Bankers' Mortg. Co. v. Osborn

• Decision Date: 27 January 1930
• Parties: BANKERS MORTGAGE COMPANY, APPELLANT, v. ROSIE E. OSBORN ET AL., RESPONDENTS
• Court: Kansas Court of Appeals

24 S.W.2d 215

224 Mo.App. 865

BANKERS MORTGAGE COMPANY, APPELLANT, v. ROSIE E. OSBORN ET AL., RESPONDENTS

Court of Appeals of Missouri, Kansas City

January 27, 1930

Appeal from the Circuit Court of Jackson County.--Hon. Brown Harris Judge.

AFFIRMED.

Judgment affirmed.

Beardsley & Beardsley for appellant.

Burns & White, E. M. Metcalf, Arthur N. Adams, Eaton Adams and Arthur N. Adams, Jr., for respondents.

BLAND J. Bland, J., concurs. Trimble, P. J., absent.

OPINION

BLAND J.

This is an action to foreclose a deed of trust. The case was tried as a suit in equity and we will so treat it in this appeal.

The facts of record are that plaintiff is a corporation, duly organized and existing under the laws of Missouri, having its principal place of business at Kansas City, Missouri. Defendants are, or were, residents of Kansas City, Missouri. On February 1, 1925, defendants Rosie E. Osborn and Ulysses G. Osborn executed their certain promissory note, due February 1, 1930, to plaintiff Bankers Mortgage Company, or order, in the principal sum of $ 12,000, "with interest from date at the rate of six per cent per annum until default or maturity, and at the rate of eight per cent per annum after default or maturity, payable semi-annually both before and after maturity on the first days of August and February in each year."

The deed of trust conveyed all the interest of the said Osborns in Lot 48, corrected plat of Troost Avenue Heights, an addition to Kansas City, Missouri. At the same time the makers of said note executed ten interest coupon notes of $ 360 each, attached to said principal note, payable to the Bankers Mortgage Company or order, and recited--"for interest due on that date upon and according to the tenure and effect of a principal note of $ 12,000, of even date herewith."

On March 11, 1925, plaintiff sold the $ 12,000 note and deed of trust securing the same to one Terrence Dolan, otherwise known as T. Dolan, together with all the interest coupons thereto attached. When each of the semi-annual interest coupon notes became due on the first four interest coupons. Dolan detached and presented them at the office of the Bankers Mortgage Company, where they were made payable, as was also the principal note, and received from said company the various amounts due thereon. On June 17, 1927, defendant David B. Smith purchased the property under a foreclosure sale of a junior mortgage.

On July 11, 1927, plaintiff instituted a proceeding against the Osborns, J. R. Smith and David B. Smith to foreclose the deed of trust above described, for default of interest coupon notes numbered from 1 to 4, inclusive, and for certain money paid for insurance. On June 7, 1928, the deed of trust was released of record. On February 19, 1929, a judgment was rendered in favor of plaintiff and foreclosing said deed of trust. Timely separate motions for a new trial were filed by defendants J. R. and David B. Smith, said motions among other things being based upon the charge:

"Because the judgment and finding of the court is contrary to the weight of the evidence."

May 20, 1929, the said motions were sustained by the court without assigning any reason therefor, and an order was entered accordingly. From this order, plaintiff has appealed.

The testimony shows that on March 11, 1925, the Bankers Mortgage Company indorsed the principal note and each of ten coupons, as follows: "Pay to the order of---without recourse, by F. E. House, Vice President," and delivered same to Terrence Dolan, the purchaser thereof, for value. It appears that some interest already had accrued on coupon No. 1, and while it was delivered to Dolan, together with the other coupons and the principal note and deed of trust, when coupon No. 1 matured, the Mortgage Company gave Dolan a check for $ 280, and took up the coupon which was for $ 360, Dolan not having purchased the interest which had accrued thereon at the date of the purchase by him of the principal note and deed of trust.

When coupons 2, 3 and 4 matured, in each instance, the Bankers Mortgage Company gave Dolan a check for $ 360, and took over or retained the coupons in the same condition, as to indorsement, as when delivered to him, and they were held in the same condition by the Bankers Mortgage Company and were so produced and put in evidence. The testimony shows that on May 10, 1927, J. R. Smith bought the principal note and the remaining coupons numbered 6 to 10 inclusive. This defendant, in answer, alleged his said purchase from Dolan of the principal note and interest coupons 6 to 10 inclusive, thereto attached; that plaintiff had represented to Dolan and to him that the first four coupons were paid fully by the makers; that they had, in fact, been paid; that he bought the principal note and coupons depending upon the truth of these representations; that plaintiff is estopped on that account from having its foreclosure, and that it has waived its rights thereto.

Defendant David B. Smith pleaded he was the owner of the land described in the deed of trust sought to be foreclosed, having bought same at a foreclosure sale under a junior mortgage; that plaintiff company represented to Dolan, J. R. Smith and himself, that the four coupon notes had been paid and cancelled; that the said notes and insurance premiums had, in fact, been paid; that plaintiff had waived its right to foreclosure and was estopped to claim such right.

The deed of trust, in evidence, provides if default be made in the payment of either principal or interest, or any part thereof, or of any sums due, the owner of said note or notes for advances under the deed of trust, or if said grantors shall fail to perform any obligation, covenant or agreement provided for in said deed of trust, including the interest payments, then, at the option of the holder of any part of said mortgage debt, or for any advances made thereunder, the same shall become due and payable; that upon such default the holder of such mortgage debt, or any part thereof, might proceed to foreclosure. The deed of trust further expressly authorizes the holder of said mortgage debt, or any portion thereof, to purchase or pay off any prior adverse liens or incumbrances or the interest thereon falling due or becoming a lien thereon; and further authorizing the holder of said mortgage debt, or any portion thereof, in every way to protect the title and possession of said premises, and that said grantors, their successors and assigns, expressly agree to reimburse said beneficiary for any and all sums so expended; that the said deed of trust further provides the grantors agree to keep all of the buildings and improvements in as good condition as they were, and to maintain fire and tornado insurance thereon, the same to be payable to the beneficiary under said mortgage indebtedness; that upon demand the makers, their successors and assigns shall repay in full the advancements which may be made under said terms and provisions; and that the said deed of trust shall be a further lien for the payment thereof.

The petition is in five counts, the first four of which refer to the unpaid interest coupon notes, and the fifth alleges payment of insurance on the property; judgment is asked on each count for the sum therein alleged to be due, with interest, and asks foreclosure of the said deed of trust and...