Casper v. Lee, 42062

• Court: United States State Supreme Court of Missouri
• Writing for the Court: ELLISON; DALTON, J., dissents in separate opinion in which HYDE; DALTON; HYDE
• Citation: 245 S.W.2d 132,362 Mo. 927
• Parties: CASPER v. LEE.
• Docket Number: No. 42062,42062
• Decision Date: 14 January 1952

Page 132

245 S.W.2d 132 362 Mo. 927 CASPER
v.
LEE. No. 42062. Supreme Court of Missouri, en Banc. Jan. 14, 1952.

[362 Mo. 929]

Page 135

Oliver & Oliver and Gerald B. Rowan, all of Cape Girardeau, for appellant.

[362 Mo. 931] Harry C. Blanton, David E. Blanton, Sikeston, for respondent.

[362 Mo. 935] ASCHEMEYER, Commissioner.

Appellant, who was plaintiff in the trial court, filed suit in the Circuit Court of Scott County to set aside a foreclosure sale held under a deed of trust securing an indebtedness owing by appellant to defendant (respondent). The petition prayed that the trustee's deed conveying legal title to described real estate to respondent (who purchased at the foreclosure sale) be cancelled and set aside; that title to the real estate be declared to be in appellant; and that respondent be required to account for the rents and profits realized on the real estate, less the amount of indebtedness and interest thereon, to respondent. Summons was served upon respondent who failed to file any pleading to the petition within the time required. A default judgment was entered against respondent on October 5, 1949, setting aside the foreclosure sale and the trustee's deed; declaring legal title to the real estate to be vested in appellant; adjudging that appellant recover $2856.47 as the net amount of rentals due him after offsetting $1,000 principal and $693.33 interest due respondent; and decreeing the deed of trust to be paid and discharged by reason of such accounting.

On December 7, 1949, more than thirty days after the entry thereof, respondent filed a motion to vacate and set aside the default judgment. After hearing, the motion was sustained; the judgment was set aside; and the case was ordered reinstated on the docket. After an unavailing motion for a new trial, appellant has taken this appeal from the order or judgment setting aside the judgment in favor of appellant. An appeal lies from such an order or judgment Harrison v. Slaton, Mo.Sup., 49 S.W.2d 31, 34; Ford v. Ford, Mo.Sup., 24 S.W.2d 990, 992. Title to real estate is involved and this court has appellate jurisdiction. Nettleton Bank v. McGauhey's Estate, 318 Mo. 948, 2 S.W.2d 771; Caruthersville School District No. 18 v. Latshaw, 360 Mo. 1211, 233 S.W.2d 6, 8.

The petition is in two counts and may be summarized as follows: On December 19, 1940, appellant executed and delivered to respondent a promissory note for $1,000 due one year after date with interest at eight per cent and on the same date executed, as security therefor, a deed of trust to J. E. Smith, as trustee, upon described real estate. The deed of trust was duly recorded in Scott County. Shortly[362 Mo. 936] before December 19, 1941, the due date of said note, appellant informed respondent that he would not be able to pay it when due, and respondent promised that he would not foreclose the deed of trust without informing appellant thereof. Notwithstanding this promise, respondent caused the trustee to advertise the property for sale under a trustee's notice and the property was offered for sale at a public auction on February 13, 1942, at the Court House in Benton, Missouri. Respondent was the highest bidder and bought the real estate for $225. The trustee executed a trustee's deed purporting to convey the property to respondent. This deed was duly recorded in Scott County.

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Immediately after the trustee's sale, respondent took possession of the real estate and has retained possession thereof and has collected all rentals thereon. On February 13, 1942, the fair market value of the real estate was $5,000. During the period from December 19, 1940, until after the date of the trustee's sale, appellant was out of the State of Missouri 'a great portion of the time', did not read the published notices of the trustee's sale and had no actual knowledge of the pending sale from respondent or anyone else.

The petition then alleges: 'That the foreclosure sale aforesaid was fraudulently and unlawfully conducted by defendant and by said J. E. Smith, who was acting at the instance of defendant, for the reason that, although defendant had promised plaintiff he would give him additional time in which to pay the note, would not foreclose the deed of trust immediately after the note was due, and would not foreclose the deed of trust without informing plaintiff of such foreclosure, he proceeded, without notice to plaintiff, to foreclose said deed of trust and to cause the said real estate to be offered for sale; and said sale was fraudulent and invalid because the consideration offered by defendant and paid for such property at such foreclosure sale was so grossly inadequate, considering the real market value of the real estate sold, as to shock the conscience of a court of equity.'

