Snyder v. Chicago, Santa Fe & California Railway Co.

Macfarlane, J.

This suit is ejectment to recover a strip of land through the southwest quarter of section 11, township 56, range 19, in Chariton county, which is occupied by- defendant and used for the track of the main line of its railway between Kansas City and Chicago. The suit was commenced September 25, 1889. The answer was a general denial and two pleas of estoppel.

It was admitted on the trial that the land in dispute is military bounty land. It was admitted also by the pleadings and on the trial, that John B. Holloway was the common source of title; that on the twenty-eighth day of May, 1867, the said Holloway made and delivered to the county of Chariton a mortgage on said southwest quarter to secure the payment of about $1,400, borrowed by him of the school fund of said county; that about January, 1882, said Holloway sold and conveyed said land to O. H. and E. J. Wood, subject to said county mortgage; that on the ninth day of February, 1882, the said O. H. Wood made and delivered to James Snyder a deed of trust on said land to secure to plaintiff, Benjamin F. Snyder, a note for $1,050, due one day after date, with power of sale. The interest on the county debt was paid annually by Holloway until he sold to Wood, and after that by Wood until 1889, when the interest for’ 1888 was not paid.

It appears from the evidence that preliminary surveys for the location of defendant’s road were made through this land some two years before work was" commenced. After such preliminary surveys had been made and stakes set indicating several lines through this land, plaintiff and O. H. Wood went upon the land and examined the different lines, and from some marks inferred that defendant contemplated putting a depot *534 on it. The evidence tended to prove that plaintiff then gave Wood authority, if a depot was put upon the land, to give the right of way through the tract, and also ground for depot purposes. But if the depot was not located on the land then he should get all out of defendant he could obtain for right of way.

The road was finally located through this land, but no depot was put upon it. About the twelfth of February, 1887, contractors, under defendant, for grading the road, were permitted by O. H. Wood to commence work on the land under a promise that damages would be paid soon. Afterwards said O. H. Wood and defendant’s agent agreed upon $1,350 as the damages to be paid for the right of way, and on the seventh day of March thereafter the said O. H. and E. J. Wood made and delivered to defendant a deed of general warranty to the right of way, being the land in dispute, and the work of grading was continued by the contractors until October or November of that year, when the road was completed, and fenced by defendant, and has since been used in the operation of the road. The evidence also tended to prove that the money was paid to O. H. Wood by defendant with the understanding and agreement on his part that it should be used and applied in the payment of the county school fund debt; that this was not done, but the money was kept and appropriated by him. It was shown that the expense of building the road and preparing it for use was several thousand dollars.

Plaintiff lived in Howard county, and testified that he did not think he had given defendant or any of its officers or agents authority to enter upon the land, and did not remember when he first learned that defendant had taken possession and commenced work.

On the fifth of February, 1889, the land was sold under the deed of trust made for the benefit of plaintiff *535 and was purchased by plaintiff, and a deed was after-wards made and delivered to him by the trustee.

The land was also sold July 12,1889, by the sheriff under an order foreclosing the county mortgage, and was bought by plaintiff for $1,615, to whom a deed of conveyance was made. These deeds were read in evidence.

Defendant set up the foregoing facts as an estoppel to the ejectment suit.

Plaintiff asked the court to instruct the jury, in effect, that the facts did not constitute an estoppel, and that plaintiff was entitled to possession under the deeds read in evidence, and should have a verdict in his favor. This the court refused and instructed the jury as follows:

“1. The jury is instructed by the court that the land in controversy is ‘military bounty land,’ granted to’ a soldier of the war of 1812 for services therein, and if the jury shall find from the 'evidence that the defendant, by its agents, servants or employes^ had for a period of two years or more before the institution of this suit been in the open, notorious, continuous and adverse possession of the land in controversy, then your verdict must be for defendant.

“2. To constitute the possession above referred to it is only necessary that defendant by its agents, servants and employes should have entered on said land in the course of the construction of said road, and continued such possession adversely to all other claimants, claiming such possession for itself, against all other persons; and if you find that defendant by its agents, servants and employes entered into the actual, open, notorious and exclusive possession thereof in February, 1887, and continuously occupied the same by its said agents, servants and employes in the con struction thereof, and thereafter continued to so occupy *536 said land by its tracks and inclosures for the period of two years or more next before the institution of this suit, then you must find your verdict for the defendant.

