author: LAMM, J.

text:
    COBE, Appellant, v. LOVAN.
    Division One,
    February 22, 1906.
    1. BUILDING AND LOAN ASSOCIATION: Sale by Directors. The board of managers of a solvent building and loan association, unaided by the consent of the stockholders, has no power to part with its assets to a stranger corporation, and thereby unsettle the vested rights of its stockholders and compel them to recognize the assignee as a new mortgagee. They have no right to absolutely transfer a loan made to a stockholder and secured by his' stock and a deed of trust on his home, which, under the association’s constitution and by-laws, he is entitled to repay to its board of managers monthly in small installments.
    2. _: _: Deed of Trust: Ejectment. And where such conditions of payment are a part of the stockholder’s note and deed of trust given by him to the association for money borrowed, an attempted transfer of the mortgage loan to another association by the board of managers is ultra vires and void, and a foreclosure of the deed of trust by the trustee at the request of the tranferee does not carry the title, and the purchaser at the foreclosure sale cannot recover in ejectment.
    3. _:_:_:_: Foreclosure: Acting Through Former President, And where the request of the trustee to foreclose was made by the aforetime president of the transferring company, who in making the request was acting for the transferee company, it will be held that the foreclosure sale was brought about by the transferee, and not by the defunct company. The law regards substance, not form; one may not do by indirection what he cannot do directly.

      4. -: -: _: _: Action of Board Required. Furthermore, the foreclosure of stockholders’ mortgages held by a building and loan association is by statute placed under the supervision of the board of directors, and not under that of the president.
    5. DEED OF TRUST: Ejectment: Equitable Defense: Redemption. The answer in ejectment may plead facts showing that the trustee’s deed, under which plaintiff holds by mesne conveyances, is void. It is not necessary, under all circumstances, as a prerequisite to such equitable defense, when otherwise well pleaded, that the defendant ask to redeem. [Distinguishing Lovelace v. Pratt, 163 Mo. 70; and Schanewerk v. Hoberecht, 117 Mo. 22.]
    6. -: Building and Loan Mortgage: Innocent Purchaser. A purchaser by quitclaim deed from the purchasing mortgagee at a foreclosure sale under a deed of trust given by a stockholder to a building and loan association, is chargeable with notice of the contents of the deed of trust foreclosed, of the constitution and by-laws of the association referred to therein, and with all that is disclosed by his chain of title, as well as the statutes of the State, read into the transaction.
    7. _: Estoppel. The mortgagor is not estopped to show that the foreclosure of the deed of trust was utra vires and void and that the purchaser thereunder took no title, by the fact that he let the deed of trust remain of record unsatisfied for nearly ten years, and permitted the recorded trustee’s deed, as indicia of ownership, to go unchallenged for two or three years after the foreclosure. Especially should that be the holding where the record of the trustee’s deed did not mislead the plaintiff to his prejudice or cause any change in his position, and the other . elements of estoppel are absent.
    Appeal from Howell Circuit Court. — Ho». W. N. Evans, Judge.
    Affirmed.

      Orr & Luster for appellant.
    (1) The deed of trust read in evidence vested the legal title to the premises in question in the trustee therein named, and also vested in said trustee the power to sell. And such power was coupled with an interest in the land itself. And the trustee’s deed read in evidence passed the legal title to the grantor named therein. Schanewerk v. Hoberecht, 117 Mo. 22; Lanier v. McIntosh, 117 Mo. 508; Kennedy v. Siemers, 120 Mo. 73; Springfield Engine, etc., Co', v. Donovan, 120 Mo. 423; Biffle v. Pullman, 125 Mo. 108; Snyder v. Railroad, 131 Mo. 568; Hume v. Hopkins, 140 Mo. 65; Keet v. Baker, 141 Mo. 175; Long v. Long, 141 Mo. 352; Building & Inv. Co. v. Dunesworth, 146 Mo. 361; Markwell v. Markwell, 157 Mo. 326; Fowler v. Carr, 63 Mo. App. 486; Price v. Blankenship, 71 Mo. App. 548; Huckabee v. Billingsly, 50 Am. Dec. 183; Robinson v. Coholan, 91 Ala. 479. (2) The grantor, Lovan, is bound by recitals contained in the trustee’s deed and is estopped from contradicting the same by parol evidence. Building Inv. Co. v. Dunesworth, 146 Mo. 361; Hull v. Pace, 61 Mo. App. 117; Sherwood v. Saxton, 63 Mo. 78; Day v. Breton, 63 Am. St. 461; Wilson v. South Park Commrs., 70 111. 46. (3) Even if the grantee in the trustee’s deed purchased with notice that the recitals contained in the advertisement and trustee’s deed were false, or with notice that default had not in fact been made by the defendant, still said grantor took the legal title under said deed subject to defendant’s right of redemption. Springfield Engine & Thresher Co. v. Donovan, 120 Mo. 423; Biffle v. Pullman, 125 Mo. 108; Markwell v. Mark-well, 157 Mo. 332. (4) If the grantee in the trustee’s deed purchased with notice as above defined, still if plaintiff purchased from said grantee without such notice, defendant’s right of redemption is cut off so far as this plaintiff is concerned. (5) The request for the sale was made in the name of the association by Drew as its president; then the law presumes, in the absence of evidence to the contrary, that said request was in fact made by said association. Sparks v. Trans. Co., 104 Mo. 540; Sav. Assn. v. Roseoe, 75 Mo. 408; State ex rel. v. Hupf erle, 44 Mo. 154; Bank v. Bank, 107 Mo. 145; Wenscolt v. Inv. Co., 63 Mo. App. 369; Hill v. Bank, 87 Mo. App. 606; Roe v. Bank, 67 S. W. 307; Bambrick v. Campbell, 37 Mo. App. 460. (6) If the record of the deed of trust read in evidence remained unsatisfied from March, 1890, to October, .1897, the date ■of the trustee’s sale, and to the present time, and the trustee’s deed was placed of record on the 24th day of November, 1897, and plaintiff has during all that time taken no steps to have said deed of trust cancelled or to redeem therefrom, and has taken no steps to cancel said trustee’s deed but has suffered the same to stand upon record as indicia of ownership in the plaintiff and his grantor, the defendant is estopped and cannot redeem as against the plaintiff in the absence of a notice to the plaintiff of anything that would render said deed of trust or trustee’s deed voidable or irregular. '26 Am. & Eng. Ency. Law (1 Ed.), 980; Day v. Breton, 102 Iowa 482; Hamilton v. Lubukee, 99 Am. Dec. 567; Kline v. Vogel, 90 Mo. 247; Ferguson v. Soden, 111 Mo. 214; Bausman v. Eads, 24 Am. St. 205; Baker v. Cunningham, 162 Mo. 134; Beattie v. Butler, 21 Mo. 320.

      W. P. Campbell for respondent.
    A sale of land under a trust deed, without the authority of the owner of the debt, is void. McG-ee v. Birch, 108 Mo. 336. The assignee of a security given by a borrowing member of a building association, has no authority to control the foreclosure. Lovelace v. Pratt, 163 Mo. 70. A building association having no interest in the land or the security, cannot purchase and obtain title at a foreclosure sale. R. S. 1889, sec. 2817. One claiming title under a building association must take notice of its corporate powers. Bank v. Oliver, 67 Mo. App. 390; Clark on Corporations, 497. A purchaser of land is charged with notice of all recitals in the deeds which constitute his chain of title, and of all facts affecting the title to which such recitals would lead an honest inquirer. Devlin on Deeds, sec. 1000; Wade on Notice, ■ sec. 313. A purchaser of land by taking a quitclaim deed is charged with notice of the rights of the holder of the paramount title and of all equities not in writing or if in writing not required to he recorded under the registry act. And such rights may be enforced in ejectment suit. Stoffel v. Sehroeder, 62 Mo. 147; Hope v. Blair, 105 Mo. 86; Condit v. Maxwell, 142 Mo. 278. An owner in possession of land is under no obligation to would-be purchasers to bring a suit to remove a cloud from his title. 12 Am. and Eng. Ency. Law (1 Ed.), 606. Cessation of business by a building and loan association releases its members from further payment of dues. Blakely v. B. & L. Assn., 26 S. W. 295; End. Bldg. Assn., see. 502; Thompson, Bldg. Assn., 30. The president of a building association has no power to foreclose, without special authority from the board of directors. Clark on Corp. 495; Morawetz on Private Corporations, sec. 537. The hostile declarations of respondent both to the trustee, and the president of the Phoenix Loan Association, were a distinct denial of the right of either to collect dues and interest, or to foreclose the trust deed, and converted his holding into an adverse holding. Benton County v. Czarlinsky, 101 Mo. 280; 1 Jones on Mort., sec. 672.
   LAMM, J.

— Cast below in ejectment for block 14 in Maxey’s addition to the city of Willow Springs, Cobe appeals.

The petition was in conventional form, laying the ouster as of March 15,1902.

