Johnson v. Houston

Bliss, Judge,

delivered the opinion of the court.

In 1860 defendant Pemberton conveyed to plaintiff, Harriet P. Johnson, a tract of land in Pettis county for $440, for which she gave her notes, and, to secure them, executed with her husband a deed of trust upon the same land, and forthwith entered upon it and made improvements. In 1861 the husband entered *230 the army, and Mrs. Johnson some time afterward left the premises. The notes not being paid, defendant Pemberton executed a deed purporting to convey the premises to defendant Houston, who went into possession, and this suit was brought against him for possession. After its commencement, Houston conveys back to Pemberton, who comes into court, and, at his own motion, is made a defendant. Upon the trial the court ruled substantially that defendants were entitled to the possession by virtue of the deed of trust, and judgment was rendered against the plaintiffs. The District Court reversed this judgment, and defendants bring up the case.

The plaintiffs have no equity, but rely solely upon the legal title of Mrs. Johnson. That she once held the title is clear. But in a mortgage, or a deed of trust in the nature of a mortgage, the legal title, after condition broken, passes to the mortgagee or trustee. Such is the general law, though modified in New York by the statute forbidding ejectment by the mortgagee, and such is the law of Missouri. (Walcott v. McKinney, 10 Mo. 229 ; Meyer v. Campbell, 12 Mo. 603 ; Sutton v. Mason, 38 Mo. 120 ; Hubbell v. Vaughan, 42 Mo. 138 .) These cases arose under common mortgages, but a deed of trust is also an absolute conveyance upon its face, with the same condition of avoidance if the debt is paid; and the addition of a power to sell without judicial proceedings to foreclose certainly can not avoid the legal effect of the grant. The plaintiffs abandoned possession, and the trustee, after the notes fell due, had the right to enter, and, without a sale or foreclosure, he could maintain his possession for the use of the beneficiary, not only against all outsiders, but against the plaintiffs themselves until they had fulfilled the conditions of their trust deed. But, instead of entering himself, the beneficiary entered, and .put defendant Houston in possession. His deed to Houston, though it could not pass the legal title, operated as an assignment of his equity, which was reassigned to him by Houston’s subsequent deed. We find, then, at the commencement of the suit, the assignee of the beneficiary in possession of the land, and that the legal title had passed out of the plaintiff to the trustee, who held for the use of the bene *231 ficiary. Plaintiff insists that no defense can be made that was not available for Houston at tbe commencement of tbe suit, and that Houston could not set up the outstanding title because be had no interest in it. But we find Houston then in possession, and not as a trespasser, but as assignee of Pemberton’s equity. He denied tbe plaintiff’s right of possession, and could show facts that would disprove that right.

Tbe rule is universal that tbe right of possession must appear in tbe plaintiff, and hence when be relies upon bis title an outstanding title may be shown to defeat him. We have seen that tbe legal title passed out of tbe present plaintiffs by their default, and only tbe equity of redemption is left. We have before held that a stranger can not set up against tbe mortgagor a title in another that arises from tbe mortgage (Woods v. Hilderbrand, 46 Mo. 284 ), but Houston is not a stranger, for be succeeded to all tbe rights of tbe beneficiary in tbe trust deed, and being in possession be certainly has a right to say that tbe plaintiffs shall not have possession until they fulfill tbe conditions of their deed.

But plaintiffs also insist that tbe deed of trust is worthless for tbe reason that it was given to secure promissory notes executed by a married woman, and that Mrs. Johnson now bolds a title to tbe premises clear of all encumbrances. Tbe equity of this claim is not very apparent, nor do I think tbe law compels us to sustain it. Tbe reply represents Mrs. Johnson as having a separate estate in tbe property, though tbe deed to her hardly sustains tbe claim. If tbe conveyance were to her separate use, she would purchase for herself alone, and her notes would be good as against tbe property. If she only bold tbe ordinary title, tbe trust deed is separately éxecuted and given as security for tbe purchase money, which is all it is necessary to say in the present case. The New York Court of Appeals, in Chase v. Peck, 31 N. Y. 581 , treats a mere equitable mortgage, when there is no conveyance in fact, as a good defense to tbe present action for possession, although it would not have been available in tbe old action of ejectment, because nothing but legal principles could have been considered. “But since tbe blending of legal and equitable remedies, a different rule must be applied. Tbe defendant can *232 defeat an action upon equitable principles, and if, upon the application of those principles, the plaintiff ought not to be put into possession-of the'premises, he can not recover in the action” (p. 586). Much' more, then, where there has been an actual conveyance, and there is an actual lien for the purchase money, will such conveyance and lien stop an equitable claim' like the present, whether Mrs. Johnson’s notes as such are good or not. If she and her husband want the-land let them pay for it. ■

The judgment of the Circuit Court was correct, and that of the District Court will be reversed.

The other judges concur.