Blisner v. Gurtz

• Decision Date: 17 September 1968
• Docket Number: No. 32753,32753
• Citation: 432 S.W.2d 361
• Parties: Estelle BLISNER and Paul Blisner, Plaintiffs-Appellants, v. Ella GURTZ, Louis Horen and Richard E. Bates, Defendants-Respondents.
• Court: Missouri Court of Appeals

Page 361

432 S.W.2d 361

Estelle BLISNER and Paul Blisner, Plaintiffs-Appellants, v. Ella GURTZ, Louis Horen and Richard E. Bates, Defendants-Respondents.

No. 32753.

St. Louis Court of Appeals, Missouri.

Sept. 17, 1968.

Richard M. Stout, Anthony J. Sestric, St. Louis, for plaintiffs-appellants.

J. E. Sigoloff, Charles S. Sigoloff, St. Louis, for defendants-respondents.

WOLFE, Judge.

This appeal relates to an attempt to invoke equity for the marshaling of assets. The object of the suit as stated in appellants' brief is 'to protect the rights of plaintiffs as junior lienholders, on some of the defendant Gurtz's properties, from favoring of Horen, as senior lienholder on all the properties.' A motion to dismiss on the ground that the petition failed to state a cause of action was filed and sustained by the court. The plaintiffs appealed.

The petition which the court held inadequate to state a cause of action, not including attached exhibit, covers ten pages of the transcript of record. We will therefore briefly summarize its pertinent allegations. It alleges that defendant Ella Gurtz is insolvent and that she owns four parcels of real estate. On two of these properties the plaintiffs hold second deeds of trust. There is due and owing to plaintiffs the sum of $4,000 on the notes secured by the second deeds of trust executed by Ella Gurtz and held by plaintiffs. On all four of the properties Louis Horen holds first deeds of trust. Defendant Bates is the trustee named in the second deeds of trust held by the plaintiffs. The plaintiffs charge that defendant Gurtz, the owner, and Bates, the trustee under the second deeds of trust held by the plaintiffs, are collecting rents from the properties and paying Horen, the holder of first deed of trust on all the properties, and other creditors of Gurtz 'in an inequitable manner.' The alleged inequitable manner consists of using rents collected from the properties upon which plaintiffs hold second deeds of trust and applying them to the debt secured by the first deeds of trust held by Horen on the two properties on which the plaintiffs do not have a second deed of trust. It is alleged that these practices will continue unless the court appoints a receiver to marshal all of Ella Gurtz's assets so that her creditors 'can be paid in full without inequitable preference.'

It is, of course, the contention of the plaintiffs that the court erred in dismissing the petition. They assert that the defendants 'are fattening their equities in the parcels,' in which the plaintiffs have no interest, out of income from parcels upon which plaintiffs hold second deeds of trust. It is asserted that the defendants are, 'thereby preventing plaintiffs from gaining security against,' the property upon which they hold second deeds of trust. They argue that this presents a situation wherein equity should order a marshaling of assets.

We are cited to Fleming-Gilchrist Const. Co. v. McGonigle, 338 Mo. 56, 89 S.W.2d 15, 107 A.L.R. 1003; and Tower Grove Bank & Trust Co. v. Duing, 346 Mo. 896, 144 S.W.2d 69. The Fleming case is a statutory action in equity to determine and enforce the rights of all parties interested in property upon which mechanics' liens are claimed. In the course of the opinion the action is likened to marshaling assets in other equitable actions. The Tower Grove Bank and Trust Company case, which is the only other case cited, has to do with the fraudulent pledge of a note to the plaintiff bank by the trustee of the mortgage which secured them. The facts in neither of these cases have any similarity to the facts pleaded in the petition here considered.

The appointment of a receiver is not and cannot be the objective of litigation. Such appointments are only auxiliary to pending actions. Milgram v. Jiffy Equipment Co., 362 Mo. 1194, 247 S.W.2d 668, l.c. 674, 30 A.L.R.2d 925; Robinson v. Nick, 235 Mo.App. 461, 136 S.W.2d 374, l.c. 385. Goll v. Kahler, Mo.App., 422 S.W.2d 359, l.c. 363. It follows that if the petition fails to state an action requiring the court to marshal the assets of the defendants no receiver could be appointed.

The plaintiffs' only charge against Ella Gurtz, the...