The answer admits' possession, denies all other averments, and pleads certain affirmative defenses, which may be summarized as follows: (1) adverse possession for ten years under a claim of ownership; (2) that plaintiff and those under whom he claims have not been seized or possessed of the premises within ten years; (3) that plaintiff claims title by virtue of a foreclosure by advertisement and sale under a trust deed, ■executed to the Willow Springs Building & Loan Association, a corporation organized under article 9, chapter, 42, Revised Statutes 1889 — said deed of trust authorizing the sheriff of Howell county, for the time being, upon the request of said association, to make a sale on default of the payment of interest, dues and penalties as provided in the deed of trust and the constitution and by-laws of said association, for a period of six months; that such sheriff sold and conveyed the premises, but his proceedings were void for the reason that he was not requested by said association, or by anyone authorized to act for the same, to' advertise and sell said premises; (4) the sheriff’s advertisement, sale and conveyance, as acting trustee, are alleged to be void because there was no default; and (5) are void because they occurred several - years after said association ceased to do business. .

Issue having been joined, the state of the proof was ' such that the court ruled against respondent’s defense of the Statute of Limitations, thus leaving as the sole issue the validity of the trustee’s deed from the then sheriff of Howell county, as acting trustee under the Building and Loan Association deed of trust.

Stated in free outline, appellant contends that the irregularities, if any, shown in the proceedings leading up to the sale are not fatal to his right to recover under tire rule laid down in Schanewerk v.-Hoberecht, 117 Mo. 22, and later decisions following that case, and the cause should be reversed.

Stated in free outline, respondent contends that such irregularities were shown-as rendered the trustee’s deed void under the rule laid down in Lovelace v. Pratt, 163 Mo. 70, and, hence, his judgment, nisi, should stand.

The facts, much condensed and to some extent stated in their legal effect, are as follows:

Lovan resides in "Willow Springs on the locus in quo as a homestead. Cobe resides in Chicago and is vice-president of the Assets Realization Company, Lo-van and Ophelia, his wife, on the 25th day of March, 1890, conveyed the premises to Wilkinson, trustee, party of the second part, for the benefit of the Willow Springs Building and Loan Association, party of the third part, to secure.a note dated March 17, 1890, due in one day to said Association, promising to pay $300 for value received with interest from date at the rate of ten per cent per annum, payable monthly on a given Monday — which note contains the following further promise: “And I promise to pay said association my monthly dues of $4 each month, as .stockholder in said association, with all penalties assessed on my said stock, according to the constitution and by-laws of said association.” The deed of trust contained a provision that if Lovan paid the interest when due and payable, and paid said dues and penalties according to the tenor and effect of the note, and said constitution and by-laws, then the deed should be void. But otherwise, if he failed to pay said interest when due, or failed to pay his monthly dues as stockholder as they accrue; then, in either event, the deed should remain in full force. A provision was inserted for the substitution of the sheriff as trustee upon the absence of Wilkinson from Howell county, providing that, in that event, “the then acting sheriff of said county, upon the request of the party of the third part, shall sell the property herein described, or so much thereof as may be necessary to pay said note, interest and dues and penalties thereon.” Provisions relating to notice, place of sale and the executing of a deed to the purchaser are not questioned and need not be set out. The trust deed also contained the usual narration that, “Any statement of facts or recital by said trustee in relation to the non-payment of the money herein secured to be paid, and of the amount due herein, or any default in the conditions of this trust deed, the advertisement, sale, receipt of money and execution of the deed to the purchaser, shall be received as primafacie evidence of such fact. ’ ’

Certain by-laws of the Willow Springs Building and Loan Association were introduced in evidence. In a nutshell, they provided that there should be a president, a vice-president, a secretary and a treasurer and seven directors. That such officers and directors should constitute the board of managers of the business of the association. That every person who subscribed stock should then pay one dollar on each share and thereafter pay a like sum to the association at each stated meeting of the board of managers. That the stated monthly meetings of the board of managers should be on the first Monday after the 15th of each month for the purpose of receiving memberships, monthly dues and fines from the shareholders, interest on loans, and to loan the funds of the association, and the transaction of other business.

Lovan owned three shares. The date of his membership does not appear, and, hence, no account of payments prior to his loan can be rendered, but on giving his note for $300 and executing his deed of trust, he received $135 from the association. Thereafter, at the stated meetings of the board of managers in Willow Springs, he paid $5 monthly for the months of April to November, 1890, inclusive, making his last payment on December 2,1890. That date was also the last time the board of managers ever met to receive dues or for any other purpose. From that day to this, as gleaned from the corporate books, there was-not a corporate act done or line written by the directors or the board of managers or by the corporation itself. The corporate story of what happened may be painfully spelled out in the following from its £ £ Joumal Book: ’ ’

Page 35 of said Journal Book is in words and figures as follows:

££ Willow Springs, Sept. 18,1890.
“Board of managers and stockholders of Willow Springs Building, and Loan Association met in called meeting for the purpose of considering the question of merging or transferring the Willow Springs Association into the Phoenix of St. Joe, Mo. Mr. Robinson, agent of the Phoenix, explained the Phoenix method of doing business and submitted a proposition for merging the association into theirs. On motion of Mr. Teeter a committee consisting of W. E. Drew, E. H. Farnsworth and S. W. Wilkinson was selected to ascertain the wishes of the stockholders of this association as to merging the two association. No other business, the meeting adjourned.
“E. H. Farnsworth, Sec.”
Page 36 was as follows: .
“Willow Springs, Mo., Oct. 28, 1890.
“Board of managers met. -Quorum present. After some discussion motion to .adjourn to Saturday night, November 1, 1890. Carried. Adjourned.
“E. H. Farnsworth, per Patterson.”
Page 37 was as follows:
“Willow Springs, Mo., Nov. —, 1890.
“Board met, no quorum. On motion adjourned to meet on December 2, 1890.
“E. H. Farnsworth, Sec.”
Page 38 was as follows:
“Willow'Springs, Mo., December 2nd.
“ Board managers met. Quorum present. Minutes of Sept. lst-18th and October 28th approved. Report of committee to arrange transfer to Phoenix filed and ■accepted. Show vote to transfer, Drew, Teeter, Wilkinson, T. Hughes absent, Randal, Rowe, Gaylord, Withaup, ab., Thomas. Yeas 8, absent 2.
“Bills allowed: S. W. Wilkerson, $25, services; E. H. Farnsworth, $55, services; S. W. Wilkinson, $5.25, record.
* ‘ Moves to prepare release by secretary. Motion to accept prop, of Phoenix carried. D. — , Teet, Wilk, G. — , Tho-s., Farm, six yeas.
“Motion to presdt. transfer bills rec. to Phoe. Motion carried to settle treasurer. Gorman and Layker.
“Report Treas. Allowed withdrawn.
John Kelly........................$14.85
Frank Sass......................... 40.90
I. S. McDonald..................... 18.42
Mrs. S. E. Davids................... 16.75
H. J. Rowe......................... 11.25
Farnsworth........................ 20.48
49.68
22.65
$194.98.”

Meditation, more or less profound, on the foregoing may result in a conclusion that there was a building and '.loan association in St. Joseph, Missouri, known as the Phoenix. That on September 18, 1890, one Robinson, representing the Phoenix, appeared at Willow Springs before the board of managers, in which meeting possibly some stockholders participated, and there discussed with them a pending proposition of the Willow Springs Building and Loan Association’s going out of business and “merging or transferring” itself in or over to the Phoenix. That thereupon a committee was appointed to ascertain the wishes of the stockholders. That another meeting was held by the board of managers in October, at which the matter was discussed, but no ac- ■ tion taken. That in November no quorum was present at the meeting; and that on December 2d the board of managers met, eight being present and two absent. If the narration in the record of this meeting, to-wit. ‘ ‘ Motion to accept prop, of Phoenix carried,” be construed into the acceptance of a pending proposition (of unknown terms) on the part of the Phoenix Loan Association to take over the assets and assume the stock and other liabilities of the Willow Springs Building and Loan Association, it may be seen what happened. If the further narration' therein, to-wit, “Motion to presdt. to transfer bills rec. to Phoe.” be eyed closely and treated to a liberal gloss, it will be further seen what happened, to-wit, that the president of the "Willow Springs association was authorized by this cryptogram to transfer all the bills receivable belonging to the Willow Springs association to the Phoenix Loan Association of St. Joseph, Missouri. What the next narration means, to-wit, “Motion carried to settle treasurer,” would depend somewhat on the local usage of the word “settle” and does not call for present adjudication. Presently after this original and astonishing mortuary literature was spread of record, and in the same year, the Phoenix Loan Association notified Lovan that it held his deed of trust and “wanted so much money.” To this demand, he stood mute. The record shows that the Phoenix association at that time held Lovan’s paper with indorsements thereon, presumably transfers made pursuant to the action of the board of managers heretofore noted. Shortly thereafter there appeared in Willow Springs the president of the Phoenix association and other of its representatives, who made demands upon Lovan and wanted to know what he was going to do. To these demands, he replied that he owed nothing to the Phoenix association; that he got no money from it; that the Willow Springs association had no right to transfer his loan to the Phoenix association; and, further, that he owed the Willow Springs association, but could not pay it because it was not there to pay. Thereat, the Phoenix people demanded an out-and-out deed to the property, which Lovan refused to make. They then asked “what he would do?” and he replied, “nothing,” whereupon they went their ways and he saw them no more. Matters remained in statu quo until April, 1891, when there appeared an advertisement by Wilkinson, trustee, foreclosing Lovan’s deed of trust. On the morning of the sale day, Lovan notified said trustee to the effect that he had no right to sell under the mortgage and had better not do it; that there was no Willow Springs Building and Loan Association. The purport of this conversation, as we construe it, is that Lovan based his objection on the theory that he had' been ready to pay the Willow Springs association in accordance with the constitution and bylaws, at the monthly meetings of its board of managers and as nominated in his bond, but had been unable to find it to do SO1. This notice resulted in the sale lapsing. Time ran on and finally, in 1897, one Drew, who was the president of the Willow Springs association at the time of its felo de se, then seven years gone, made a written request, over his title as such president, to the sheriff of Plowell county to make a sale under the deed of trust on October 11, 1897. It seems Drew appeared in Willow Springs and gave an advertisement signed by such sheriff, as acting trustee, to the printer and at that time notified him “that the association at St. Joseph had bought the stock of the Willow Springs association and that-'he ivas representing the St. Joseph association, that he was closing matters up for them.” Thereafter on October 25, 1897, at a sale made, the property, was struck off to the Phoenix Loan Association of St. Joseph, Missouri, at the sum of $50, and such sale was followed by a trustee’s deed reciting, inter alia, that the .powers of the trustee were executed “at the request of the legal holder of said indebtedness.”

