the action complained of they took no cognizance of the public good, that they'neither considered nor discussed the effect of their action in connection with the public welfare, nor investigated rumors and facts which, by an afterthought, they now present in justification. On the other hand, the judges who have testified, established by their own word the solvency and suitability of the unsuccessful bidder with respect to its resources and management. The ability of its directors to respond to the stringent liability which the law imposes upon them was also well established.

II. The first point in logical order presented by the appellants is that the bid of the Jefferson Trust. Company should have been rejected, because, as a matter of fact, as shown in this proceeding, that institution was acting in excess' of the powers granted it by its charter: (1) by receiving deposits payable on demand without interest, and (2) by loaning its trust funds without real estate, collateral or other security. It is not denied that it has the power under its charter to enter into the statutory contract as depositary of the county funds, but to use the language of the brief, “quo warranto would lie to declare a forfeiture of the Trust- Company’s charter for misuser and ñon-user of its franchise, in doing. a' general banking business,” which it is alleged to have been doing in the petition.

In 1907 the Legislature had the whole subject of banking before it and treated it in a single act repealing-the following articles of Chapter 12, Revised Statutes 1899, and enacting new articles in lieu thereof: Article VIII, entitled “Banks of Deposit and Discount;” Article XII, ,entitled, “Trust Companies,” and Article XIII, entitled, “Savings and Safe Deposit Institutions,” together with all acts amendatory thereof, and enacting three new articles, with the- same titles, covering the same matter, in lieu thereof, and amending Article XX, entitled “State Banking Department.” [Laws 1907, p. 124.] -These articles were evidently intended to cover- everything connected with the banking business of the State subject to State jurisdiction and control, and are substantially continued in the Revised Statutes of. 1909. This law gave the State Banking Department charge of the execution of the laws relating to banks, private banks and bankers, trust companies and savings and safe deposit companies, and the banking business in the State. In the provisions relating to each of these institutions their powers are entwined in a manner that indicates clearly the common ground covered by all. It was made the duty of the examiner (R. S. 1909, sec. 1080) “to visit and examine every bank, private banker and trust company receiving deposits, except national banks, and every savings and safe-deposit company.” It was also provided that “for the purposes of this section each such institution and private banker are hereby denominated banks.” Thus the popular habit, of designating the places in which these institutions received deposits as “banks” received legislative endorsement. In the article concerning banks of deposit and discount, banks and trust companies were indiscriminately included. For instance, in Section 1099 it is provided that every person who shall be elected director of a bank or trust company shall qualify within thirty days or forfeit the office. Section 1094 provides with reference to banks of deposit and discount that they “shall be authorized and empowered to conduct the business of receiving money on deposit and allowing interest thereon, and of buying and selling exchange, ... of loaning money upon real estate or personal property, and upon collateral and personal securities, at a rate of interest not exceeding that allowed by law, 'and also of buying, selling and discounting negotiable and non-negotiable paper of all kinds, as well as all kinds of commercial paper.” Trust companies are authorized “to receive money, in trust and to accumulate the same at such rate of interest as may be obtained or agreed upon, or to allow such interest thereon as may be agreed,” and to do the other things which we have mentioned as being within the powers of the banks of deposit and discount, as well as many other things not so included. [R. S. 1909, sec. 1124.] Section 1125, which appeared for the first time as Section 2 of the article relating to trust companies in the Act of 1907, provided as follows: “Every trust company now organized, or which may be hereafter organized snail at all times have an amount of cash on hand and cash due from banks and other trust companies equal to at least fifteen per centum of the aggregate amount of its demand deposits.” The same provisipn as to banks of deposit and discount appears in Section 1098.

While banks of deposit and discount were empowered to receive money on deposit and to allow interest thereon, the trust companies were empowered to receive money in trust and to allow such interest thereon as may be agreed. These two propositions were before this court in State ex inf. v. Lincoln Trust Company, 144 Mo. 562, in which it was held that while the power quoted gave to the bank of deposit and discount the right to charge interest or not on its deposits the trust company could only receive deposits upon which it should agree to pay interest. The nse of .the words"in trust” instead of the words "on deposit,” as in Section 1094, was considered important as differentiating the two transactions. But as was said by Bond, J., in Muth v. St Louis Trust Co., 88 Mo. App. 596, 602; "There seems to be no legal obstacle to the exercise by trust companies of all the functions of ordinary banks as to receiving and paying out deposits of money, provided a rate of interest, however small, is allowed upon the sums so received.” [Stone v. Trust Co., 150 Mo. App. 331, 342; State ex inf. v. Lincoln Trust Co., supra.] The money deposited in either case becomes a part of the assets of the institution as a necessary result of the transaction. This was recognized in the Act of 1907 (B. S. 1909, sec. 1125), where it was plainly labeled to that effect in the following words: "Every trust company now. organized, or which may be hereafter organized, shall at all times have an amount of cash on hand and cash due from banks and other trust companies equal to at least fifteen per centum of the aggregate amount of its demand deposits.’’’ Section 1124 confers upon them the right to buy and sell all kinds of negotiable and non-negotiable paper, and Section 1127 provides that the Bank Commissioner have "and exercise the same supervision, authority and power over all trust companies, as he is now authorized to have and exercise over trust companies which receive deposits.”