“3. If you find from the evidence in this case that the plaintiff authorized or directed one O. H. Wood, the occupant of said land, being the mortgagor, or holding under the mortgagor, to grant •the defendant railway company the right of way across the southwest quarter of section 11, township 49, range 19, forasmuch as he could get'from the defendant, and that said Wood did grant the defendant by deed or otherwise for as much as he could get right to enter upon said land and occupy the same for its right of way, and that such land so granted as such right of way is the land in controversy, and that in pursuance of such grant defendant entered thereon and built its road at great expense, and that during the construction of said road the plaintiff knew thereof and made no objection to the defendant or its officers during the construction of said road, then your verdict must be for defendant; though you may further find that thereafter the plaintiff bought said land at the sale by the sheriff in foreclosure of the mortgage to Chariton county by deed from the sheriff to J. C. Crawley as plaintiff’s attorney, and by deed from Crawley to plaintiff; and although you may further find that plaintiff also purchased said land and got a deed therefor under and by virtue of a sale by the trustee under the deed of trust made by O. H. Wood to secure the note of date February 9, 1882.”

The jury found for the defendant, and plaintiff appealed.

I. There is no question, we believe, of the correctness of the general propositions that a land-owner may, by words or conduct, waive the payment of compensa *537 lion as a condition precedent to taking and using his land for public purposes; that such waiver may be inferred from a license, express or implied, to go upon the land and make the improvement; and that license will be implied when the owner, with full knowledge, permits or acquiesces in a railroad corporation taking possession of his land and expending large sums of money in constructing its road thereon. It is also well settled that, after such license has been given, the owner will be estopped from maintaining ejectment to recover possession of the land so appropriated. Bradley v. Railroad, 91 Mo. 493 ; Cory v. Railroad, 100 Mo. 282 ; McClellan v. Railroad, 103 Mo. 295 ; 2 Wood’s Railway Law, 792; Mills on Eminent Domain, sec. 140. To "these propositions there is no controversy between ■counsel as we understand them.

II. We are asked by defendant to apply these principles of estoppel to the mortgagees of land, and, through them, to purchasers at foreclosure sales. While a mortgagee or beneficiary in a deed of trust has no further beneficial interest in the land than of security for his debt, there is no doubt that he can, by words or active conduct, estop himself to claim even the security, but, as he has such limited interest and has no possession or control of the land, it is quite evident that •conduct which would estop the owner might not estop the mortgagee. It was accordingly held in McShane v. Moberly, 79 Mo. 45 , that mere silent acquiescence would not be sufficient. In that case the mortgagee of a tract •of land stood by, and saw the mortgagor lay it-out into lots, blocks and streets, and dedicate the streets to public uses, and saw the city accept the streets, and adopt them as public highways. It was held that a sale of land, under the mortgage, passed the title to the purchaser freed of the public easement. The court .says: “The interest of the mortgagee in the premises *538 is the amount of his mortgage debt expressed upon the face of his deed. And as before foreclosure the right of redemption resides with the owner of the equity of the redemption, the mortgagee had a right to presume that the city, when it began to deal with the premises, would, and that it intended to, perform its obligation to redeem. It cannot be maintained, on such a state of' facts as disclosed by this record, that the assignee of the mortgagor may not only neglect the performance-of his duty to redeem, if he wants the land, but that having neglected it he can go onto the land, and because he changes its face with streets he will acquire-the land free from the mortgage altogether. So long-as the mortgagee is guilty of no laches, no neglect, no-fraud, he may point to his deed of record as his caveat, warning all comers of his rights and their peril in dealing with the premises. ”

’ III. In this case we are unable to see that there is-any question of waiver of prepayment by any word or act of plaintiff. The evidence shows that he advised or directed Wood, the mortgagor in possession, to get-all the damages possible for the right of way. Wood did contract for the compensation, received the money; and granted to defendant the right of way. Plaintiff' at most only authorized Wood to agree upon and. collect the damages. He gave no authority to waive-prepayment. The extent to which plaintiff was bound then depends upon the authority he gave Wood, and what was done under that authority.

The relation between mortgagor and mortgagee-does not constitute one the agent of the other, and the former has no power, by virtue of the relation, to do any act which would impair the security, or alter the condition of the mortgaged property. Funkhouser v. Lay, 78 Mo. 465 ; McShane v. Moberly, supra.

No reason can be seen, and we think none exists,. *539 ■which would prevent one from acting agent for the other in dealing with the property in which they are jointly interested. If, then, plaintiff authorizes Wood to settle the amount of damage, and grant to defendant the-right of way over the land, what Wood did in the premises was binding, in respect to his rights under the deed of trust held by him. To that extent the third instruction was correct. The instruction, however, goes further, and declares, in effect, that' the circumstances which would bind his interest, under his own deed of trust, would likewise bind him as purchaser under the prior mortgage held by the county. In this the instruction was erroneous. Plaintiff could only have intended, in instructing his agent, to affect the interests and rights he then held, and not such as he might thereafter acquire, through a prior mortgage made by a former owner of the land. The purchaser under the county mortgage cut out the second mortgage and all rights and obligations thereunder. Barrett v. Johannes, 70 Mo. 439 ; Funkhouser v. Lay, supra.