This deed was placed of record, and matters again lagged along until July 15, 1899, when, upon the application of the State Supervisor of Building and Loan Associations, the Phoenix Loan Association was placed in the hands of receivers by the circuit court of Buchanan county. [State ex rel. v. Phoenix Loan Association, 159 Mo. 102.] Thereafter its affairs seem to have come within the jurisdiction of the United States Circuit Court at St. Joseph, and, on the 23d of February, 1902, a decree of the Federal chancellor was handed down confirming a sale to appellant herein of all the assets of the Phoenix Loan Association, and the existing special master in chancery and receivers were ordered to make conveyances effectuating such confirmed sale. Thereafter, by their several quitclaim deeds, said receivers and- said special master in chancery conveyed the locus in quo to appellant, Oobe, who thereupon instituted this suit, with the result first aforesaid.

Was that result right? We think so, because:

(1) An incorporated building and loan association differs from an ordinary corporation. Among other ways, in the fact that in an ordinary business corporation, stock is subscribed and either paid for at the time, and thus becomes the property of the shareholder, or it is partly paid for and becomes his property, subject to future calls upon his subscription; while in a building and loan association the stock subscriber is not the out-and-out owner of his stock from the start. He pays thereon a minimum monthly payment, and when these monthly payments, with his increment of gains accrued, equal the par value of the share of stock, he is entitled to receive that amount. [4 Am. and Eng. Ency. Law. (2 Ed.), 1004.] If, in the meantime, a member has borrowed on his stock, it, by pledge or operation of the loan, remains the property or quasi property of the corporation, and the loan is returned by the payment of interest and stock dues, penalties, etc. — the repayment of the loan culminating at the same time the stock itself matures, at which time, in theory at least, the corporation, or a given series of its stock, is liquidated, that is to say, the non-borrowing stockholders have their stock redeemed and the borrowers have their loans cancelled.

The loans made to borrowers, evidenced by secured - notes, together with all stock subscriptions calling for periodical dues, are assets of such corporation. It is self-evident that in a solvent corporation — a going concern — these assets must be kept together to subserve the underlying purposes of the corporation itself, and reach the'end in view. If, for instance, these assets conld be separated, then the liability on the stock subscription might pass off to, and become the property by assignment of, one vendee, while the same liability in another form, to-wit, a note given by a borrowing stockholder, might pass to another vendee, and thus a double liability be asserted against a stockholder. In the case at bar, there was no attempt on the part of the Willow Springs Association to separate those liabilities. It parted with them, lock, stock and barrel, to the Phoenix Loan Association. That is to say, the latter undertook to become the owner of .the entire stock subscriptions, as well as all bills receivable based upon loans to subscribers.

We are not dealing with the case of an insolvent building and loan association whose right to collect stock subscriptions and continue business is arrested at a given time by the hand of the law and whose assets are thereupon collected and marshaled for the purpose of winding up its affairs. There is not a hint in this record that the Willow Springs Association was insolvent on December 2, 1890, at the time .its board of managers assumed to part with its assets to a stranger corporation (whose power to purchase may well be doubted), and undertook to make its stockholders recognize a new and distant master residing in anther corner of the State. No reason is suggested for this extraordinary performance and we are cited to no authority giving a board of managers of a building and loan association such capricious power to end its life, to unsettle the vested rights of its members, and to make such rights depend not only on the business vicissitudes incident to the selling corporation, but to take on a new burden of dangers in business vicissitudes arising in the life of the buying corporation.

What might have happened if a stockholders’ meeting, duly called, had unanimously consented to such proceeding, and after a board of directors had, pursuant to authority by the corporation itself, carried out such scheme, we need not consider.

Nor is it necessary for us to consider whether in a court of equity the buying corporation might have asserted and established, in a proper proceeding, equitable rights by subrogation or otherwise to the transferred assets; nor is it necessary for us to consider whether a promissory note, evidencing some incidental indebtedness to a building and loan association and not a loan to a subscriber upon stock, might, or might not be transferred by authorized indorsement. Take, for instance, the emergencies provided for by section 2811, Revised Statutes 1889, where loans are allowed to be made to others, who are not shareholders, at such rate of interest as the directors may fix in case there is no stockholders’ demand. If loans so made had been re-discounted for the purpose of creating a fund to sub-serve a stockholders’ demand, springing into existence during the life of such loan, a different question might arise. Nor are we dealing here with close questions relating to the right of a building and loan association to borrow money for legitimate corporate purposes and hypothecate stockholders’ papers to secure such loan. We are dealing with the right to absolutely transfer a loan made to a stockholder and secured on his home,' which, under the constitution and by-laws referred to and read into the note and deed of trust, he was entitled to repay to the board of managers of the Willow Springs Building and Loan Association, at Willow Springs, monthly in small installments. And dealing with this case we are of the opinion that the attempted transfer of this mortgage loan by said board of managers to the Phoenix association was without shadow of legal right and wholly ultra vires. In our view it is contrary to the reciprocal rights and duties existing between such corporation and its members, and, if the principle were once established, it would result in mischief — lift the lid of a Pandora’s box of ills. This is the general doctrine laid down. in Thompson on Build. Assns. (2 Ed.), sec. 286, and is the doctrine of this court. [Lovelace v. Pratt, 163 Mo. 70; see, also, State ex inf. v. Equitable Loan & Inv. Co., 142 Mo. l. c. 342.]

(2) Appellant insists the case at bar is not on all-fours with Lovelace v. Pratt, supra, and therefore that case ought not to control this. Let ns see about that. The Lovelace case was an ejectment suit, as is this. In that case the title of plaintiff to the locus in quo originated in the foreclosure of a building and loan mortgage, as does the title of plaintiff here. In that case, the building and loan association had transferred its mortgage security to another; so here. In that case, at the request of the transferee of such mortgage security, the trustee sold. The gist of the defense in that case was that the building and loan association had no authority to part with the security, and that a foreclosure, so procured, avoided the trustee’s deed; so, too, here. And it is at this point appellant discovers what he urges is a controlling factor in the present case, and distinguishes it from the Lovelace case, to-wit, in this case the foreclosure was directed by Drew, the one-time president of the Willow Springs Building and Loan Association. If, now, it be remembered that Drew, in directing the advertisement and foreclosure', admitted he was the agent of the Phoenix association and was transacting his master’s business and if we add to that admission the further contention of appellant, to the effect that, if the title to the security did not pass by the transfer, it must have remained in the Willow Springs association and, therefore, that association had the power and duty of directing a foreclosure, we have the present question presented to us in a nutshell. In disposing of it, it must be borne in mind that the law regards substance, rather than form — the spirit and essence of a thing, rather than the mere dry letter. One may not do by indirection what he can not do directly; or, as said by Valliant, J., in a case just handed down, “If it could not be done on a straight line, it could not be done in a circle. ’ ’ To all intents and purposes the act of foreclosure in this instance was procured by the Phoenix association,, and was made for its purposes. Drew was its alter ego, and may not ambush or confuse his position by a mere official designation assumed for the nonce. Qui facit per alium, faeit per se. The transaction finds its counterpart in a very ancient one in which, by uniting a borrowed hand to a real voice, a notable property transaction was brought about. Ás preserved in an authenticated record, it runs as follows: And Jacob went near Isaac his father; and he (that is, Isaac) felt of him, and said, the voice is Jacob’s voice, but the hands are the hands of Esau. The record (of this last case) further shows that Isaac’s eyes were dim and, because the hands extended to him were hairy, like Esau’s, Jacob effected, in conjunction with a prior trade of birthright for a meal of bread and bean pottage, a transfer of Esau’s interest, contingent and expectant, those intended for use as well as those intended for ostentation. If we may be permitted to loiter afield a moment, it may be said that Jacob by that transaction showed he was well named, ‘ ‘ The Supplanter, ’ ’ (sub, under; planta, sole of the foot, or heel). The record has it that in the very act of- birth, he held Esau by the heel, and certainly, by afterwards laying him by the heels, he justified his name. But we are not called to review this venerable transaction and adjudicate upon it. Live business presses, and sufficient unto the day is the evil thereof. Suffice it to say, that we see no difference in principle between the Lovelace case and the case at bar. And this is so-, because, further, Drew received no direction from the Willow Springs association whatever. His acting in its name was a mere assumption on his part in the interest, as said, of the Phoenix association. By statute law, existing at the time Lovan made his mortgage, foreclosures of stockholders’ mortgages were placed under the supervision of the board of directors, and not under the supervision of the president. Section 2813, Revised Statutes 1889, reads as follows: “. . . If the borrower fails totally in his payments during the space of six months, or if the balance due by such borrower has been allowed to accumulate until it equals the sum of six months’ dues and interest, then the board may, in its discretion, proceed at any time to advertise for sale, under deed of trust, the property pledged to the association by such borrower . . ”

