Ankrum v. The Commercial State Bank of Ridgeway

• Decision Date: 06 November 1922
• Citation: 244 S.W. 951,211 Mo.App. 684
• Parties: JULIA ANKRUM and WILLIAM ANKRUM, Appellants, v. THE COMMERCIAL STATE BANK OF RIDGEWAY, et al., Respondents
• Court: Kansas Court of Appeals

244 S.W. 951

211 Mo.App. 684

JULIA ANKRUM and WILLIAM ANKRUM, Appellants, v. THE COMMERCIAL STATE BANK OF RIDGEWAY, et al., Respondents

Court of Appeals of Missouri, Kansas City

November 6, 1922

Appeal from the Circuit Court of Harrison County.--Hon. L. B. Woods Judge.

REVERSED AND REMANDED (with directions).

Judgment reversed and cause remanded.

James M. Johnson, Barlow, Barlow & Kautz and Donald W. Johnson for appellants.

Frisby & Frisby for respondents.

OPINION

ARNOLD, J.

This is a suit in equity. On November 21, 1917, plaintiffs instituted a suit in the circuit court of Harrison County Missouri, by bill in equity against defendant bank and Frank M. Frisby, the purpose of which was to cancel, to the extent of $ 2300, a certain note in favor of the defendant bank in the sum of $ 4745.21, and to cancel to the extent of $ 161 each on five coupon interest-bearing notes, representing interest on said principal note to accrue thereafter in the sum of $ 322.16, each due respectively October 12, 1916, 1917, 1918 and 1919, and to restrain and enjoin defendants from enforcing a certain deed of trust executed October 12, 1915, by plaintiffs in favor of defendant bank on certain lands of plaintiff Julia Ankrum, located in Harrison County, Missouri, to secure the payment of said principal note and coupon notes for the reason that, by virtue of a certain contract entered into between plaintiffs and the defendant bank, on said October 12, 1915, whereby defendant bank agreed to "exhaust all remedies by suit on said judgment to be brought in Texas or by attachment in Missouri and in Texas against said Rio Grande Valley Development Company and that out of the proceeds of any and all moneys that may be realized on said judgment against the Rio Grande Valley Development Company, there shall be paid in the following order . . ." The contract then provided that out of such proceeds should first be paid the costs in Missouri and Texas, necessary and actual expenses in pursuing and exhausting said remedies and all attorney's fees, and all excess to be credited on the note and deed of trust above mentioned.

As shown by the record the facts and circumstances leading to the execution of said contract are as follows: On October 27, 1913, at Pharr, Hidalgo County, Texas, plaintiff William Ankrum entered into a certain contract for the purchase of 120 acres of land in said county and State. Prior to the date on which contract was made the said lands were owned by the Bankers Trust Company of Houston, Texas. On said date, said Trust Company by warranty deed conveyed the said 120 acres of land to the Rio Grande Valley Development Co., for a total consideration of $ 11,400. The purchase price was paid as follows: $ 800 for each 40 acre tract, or a total of $ 2400 cash, and vendor's lien notes for $ 9,000. The warranty deeds from the Bankers Trust Co., to the Development Co. reserve vendor's lien to secure the payment of five notes of $ 600 each on each 40-acre tract, or a total of $ 9,000, on the 120 acres, and these deeds were particularly described and serially numbered. These notes were executed by said Development Co., payable to the Bankers Trust Co., as additional security for $ 6,000 of these notes; the Development Co., on the same date, executing two deeds of trust on 80 acres of this same land, to secure payment thereof. Both the warranty deeds and the said deeds of trust were duly filed for record.

Pursuant to the terms of the contract by which William Ankrum purchased the 120 acres of land, he agreed to assume the $ 9,000 in vendor's lien notes and to execute his own note in the form of a vendor's lien in the sum of $ 2300. This note was executed as per contract, the Development Co., being the payee thereof; and thereupon the vendor Rio Grande Development Co., executed its warranty deed to Ankrum, subject to the said $ 9,000 vendor's lien notes. In addition, the deed also reserved to the Development Co., the vendor's lien covering the said note for $ 2300. The warranty deed from the Development Co., to Ankrum never was filed for record.

The Rio Grande Valley Development Co., by its agent W. D. Oliver, sold and endorsed said $ 2300 note to the defendant Commercial State Bank of Ridgeway, Mo.

Ankrum refused to pay said note and the bank brought suit thereon, and also filed two suits in equity to cancel alleged fraudulent conveyances of property from William Ankrum to Julia Ankrum, the other plaintiff herein. These three suits were pending in the circuit court of Harrison County, Missouri, on October 12, 1915 On April 6, 1915, 80 acres of the 120 acres of land which William Ankrum had purchased from the Rio Grande Development Co., as above stated, were sold by the trustee under the deed of trust given by the said Development Co., to the Bankers Trust Co., to secure the payment of the first vendor's lien notes made to the Trust Company at the time said lands were purchased. At the said sale the 80 acres brought $ 1600. On October 12, 1915, the Commercial State Bank and Ankrum entered into the contract above referred to, whereby the three suits then pending in the circuit court of Harrison County, Missouri, where compromised and settled and whereby the Ankrums secured by deed of trust on Harrison County lands the total amount due on the $ 2300 note, and also an indebtedness of $ 1600 owing by Ankrum to said bank.

In said contract the defendant bank agreed to dismiss said suit as to the Ankrums on the $ 2300 note and to take judgment against the Rio Grande Valley Development Co. This was done at the October Term, 1915, of the Harrison County Circuit Court. At the time said contract was entered into, 80 acres of said land had been foreclosed upon and sold. Ankrum refused to pay the first two installments of interest on said note, and tendered payment of interest on the $ 1600 item of indebtedness included in said principal note, and the trustee advertised the security for sale.

The original petition was in two counts, the first of which was later dismissed by plaintiffs and the cause went to trial on the second count. Said second count alleges facts practically as detailed above, and sets out the compromise contract as an exhibit. Further the petition charges that the lands in Hidalgo County, Texas, were of the reasonable value of more than $ 15,000, and that the $ 2300 note, together with the $ 9,000 other vendor's lien notes, was a first lien upon the Texas lands, and that it became the duty of the defendant bank to enforce said vendor's lien. The petition further charges "that said defendant bank wholly failed to exhaust its remedies under said vendor's lien note of $ 2300 and judgment, allowed said vendor's lien to lapse, and although the Rio Grande Valley Development Company was a prosperous and solvent company it took no steps to realize on said judgment against said development company, and that notwithstanding the failure of said defendant to perform said agreement and its breach thereof, the defendant, Frank M. Frisby, as trustee, as aforesaid, at the request of the defendant, the Commercial State Bank of Ridgeway, has advertised the said real estate for sale in pursuance of the power of sale contained in said deed of trust, and will, unless restrained and enjoined by this court, proceeded to sell the same on the 24th day of November, 1917, regardless of the failure of said defendant bank to comply with said contract and to perform its said duty to enforce said...