Their powers cover practically the whole field of legitimate banking, with the exception of receiving money on deposit without the payment of interest. They are sufficient to render innocuous the statement that the Jefferson Trust Company was doing a general banking business. It raises no inference that it was exceeding its charter powers. Nor do we think that the evidence is sufficient to prove that at the time of the letting in question or afterward the company was engaged in handling deposits without the payment of interest. A general order was made by its board of directors on December 19, 1911, fixing the rate of interest on all deposits at one and one-fourth per cent. This, the secretary testified, had been paid on all accounts closed since that time. If there had been any delinquency in this respect the Bank Examiner does not seem to have noticed it. Had he thought proper to do so, and that the practice of the company required such a course, it was his duty to report it to the Commissioner, who in turn might have brought it to the attention of the Attorney-General, within whose, province it was to see that proper proceedings were instituted to see that the practice was discontinued. [State ex inf. v. Trust Co., supra.]

Of the loans complained of the most important is a loan of $8,000 made to one Pounds, to pay for a farm purchased by him from Doctor Denny, the president of the company. The amount was advanced upon a note of Pounds to Denny, secured by deed of trust upon the land, and indorsed by Denny to.the bank. The transaction Avas approved by the directors. . The safety of the loan' does not seem to be questioned, but its legality is attacked on the ground that it was excessive, and incidentally a question is made as to whether it was a loan to Denny or Pounds, or a purchase of the note with its security. If it was made to Denny, it would seem to come within the following provision of Section 1131, Revised Statutes 1909, to which it has been carried intact from the Act óf 1907; “No director or officer of a trust company in this State receiving deposits shall be permitted to borrow any of the money of the trust company in which he is a director or officer in excess of ten per centum of the paid-up capital and surplus without the consent of a majority of the directors of the trust company, Other than the borrower, first having been obtained in a regular meeting of the board, said consent' to be made a matter of record before the loan is made.” Although the only consent proven is a general one, it does not seem to be questioned in the briefs of counsel that it was given in time and manner prescribed by the statute, and we will therefore presume that it was. This provision seems unlimited in its scope, and to permit the loan of the entire capital to an officer of the company, provided only that its terms are complied with. The appellants do not claim that it was a loan to Pounds. If we consider it as a purchase of the note from Denny, which is the form of the transaction, and we think its substance, it comes directly within the power conferred by Section 1124, which authorizes the corporation “to buy ’ . . . all kinds of negotiable and non-negotiable paper.”

Another class of transactions complained of consists of certain notes to the secretary, Mr. Dietrich, and by him transferred by indorsement without recourse to the Trust Company. This transaction seems also to be covered by the same provision of Section 1124, which we have already quoted.

In this connection one of the appellants’ witnesses, Mr. Nichols, vice-president of the American Trust Company of St. Louis, testified that the method employed by his company and the other trust companies of St. Louis and elsewhere in handling loans is that the borrower executes the note to himself and thereupon indorses it and hands it to the cashier who gives him the money.- While this testimony is not applicable or competent in this case, it was placed before the trial court and before us without objection, -and we refer to it to show that it has not been overlooked.

We have no doubt that the transactions of the Jefferson Trust Company to which we have referred come directly within the power to buy all kinds of negotiable paper. They appear to have been sanctioned by the Banking Department of the State, and do not appear from the testimony to have been improvident or to have resulted in loss. Nor do they appear to have been considered by the county court in making the award in question.

III. Whether or not the county court acted within its discretionary power in awarding this contract involves consideration of the staiute under which it acted. It is not contended that its discretion was judicial in character, that is to say, such discretion as is possessed by courts whose jurisdiction is founded upon notice and opportunity to be heard. The county court, notwithstanding its name, is, in this matter, merely an administrative agency of the county, possessing this power in common with the township boards. [R. S. 1909, sec. 3803.] As in case of all public ■officers, its official acts, carry with them the presumption that it has done its duty, until the contrary is made to appear. But this presumption only applies to acts within its administrative powers done in pursuance of the legislative purpose. Where this power depends upon specific facts, their existence may always be controverted, and in so far as it is founded upon the exercise of judgment it must be exercised in good faith, reasonably and with regard to the legislative purpose.