(3) Lovelace v. Pratt, supra, must either be overruled, or the case before us must be controlled by it. Appellant contends that the Lovelace case is out of line with Schanewerk v. Hoberecht, 117 Mo. 22, but we think not. The answer in that case was a general denial, and this is true, generally speaking, of the cases following that.' The answer in this case pleads facts showing that the trustee’s deed, under which appellant holds by mesne conveyances, quitclaim deeds, is void. Under Revised Statutes 1899-, section 605, a defendant may plead his legal defenses as well as his equitable defenses to a suit at law. As a general proposition, he need not ask for affirmative equitable relief, unless the case admits of it and hé chooses to. It would serve no useful purpose to review the Schanewerk case and the cases following it. That case does not decide that a defendant is cut out of an equitable defense setting forth facts which, if true, show that a certain deed, upon which plaintiff must rely, is void. That case does not decide that in order to make such equitable defense, when well pleaded, defendant must ask to redeem under every and all circumstances. Prom whom would defendant redeem in this case, for instance 1 If the Phoenix corporation got no title, because its sale was brought about in violation of law, it would follow necessarily that appellant got no title; and if he held no title, there was nobody in court’ from whom respondent could redeem.

The learned judge, who- wrote the opinion in the Lovelace case, was on the bench at the time the Schanewerk case was decided and participated in the decision of the cases following that. He, with his learned associates in Division Two, could not have been unaware of the doctrine announced in the Schanewerk case, but evidently distinguished the Lovelace case, and we think rightly so.

(4) But, says appellant, by letting the trust deed remain unsatisfied of record since 1890, and by letting the recorded trustee’s deed go unchallenged, as an medida of ownership, respondent is estopped to now question the validity of either as against appellant, a purchaser without notice.

To this contention respondent answers, in one form, in the pioneer figure, and warlike metaphor, following: “Lovan has done what many a good man has done under similar circumstances. He has sat quiet in his castle, blunderbus in hand, while the wolves howled and prowled through the woods. It so happenedthatthe vice-president of the Assets Realization Company is the first to come within easy range. ’ ’

The familiar elements of estoppel are wanting in appellant’s case. It can not be pretended that the indicia of ownership-, allowed to remain of record' in Howell county, misled appellant to his prejudice and caused a change in his position. He was a resident of' Chicago. He dickered for the whole of the assets of the Phoenix association and paid therefor the sum of $80,000. It is inconceivable-, in the absence of positive proof, that the $50 purchase of the Phoenix association at Willow Springs had a feather’s weight in that transaction. It comes well within the maxim, de minimis. Besides, appellant holds under quitclaim deeds, following the trustee’s deed in question. He is no such innocent purchaser for value as would entitle him to avoid the effect of outstanding equities, but is charged with notice of the contents of the trust deed foreclosed, of the constitution and by-laws of the "Willow Springs Building and Loan Association referred to in that trust deed, and with all that is disclosed by his chain of title, as well as of the statutes of the State, read into the transaction.

In conclusion, in our opinion, respondent under the facts uncovered should be allowed, so far as this case in its present aspect is concerned, to sit unmolested under his own vine and fig tree — if such tree grows in Howell county (on which we express no opinion).

The judgment is, accordingly, affirmed.

All concur.


source: Caselaw Access Project

author: MARSHALL, J.

license: Public Domain

text:
    SCHMIDT et al., Appellants, v. RANKIN.
    Division One,
    February 22, 1906.
    1.. CHATTEL MORTGAGE: Conversion: Burden. The burden, is on the plaintiff mortgagee to show that certain cattle sold through a commission company to defendant were the cattle covered by the mortgage, also to furnish the jury with facts - from which they would be authorized to draw inferences of fact as to the exact number of cattle covered by the mortgage that defendant purchased, in order to charge him with converting them. But where plaintiff produces facts from which the jury may infer that a certain number of those bought by defendant was covered by the mortgage, it is error to tell the jury that plaintiff cannot recover at all if they cannot determine just how many more of the entire number sold were covered by the mortgage.
    2. _: Payment and Subsequent Mortgage By Agent: Acquiescence by Former Mortgagor: Conversion. The owner of cattle had mortgaged them and authorized his agent to sell them at an average price of two dollars per head in excess of the mortgage debt. The agent, without the knowledge of his principal, borrowed money from plaintiff’s assignor and secured the loan by a mortgage on the cattle, and with the money paid off his principal’s mortgage and sent him the two dollars per head, and then shipped them, and through a commission house a part of them were sold to defendant. Held, that his principal by acquiescing in the act of his agent made the agent’s act in becoming the owner of the cattle a legal act, even if the agent’s method oí purchase in the first place was objectionable, and, hence, the agent’s mortgage was valid, and, being properly recorded, the defendant is liable to the owner of the mortgage notes, as for conversion, for the value of the cattle covered by the mortgage purchased by him.
    3. -: Sale In Open Market: Caveat Emptor: Full Value. The rule of law is that a purchaser of cattle in the open market purchases at his own risk and peril. As between plaintiff mortgagee holding a valid mortgage on cattle, and a defendant who, without knowledge of the existence of the mortgage other than is imputed by its record, purchases them in the open market from a commission house to whom they have been shipped by the mortgagor, both may be said to be innocent purchasers; but the defendant is liable to the true owner, if the seller and ostensible owner is not the true owner, and the fact that he pays full value for them is no defense.
    4. _¡Question for Jury: Instruction. Whether or not cattle purchased by defendant in the open market were cattle covered by plaintiff’s mortgage is a question of fact for the jury, and if the instructions are proper their finding is final. But if they were improperly instructed, their finding amounts to nothing,
    Appeal from Buchanan Circuit Court. — Hon. Henry M. Ramey, Judge.
    Reversed and remanded.

      Beardsley, Gregory & Kirshner for appellants.
    (1) The court erred in giving instruction 2 on behalf of defendant. It was error on the part of the court to instruct the jury that though they might believe some of the cattle bought by defendant and by his firm were the cattle covered by the mortgage in controversy, yet if they could not tell the exact number of the cattle covered by the mortgage which were bought by Rankin and his firm, then the plaintiffs could not recover to any extent whatsoever. The plaintiffs were entitled to recover for such number of cattle as they proved to the satisfaction of the jury were covered by the mortgage and converted by defendant or his firm, although they might find that there was a large number, not being able, however, to exactly determine that larger number. (2) The court erred in giving to the jury instruction 6, on behalf of defendant. This instruction is in direct conflict with instruction 1, and given on behalf of the plaintiffs, and which latter instruction correctly declared the law. Gillett may not have bought the cattle from Hollinger so that he might be said to have become their owner on August 20th, within the usual meaning of those terms. Yet, if he had himself taken the cattle under the authority which he had as agent, to sell, and sold to himself, such a sale to himself was not void, but voidable at the option of Hollinger. Barr v. Randall, 35 Kan. 129’; Hoyt v. Latham, 143 U. S. 553; Remick v. Butterfield, 31 N. H. 70*; Jennison v. Hapgood, 7 Pick. 1; Bohn v. Davis, 75 Tex. 24; Reddick v. Gressman, 49 Mo. 389; Ellis v. Peck, 45 la. 112; Golson v. Ebert, 52 Mo. 271; Johnson v. Outlaw, 56 Miss. 541; Railroad v. Solmer, 123 Fed. 855; Connelly v. Hammond, 51 Tex. 647; Grant v. Beard, 50 N. H. 129; Smith v. Johnson, 71 Mo. 383. The ratification afterward made by Hollinger had the effect of completing the sale as of the date prior to August 20, 1898. Boyle v. Zacharie, 6 Peters 644; Ferris v. Thaw, 72 Mo. 446; Suddarth v. Empire Lime Co*., 79 Mo. App. 585; Hume v. Eagon, 73 Mo. 271; Turner v. C'hillicothe, etc., Co-., 51 Mo. 501; Savings Ass’n v. Morrison, 48 Mo. 273; Express Co. v. Rawson, 106 Ind. 215. The error in instruction 6 was not cured by the giving of instruction 1 for plaintiffs. Imp. Co. v. Ritchie, 143 Mo. 612; State v. Bacon, 147 Mo. 286; State v. McNally, 87 Mo. 658.

