Hord v. Harlan

Gantt, P. J. This is a bill in equity by plaintiffs to postpone the lien of a certain deed of trust executed by defendant Charles Harlan to Daniel M. Tucker, trustee for Wm. B. Tucker, January 26, 1893, to secure a note for $4,000. The several plaintiffs, J. W. Hord, Joseph A. Dealing, H. T. Greenway, E. M. Bryan, A. M. Taylor, John W. Gordon and George C. Ramsey each obtained a several judgment in his own behalf against defendant Harlan in the circuit court of Callaway county during the summer and fall of 1894, the total amount of such judgment aggregating $2,461.35. The various debts upon which these judgments are based were incurred by the said plaintiffs becoming sureties for Harlan in bank at Jefferson City and Pulton. The farm known as the “home place” of defendant Harlan consisted of two hundred and forty-three and seventy-five hundredths acres of land, about twenty-five miles from Pulton, the county seat, in the south part of Callaway county on the Missouri river. It was estimated by the various witnesses to be worth between $7,000 and $8,000. It sold for $5,050 at the trustee’s sale under the Tucker deed of trust to A. M. Taylor, one of the plaintiffs. On March 24, 1879, W. B. Tucker loaned 0. H. Harlan $2,000 at eight per cent compound interest and took a deed of trust on the “home place.” This deed of trust was not recorded until November 21, 1892. On the sixteenth of January, 1893, the note for $2,000 amounted to $5,800. Tucker on that day remitted $1,800 and took a new note from Harlan for $4,000 and a new deed of trust on the same land to secure the new note. The plaintiffs’ judgments represent the balances due on the several notes of Harlan on which they were his sureties. He had owned an island and had given a deed of trust thereon to secure [473] several of these notes and had given personal security on other notes and after these mortgages were foreclosed these balances still existed and were paid by these sureties. These debts were contracted by O. H. Harlan prior to-the filing of the Tucker deed of trust. All of these plaintiffs testified that they were ignorant of the existence of the Tucker deed of trust' of 1879 until after it was recorded in 1892; that had they known the home place was thus encumbered they would not have gone security for C. H. Harlan. All or nearly all of them testified that he had assured them the home place was clear of incumbrances, but no knowledge of these representations by Harlan to these plaintiffs or either of them was brought home to Tucker who lived some twenty-five miles distant. There was no evidence that Tucker made any agreement or had any understanding with Harlan that he would not record his deed of trust. Tucker testified that the failure to record his deed was a piece of pure negligence on his part which he discovered when his friends began to predict that he would lose by having become surety for Harlan on a guardian’s bond. The circuit court after hearing all the evidence dismissed plaintiffs’ bill and gave judgment for defend- ■ ants. Plaintiffs appeal. Plaintiffs predicate their claim to postpone defendant Tucker’s deed of trust to their judgments upon the decisions of this court in Bank v. Doran, 109 Mo. 40, and Bank v. Buck, 123 Mo. 141. In those cases it was ruled that an agreement by a mortgagee to withhold his mortgage from record whereby others are induced to give credit to the mortgagor is a fraud upon subsequent creditors, and will postpone the 'mortgagee to such subsequent creditors, but it was expressly ruled in Bank v. Buck, 123 Mo. 141, that “a person incurs no penalty for a mere failure [474] to record his deeds, save such consequences as are provided for by the recording acts; and the mere failure to record a deed or mortgage is not even evidence of fraud.” In Buck’s case it was clear that there was an understanding between Prance, the mortgagee, and Buck & McCroskey that the mortgage should not be recorded; that the mortgage was in the form of an absolute deed and by the suppression of this deed Buck and McCroskey, who were bankers, were enabled to obtain credit with the plaintiff in that case to an amount three times the amount of their bank capital. In those circumstances we held the deed fraudulent but no such' facts are to be found in this record. In Bank v. Doran, 109 Mo. 47, the chancellor found “that at the time said deeds of trust were executed it was expressly agreed by the said Bartle that the same should be withdrawn from the record and the existence thereof concealed.” Upon that finding, to which this court deferred, the deed was held fraudulent. Bank v. Frame, 112 Mo. 502, follows Bank v. Doran. This question was again before us in Bank v. Rohrer, 138 Mo. 369, and the cases reviewed and it was again held that the mere withholding of a deed from record was not evidence of fraud. In that ca.se it is said: “It has always been held in- this State ‘that the title of a bona fide purchaser or mortgagee under a deed or mortgage not recorded, is good against creditors at large, and is also good against sales under judgments and executions, if the deed or mortgage' is duly recorded before such sales.; ” Sappington v. Oeschli, 49 Mo. 244; Davis v. Ownsby, 14 Mo. 170; Valentine v. Havener, 20 Mo. 133; Bank v. Buck, 123 Mo. 141. In this case there was no agreement to withhold the deed of trust from record. There is not a scintilla of evidence that impeaches the consideration of Har [475] Ian’s note to Tucker. There are no circumstances whieh bring home knowledge to Tucker that Harlan was obtaining credit upon the faith of his mortgage not being recorded. On the contrary Tucker testified that it was a pure oversight and neglect on his part. The circuit court believed his evidence and we adopt that finding. It results that the. facts of this case clearly distinguish it from Bank v. Doran and Bank v. Buck and demonstrate that there was no fraudulent intention to mislead plaintiffs and no acts from which fraud can be inferred. The decree of the circuit court is affirmed. Shebvvood and Bubgess,- JJ.', concur.