The purpose indicated in this act is plain, and well expressed in the simple provision of Section 3805 that “it shall be the duty of the county court . . .to. publicly open said bids, and cause each bid to be entered upon the records of the court, and to select as the depositaries of the county funds, district school funds and capital funds, not otherwise invested according to law, the banking corporations, associations or individual bankers whose bids respectively made for one or more of said parts of said funds shall in the aggregate constitute the largest offer for the payment of interest per annum for said funds. Provided, that the court shall have the right to reject any and all bids.” It goes without saying that the purpose of this law is to obtain for the public the largest available income from its funds. Their safety in the hands of the depositary is required to be safeguarded by ample security in addition to the responsibility of the bank, and it cannot be possible that the Legislature intended to revoke its simple and peremptory command, and by this proviso to substitute a power in the county court to do whatever it might desire to do. The meaning of the proviso is plain. It means that whenever, in order to obtain the highest rate of interest reasonably available, it becomes necessary, in the judgment of the county court, to reject any and all bids on the whole or any part of the funds, it may do so. Its obvious utility is to save from defeat the purpose of the law by preventing combinations of bidders by which the funds are divided and the bids determined by agreement among bankers. For this purpose it goes hand in hand with the provision for readvertising for bids, and has proved a healthy measure. This discretion may also be of use in many ways affecting the safety or availability of the funds. [Reagan v. County Court, 226 Mo. 79; Barrett v. Stoddard County, 246 Mo. 501; State ex rel. v. Hawkins, 130 Mo. App. 41; State ex rel. v. Harris, 176 S. W. 9.] But it can never be permitted to substitute a purpose of the court for the expressed purpose of the Legislature, and must always be exercised “in good faith . and with due regard for the best interest of the county.” As we have already stated, we see no.reason, for interfering with the. finding of the court in this respect, and it follows that the award of the county court was properly set aside.

IY. The judgment in this case must stand entirely upon the provisions of the statute under which the proceeding was instituted and must be maintained. That statute (Sec. 3729, R. S. 19091) prescribes the duty and power of the circuit court as follows: “The circuit court shall make a full investigation of the matters alleged, and shall have power to set aside, reform or cause to be enforced any such contract, or any extension of any such contract, as the court shall deem best under the law and the facts. ’ ’ The subject of the statute is declared by the same section to be “any contract made and entered into by the county court of the county, with any person or corporation, affecting or concerning any public buildings, lands, moneys or property of the county in any manner whatever.” The action in favor of these plaintiffs, without the intervention of the State or any prosecuting officers of the State, is purely statutory, depending upon the statute for the right of the plaintiffs to sue and for the remedy to which they are entitled. The only contract involved is the contract of the county made through the agency of the county court by the acceptance of the hid of the Bank of Plillsboro and constituting it the depositary of the public funds in consideration of the rate of interest specified. The power of the circuit court is limited to setting aside, reforming or causing to he enforced that contract, and it had no right by mandamus or mandatory injunction m this proceeding to compel the county court to make another contract with another person or corporation. State ex rel. v. Harris, supra.] It follows that the judgment of the circuit court in so far it sets aside the order of the county court awarding and designating the Bank of Hillsboro as depositary of the funds' to which it relates, is affirmed. In So far as it orders the county court to award and designate the Jefferson Trust' Company as depositary for such funds, it is reversed.

The cause is remanded to the circuit court for Jefferson County for final disposition in accordance with this judgment.

Bailey, G., concurs:

PER CURIAM.

The foregoing opinion of Brown, 0., is adopted as the opinion .of the court.

All the judges concur; Woodson, J., in the result.


author: RAILEY, C. PER CURIAM:

text:
    JACOB REHM v. EMIL G. ALBER et al.; HIRAM H. and PEARL E. SEVERANCE, Appellants.
    Division One,
    December 3, 1917.
    1. MORTGAGE: To Defeat Execution: Fraud. The facts in this case show that the deed of trust held by plaintiff and subsequently released by him, was executed by the mortgagor to defeat execution under a judgment obtained by defendants on a debt due from him to them.
    2. -: To Secure Former Gift. A deed of trust given to plaintiff by the husband of his only child, in an attempted payment for a lot, which had previously been given to the husband, with no-intention of receiving any consideration therefor, and made and placed upon record with the intention of placing the lot beyond the reach of the mortgagor’s existing creditors, is fraudulent.