      Botsford, Deatherage & Young and Bush & String-fellow for respondent.
    (1) The trial court should have given respondent’s peremptory instruction to the jury to return a verdict for the defendant. (2) The most that could be said in behalf of the appellants on the testimony is, that it leaves the .question in doubt whether the defendant’s cattle were from Sldddy ranch or from the Pierce pasture; but if the evidence leaves the question in doubt, then the plaintiffs are not entitled to recover. Smart v. Kansas City, 91 Mo. App. 586. (3) Gillett had no authority to make the mortgage under which plaintiffs claim, dated August 2,1898, to Elmore & Cooper. Appellants’ brief cites the case of Grant v. Beard, 50' N. H. 129, in support of their contention in favor of the application of the doctrine of ratification. In that case, the New Hampshire Supreme court, in accord with the doctrine which universally prevails in the American courts-, held that the principal could not be held to have- ratified a transaction on the part of his agent unless he did so with full knowledge of all the facts. The same doctrine is recognized in the case of United States Express Co. v. Rossen, 106 Ind. 215, which is also- cited by appellants’ counsel In this connection, we call the attention of the court to the fact that the local citation on page 286, in State v. Bacon, 147 Mo. 160, which is cited by appellants’ counsel, is a part of the dissenting opinion in that case, of one of the judges of the Supreme Court, and is not a part of the opinion of the court. (4) The adjudication of this court in the case of New England National Bank v. Northwestern National Bank, 171 Mo. 307, is an authority in point that the mortgage in this case by Gillett to Elmore & Cooper is null and void. (5) Complaint is made that defendant.’s sixth instruction is in conflict with appellants ’ first instruction, also given by the court. We submit that appellants’ first instruction was erroneous and defendant’s sixth instruction was proper. If this was so,- error cannot be assigned by appellants to the giving of defendant’s sixth instruction.
   MARSHALL, J.

This is an action for the conversion of one hundred and sixty-two head of cattle of the alleged value» of $6,000. The action was begun on the 9th of August, 1899. There was a verdict and judgment for the defendant, and the plaintiffs appealed.

THE ISSUES.

The petition is in two counts, arising out of the fact that the plaintiff, Louis Schmidt, owns one note for $6,000, and the plaintiff, D. A. McPherson, owns the other note for $6,000, both of which were secured by a chattel mortgage on the cattle, alleged to have been converted by the defendant. The answer is a general denial, coupled with a plea that two separate and distinct causes of action are united in the petition. The reply is a general denial.

The case made is this:

In the spring of 1898, Joseph W. Gillett, was the owner of one thousand head of cattle, branded S-T (called S bar T) which were on a ranch in Dickinson county, Kansas, known as the Skiddy Ranch. He moved four hundred head of the cattle to the Pierce Pasture, located about eleven miles northeast of Alta Vista, which pasture was partly in Geary County, and partly in Waubaunsee County.

In May, or the early part of June, 1898, he sold three hundred of the cattle he had so placed in the Pierce Pasture to a third party, who shipped the same to Missouri and sold them. The said three hundred do not figure in this case.

Immediately thereafter, he óaused three hundred of the cattle he had left on the Skiddy Ranch to he placed in the Pierce Pasture, to take the place of the three hundred so sold, and to make the number in the Pierce Pasture aggregate four hundred.

In the month of June, 1898, Grant G. Gillett, a brother of Joseph Gillett, arranged with Joseph to purchase the four hundred head of cattle in Pierce Pasture, and the remaining cattle on the Skiddy Ranch. When the transaction was closed it developed that Grant G. Gillett was acting for Charles R. Hollinger and not for himself. In order to pay for the cattle, Hollinger executed a mortgage on the cattle in the Pierce Pasture to the J. C. Bohart Commission Company, of St. Joseph, and with the proceeds of that loan he, through Grant Gillett, paid Joseph Gillett for said four hundred head in the Pierce Pasture, and what remained on the Slriddy Ranch.

Shortly thereafter, it was agreed between Grant G. Gillett and Hollinger, that Grant G. Gillett should dispose of the cattle so as to secure to Hollinger a profit of two dollars per head.

On the 20th of August, 1898, Grant G. Gillett executed a mortgage on the four hundred head of cattle in the Pierce Pasture, to Elmore & Cooper, of Kansas City, Kansas, to secure two promissory notes of $6,000 each, made by Grant G. Gillett to Elmore & Cooper, due one hundred and fifty days after date; the cattle to remain in the possession of the mortgagor until condition broken. The mortgage was recorded in Dickinson county, Kansas, the residence of the mortgagor, as required by the statutes of Kansas. With the proceeds of that loan, Grant G. Gillett paid off the mortgage that Hollinger had executed to the J. C. Bohart Commission Company, and returned the notes and mortgage to Hollinger, and- also paid Hollinger the two dollars a head profit he had agreed to give him.

Elmore & Cooper sold one of the $6,000 notes to the First National Bank of Deadwood, South Dakota, and thereafter, on January 18,1899, said First National Bank sold said note to the plaintiff, D. A. McPherson, which was before the maturity thereof. Elmore & Cooper sold the other $6,000 note to the Franklin Bank in St. Louis, and thereafter, on the 10th of January, 1899, that bank sold it to the plaintiff, Louis Schmidt.

According to the plaintiff’s version, on the 25th of September, 1898, Joseph Gillett gave an order on Ben Pierce, the owner of the Pierce Pasture, to deliver the four hundred head of cattle in that pasture to James Davis, and Grant G. Gillett indorsed that order. On Sunday, September 25, 1898, Davis went to Alma, which was near the Pierce Pasture, and the next day he proceeded to the Pierce Pasture, and stayed there on Monday night, September 26th. On Tuesday, September 27th, Pierce delivered to Davis the four hundred head of cattle that were in the Pierce Pasture, and Davis, with his assistants, drove them to Alta Vista, where the cattle were loaded into cars on the Rock Island railroad, and Davis started with them, going as far as Herrington. There Grant G. Gillett met the train and took the cattle by a. branch road to Woodbine, Davis going in another direction for other cattle. The cattle reached Woodbine early on the morning of Wednesday, September 28th, and were there unloaded. On the evening of the same day, Grant G. Gillett took three hundred and sixty-two head of the same cattle to Woodbine, loaded them on cars, and shipped them to St. Joseph, consigning three hundred and one head to the J. C. Bohart Commission company, and sixty-one head to Thomas Trowers Sons; Davis accompanying the cattle, and reaching St. Joseph on the morning of September 29 th.

On Sunday, September 25, 1898, Grant G. Gillett caused one hundred and fifty of the cattle that remained on the Skiddy Ranch, to be driven to Woodbine. These cattle were mingled with other cattle (how many is not stated) then at that point, and, on the night of September 25th, they were shipped to the J’. C. Bohart Commission Company, of St. Joseph, and arrived there on the morning of September 26th.

The plaintiffs claim that the defendant, Rankin, purchased seventy-four head of the cattle so taken from the Pierce Pasture, and covered by the mortgage securing the note held by the plaintiff, McPherson, from the Bohart Commission Company, and the first count of the petition is to recover $3,000 in favor of McPherson against Rankin for said seventy-four head of cattle so purchased by Rankin, and afterwards sold by him. The plaintiffs further claim that Rankin was a member of the firm of Rankin, Travis & Co., and that he purchased for said firm eighty-eight head of said cattle, so taken from the Pierce Pasture, from the J. C. Bohart Commission Company, and the second count is to recover the value thereof in favor of Schmidt, the holder of the second note, secured by the same mortgage.

On the other hand, the defendant claims, that the one hundred and fifty head of cattle taken from the Skiddy Ranch, on the 25th of September, 1898, and that reached St. Joseph on the 26th of September, 1898, were the inferior class of cattle of the whole bunch, or “tail enders,” as they were called, and wefe mostly, yearlings, whereas, the cattle that were in the Pierce Pasture were what were called “tops,” that is, were older, heavier and better cattle; that the former were worth only about $3.80 a hundred, while the latter were worth $4.25 to $4.50 a hundred; that the one hundred and fifty head of cattle from the Skiddy Ranch that reached St. Joseph on the 26th of September, were not sold at once, hut that they remained in the pens of the Bohart Commission Company to themselves, and that on the 29th of September, David Rankin, the father of the defendant, was in St. Joseph and saw them in the pens, and they were offered for sale to him but that he declined to buy; that on that night David Rankin returned to his farm in Atchison county, and informed his son, the defendant, of those cattle; and that on the next day the defendant and Travis, and a man named Murchie, went to St. Joseph, the 30th of September, and purchased the one hundred and fifty head, together with others, which had been.brought from the Skiddy Ranch on the 25th of September, from the Bohart Commission company, paying $3.80 per hundred therefor.

