Ellsberry v. Duval-Percival Trust Co.

BRADLEY, J.- — -This is an action to determine the priority of liens. Below the decree went for plaintiff and defendants Duval-Percival Trust Company and Mary E. Flannery appealed. The suit was commenced against the two defendants above named and one W. J. Smiley. The trust company and Mary E. Flannery filed answer and contested, but Smiley made no appearance. Hereinafter when we use the term defendants we have reference to the trust company and Mary E. Flannery who prosecute this appeal. Prior to the transactions which gave rise to this cause Miss Affa Wealand was the owner of .120 acres of land in Barton county. One *242 Irwin H..'Dowell claimed to have found a purchaser for said land in the person of one John Johnson, March 25, 1924, a. deal through Dowell was made whereby-Miss Wealand sold her land to Johnson for $4800. Five hundred dollars was to be paid in cash, and the balance was to be in two notes, one for $500 due in one year, and one for $3800 due in five .years. Both notes were to draw six -per cent, interest and were to be' secured by first deed of trust on the land sold. March 25th Miss Wealand and her sister, the plaintiff herein, and Dowell went to the office of Leland Selvey an abstractor and notary, and Selvey prepared, and took the acknowledgment to, a warranty deed conveying the land from Miss Wealand to Johnson, Dowell had with him, at the time, the two notes and deed of trust given by Johnson which by direction of Miss Wealand were made to plaintiff. The deed of trust from Johnson to plaintiff were dated March 1, 1924, and acknowledged March 22nd. The warranty deed from Miss Wealand to Johnson and the deed of trust from Johnson to plaintiff were left with the notary Selvey to be recorded when the $500 cash was paid. March 26th, the-next day after the meeting at Selvey !s office, Dowell paid the $500 and thereupon Selvey took the warranty deed and- the deed of trust to the recorder’s office. The warranty deed was filed at 3:45 P. M., and the deed of trust at 3:50, five minutes later. The above are the facts .relative to the-steps and transactions which resulted in the deed of trust held by plaintiff. Following are the facts, appertaining to the deed of trust under which appellants claim priority. March 21st, four days before Miss Wealand executed deed to Johnson and five days before his deed was delivered and filed for record Johnson conveyed by warranty deed to defendant Smiley for -a recited consideration of $6300. This deed was acknowledged on March 22nd and was filed for record at 3:10 P. M.-,-March 26th, 35 minutes prior to the filing of the deed from Miss Wealand to Johnson. March 21st Smiley executed a deed of trust to defendant trust company to secure a note for $2000, and this deed of trust was acknowledged March 22nd and filed for record at 3:15 P. M., March 26th, 35 minutes prior to the filing of the deed of trust to plaintiff to secure the purchase price of the land sold by Miss Wealand to Johnson. * March 26th, and immediately after the four instruments above mentioned were filed, Dowell had Lester L. Pahlow, an' abstractor, to bring the abstract of the Wealand land down to 3:45 P. M., March 26th. When thus brought down the abstract showed all of the conveyances herein mentioned except the deed of trust from Johnson to plaintiff given to secure purchase price. The abstract, showing' transfers to 3:45 P. M., of March 26th, was presented to defendant trust company on March 27th and was approved and a $2000 loan made to Smiley, but the money was paid to Dowell who “submitted proof” *243 that he was Smiley’s agent and had the right to receive the money. April 29, 1924, the defendant trust company for value assigned the Smiley note and deed of trust to defendant Mary E. Flannery. Plaintiff stands upon the proposition that the deed of trust from Smiley to the defendant trust company, although filed for record 35 minutes prior to the filing of her deed of trust, is nevertheless inferior and not entitled to priority. Defendants contend that when plaintiff’s deed of trust was filed the deed of trust from Smiley to the trust company was then on file, that is of record and that plaintiff, therefore, took her deed of trust with constructive notice of the Smiley deed of trust to the trust company. It is not claimed that Miss Wealand or plaintiff had any actual knowledge of the deceptions and manipulations of Dowell which resulted in this action. Defendants as stated rely upon the priority of record to sustain their position. Section 2198, Revised Statutes 1919, provides that every instrument proved or acknowledged that affects or conveys real estate shall be recorded in the office of the recorder in the county in which such real estate is situated. The following section, section 2199, provides that every such instrument, etc., shall from the time of filing “impart notice to all persons of the contents thereof and all subsequent purchasers and mortgagees shall be deemed, in law and equity, to purchase with notice.” Defendants invoke these statutory provisions of our recording act. Also they invoke section 2266, Revised Statutes 1919, of the statute on conveyances, and the general doctrine of inurement respecting after acquired title. Section 2266 is as follows: “Where a grantor, by the terms of his deed, undertakes to convey to the grantee an indefeasible estate in fee simple absolute, and shall not at the time of such conveyance, have the legal title to the estate sought to be conveyed, but shall afterward acquire it, the legal estate subsequently acquired by him shall immediately pass to the grantee; and such conveyance shall be as effective as though such legal estate had been in the grantor at the time of the conveyance.” Defendants in effect say that under this statute and under the general doctrine of inurement of after-acquired title the title that Johnson acquired by the deed from Miss Wealand immediately passed to Smiley and by the same rule passed instanter from Smiley to the holder of the Smiley deed of trust. And since the course of title thus ran, and since the Smiley deed of trust was of record to plaintiff’s deed of trust, it is vigorously contended that plaintiff’s deed of trust is not entitled to priority. Such reasoning is not without force and on the point able lawyers, courts and textwriters have differed. But as we read the law in our own jurisdiction defendants’ position cannot be sustained for two reasons: (1) Because of our recording law a recorded deed executed by one who has no title, but who after *244 ward acquires the title by recorded deed, is not constructive notice to a subsequent purchaser in good faith from the common grantor. [Ford v. Unity Church Society, 120 Mo. 498, 25 S. W. 394; Dodd v. Williams, 3 Mo. App. 278; Norman’s Land & Mfg. Company v. Hunter et al., 270 Mo. 62, 193 S. W. 19; Convey v. Pratt, 248 Mo. 576, l. c. 584, 154 S. W. 749.] In the note to Builders Sash & Door Company v. Joyner, 25 A. L. R. 81, the doctrine of after-acquired title is considered at length, and a great number of cases are there collated and discussed. On page 89 of the note mentioned is this language: “As appears from the theory of the cases discussed, supra, those cases hold that an after-acquired title inures to the benefit of the prior grantee, notwithstanding the recording laws. Upon this point there is difference of opinion. It is the view of the cases discussed in the present subdivision that the recording laws prevent the after-acquired title from inuring to the benefit of a grantee who took a conveyance from one who had no title to the property and who recorded such title before the grantor acquired title.” Supporting this last statements, among other cases cited are Ford v. Unity Church Society, and Dodd v. Williams, supra. The Ford case is a leading case and we could not improve upon the statement of the law as there made, and will not further discuss the question. (2) The second reason why defendants’ position cannot be sustained is that a mortgage or deed of trust given to secure the purchase price of land and executed simultaneously with the deed to the purchaser, takes precedence and priority over liens created by the grantee prior to his acquisition of title. [Windler v. Lambeth, 163 Mo. 428, l. c. 440, 63 S. W. 684.] The judgment below was in accordance with the law and should be affirmed, and it is so ordered. Cox, P. J., and Bailey, J., concur.