IV. It is next earnestly contended that the county of Chariton, by its conduct, waived the prepayment of damages, and plaintiff purchasing with notice is estopped from maintaining ejectment under his title derived through the county mortgage.. We have grave doubts whether any county official had authority to waive the rights the county held under the mortgage. It was held in Knox Co. v. Gog gin, 105 Mo. 182 , that payment of the school-fund debt to the deputy county clerk was no payment at all, and that before a school-fund mortgage could be satisfied the money should be received by the treasurer, and his duplicate receipt filed with the county clerk, as required by statute. If satisfaction of a mortgage could only be accomplished by payment of the debt strictly in the manner pointed out by the statute, it is difficult tó see how the security can *540 be wholly destroyed by the mere silence of the county officials. Indeed, the proposition is asserted broadly in Heidelberg v. St. Francois Co., 100 Mo. 75 , that the “doctrine of estoppel does not apply to counties.” The following cases in addition to those cited by the court will be found to bear out the same proposition : Sturgeon v. Hampton, 88 Mo. 204 ; Board of Ed. v. Boyd, 58 Mo. 276 ; Jones v. Mack, 53 Mo. 147 .

Y.. However that may be, we are satisfied that there was no such conduct on the part of the county as amounted to a waiver of any of its rights. No affirmative act or declaration was shown. The debt was a £>art of a permanent fund intrusted to the county for the use of the public schools. Security for the principal, and prompt payment of the interest only, were required. The money was borrowed in 1867, and. the interest had been paid annually for twenty years. The security was ample. The principal was not needed. So long as the annual interest was paid, there was practically no default. The improvements placed upon [the land rather enhanced than impaired the security. Default was not made in the payment of interest until 1889, when the county immediately proceeded to foreclose. There was no estoppel. The sale under the foreclosure of the county mortgage swept away the rights defendant had secured by its deed from Wood. Plaintiff, the purchaser, took the title as it came from the grantor of-, the county.

YI. We do not think the mere entry on the land by defendant under a deed from the owner of the equity of redemption and constructing its road thereon sufficient notice to the county of an adverse possession to start the running of the statute of limitation. It has been recently held, in a number of cases, that the mortgagor, or his grantee in possession of the mortgaged property, does not hold adversely to ■ *541 the mortgagee so long as the relation exists, and the mortgage is recognized. See authorities cited in Chouteau v. Riddle, 110 Mo. 366 ; 1 American & English Encyclopedia of Law, 246.

As has been stated the custom of permitting school-fund bonds to run, as long as the security remains good, and the interest is paid, makes them differ essentially from ordinary commercial paper secured by mortgage. Default in the former does not properly occur, so as to affect the relation of the parties to each other, until there is a failure to pay the annual interest; and, until that default takes place, the presumption will be that the possession is friendly and not adverse. Moreover the agent of defendant, who took the right of way, recognized the county mortgage by directing the money paid for right of way to be applied to its reduction. When defendant took its grant of the right of way, therefore, it did so subject to the mortgage, and its possession was presumably friendly until there was some act of hostility brought home to the notice of the county.

The third instruction, in our opinion, improperly defined what would constitute an adverse possession.

VII. On the trial plaintiff offered in evidence an application for a continuance made by defendant, in another suit, respecting the possession of the land in dispute, in which it was stated that the right of way was, during the summer of 1887, occupied by contractors, and that defendant had no occupancy, dominion or control of it during that time. The court refused to admit the evidence.

• It Is well settled that any pleading or other paper, filed by a party in a cause, which states facts relevant to the issues iii another cause on trial, in which the one filing it is also a party may be read as evidence in such cause, against the party making it as an admis *542 sion. Bogie v. Nolan, 96 Mo. 85 ; Schad v. Sharp, 95 Mo. 573 ; Pomeroy v. Benton, 77 Mo. 64 ; Turner v. Baker, 64 Mo. 218 . While such writings are, as a rule, admissible as admissions, what was contained in this one was wholly immaterial, and the application was properly excluded. .As affecting the question of the statutes of limitation, which was the question in issue, the possession, occupancy and control of the property by the contractors, under a contract from the defendant, was the possession of defendant itself, and the evidence which was excluded would not have ■changed the legal effect of that possession.

Judgment reversed and cause remanded.

All concur.