The defendant further claims that they bought none of the three hundred and sixty-two head of cattle that were brought from the Pierce Pasture to St. Joseph, on the 29th of September, but that they were older and better cattle, and were kept in a separate pen by the Bohart Commission-company. The defendant further claims, that the cattle purchased by him, for himself and his firm, were the inferior cattle that arrived in St. Joseph on the 26th of September, and that they were easily distinguishable from the cattle from the Pierce Pasture, which arrived there on the 29th of September, by reason of the facts, both of their being young and inferior, and because they were what is called “stale” cattle, that is, they had been in the pens several days, and had been fed on hay and then given water to drink, which had the effect of temporarily increasing their weight, and which treatment would show from the hair of the cattle standing out straight instead of lying down smo'othly, as would the hair of fresh cattle that had only recently come into the stock yards.

Much oral testimony was adduced on each side, intended to identify the cattle purchased by the defendant, as the cattle which came from the Skiddy Ranch, as the defendant claims, or as the cattle which came from the Pierce Pasture, as the plaintiffs claim. Each party attempted to trace each bunch of cattle from the time it left the Skiddy Ranch, or the Pierce Pasture, until the sale'thereof in St. Joseph, and the plaintiffs introduced testimony tending to show that the defendant sold some of the cattle purchased by him on September 30, 1898, in Chicago, and some of them in Buffalo, New. York, in February, 1899.

The plaintiffs' introduced in evidence the account sales of cattle, on account of Grant G. Gillett, by the Bohart Commission Company on October 1, 1898, and October 3, 1898. The account sales both showed that the cattle were sold on account of Grant G. Gillett. The account sales of October 1, 1898, showed that the cattle sold were branded S-T; that there were three hundred and three of such cattle sold on that day, ranging in price from $3.60 to $3.65 per hundred, and that of the three hundred and three, the defendant bought two hundred and one, and his friend, Murchie, bought thirty-six. The account sales of October 3, 1898, show the sale of two hundred and eighty-five head. No brands are given in the account sales. They sold at prices ranging from $3.50 per hundred to $4.40 per hundred, but neither Rankin nor Murchie appear to have purchased any of those. Only one hundred and forty-one of the two hundred and eighty-five brought $4.20 to $4.40; the balance ranging from $3.50 to $3.95 in price.

Further facts appearing in the evidence will be noted in the course of the opinion, the foregoing being sufficient to indicate the issues of fact involved.

The court gave eight instructions at the request of the plaintiffs, and twelve at the request of the defendant. The plaintiffs claim that the second, third, -sixth and ninth instructions given for the defendant are erroneous, and that the sixth instruction given for the defendant is in conflict with the first instruction given for the plaintiffs.

Those instructions referred to are as follows:

Instruction numbered one given for the plaintiff is: “The court instructs the jury that, although you may find from the evidence and under the other instructions given you, that Grant G. Gillett sold the S-T cattle in the Pierce Pasture in the summer of 1898, to Chas. R. Hollinger, nevertheless if you further find from the evidence that prior to the 20th day of August, 1898, said Hollinger had given said Gillett authority to take control of said cattle and dispose of them as he chose, upon procuring for him (said Hollinger) a certain price per head over and above the mortgage that he (Hollinger) had put upon said cattle, and that on or before the 20th day of August, 1898, said Gillett had concluded himself to become the purchaser and owner of said cat-tie and to pay to said Hollinger the price per head which he was to receive under the agreement as aforesaid, and that on said 20th day of August, 1898, he executed the chattel mortgage to Elmore & Cooper in evidence in this case, and within a few days thereafter, and while said cattle remained in the place described in the mortgage in Geary county, Kansas, said Gillett paid off the mortgage which Hollinger had placed upon said cattle, obtaining a release of the same, and sent said Hollinger a check for the amount per head which Hollinger had stipulated as aforesaid that he should receive, and that said Hollinger received said money, and acquiesced thereafter in the transaction when he learned that Gillett had himself assumed ownership' of and mortgaged said cattle, then in that event, Gillett had authority to make the mortgage on said cattle on the 20th day of August, 1898, and when his title was afterwards completed by the completion of the payment for said cattle as aforesaid, his mortgagees had under their mortgage a good and complete mortgage lien upon said cattle, the mortgage taken having been filed for récord in accordance with the provisions of the laws of the State of Kansas. ’ ’

The instructions given for the defendant, and here assigned as error, were as follows:

“2. Even if the jury should believe from the evidence that some of the cattle bought by defendant W. F. Rankin or by Rankin, Travis & Go., as shown by the evidence, were a part of the cattle covered and included in the mortgage read in evidence, yet if the jury cannot determine from the evidence how many, if any, of said cattle so bought by defendant or by Rankin, Travis & CA. were included in said mortgage, the plaintiffs cannot recover on either count of the petition.
“3. The court instructs the jury that in order for plaintiffs to recover they must prove by a preponderance of the evidence the following facts:
“First. That at the time of the bringing of this action plaintiffs were the holders by assignment and transfer by the owners thereof, of the two notes mentioned in the evidence as being executed on August 20, 1898, by G-. Gr. Gillett for six thousand dollars each, and of the chattel mortgage executed on said date by said Gillett purporting to secure said notes, and of the cause of action, if any, which the assignors of said notes had at the time of said transfer on account of the conversion alleged to have been made of cattle described in said mortgage.
‘ ‘ Second. That the cattle shipped by Gillett from Woodbine, Kansas, on September 28, 1898, to Bohart Commission Company were the same cattle conveyed in said chattel mortgage and that said cattle were of the description in said mortgage and were branded S-T on the left side, and that no other cattle than those included in said mortgage were included in said shipment. ■
“Third. That the defendant W. F. Rankin, purchased on the 30fch day of September, 1898, and received into his possession, cattle from said shipment and which were conveyed in said mortgage.
“Without the existence of all said facts and of proof thereof plaintiffs cannot recover, and the defendant Rankin can be held liable only for such cattle as he received at the time which were included in said shipment and which were covered by said mortgage, and the burden of proof is upon the plaintiffs to show the number and description of all such cattle, if any, that said Rankin received out of said shipment.
“6. If the jury believe from the evidence that on August 20, 1898, one C. R. Hollinger was the owner of the cattle in controversy and made no sale of said cattle at or prior to said date to G. G. Gillett, plaintiff cannot recover in this action; and even if you should believe from the evidence that said Hollinger employed said Gillett as his agent to handle said cattle for him, this of itself would not constitute a sale of said cattle to Gilett, nor would it give to said G-illett the right or authority to mortgage said cattle.
“9. The fact that some of the cattle bought by defendant, W. F. Rankin, on September 30, 1898, were branded S-T on the side, as shown by the evidence, is not alone sufficient to prove that said cattle so branded S-T were a part of the cattle included in the mortgage of plaintiffs’ read in evidence, provided the jury believe from the evidence that cattle not included in said mortgage read in evidence were on the market at the St. Joseph Stock Yards on said September 30, 1898, and were also so branded S-T, and that some of said other cattle so branded S-T, if they were so branded, and not included in said mortgage, were bought by defendant Rankin of defendant Bohart Commission Company. ’ ’

The defendant further claims that the trial court should have given a peremptory instruction for the defendant, and, therefore, the verdict and judgment are for the right party, and the judgment should be affirmed even if erroneous instructions were given by the court.

I.

The principal contention of the defendant is that the court should have given a peremptory instruction to find for the defendant, and that, therefore, any erroneous instructions given for the defendant should not operate to reverse the judgment.

The gist of this contention is that the testimony of both the plaintiff and the defendant shows beyond question that the cattle purchased by the defendant on the 30th of September, 1898, were not a part of the cattle covered by the mortgage held by the plaintiff. In other words, that the cattle purchased by the defendant were a part of the one hundred and fifty cattle that came from the Skiddy Ranch, and reached St. Joseph on the 26th of September; that they were small, inferior cattle, yearlings, “tail enders,” and not as good cattle as the “tops” that were in the Pierce Pasture; that the cattle purchased by the defendant had remained in the pens of the Bohart Commission Company from the 26th of September to the 30th of September, and had become rough, hay-fed cattle, and were ■easily distinguishable from the Pierce Pasture cattle that had reached St. Joseph on the 29th of September.

The evidence discloses that all of the cattle were not branded S-T, hut that some of them (the number is not stated) were branded 00, or “circles” as it is called.

