Laclede National Bank v. Richardson
| Decision Date | 15 May 1900 |
| Parties | LACLEDE NATIONAL BANK, Appellant, v. RICHARDSON, Administrator |
| Court | Missouri Supreme Court |
Appeal from St. Louis City Circuit Court. -- Hon. P. R. Flitcraft Judge.
Affirmed.
Hornsby & Harris for appellant.
(1) A mortgagee or pledgee may perform such acts as giving the notice of sale, conducting the sale, etc., through its agent. Jones on Mortg., sec. 1861; Hubbard v. Jarrell, 23 Md. 66; Crauston v. Crane, 97 Mass. 459; Singleton v. Scott, 11 Ia. 589; Fogarty v Sawyer, 23 Cal. 570; Cogan v. McNamara, 18 A 157; Bryan v. Baldwin, 7 Lans. (N. Y.) 174; Fitzpatrick v. Fitzpatrick, 6 R. I. 64; Waite v. Dennison, 51 Ill. 319; Guinzburg v. Downs Co., 165 Mass. 467; McCutcheon v. Dittman, 48 N.Y.S. 360. (2) The advertisement of sale need be in no special form, and is sufficient if it advise the public of the time and place of sale and identify the property to be sold. Colebrooke on Col., Sec. (2 Ed.), p. 215; Perry on Trusts, sec. 782; People ex rel. v. Prescott, 3 Hun. 419; Tyler v. Herring, 19 Am. St. Rep. 288; Powers v. Kueckhoff, 41 Mo. 430. (3) The notice of sale given by plaintiff to defendant and published in the paper was sufficient and reasonable. Colebrooke on Col. Sec., sec. 331; 18 Am. and Eng. Ency. of Law, 712; Ins. Co. v. Dalrymple, 25 Md. 247; Bryan v. Baldwin, 7 Lans. (N. Y.) 174; Stewart v. Drake, 46 N.Y. 449; Willoughby v. Comstock, 3 Hill (N. Y.) 389; McDowell v. Steele Works, 124 Ill. 491; Fraker v. Reeves, 36 Wis. 85; Brown v. Wood, 9 How. Pr. 497; Stevenson v. Hano, 148 Mass. 616; Guinzburg v. Downs Co., 165 Mass. 467. (4) Mere inadequacy of price is no ground for setting aside the sale. Hammond v. Scott, 12 Mo. 8; Phillips v. Stewart, 59 Mo. 491; Mellon v. McRee, 9 Mo.App. 344; Carter v. Abshire, 42 Mo. 303; Kline v. Vogel, 11 Mo.App. 211; Landrum v. Bank, 63 Mo. 48; Maloney v. Webb, 112 Mo. 575; Learned v. Geer, 139 Mass. 31; Erwin v. Parham, 12 How. 197. (5) Defendant having virtually acquiesced in the sale, must be deemed to have ratified the same, and can not be now heard to complain. Colebrooke Col. Sec., p. 442; Willoughby v. Comstock, 3 Hill (N. Y.) 389; Guinzburg v. Downs Co., 165 Mass. 467; Kelsey v. Bank, 69 Pa. St. 426.
R. M. Nichols for respondent.
(1) An action, such as the present, upon a debt secured by collateral, is, in effect, a final settlement, and the pledgee or plaintiff is required to produce, or account satisfactorily for its non-production, all of the collateral pledged. Jones on Pledges, sec. 596; Stewart v. Byler, 98 Pa. St. 80; Bank v. Fant, 50 N.Y. 474; Matson v. Matson, 55 Wis. 452; Lucas v. Harrison, 20 Ill. 467; Colebrooke on Col. Sec., sec. 106. (2) The fifth point, made by appellant in this court for the first time, that "respondent virtually acquiesced in the sale and must be deemed to have ratified the same and can not now be held to complain," is not covered by the exceptions. (3) In the exercise of a reasonable discretion, the sale under the power contained in the collateral note, would be valid, whether made publicly or privately. The discretion given the trustee to sell "at public or private sale or otherwise at his option," did not change the character of the trustee's duties, as a trustee; his discretion being larger, his duties were larger than an ordinary trust deed for the security of money, which usually prescribes the terms and place of sale, the length of time and the medium through which the notice is to be given, leaving it discretionary with the trustee only as to the medium of advertising and the manner of conducting the sale. Stoffel v. Schroeder, 62 Mo. 147; Thompson v. Haywood, 129 Mass. 403. (4) The referee's findings are sustained by the evidence, which conclusively shows that F. W. Mott, as agent of the bank, in his own name made the sale of the collateral. The power to make the sale is given only to the "Laclede National Bank or its officers." The manner of making the sale was left discretionary with the bank or its officers, and the donees of this power, could act in making the sale, only in person, and not by agent. The sale was made in the name of and by the agent; the attempted delegation was clearly void and the power has not been executed. Perry on Trusts, secs. 408, 779, 602q; Graham v. King, 50 Mo. 23; Howard v. Thornton, 50 Mo. 292; Bales v. Perry, 51 Mo. 452; St. Louis v. Priest, 88 Mo. 612; Singer Mfg. Co. v. Chalmers, 2 Utah, 542; Pearson v. Jamison, 1 McLean, 197; Singleton v. Scott, 11 Ia. 589; Skepworth v. Robinson, 24 Miss. 688; Grover v. Hale, 107 Ill. 640; Ritter v. Calhoune, 8 S.E. 523; Morris v. Ins. Co., 