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Siemers et al., Appellants, v. Schrader et al.

Supreme Court of Missouri1885-10
88 Mo. 20

Summary

Holding. The beneficiary of a deed of trust, holding only an equitable interest rather than legal title, cannot maintain an action of ejectment to recover possession of the trust property. The judgment for the defendant was affirmed.

Siemers and Johnson sued to eject Schrader from property, claiming rights through a deed of trust. Siemers had entered into a written agreement in 1870 to purchase the property at a trustee sale under the deed of trust, but when the property was advertised for sale in 1872, the notice requirements were not properly followed, and Siemers therefore acquired no legal title from that transaction. Siemers later conveyed half his interest to Johnson, and they brought this ejectment action against Schrader, who occupied the property as a tenant of Chambers. Chambers had acquired the property through a tax sale in 1882 and subsequently received a quit-claim deed from Virginia Brault and others.

The court held that although Siemers and Johnson owned the note secured by the deed of trust, they possessed only an equitable interest in the property, not legal title. The court distinguished between mortgages and deeds of trust, explaining that in a deed of trust the beneficiary (note holder) does not receive legal title—that is conveyed to a trustee instead. Because Siemers and Johnson lacked legal title, they could not maintain an ejectment action to recover possession of the premises. The defective trustee sale left Siemers with no valid claim to the property.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Rights of a beneficiary in a deed of trust versus a mortgagee
  • Standing to bring ejectment action based on equitable versus legal title
  • Effect of defective notice in trustee sale on acquisition of title
  • Distinction between legal and equitable interests in trust property

Procedural posture

The plaintiffs appealed from a judgment in favor of the defendant entered by the circuit court and affirmed by the court of appeals.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Henry, C. J.

On December 18, 1868, Virginia Brault and H. K. Burch executed and delivered a deed ■of trust conveying the property in dispute to Barr’s trustee, to secure a note for three hundred dollars, made by them to Barr. Afterwards said note became the ■property of plaintiff, who, in 1870, by an instrument in writing, agreed with Virginia Brault to sell, without any unnecessary delay, the real estate in controversy, under said deed of trust, and purchase it, and to convey it to her, on payment to him of money named in said agreement as having been paid by him for her and Burch, and further agreeing that he would not convey or dispose of the property to any one else, within two years from the date of the instrument. This was signed by Siemers alone, but was delivered by him to Virginia Brault. Subsequently, in 1872, the property was advertised for sale under said deed of trust, and Siemers purchased it and received a deed therefor from the trustee, but the-sale was not advertised for such a length of time as the trust deed required, and he acquired no title to the property by that deed.

After that sale he conveyed an undivided half of his interest in the premises to his co-plaintiff, Johnson, and they instituted this suit in ejectment to recover the possession of the premises against Schrader, a tenant of Chambers, who, on his own application, was made a party defendant. Chambers purchased the properly at a sale for taxes in 1882, and in 187G, Virginia Brault and Burch, and Nancy Bonner, to whom said agreement between Siemers and Virginia Brault had been assigned by the latter, conveyed the proiierty to-Chambers by quit-claim deed. Defendant had a judgment in the circuit court which, on appeal to the court of appeals, was affirmed, and plaintiffs have prosecuted an appeal to this court.

Siemers acquired no title by the purchase at the trustee’s sale. The requisite notice of the sale was not given, and it is scarcely necessary to cite authorities for the proposition, that a conveyance under such a sale passes no title. By his written agreement he stipulated that he would acquire the title by a sale under the deed of trust, but his attempt to do so was abortive, and nothing has since occurred, so far as is disclosed by this record, to invest him with the legal title. A mortgagee, in the-absence of an agreement to the contrary, may maintain ejectment for the possession of the mortgaged premises, after breach of the condition. Jones on Mortgage, sec. 702. But plaintiffs, as owners of the debt secured by the deed of trust, have only the same equitable interest in the trust property which the payee of the note had. The title was not conveyed to the holder of the note, but to a trustee ; and while a deed of trust to secure a debt is, in legal effect, a mortgage, yet it has not all the legal incidents of a mortgage. There is a marked distinction between them in some respects. In the case of a mortgage, the beneficiary is also the grantee in the deed, having in himself the legal title, whereas, in a deed of trust, the beneficiary is not, but another is, the grantee. The beneficiary has but an equitable title. In some cases the beneficiary in a deed of trust may recover possession, even from his trustee ; but those are cases in which the trustee holds solely for the use and benefit of the beneficiary, and no one else has any interest in the trust property.

But in a deed of trust to secure a debt, the grantor still has an interest in the property, and in the due and proper execution of the trust by the trustee who represents the interests of both parties. He has, in the first instance, a voice in the selection of the person to whom he will convey the property in trust. It has never yet been held in this state, in a case involving that precise question, that even the trustee in such a deed can maintain an action of ejectment to recover the premises. In the case of Johnson v. Houston et al., 47 Mo. 227, the argument and remarks, in the opinion delivered by Judge Bliss, seem to recognize the right of the trustee to recover possession after breach of the condition ; and I cannot see why he may not, since the legal title is conveyed to him, as to the mortgagee in a mortgage. But no case in which the beneficiary in a deed of trust was held to have that right has been cited, nor have I been able to find one. He cannot, in any sense, be regarded as having the legal title. Another person, by the express terms of the deed, has the legal title, and it would be an anomaly if the beneficiary were permitted to main tain an action of ejectment. The decisions in the cases of State to use, etc., v. McKellop et al., 40 Mo. 184; Winkelmaier v. Weaver, 28 Mo. 358, and The State to use of Peters v. Koch, 47 Mo. 582, cited by appellants’ counsel, were all controlled by a local act concerning the duties of sheriff and marshal of St. Louis county, authorizing any one having an interest in the property to set up a claim, and the court held that, under that statute, a beneficiary in a deed of trust of personal property, ■could make the claim. This view of the case renders it unnecessary to consider the questions relative to the tax ■deed, and the quit-claim deed, under which Chambers claims title. The judgment is affirmed.

All concur.