      3. -: Release: Reinstatement After Sale Under Execution: Notice. A purchaser at execution sale, without actual notice of any outstanding title or claim, gets title through his sheriff’s deed as against the mortgagee who, having received a warranty deed in consideration of a cancellation of the debt, by mistake previously released the deed of trust on the margin of its record, at a time when the judgment was a subsisting lien- on the property.
    4. -: -:-: Notice at Date of Purchase. In August defendants brought suit against the mortgagor in a deed of trust, who was plaintiff’s son-in-law, and who in September made a deed of trust to secure a note for $1,000 made payable to plaintiff. In April judgment was obtained, and in June the mortgagor conveyed the lot to plaintiff by. warranty deed, reciting as its consideration the surrender of the note, and the next day the deed was recorded and plaintiff entered satisfaction of the deed of trust on the margin of the record, now claiming that he made the release in ignorance of the fact that said judgment was a lien on the property. Two years later execution was issued and levied and defendants became the purchasers and received a sheriff’s deed. Plaintiff asks that the release and warranty deed be canceled, and the deed of trust be reinstated and declared a prior lien. He alleges that defendants- knew of the existence of the deed of trust when they obtained their judgment, but does not charge them with notice of any equities when they purchased two years later. Held, that, admitting the deed of trust was bona-fide, it cannot be reinstated, but the defendants took the title by their sheriff’s deed; but the facts show that the deed of trust was fraudulent, contrived for the purpose of enabling the maker to defraud defendants, and that plaintiff knew of the existence of the judgment when he released the deed of trust.
    Appeal from Jacltson Circuit Court. — Hon. Frank G. Johnson, Judge.
    Reversed and remanded (with directions).

      Wm. B. Thurmond and James M. Chaney for appellants.
    (1) Under the pleadings and the evidence the court erred in decreeing a cancellation of the release of the deed of trust and reinstating same as a lien superior to appellants’ title under the sheriff’s sale in execution. Davis v. Owenly, 14 Mo. 170; Valentine v. Havener, 20 Mo. 133; Stillwell v. McDonald, 39 Mo. 282; Potter v. McDowell, 43 Mo. 93; Reed v. Owenby, 44 Mo. 204; Black v. Long, 60. Mo. 181; Vance v. Corrigan, 78 Mo. 94; Stafford v. Pizer, 82 Mo. 393; Land Co. v. Rhodes, 54 Mo. App. 132; Blevins v. Smith, 104 Mo. 601; Wilson v. Jackson, 167 Mo. 135; Machine Works v. Bowers, 200 Mo. 231; Land & Lbr. Co. v. Bippns, 200 Mo. 697; Tate v. Saunders, 245 Mo. 217; White v. Lbr. Co., 240 Mo. 20; Iiigbee v. Billick, 244 Mo. 427. (2) The court erred in admitting evidence by plaintiff as to his ignorance of the effect of his release of the deed of trust, so as to establish appellants’ title under the sheriff’s deed as superior to plaintiff’s alleged lien. “Kingman v. Shawley, 61 Mo. App. 54; McIntyre v. Casey, 182 S. W. 969; Garrett v. Wiltse, 252 Mo. 714. The court erred in admitting vague and uncertain testimony by plaintiff as to his expense in maintaining the property. 13 Cyc. 214; Barngrover v. Maack, 46 Mo. App. 407..

      Charles 8. Owlsey and Boland Hughes for respondent.
    (1) A court of equity will set aside the satisfaction of a mortage or deed of trust where the entry of satisfaction is made by mistake, and where there are no intermediate rights acquired upon the faith of the satisfaction. Christy v. Scott, 31 Mo. App. 337; Bruce v. Nelson, 35 Iowa, 157; Young v. Morgan, 89 111. 199; Stinson v. Pease, 53 Iowa, 574; Morgan v. Hámit, 23 Wis. 30; Barnes v. Mott, 64 N. Y. 397; Seiberling v. Tipton, 113 Mo. 379. (2) The satisfaction of the deed of trust on the margin of the record possessed no more sanctity nor conclusive force than a receipt for the money. Christy v. Scott, 31 Mo. App. 337; Land Co. v. Rhodes, 54 Mo. App. 129; Chappel v. Allen, 38 Mo. 223; Valle v..Uon Mt. Co., 27 Mo. 455; Plomer v. Grasholz, 33 Md. 525; Seiberling v. Tipton, 113 Mo. 373. (3) Mistake in such connection is nothing more than “that result of ig-' norance of law or of fact which has misled a person to commit that which if he had not been in error, he would not have done.” Story, Equity, sec. 110, note' 1; Christy v. Scott, 31 Mo. App. 337; Bruce v. Nelson, 35 Iowa, 157; Stinson v. Pease, 53 Iowa, 574; Hutchinson v. Sehwartsweller, 31 N. J. Eq. 205; Young v. Morgan, 89 111. 205; Shaver v. Williams, 87 111. 472. (4) A purchaser at an execution sale is not an innocent purchaser without notice. He buys only such interest as the judgment debtor has; if that interest is subject to equities, even totally unknown to the buyer, the title is subject to the same equities. Martin v. Nixon, 92 Mo. 26; Mann v. Best, 62 Mo. 496; Davis v. Briscoe, 81 Mo. 27.
   RAILEY, C.

