Brown v. Kennedy
| Decision Date | 01 July 1925 |
| Docket Number | 24955 |
| Citation | 274 S.W. 357,309 Mo. 335 |
| Parties | HEZ BROWN et al. v. JOSEPH E. KENNEDY et al., Appellants |
| Court | Missouri Supreme Court |
Appeal from Macon Circuit Court; Hon. Vernon L. Drain Judge.
Reversed and remanded (with directions).
Matthews & Jones and C. G. Buster for appellants.
(1) A note, and a deed of trust, given to secure it, both executed at one time, are one contract, and must be construed together, so that effect may be given to all the terms of both instruments where possible to do so. Rumsey v People's Ry. Co., 154 Mo. 246; Truchon v Mackey, 171 Mo.App. 47; Phillips v. Bailey, 82 Mo. 639; Wilson v. Reed, 270 Mo. 406. (2) A deed of trust may be foreclosed before the maturity of the note which it secures, if it has provisions or conditions upon which a forfeiture will take place. Wilson v. Reed, 270 Mo. 400; Rumsey v. People's Ry. Co., 154 Mo. 246; Truchon v. Mackey, 171 Mo.App. 47; Phillips v. Bailey, 82 Mo. 639. (3) The rule in Missouri is that there may be no misunderstanding and, to state it in plain terms, we hold that where a sale is made under a deed of trust on the grounds that there has been default in the interest, and it appears, or is found, that there has been a tender of the interest and costs prior to the sale, then the debtor is entitled to redeem upon making proof of such facts, unless precluded by specific terms of the contract. Potter v. Schaffer, 209 Mo. 596. The sale may be stopped where the deed of trust only provides for making the sale before the maturity, but if the basic contract makes the whole debt due and payable, provides for a sale by specific terms, then the sale cannot be stopped, and especially where the note provides that the sale is to go on "without notice" and "anything to the contrary notwithstanding." (4) The basic contract fixing the time of payment of a note is one of the requisites of the note in order to make it a negotiable note, and the note payable on default of interest fixes the time as specifically as within six months after date. One agreement in the note is as important to the lender and to the borrower as the other, and if the courts ignore, strike out, and obliterate the date of payment in the note, they are altering the note by a material alteration through a decree of the courts, which, if done by an individual, would make the note null and void. Potter v. Schaffer, 209 Mo. 596; Kennedy v. Ross, 25 Pa. 256; Dobbins v. Parker, 46 Iowa 357. (5) Tender of unpaid interest six months after the maturity of the note, and the right to foreclose the mortgage as accrued under an option to consider the whole sum due will not default the foreclosure. Swearingen v. Lahner, 26 L. R. A. 765; Horn v. Bennett, 24 L. R. A. 800.
Dan R. Hughes and John R. Hughes for respondents.
(1) Injunction is the proper remedy when a trustee under a deed of trust attempts to sell lands upon a default in the payment of interest and before the maturity of the note, after the amount due, including cost and expenses, have been tendered. Wolz v. Parker, 134 Mo. 458. (2) Where the note and deed of trust provided that upon a default of the payment of interest when due, the mortgagee might declare the entire debt due, still the mortgagor has the right to pay the amount due, including cost, and prevent the trustee's sale. Whelan v. Reilly, 61 Mo. 565; Thornton v. Bank, 71 Mo. 221; Philips v. Bailey, 82 Mo. 639; Wolz v. Parker, 134 Mo. 458; State ex rel. v. Ross, 136 Mo. 259; McClung v. Trust Co., 137 Mo. 106; Potter v. Schaffer, 209 Mo. 586. (3) A forfeiture of a deed of trust is not favored by the law and in this State the courts will prevent a forfeiture when possible. Whelan v. Reilly, 61 Mo. 565; Philips v. Bailey, 82 Mo. 639; Potter v. Schaffer, 209 Mo. 586. (4) Plaintiffs having acquired the interest of the mortgagors had the right to pay the amount due under the deed of trust and prevent a foreclosure. Lapsley v. Howard, 119 Mo. 489; Wolz v. Parker, 134 Mo. 458; Knollenberg v. Nixon, 171 Mo. 445. (5) Tender of amount due under the original contract will prevent a foreclosure sale. Duncan v. Home Co-operative Co., 221 Mo. 315.
The plaintiffs brought this suit in the Circuit Court of Macon County against the defendants to enjoin the sale of certain real estate under a deed of trust given to secure the payment of a note for $ 9,500, executed by one Bush and wife, with certain interest coupons attached. The note itself provided that the failure of the payment of any one of the coupons when due should mature the entire indebtedness.
Joseph E. Kennedy was the trustee, and Clyde L. Martin was the payee. Martin was the president of the Macon County Bank, and indorsed the note to the bank. Bush was the owner of the land, and he defaulted in the payment of the interest evidenced by the first interest coupon, and after notice from the owner of the note that the interest was due, and after some negotiations, he notified Martin to proceed to the foreclosure of the deed of trust. The appellant Kennedy, as trustee for the bank, began the foreclosure proceeding, and published the usual notice of foreclosure for some seventeen days in succession.
After the notice for foreclosure had run for some seventeen days, the respondents, Hez Brown and George T McDowell, purchased the legal title from Bush, and tendered the Macon County Bank, the owner of the $ 9,500 note, the amount of the interest accumulated on the coupon together with the costs of foreclosure up to that time. The appellant Martin, as president of the Macon County Bank, declined to accept the amount tendered and demanded payment of the entire amount due under the said $ 9,500 note. Payment of the note and interest was refused, and before the day advertised for the sale of the property under the deed of trust, the appellant sued out an injunction to prevent the contemplated sale. The note for $ 9,500 provided that in case of failure to pay the interest when the same became due, then at the election of the legal holder of said note the entire principal sum and the accumulated interest thereon should become immediately due and payable. The deed of trust given to secure said note was of even date with said note, and provided that in case of failure to pay the interest on said principal note when the same became due then the principal sum of said note and the accumulated interest thereon should become immediately due and payable at the election of the holder of said note, and that the trustee in the deed of trust might proceed to sell said land to satisfy said debt.
It is the contention of the appellants that by virtue of the provisions of the note and deed of trust given to secure the same, and by reason of the election of the legal holder thereof, the trustee, at his direction, was authorized to sell the security and apply the proceeds to the payment of the debt. The appellants further contend that by reason of the direction of the owner of the legal title to the trustee to proceed with the sale, his subsequent vendor...
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Wolfley v. Wooten
...was fixed and it was no longer within her power to pay the amount in arrears and thus restore the note to good standing. [Brown v. Kennedy, 309 Mo. 335, 274 S.W. 357.] Thus January 3, 1923, when the writ of garnishment was served upon it, there was due and owing to appellant from defendant ......