State ex rel. Peters v. Koch

Wagner, Judge, delivered tbe opinion of tbe court. Eiebmann was indebted to Peters in tbe sum of $170, and, to secure tbe same, executed a deed of trust on certain furniture in bis bouse. Tbe deed of trust was regularly recorded. Subsequently tbe respondent Koch sued out an attachment against Eiebmann, and caused tbe property conveyed by tbe deed of trust to be levied upon and sold. Tbe trustee named in tbe deed of trust declining to act, Peters filed bis claim under the sheriff’s and marshal’s act, applicable to St. Louis county, and thereupon tbe shSriff took from tbe respondents an indemnifying bond conditioned to make good to Peters all damages arising from tbe levy and sale of tbe property. This suit was instituted upon tbe bond so taken. Upon tbe trial tbe existence of tbe debt, and good faith in tbe execution of tbe deed of trust securing tbe same; tbe insolvency of tbe debtor ; tbe levy and sale under tbe attachment of tbe property covered by the deed, and tbe value thereof, were clearly proved. Tbe main defense set up in tbe answer and relied on was that Peters and Eiebmann combined and conspired together-to delay, binder and defraud tbe creditors of Eiebmann, and for that purpose and with that intention.Eiebmann conveyed and Peters accepted a conveyance of tbe personal property, and that Eiebmann still remained in possession and was tbe owner of tbe property. This related to an absolute sale made subsequent to tbe deed of trust; and as it constituted new matter, and no reply was filed, it must be taken as confessed. Tbe court, at Special Term, gave judgment for tbe plaintiff; but this judgment was reversed at [584] General Term, and the plaintiff brings the case here for review. That the plaintiff, as the real party in interest in the deed of trust, had a right to give the notice and make the claim to the property when seized by sheriff, is established by the decision in State, to use, etc., v. McKellop et al., 40 Mo. 184; and the only question, therefore, is whether the new matter set up in the answer constituted a full and valid defense. It is true, there was evidence given going to show that the sale was fair and honest, but yet the pleadings did not deny the averment in the answer, and it is admitted that no change of possession followed the sale. This fact of itself, under our present statute, would make the sale void as to creditors, and the plaintiff does not set up any claim or assert any right in consequence of the second sale. The retention of possession, however, does not avoid his right to recover under the deed of trust, for the statute expressly provides that where a mortgage or deed of trust on personal property is acknowledged or proved and recorded, the property may be retained in the possession of the mortgagor or vendor. The only issue presented is the right of the plaintiff to recover the debt secured by the deed of trust. The position is taken by the defendants — and we suppose it was upon that theory that the court at General Term acted — that the second sale to Peters constituted a merger of both titles in one, and that, as the second sale was void because no change of possession took place, therefore his rights under both claims were gone. But we can not assent to this doctrine. There is no question about the entire validity of the deed of trust. The debt secured by it was in full force and vigor. Merger is the extinguishment, by act of law, of one estate in another by the union of the two estates. But even had the second sale been good and passed what rights Eichmann had remaining in him in the property to Peters, still it would not have amounted to a merger. The legal title was in the trustee, and the subsequent sale was only of an equity. Peters, if the sale had been good, would only have taken an equitable interest whilst the legal title was outstanding in the trustee. Under such circumstances it is obvious there could be no merger. Peters never claimed [585] under the second sale, but relied wholly upon the first, about the validity of which there can be no doubt, and I think there can be no question as to his right to recover. This view effectually disposes of all the points made by the instructions. It results, therefore, that the.judgment of the General Term must be reversed and that of the Special Term affirmed. The other judges concur.