On July 30, 1912, plaintiff filed in the circuit court at Kansas City, a bill in equity to set aside k release of a deed of trust entered by him upon the margin of record of said deed of trust, recorded in the Recorder’s office of Jackson County, Missouri, covering lot 10 in block 11 of Howard and Scott’s Addition to Kansas City, Missouri, and to have said deed of trust established as a lien superior to the title of appellants, Hiram H. and Pearl E. Severance, who acquired title to said lot at an execution sale.

The petition alleges that Emil ,Gr. Alber, on September 2, 1909, while the owner of above lot, executed, in conjunction with his wife, a deed of trust thereon, to secure a note of $1,000, in favor of plaintiff, due five years after date, and representing a former indebtedness; that on April 22, 1910, defendants, Hiram H. and Pearl E. Severance, obtained in the circuit court at Independence, Missouri, a judgment against said Emil G-. Alber for $700, which became a lien upon said lot, subject to the lien of said deed of trust; that on June 6, 1910, Alber made default in the payment of the interest due on said not-e and failed to pay the taxes on said lot; that plaintiff thereupon exercised his right to declare the whole of the note aforesaid due and payable; that Alber informed plaintiff of his inability to pay said indebtedness, and in order to save costs and expenses, offered to deed plaintiff his equity of redemption in said lot; that, pursuant to said offer, he and his wife, executed and delivered to plaintiff, on June 6, 1910, a warranty deed for said lot, which was recorded in said county on June 7, 1910, in Book “B” — 1312, at page 376, of the records of'the Recorder’s office. The petition further alleges: “That the consideration for the said conveyance was the agreement of this plaintiff with the said Emil G. Alber to surrender his obligation upon the said note; and that this plaintiff, by mistake and inadvertence and in ignorance of his rights and the legal effect of so doing and in ignorance of the fact that a judgment had been rendered against the defendants Emil G. Alber and Lydia L. Alber, in favor of Hiram H. Severance and Pearl E. Severance, and in ignorance of the fact that said judgment was a lien upon the said property, entered satisfaction of the said deed of trust on the margin of the record where same was recorded in the office of the recorder of deeds of Jackson County, Missouri, aforesaid;” that the legal effect of above action was to leave the record showing said judgment to be a first lien on said lot, etc; that Hiram H." Severance and Pearl E. Severance; at the time said judgment was rendered, hneiv of the existence of plaintiff’s deed of trust as a first lien upon said property. The petition then avers -that appellants, after learning of the satisfaction of said deed of trust on April 30, 1912, had an execution issued upon said judgment, and caused said lot to be sold at sheriff’s sale thereunder, on June 8,1912; that they became the purchasers of said lot at the sheriff’s sale, received a deed from the sheriff therefor, and recorded the same on June 18,1912, in Book “B” — 1426, at page 312, in the Recorder’s office aforesaid. The petition prays the court to cancel and set aside the entry of satisfaction on the margin of said deed of trust, and to establish by its decree said-deed of trust as a first lien on said lot, and to cancel said sheriff’s deed, as a cloud on plaintiff’s title, etc.

