Pleasant Hill Light, Power & Water Co. v. Quinlan

ELLISON, J. This is a proceeding in equity to subrogate plaintiff to the rights of another in a certain deed of trust given to that other for the purpose of indemnity. The trial court dismissed the biil after a hearing and plaintiff appeals. It appears that J. O. McAlister was engaged (in two cases) in litigation with J. H. Walden, and that. [490] being defeated by Walden in tbe circuit court of Oass county, be appealed to this court. That for tbe purpose •of sucb appeals be was compelled to give bond with a surety; that be procured tbe National Surety Company ■as bis surety, and to indemnify that company against loss be executed to it an indemnity deed of trust on certain of his real estate, to-wit: lots four, five and six, in block forty-seven, Pleasant Hill. That after-wards, on May 7, 1906, tbe judgments were affirmed by this Court and tbe surety company became liable on tbe appeal bond. On tbe 17th day of November, 1905, McAlister sold and conveyed to tbe plaintiff by warranty deed certain ■other real estate in Pleasant Hill (of lengthy description), but not that included in tbe indemnity deed of trust to tbe surety company. But on tbe 27th day of November, 1905, McAlister conveyed to defendant, Ada Quinlan, tbe same realty be bad conveyed to the surety company as indemnity against liability on the appeal bonds as above stated. Tbe judgment against M'cAlister was, of course, a lien on all bis real estate, and thus plaintiff and defendant Ada became tbe owners of separate pieces of realty which were subject to sucb lien; for they both bought of McAlister after the date ■Of tbe judgment against him. Tbe difference in their situations was that tbe piece bought by defendant bad been specifically conveyed or set apart as indemnity for tbe payment of tbe judgments. Afterwards defendant Ada purchased tbe judgments against McAlister and bad execution issued and levied upon tbe real estate of this plaintiff which it bad bought of McAlister, and in order to save it plaintiff was compelled to pay off tbe execution, amounting to more than six hundred dollars. Plaintiff then instituted this proceeding asking to be subrogated to tbe rights of tbe surety company in tbe indemnity deed of trust, and that tbe land in sucb deed of trust be sold [491] for the amount it had been compelled to pay, claiming that that land had been deeded to a trustee for that purpose, — and for general relief. Where, as in this case, two persons buy separate pieces of real estate of a common grantor, upon each of which there is a judgment lien, but upon one of which the judgment debtor had placed a special lien for the amount of the judgment, the latter piece is primarily liable as between the two purchasers. And if the one who purchased the piece not so set apart, is compelled to pay it to save his land, he may go upon the other tract which was so set apart, for reimbursement. Defendant, to avoid the application of this principle of equity to the present transaction, goes into a detailed statement of a sale or exchange of lands between defendant and McAlister whereby she became the owner of McAlister’s Missouri property, including that in controversy, in exchange for her property in Oklahoma. It seems that the business in behalf of defendant was done by her brother and she, of course, is chargeable with whatever knowledge he had. Besides the indemnity deed of trust being recorded, her brother had knowledge thereof and she must therefore be held to the enforcement of the equitable principle above stated, unless for the following consideration urged by her. It appears that when McAlister and plaintiff were negotiating for plaintiff’s purchase of the land it bought ■of him, the plaintiff realizing the judgments pending ■on appeal in this Court, were a lien on the property it proposed to purchase, stipulated with McAlister that it would hold back $>500 of the purchase money so as to be safe in case of an attempt to enforce the judgments against the property it proposed to purchase. It appears that defendant’s agent learned of such stipulation, hut not through this plaintiff. Before the deal was consummated and the conveyance made, that provision was abandoned and plaintiff paid the full consideration, [492] and received an absolute conveyance. The evidence shows that this plaintiff did not represent to defendant that it had reserved five hundred dollars for the payment of the judgment. Nor did it put such stipulation in the preliminary contract of sale with a view of any one seeing it. It was the private stipulation between McAlister and plaintiff, which they had a right to abandon. Defendant had no right to rely upon it as it was not made to her. nor her agent. The rule is that estoppel cannot be based on statements made to third persons which are not intended to be communicated to the party claiming the benefit thereof. [2 Beach on Equity, sec. 1101.] It is said in Kinney v. Whiton, 44 Conn. 262, that if a bystander overhears a conversation between two others, not intended for him, he has no right to appropriate it to himself and act upon it. To the same effect are Kuhl v. Jersey City, 23 N. J. Eq. 84; Maguire v. Selden, 103 N. Y. 642; Mayenborg v. Haynes, 50 N. Y. 675; and Stevens v. Ludlum, 48 N. W. 771. For these considerations we are of the opinion that plaintiff is entitled to have the indemnity deed of trust foreclosed and the property therein described sold for the amount of the judgment, interest and costs, etc., which it was compelled to .pay to protect its property from the execution levied upon it. The judgment will be reversed and the cause remanded'that proper judgment may be entered accordingly. All concur.