It is conceded on both sides that originally there were one thousand head of cattle, owned by Joseph Gillett, and located on the Skiddy Ranch. He took four hundred of those, said to have been the pick of the lot, and placed them in the Pierce Pasture. Then he sold three hundred of said four hundred that were in the Pierce Pasture, and they were shipped to Missouri and sold, and cut no figure in this transaction.' This left one hundred head in the Pierce Pasture, and six hundred head on the Skiddy Ranch. Then Joseph took three hundred of the six hundred on the Skiddy Ranch and placed them in the Pierce Pasture, with the one hundred that remained therein. This left four hundred in the Pierce Pasture and three hundred on the Skiddy Ranch. Joseph then sold the four hundred that were in the Pierce Pasture, and plaintiffs say, the two hundred and forty that remained on the Skiddy Ranch (according to the figures above given there were three hundred still on the Skiddy Ranch) to Hollinger. Hollinger authorized Grant G. Gillett to dispose of the four hundred in the Pierce Pasture, and the two hundred and forty or three hundred on the Skiddy Ranch, so as to net him two dollars a head, and in order to do so, Gillett borrowed $12,-000 from Elmore & Cooper, on the 20th of August, 1898, and executed a mortgage on the four hundred head in the Pierce Pasture; and the plaintiffs are the assignees of that mortgage- and those notes. Grant Gillett, out of the proceeds o-f this loan, paid off the Hollinger mortgage to the Bohart Commission Company, and returned the same, with the note it secured, to Hollinger, and also paid Hollinger the two dollars a head he was to receive from the cattle.

It is conceded on both sides, that on the 25th of September, Grant G. Gillett shipped one hundred and fifty of the cattle-that were on the Skiddy Ranch, to the Bohart Commission Company, in St. Joseph, and that they reached there on the 26th of September. It is also conceded that on the 27th of September Grant G.' Gillett took the four hundred head that were in the Pierce Pasture to Woodbine, Kansas, and that on the 28th of September, he shipped three hundred and sixty-two of said four hundred head to St. Jo-seph, consigning three hundred and one thereof to the Bohart Commission Company, and they reached St. Joseph on the morning of the 29th of September. The plaintiffs claim that the one hundred and fifty head from the Skiddy Ranch that were shipped on the 25th of September, were mingled with other cattle — how many others were so added the plaintiffs’ statement does not show. The defendant claims that the Skiddy Ranch cattle were kept in separate pens in St. Joseph from the Pierce Pasture cattle, and that the Skiddy Ranch cattle were sold on the 1st. of O'ctober, whereas the Pierce- Pasture cattle were not sold until the 3d of October.

The account sales of the 1st of October shows that there were three hundred and three head of cattle sold that day, and the account sales of October 3d shows that there were two hundred and eighty-five head sold that day, and that all of them were sold on account of Grant G. Gillett. Therefore, the story told by the account sales is that there were one hundred and fifty-three cattle sold on the 1st of October more than were embraced in the one hundred and fifty that were shipped from the Skiddy Ranch to St. Joseph on the 25th of September, and that there were sixteen less sold on the 3d of October than were shipped from the Pierce Pasture on the 28th of September and consigned to the Bohart Commission Company. The account sales of October 1st further shows that the defendant purchased two hundred and one of the Gillett cattle on that day, and that his friend Murchie purchased thirty-six cattle, aggregating two hundred and thirty-seven, or eighty-seven more cattle than the one hundred and fifty that were shipped from the Skiddy Ranch on the 25th of September. The one hundred and fifty from the Skiddy Ranch, shipped on the 25th of September, plus the three hundred and one shipped on the 28th of September, and all consigned by Grant Gillett to the Bohart Commission Company, aggregate four hundred and fifty-one head; yet the account sales of October 1st and 3d shows that four hundred and thirty-eight head altogether were sold on these two days.

These considerations clearly demonstrate that the defendant, alone, purchased fifty-one more cattle on the 30th of September, than were shipped from the Skiddy Ranch on the 25th of September. There is no evidence in the record that Gillett had any other cattle in the hands of the Bohart Commission Company between the 25th of September and the 3d of October, than the two shipments of September 25th and September 28th.

The account sales of October 1st further shows that the whole three hundred and three head sold that day were branded S-T, whereas the account sales of October 3d does not show what brands were on the cattle. The account sales of October 1st and 3d show that there were five hundred and eighty-eight cattle sold on those two days for Grant G. Gillett. If there were only one hundred and fifty S-T cattle shipped September 25th, and three hundred and one S-T cattle shipped September 28th, then there were in the hands of the Bohart Commission Company, on .the 29th of September, four hundred and fifty-one S-T cattle, and hence, there were one hundred and thirty-seven more cattle belonging to G-illett, in the hands of the Bohart Commission Company, and sold by them on October 1st and 3d than there were S-T cattle shipped from both the Skiddy Ranch and the Pierce Pasture; hence, if all the cattle that were sold on October 1st were S-T cattle, as shown by the account sales of that day, there must have been one hundred and fifty-three S-T cattle sold by the Bohart Commission Company on October 1st more than the one hundred and fifty that had come from the Skiddy Ranch, and as there is no evidence that any S-T cattle came from anywhere else except the Skiddy Ranch or the Pierce Pasture, the conclusion is inevitable that, if the account sales of October 1st is correct, there were one hundred and fifty-three of the cattle that came from the Pierce Pasture sold on that day, and the plaintiffs’ mortgage covered all of the cattle that came from the Pierce Pasture, and consequently, on this showing, the plaintiff would be entitled to recover from, the defendant, such of one hundred and fifty-three cattle as he purchased on that day, and it is conceded that he purchased in all two hundred and one S-T cattle on that day. And, therefore, if the defendant purchased all of the one hundred and fifty that came from the Skiddy Ranch, he would also have purchased fifty-one of the one hundred and fifty-three that were sold on that day that had come from the Pierce Pasture.

"What is here said is not intended as decisive of the plaintiffs’ right to recover for any particular number of cattle, but is cited to show that the testimony offered by the plaintiffs was sufficient to' take the case to the jury, and that it was for the jury to determine how many of the cattle, purchased by defendant, were from the Skiddy Ranch and how many were from the Pierce Pasture. Therefore, there was no error in the refusal of the peremptory instruction asked.

II.

The defendant contends that, even if he did purchase some of the cattle that came from, the Pierce Pasture, still the plaintiffs cannot recover unless they furnish the jury accurate information as to how many of the Pierce cattle the defendant purchased, and that it was not competent to leave it to the jury to guess how many there were; and the second instruction given for the defendant told the jury that if they could not determine, from the evidence, how many of the cattle', purchased by the defendant, were included in the plaintiffs’ mortgage, then the plaintiffs, could not recover on either count of the petition.

The burden of proof was on the plaintiffs to show that the defendant had purchased some of the cattle covered by their mortgage, and the burden was further upon them to furnish the jury with evidence of facts from which the jury were authorized to draw inferences of fact, as to the exact number of cattle covered by the mortgage that the defendant had purchased.

The foregoing demonstration, in the first paragraph of this opinion, shows that the defendant must have purchased some of the cattle that came from the Pierce Pasture, for, he purchased, on that day, fifty-one more S-T cattle than had come from the Skiddy Ranch, and there is no evidence in the record that any S-T cattle came from anywhere except the Skiddy Ranch and the Pierce Pasture. Therefore, conceding to the defendant that he purchased the whole one hundred and fifty head that came from the Skiddy Ranch, and bearing in mind that the defendant purchased two hundred and one S-T cattle on the 1st of October, the jury would have been authorized, on such showing, to find that the defendant had purchased at least fifty-one of the cattle that came from the Pierce Pasture, and that were covered by the plaintiffs ’ mortgage.

The argument of the defendant is that all of the Pierce Pasture cattle were sold on October 3, and that they were worth froin $4.25 to $4.50 a hundred, whilst the cattle that were sold on October 1st were inferior cattle, and that defendant paid only $3.80 per hundred for them. As hereinbefore pointed out, however, there were only one hundred and forty-one of the two hundred and eighty-five cattle that were sold on the 3d of October that brought over $4 per hundred, the remaining one hundred and forty-four ranged in price from $3.50 to $3.95 per hundred. The argument of the defendant in this respect, therefore, is not supported by the account sales of October 3d; neither is the claim that the defendant paid $3:80 per hundred for the cattle purchased on the 30th of September, borne out by the account sales of October 1st, for according to those sales defendant paid $3.60 per hundred. This line of argument, therefore, does not overcome the fact that the defendant purchased at least fifty-one more S-T cattle, on the 30th of September, than were shipped from the Skiddy Ranch on the 25th of September. Instruction numbered 2, given for the defendant, was therefore erroneous, for there was evidence upon which the jury could have found that defendant had purchased at least fifty-one of the cattle covered by the mortgage, and the plaintiffs were, therefore, entitled to recover for that number of cattle even if the evidence left it so that the jury could not determine how many more the defendant purchased were covered by the mortgage. The court should have put the case to the jury for the jury to determine how many of the cattle the defendant purchased, which were covered by the mortgage, and to return a verdict for the plaintiff for the number so found to have been purchased.