It is then alleged that respondent had collected rentals and had realized income from the property in the approximate amount of $5,000 for which appellant is entitled to an accounting and that appellant is indebted to respondent upon the promissory note in the principal amount of $1,000 with interest amounting to $693.33.

The second count of the petition realleges all of the facts we have summarized with the exception of the statement of the amount of indebtedness owing to appellant. as to this, the second count states that when the note for $1,000 was executed and delivered, appellant received only $750 from respondent and that the additional sum of $250 incorporated in the note constitutes usurious interest. [362 Mo. 937] It is alleged that, by reason of such usury, the deed of trust securing the note is invalid and unenforceable so that the purported foreclosure sale and purchase thereunder by respondent were invalid and ineffectual to convey legal title to the real estate to respondent. It is then alleged that appellant is indebted to respondent in the principal sum of $750 together with interest thereon in the amount of $520.

The decretal part of the judgment entered by the trial court has already been summarized. Other portions of the judgment will be referred to in the course of the opinion.

The motion to set aside the default judgment is denominated to be 'In the nature of a Writ of Error Coram Nobis and because of errors patent on the record as authorized by Section 1267, RSMo 1939.' It is permissible to present such issues in the same motion. Crabtree v. Aetna Life Ins. Co., 341 Mo. 1173, 111 S.W.2d 103, 106. The motion stated the following grounds for setting aside the judgment: (1) After being served with summons, respondent employed a member of the Scott County Bar (not present counsel) to enter his appearance and file the necessary pleadings setting up respondent's defenses but that through inadvertence his lawyer failed to appear and file a pleading although he had assured respondent he would do so. (2) Appeallant had the court enter an interlocutory and final judgment on October 5, 1949, without notice to respondent and without having the cause placed upon the trial docket, in violation of R.S.1949, Sec. 510.070, V.A.M.S. (3) Appellant was not the owner of the property covered by the deed of trust at the time of foreclosure, at the time he filed the instant suit, and at the time judgment was rendered, having conveyed legal title thereto to one M. C. Bruce by a deed dated July 1, 1941, and recorded in Scott County; that such fact was unknown to respondent and the trial court at the time judgment was entered and, if known to the court, would have precluded the entry of judgment. (4) The subject matter of the instant suit was res adjudicata since another suit seeking the

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same general relief against respondent had been filed by appellant on April 11, 1945. This suit was dismissed for want of prosecution on March 8, 1948, and this dismissal, by force fo the Civil Code of 1943 was with prejudice and barred the instant action. (5) The petition fails to state a cause of action because (as to Count I) it fails to allege any consideration for a definite agreement to extend the time of payment of the deed of trust indebtedness and mere inadequacy of purchase price does not justify vacating the trustee's sale; and (as to Count II) usury, if it existed, would not invalidate the lien of the deed of trust to the extent of the indebtedness legally due. (6) The judgment on its face is contradictory. (7) The trustee of the deed of trust (J. E. Smith) was a necessary party defendant and his nonjoinder as a party nullifies the judgment.

[362 Mo. 938] The motion also alleged that respondent has good and valid defenses to the merits, as follows: (a) a denial that there was any agreement with appellant concerning foreclosure of the deed of trust as alleged in the petition; (b) a denial that the property was sold for a grossly inadequate sum; (c) a denial of the usury alleged in Count II and a statement that, in any event, the deed of trust was valid to the extent of any sum legally due respondent; (d) that the property purchased at the foreclosure sale was worth $1,000.00 and not $5,000.00 and that appellant had abandoned the property and absconded from the State of Missouri; (e) that the amount of rentals collected by respondent was substantially less than the amount adjudged to have been collected; that respondent paid taxes on the property and substantial amounts for repairs; and that if these facts had been known to the court they would have precluded a judgment against respondent even if the foreclosure sale were set aside; and (f) that the relief appellant seeks is barred by laches and statutes of limitation.

Finally, respondent alleges that he 'was guilty only of excusable neglect' in not protecting his interests since: He relied upon the statements of the attorney employed by him that his interests would be protected; he was a layman unfamiliar with the procedure necessary to protect his interests; he knew that the prior suit against him had taken a protracted course and...