18 S.E. 843; Sebastian v. Johnson, 72 Ill. 282. (5) The trustee has not exercised a sound discretion in the alleged sale, for the following reasons: (a) Mott was the acknowledged agent of the bank, and his interest was such that he was incompetent to act as auctioneer. Thatcher v. Tracy, 8 Mo.App. 317; Morris v. Ins. Co., 18 S.E. 843; Long v. Long, 79 Mo. 655; Perry on Trusts, sec. 602v. (b) "If the form of notice and the manner of giving it, are not prescribed, the mortgagee must give proper notice and in a reasonable manner, and if he fails to do so, the sale will be set aside." Perry on Trusts, sec. 602q; Colebrooke on Col. Sec., sec. 118; Fraker v. Reeves, 36 Wis. 85; Wheeler v. Newbold, 16 N.Y. 392; Stephens v. Bank, 31 Conn. 149. (c) "Where no length of time is specified for the notice required, it must be one which, under all circumstances, is reasonable." Massey v. Snaden, L. R. 4 Exch. 13; Perry on Trusts, sec. 602q. (d) "The principal object of publishing notice of sale is to inform the public generally so that bidders may be present at the sale and a fair price obtained." And it is the duty of the trustee to see that proper notice is given. Perry on Trusts, secs. 602q, 782; DeJarnette v. DeGiverville, 56 Mo. 451. (e) Where the constating instrument "does not fix the place of the sale, the trustee may make it in any place which, in his discretion, he may select, but he must exercise that discretion fairly and prudently." Morris v. Ins. Co., 18 S.E. 843; Hess v. Dean, 66 Tex. 668. (f) The testimony showed that the trustee did not exercise a wise discretion in selling the property upon a five days' notice at public sale, the notice having failed to attract bidders sufficient for the property sold; that, from the character of the property sold, he should have advertised for twenty days notice and should have advertised by means of hand-bills or catalogues, placed in the hands of real estate agents, brokers and attorneys, and should have given all creditors of the estate personal notice of the sale, and given an opportunity of inspection of the property to be sold before the sale. Montague v. Dawes, 96 Mass. 369; Perry on Trusts, sec. 602q; Morris v. Ins. Co., 18 S.E. 843. (g) The trustee had the power, if it became his duty to adjourn the sale for want of bidders or for any cause, to prevent the sacrifice of the property. Russell v. Richards, 26 Am. D. 537; Jones on Mortg. (4 Ed.), sec. 1873. (7) The notice is defective, as a notice of public sale, because it fails to state that the sale would be at public vendue to the highest bidder, and as a notice of public sale or private sale, because it fails to state that the sale would be for cash, or give other terms, or that the sale was made by virtue of power given in the note, and for the further reason that there was no opportunity given for examination and not sufficient time to examine, and no proper description of the property given. Powers v. Kneehoff, 41 Mo. 428; Stewart v. Brown, 112 Mo. 181; Judd v. O'Brien, 21 N.Y. 186.
The Laclede National Bank of St. Louis presented to the probate court of the city of St. Louis, for allowance against the estate of J. H. Simpson, deceased, its claim based upon two promissory notes made by the deceased in its favor, dated respectively February 6th, and February 15th, 1893, payable to the order of the bank, and due ninety days after date each for the sum of $ 20,000. These notes are in the form of what is known as "collateral notes," containing provisions whereby certain personal property is pledged as security for their payment, with power to sell such security in event of non-payment of the notes, and contain the following power of sale: The property mentioned in these notes, as pledged for their payment respectively, was numerous promissory notes secured by several deeds of trust on real estate. Some of these deeds of trust, so pledged, were first liens on the real estate therein described, while others were second, and still others third liens. It seems that Simpson during his lifetime was a regular customer of the bank, keeping a deposit there, and that in the course of his dealings with the bank the latter made these loans, taking the notes and deeds of trust as security therefor, and held them at the time of Simpson's death, which occurred on February 23, 1893. After the death of Simpson, the bank employed one F. W. Mott, a real estate broker, to take charge of and attend to the collection of the collaterals in question, placing the entire matter in his hands for the purpose of realizing on them. During the following year Mott succeeded in...
To continue reading
Request your trial