Defendants Alber and wife filed no. pleadings in the cause. The appellants demurred to the petition, but their demurrer was overruled, ¿nd they filed a joint answer and cross-bill. They admit that on September 2, 1909, Emil O. Alber was the owner of said lot, but deny that he was indebted to plaintiff. They allege that on August 20, 1909, and for a long time prior thereto, said Emil Gr. Álber and 'Walter Kennedy were indebted to the above defendants in the sum of $700; that on August 20, 1909, these defendants filed suit in the circuit court aforesaid at Independence, Missouri, for the recovery of said sum, and on September 2, 1909, said Alber executed to plaintiff — his father-in-law — the note and deed of trust described in the petition. They allege that said note was executed without consideration and for the purpose of fraudulently covering up said real estate, to prevent them from subjecting the same to the payment of their indebtedness; that on April 22, 1910, they obtained a judgment in the circuit court aforesaid, against said Alber and Kennedy for $700; that in continuation of the scheme of said Alber to defraud them, he and his wife executed and delivered to plaintiff, but without consideration, the warranty deed described in the petition. They admit that they bought the lot in controversy at the execution sale on June 3, 1912, received a sheriff’s deed therefor, and that' the same was duly recorded as heretofore stated on June 3, 1912; that they paid to said sheriff the amount of their bid, etc. They deny that they had any ¡knowledge of the fact that said deed of trust mas a first lien on said lot, but aver that it was given without consideration, etc. They deny that plaintiff was ignorant of the rendition of their judgment, and allege that the warranty deed was given to him by Alber and wife to defraud these defendants. The answer then prays for judgment; that the title to.said lot be declared to be in them, and that the interest of said plaintiff and the other defendants be cancelled and terminated, etc.

The reply is a general denial of the new matter pleaded in the answer.

In order to avoid repetition, we will consider the evidence, as far as necessary, in the opinion.

The decree below was in favor of plaintiff. The defendants, Hiram H. Severance and Pearl E. Severance, filed tlieir joint motions for a new trial and in arrest of judgment, both of which were overruled, and the cause duly appealed to this court.

I. It becomes necessary, at the outset, to determine from the record, whether the deed of trust given by Alber and wife to Leander W. Byrum, as trustee, on the real estate in controversy, to secure a note of $1,000, given by them of even date therewith to plaintiff, represented a bona-fide indebtedness of said amount from Alber to plaintiff, or whether it was executed to enable Alber to encumber said property for its value and thereby place it beyond the reach of the demand of appellants, as evidenced by their suit against Alber, brought in the circuit court at Independence, Missouri, on August 20, 1909, for $700.

It appears from the evidence that defendant, Lydia L. Alber, was the only child of plaintiff and that she married Emil O. Alber about 1895. Plaintiff’s wife died about 1904. 'Since 1909, and before that time, plaintiff says he commenced boarding with Mrs. Alber and paid his board regularly every week. He claims to have bought the lot in suit in 1884. He testified •that he deeded said lot to Alber about fourteen or fifteen years after his daughter married. He fixed the date as 1887, but it must have been about 1897 or 1907. He says Alber built a house on the lot before he received a deed for same. Plaintiff testified that the $1,000 note, secured by said deed of trust, was made up of money which he had loaned Alber from time to time, and $300 which he claims represented the purchase money of said lot. The testimony in chief of plaintiff, on this subject, reads as follows:

“Q. Did you just give it to him, or did he buy it from you? A. . Well, that is, I gave him the lot.
“Q. You gave him- the lot? A. Yes, sir; I deeded it to him.
“Q. For nothing, or did he pay you anything? A. I deeded Mm the lot in-consideration of three hundred dollars.
“Q. The consideration for the deed was three hundred dollars? A. Yes, sir.
“Q. Did he pay you the $300? A. He never did.”

Etmil G. Alber testified, that he was married sixteen years before the trial in - 1914, which would be about 1898; that he bought the lot and was, to pay plaintiff $300, but never paid for same.. Witness testified: “He (plaintiff) .loaned me money from time to time for different things and to live on and at last it came to so much, that suit was coming up and 1 tvanted some more money. I needed three hundred dollars, and I told him the. fix I was in.”

But he said plaintiff refused to let him have more money without a mortgage to secure it and what he had previously received. Witness, after saying he did not expect to pay plaintiff, testified:

“Q. Did you siay that you never expected to pay it back? A. Well, yes, I expected of course when I got it to pay it back, but it was all a sort of a family affair, and I didn’t pay it back, for I never got fixed so I could pay it back, because I didn’t have the money.”

On August 20, 1909, appellants sued Alber in the circuit court at Independence, Missouri,- for $700, and afterwards got judgment against him for said sum. Just twelve days after said suit was filed, the deed of trust was executed, and bears date of September 2, 1909.

It appears from the testimony of Mr. L. W. Byram —a witness for plaintiff — that Alber got him to prepare the deed of trust and also the deed which he made to plaintiff.- Witness testified that he had never seen plaintiff until the day of trial.