The witness Barnes testified that the Bohart Commission Company sold to the defendant the cattle that had been there several days, and “possibly might have sold him some of the other cattle, I wouldn’t be positive; more than likely he did.” And the witness Thompson, who was the general manager of the Bohart Commission Company, testified that of the cattle which arrived on September 26th, which included the one hundred and fifty from the Skiddy Ranch, "We sold a few cattle along during the week, and receipts accummulated on us and we worked on the cattle along and sold a few more of them, and on Thursday, if I remember correctly, I went away and left some of the cattle unsold. Q. Where did you go to? A. Kansas City. Q. And some of the cattle that had been received here on Monday, the 26th, were still unsold? A. Yes, sir.” The witness further testified that he tried to sell them to Mr. Rankin’s father, and that he had gone to Kansas City to try to sell the cattle, and that they were sold during his absence. The jury were entitled, therefore, to consider this testimony in determining whether or not all of the one hundred and fifty cattle, that had come from the Skiddy Ranch, were on hand on the 29th of September, when the defendant’s father saw the cattle, or on Friday, the 30th of September, when the defendant purchased. For if this testimony was true, then the defendant must have purchased more than fifty-one of the cattle covered by the plaintiffs’ mortgage in order to make up the two hundred and one head, which he purchased on the 30th of September. In other words, there was evidence from which the jury could have found, as a fact, that the defendant had purchased a definite number of cattle that were covered by the plaintiffs’ mortgage.

III.

The sixth instruction given for the defendant is assigned as error. That instruction is as follows:

"If the jury believe from the evidence that on August 20, 1898, one C. R. Hollinger was the owner of the cattle in controversy and made no sale of said cattle at or prior to said date to Gr. Gr. Grillett, plaintiffs cannot recover in this action; and even if you should believe from the evidence that'said Hollinger employed said Gillett as his agent to handle said cattle for him, this of itself would not constitute a sale of said cattle to Gillett, nor would it give to said Gillett the right or authority to mortgage said cattle.”

It is claimed that this instruction is not only erroneous in itself, but that it is in direct conflict with instruction numbered 1 given for the plaintiff, which told the jury in substance that if Hollinger had given Gillett authority to dispose of the cattle, as he chose, upon procuring a certain price per head, over and above the mortgage, then on the cattle, made by Hollinger, and if Gillett himself concluded to become the purchaser and owner of the property, and to pay Hollinger the price per head which he was to receive under this agreement, and if Gillett executed the mortgage to Elmore & Cooper, and paid off the mortgage which Hollinger had placed upon the cattle, and obtained a release of the same, and sent Hollinger a check for the amount per head which Hollinger was to receive; and if Hollinger received the money and acquiesced thereafter in the transaction when he learned that Gillett had himself assumed the ownership of and mortgaged the cattle, then Gillett had the authority to mortgage the cattle, and his title was afterwards completed by the payment of the Hollinger mortgage and the amount he paid to Hollinger.

The defendant does not seriously contend that this instruction numbered 6 is not in conflict with plaintiffs’ instruction numbered 1, hut he contends that plaintiffs’ instruction numbered 1 is erroneous, because he says the evidence shows that Hollinger gave Gillett power to sell the cattle so that it would net him (Hollinger) $1.50 to $2 per head over and above the mortgage he (Hollinger) had given to the Bohart Commission Company, but that Hollinger never gave Gillett any authority to mortgage the cattle and with the proceeds of the mortgage to pay off the Hollinger mortgage to the Bohart Commission Company, and the amount to be paid to Hollinger; and furthermore that the evidence does not show that Hollinger, when he received the $2 per head, knew that Gillett had mortgaged the cattle instead of selling them, and that he, therefore, never ratified the unauthorized act of Gillett. And it is claimed that this case falls within the rule laid down by this court in New England Nat. Bank v. Northwestern Nat. Bank, 171 Mo. 307. It is true that at the time Gillett executed the mortgage, under which the plaintiffs claim, and when he paid off the Hollinger mortgage to the Bohart Commission Company, and when he sent Hollinger the $2 per head he was to have, Hollinger did not know that Gillett had mortgaged the cattle to Elmore & Cooper, or that with the proceeds of that mortgage his mortgage to the Bohart Commission Company had been paid, and the $2 per head to him had been paid. But Hollinger afterwards ascertained all of those facts, and knew them before the trial of this case, and perhaps before the institution of this suit, and when he did ascertain all of the facts, he acquiesced in the act of Gillett, and that acquiescence thereby made the act of Gillett, in becoming the owner of the cattle himself, in that way, a legal act, even if there could have been any objection to Gillett becoming the purchaser himself, in the first place. This case is unlike the case of New England National Bank v. Northwestern National Bank, supra, in this, that in that cáse there were no cattle in esse, such as were secured by the mortgage, whereas, in this case, the cattle covered by the mortgage were not only in esse but segregated from all the other cattle of similar kind or brand. The Gillett mortgage was not void, but only voidable at the election of Hollinger, and Hollinger is not the complaining party here. Hollinger bought the four hundred cattle in the Pierce Pasture, and the two hundred and forty or three hundred head on the Skiddy Ranch, from Joseph Gillett, by executing a mortgage on those that were in the Pierce Pasture to the Bohart Commission Company, and paying Joseph with the proceeds of that mortgage. Grant Gillett bought the cattle from Hollinger by executing a mortgage on the four hundred head in the Pierce Pasture to Elmore & Cooper (he did not include in the mortgage the cattle that were on the Sldddy Ranch), and with the proceeds of that mortgage he paid Hollinger’s mortgage to the Bohart Commission Company, and the $2 a head he had agreed to pay Hollinger, or that he had agreed Hollinger should receive over and above the mortgage. Elmore & Cooper sold the notes secured by the mortgage to the two banks mentioned, and those banks sold the notes to the plaintiffs, before maturity. Therefore, in its final analysis, the money of these plaintiffs paid for not only the four hundred cattle that were in the Pierce Pasture but also the cattle that were on the Sldddy Ranch, and also the $2 per head that went to Hollinger. The plaintiffs’ security covered only the cattle that were in the Pierce Pasture. The mortgage securing the plaintiffs’ money was properly recorded in the county of the residence of the mortgagor in Kansas. The cattle covered by the mortgage were, at the time of its execution, branded with a certain mark and segregated from all other cattle of any kind or brand. The plaintiffs, therefore, had whatever security is afforded by the cattle mortgage.

The defendant, however, contends that he purchased the cattle in open market, and paid full value therefor without any notice of the rights of the plaintiffs, and that the plaintiffs have no one but themselves to blame for the confusion and loss which ensued, arising from the fact that there were also other cattle marked S-T, not covered by the plaintiffs’ mortgage, as well as the cattle of that brand which were so covered, and that the plaintiffs could have saved the loss and confusion if, after they had received the mortgage, or after their assignors had received it, they had caused the cattle to he further branded with some other mark besides S-T, in order to definitely mark them.

It would undoubtedly have been the part of wisdom for the plaintiffs, or their assignors, so to have done. But defendant cites no case or law which imposed such a duty on the plaintiff's, or their assignors, nor does the defendant attempt to show that the plaintiffs, or their assignors, knew that there were any other cattle in the world branded S-T except those covered by the mortgage. At best, cattle mortgages afford uncertain security, and the conditions here presented are liable to arise at any time when the mortgagor is not thoroughly honest; for the facilities afforded to the mortgagor of spiriting away the mortgaged cattle are so great that loss to purchasers in the open market is liable to occur at any time. But the doctrine of ca,veat emptor applies to purchasers in open market. As between the plaintiffs holding a valid mortgage on the cattle in the Pierce Pasture, and the defendant, who purchased the cattle in the open market and without knowledge of the existence of the mortgage other than is imputed by the recording of the mortgage, both may justly be said to be innocent parties, but the rule of law is that a person who purchases in open market purchases at his own risk and peril, and is liable to the true owner of the property purchased if the seller and ostensible owner is not the true owner. Therefore, the rights of the parties in this action must be determined according to the cold principles of law. If the defendant purchased any of the cattle covered by the mortgage, he is liable to the plaintiffs for as many as he so purchased, and the fact that he paid full value for them in open market is no defense. The question of whether the cattle purchased by the defendant were or were not a part of the cattle covered by the mortgage, was a question of fact to be found by the jury. The jury found the fact for the defendant, and if the jury had been properly instructed, that would have ended the case, bnt the plaintiffs were entitled to have the jury instructed according to the true law of the case, and if the law was improperly given to the jury, then the finding of the jury of the fact under such instruction, amounts to nothing. As hereinbefore pointed out, the second and sixth instructions given for the defendant were erroneous. The ninth instruction was also misleading, and should not have been given in the form it now is.

The case, therefore, in a nut shell is this: The plaintiffs claim that the defendant purchased a portion of the three hundred and one head of cattle that were covered by their mortgage and that arrived in St. Joseph on the 29th of September; whereas, the defendant claims that he purchased none of the three hundred and one that were covered by the mortgage, hut that he only purchased one hundred and fifty that were not covered by the mortgage. If the defendant purchased any of the cattle that were covered by the mortgage, then he is liable to the plaintiffs for as many thereof as he so purchased, for as to them the plaintiffs had the better title. On the other hand, if the defendant purchased only the one hundred and fifty that were not covered by the mortgage, he got a good title, because as to them, the plaintiffs had no claim under their mortgage. The matter, therefore, is principally a question of fact for the jury to pass on, under proper instructions from the court as to the rights of the parties.

Prom the foregoing reasons it follows that the judgement of the circuit court must he reversed and the cause remanded for trial anew in accordance herewith.

All concur.