The dealings, between relatives of this character, where the rights of creditors are involved, as a rule, should be closely scrutinized. [Barrett v. Foote, 187 S. W. (Mo.) l. c. 70; Ice & Cold Storage Co. v. Kuhlmann, 238 Mo. l. c. 697; Cole v. Cole, 231 Mo. 236; Bank v. Fry, 216 Mo. l. c. 45.] We are satisfied from the evidence that plaintiff gave the lot, in controversy to defendant Alber, without any intention of receiving any consideration therefor. Plaintiff’s testimony, is vague, indefinite, uncertain, and does not satisfy us that he actually let Alber have any money, with the intention of having it repaid, before the execution of said deed of trust, but .that, whatever Alber received, if, anything,. was simply a gift to him as a member of the family. We are further satisfied from the evidence that Alber explained his condition to plaintiff, as above stated and informed him as to the pendency of the Severance suit. Alber had the deed of trust prepared himself, after his talk with plaintiff, and likewise had the deed prepared from himself and wife to plaintiff, in which it was provided that the deed of trust was to be satisfied of record.

After carefully reading the record the second time, we are satisfied from same, that plaintiff and defendant, Emil Gr. Alber, on September 2, 1909, caused the deed of trust aforesaid to be executed and placed of record for the purpose and with the intention of fraudulently placing the lot beyond the reach of appellants, as creditors of said Alber. We are further satisfied from the record, that both plaintiff and Alber caused to be prepared and recorded the warranty deed from Alber and wife to plaintiff, under the belief that by so doing, they had cut off the right of appellants, as creditors of Alber, from charging said lot with the payment of their debt, or from acquiring the title thereto under an execution sale.

On the record before -us, we are of the opinion that plaintiff is not entitled to the relief prayed for in this action.

II. In addition to the conclusion above reached, we are of the opinion that plaintiff is not entitled to maintain this action on account of the intervening rights of appellants. The sequence of events, leading up to the present suit, as shown by the record, may be stated as follows: (1) Suit filed by the Severances against Alber and Kennedy, in the circuit court of Jackson County, Missouri, at Independence, August 20, 1909; (2) deed of trust, executed by Alber and wife, securing note for $1,000 given by Alber to Rebm, September 2, 1909; (3) judgment rendered in favor of Severances against Alber, April 22,1910; (4) warranty deed from Alber and wife to Rebm, conveying lot now in question, June.6, 1910; (5) deed of trust released on margin of record by Rebm, June 7, 1910; (6) levy upon lot in question, under tbe Severances’ judgment, May 6, 1912; (7) execution sale of said lot, under Severances’ judgment against Alber, June 3, 1912; (8) sheriff’s deed to tbe Severances, conveying said lot, purchased by them at execution sale, June 12, 1912; (9) sheriff’s deed, last mentioned, recorded, June 18, 1912; (10) suit now at bar filed by Rebm, seeking to set aside bis own release of tbe deed of trust and to re-instate same as a lien upon tbe property superior to appellants’ (Severances’) title acquired at sheriff’s sale, July 30, 1912.

Plaintiff in chief, testified:

<(Q. "When was tbe first time you learned about this judgment? A. Well, later on.
“Q. Well, bow long? A. In a short time.
“Q. Before or after you got tbe deed back? A. Before be gave me tbe deed back I_beard. something.
“Q. After they bad sold it under tbe judgment and bad taken it? A. Yes, sir.”

Of course Alber knew of tbe suit, and must have known of tbe rendition tbe judgment. He was acting for himself and plaintiff, when be executed both tbe deed of trust and warranty deed to respondent. Although tbe plaintiff knew of tbe judgment and sale thereunder, be made no effort to have bis entry of satisfaction of the deed of trust set aside until July 30,1912, when tbe present suit was commenced. We are satisfied from the testimony that both plaintiff and Alber knew of tbe pend'ency of tbe Severance suit, and bad the warranty deed executed and recorded to cut off tbe right of an execution purchaser to buy tbe land and obtain tbe title thereto. There is nothing in the record to indicate that appellants, or either of them, had any notice of any alleged equities between plaintiff and Alber. The warranty deed dated June 6, 1910, in express terms provides that the deed of trnst was to be satisfied of record. It was released on June 7, 1910, by plaintiff in person.

Plaintiff’s petition, among other things, in referring to said warranty deed, alleges:

“That, the consideration for the said conveyance was the agreement of this plaintiff with the said Emil G. Alber to surrender his obligation upon the said noted'

Here, then, was the warranty deed, dated June 6, 1910, providing for the release of the deed of trnst; the deed of trust released on the margin by plaintiff on June 7, 1910; the lot in controversy levied on by the sheriff, under the Severance judgment, on May 6, 1912; the execution sale thereunder on June 3, 1912; the sheriff’s deed delivered to appellants for said lot on June 12,1912, and said sheriff’s deed duly recorded in Jackson County, Missouri, on June 18, 1912. It thus clearly appears, that the deed of trust was satisfied of record, when the loU was levied on and sold under the above judgment. The deed to appellants for said lot was duly recorded be-, fore the commencement of this action to set aside the\ release upon the margin of said deed of trust. On the record thus made, we are of the opinion that appellants, under the following authorities, have acquired the fee simple title to the lot in controversy: Sections 2810-11, Revised Statutes 1909; Keaton v. Jorndt, 259 Mo. l. c. 194-5; Tate v. Sanders, 245 Mo. l. c. 217; Higbee v. Bank, 244 Mo. l. c. 427; White v. Lumber Co., 240 Mo. l. c. 20-21; Land & Lumber Co. v. Bippus, 200 Mo. l. c. 697; Harrison. Machine Works v. Bowers, 200 Mo. l. c. 231-2; Payne v. Lott, 90 Mo. l. c. 681; Vance v. Corrigan, 78 Mo. 94.

In Higbee v. Bank, supra, the facts, in some respects, were similar to those at bar. On page 428, we said:

“In an execution sale the purchaser gets title through his sheriff’s deed as against a deed by the execution debtor unrecorded at the time. [Vance v. Corrigan, 78 Mo. l. c. 95-6; Harrison Machine Works v. Bowers, 200 Mo. l. c. 231-2.] At very best defendant’s released deed of trust could not stand on a better foot than an unrecorded deed.”

The' foregoing authorities, as well as many others which might be cited, clearly sustain the above quotation. It may be said in passing, that the converse of this rule is equally true, and that, where a deed of the execution debtor, which had formerly remained unrecorded, is filed for record before a sale taires place under an execution, it would pass the title, as against the subsequent purchaser at the execution sale. [Givens v. Burton, 183 S. W. (Mo.) l. c. 622, and cases cited.]

The plaintiff in this case invokes the aid of a court of equity to set aside and cancel a release which .he has voluntarily entered upon the margin of a deed of trust duly recorded. He seeks to cancel a warranty deed which he obtained from his son-in-law for the lot in controversy, and also asks that said deed of trust be reinstated and declared a prior lien on said lot. He simply alleges that appellants knew of the deed of trust when they obtained their judgment on April 22, 1910, and does not charge them with notice of any equities ivhen they purchased. If it was a bona-fide deed of trust, the record of same imparted constructive notice to appellants, as to its contents, whether they had any actual knowledge of same or not. The judgment rendered in favor of appellants gave them a lien on the lot in controversy, subject to the lien of said deed of trust, if bona-fide. On June 6, 1910, Alber conveyed the lot .to plaintiff by warranty deed, and provided therein, that said deed of trust should be released. On the following day — June 7, 1910' — said deed of trust was released on the margin of the'record by plaintiff. This release of the deed of trust by the latter, destroyed the constructive notice which it formerly imparted, to the effect, that it was a prior lien on said lot. The judgment was then left in full force and effect as the first lien on said lot, and so continued up to the time when appellants bought the property at execution sale, on June 3, 1912. The plaintiff allowed his entry of satisfaction, on the margin of said deed of trust, to remain from June 7, 1910, until the commencement of this action on July 30,1912, without taking any steps to set the same aside. Instead of bringing this suit, suppose the plaintiff, on July 30, 1912, had obtained a deed of trust from Alber and wife, undertaking to correct the marginal release, etc., it is clear that under the above authorities, with appellants’ deed on record, the second deed of trust would be inoperative to restore the former deed of trust or give it vitality.

Plaintiff’s petition fails to allege that appellants had any notice of his alleged equities growing out of the entry of satisfaction upon the margin of said deed of trust, when they bdught at the execution sale in June, 1912, nor is there any testimony in the record tending to show such notice.

On the record before us, the respondent has failed to make out his cause of action. Under the law and facts of the case, the appellants are entitled to a decree, declaring them to be the owners in fee of the real estate in controversy.

III. We have examined the authorities cited by respondent, and do not deem them in conflict with the conclusions heretofore reached, when considered in the light of our Recording Act. We accordingly reverse and remand the cause with .directions to the trial court to set aside its decree; to dismiss plaintiff’s bill; to enter a decree in favor of appellants herein, declaring them to be the owners in fee as tenants in common of the real estate in controversy; and to take such steps as may be necessary to put them in possession of said real estate, etc.

Brown, G., concurs.

PER CURIAM:

The foreg'oing opinion of Railey, C., is hereby adopted as the opinion of the court.

All of the judges concur; Bond, P. J., in result.