Custer v. Kroeger

• Decision Date: 26 February 1926
• Citation: 280 S.W. 1035,313 Mo. 130
• Parties: DANIEL M. CUSTER, Appellant, v. JOHN KROEGER
• Court: Missouri Supreme Court

280 S.W. 1035

313 Mo. 130

DANIEL M. CUSTER, Appellant, v. JOHN KROEGER

Supreme Court of Missouri

February 26, 1926

Appeal from Lewis Circuit Court; Hon. J. A. Cooley, Judge.

Affirmed.

Hilbert & Henderson and A. F. Haney for appellant.

(1) This is an action ex delicto, in which the plaintiff seeks redress in damages for the tortious acts of the defendant. Cooley on Torts (2 Ed.) pp. 64, 592. Where a foreclosure sale is brought about by the fraud or duress or willfully oppressive acts or conduct of the mortgagee, the mortgagor, instead of having the sale set aside, may maintain an action for damages against the mortgagee. 27 Cyc. 1505; Stansberry v. McDowell, 186 S.W. 757; 2 Jones on Mortgages, sec. 1189; Kerbaugh v. Nugent, 48 Ind.App. 43. (a) The act of defendant in lulling plaintiff into the belief that he was to have the use of the abstract for the purpose of procuring a new loan, and then afterwards in order to prevent plaintiff from getting a loan, forcibly taking the abstract away from plaintiff before he had completed the use of it for that purpose, amounted to the commission of a legal wrong against plaintiff; and in this connection it is immaterial whether the promise of defendant to let plaintiff use the abstract was or was not an enforcible agreement. Alfred v. Pleasant, 175 S.W 892; Laundy v. Girduer, 238 S.W. 789. (b) In an action for damages for the wrongful foreclosure of a mortgage upon real estate, the measure of plaintiff's damages is the value of his equity in the property, that is, the difference between the reasonable value of the property and the amount due on the note at the date of the foreclosure sale. Real Estate Syndicate v. Sims, 121 Mo.App 156. Not only are such actual damages allowable in such action, but punitive damages are also allowable. Stansberry v. McDowell, 186 S.W. 760. (2) The allegations of the petition show a cause of action for damages. It is alleged, among other things, that plaintiff owned an abstract of title to his land, but had let defendant have it at the time he gave the note and mortgage in controversy to defendant, and as the time drew near to pay off said indebtedness plaintiff needed to use his said abstract in procuring another loan on his said land to take the place of the defendant's loan, as the procurement of a loan on that land was the only means plaintiff had by which to raise the money to pay off defendant's loan. Plaintiff informed defendant of the fact that it would be necessary for him to have said abstract in order to procure such loan, and upon plaintiff's request defendant delivered said abstract to plaintiff in order that plaintiff might use it for that purpose, and that thereafter, before plaintiff had opportunity to get through with the use of it for that purpose, defendant wrongfully entered plaintiff's residence and by force and violence and against the protest of plaintiff took said abstract away from plaintiff and carried it off with him, and thereby deprived plaintiff of the use of it for the negotiation of a loan, notwithstanding plaintiff, at the time defendant took the abstract from him, explained again to him the necessity of his having the abstract for the purpose of procuring a loan with which to pay off his note and mortgage, and defendant well knew that plaintiff had no other way to procure the money for that purpose except by getting a loan on that land. As this abstract was plaintiff's abstract, and on which he relied for negotiating a new loan to pay off defendant's loan, no reasonable person could doubt that plaintiff had the right to use this abstract for that purpose. It may be true that defendant had a right to the use and possession of the abstract as mortgagee as long as the mortgage remained in force, but it would be highly unreasonable to maintain that defendant had the right to exclude plaintiff from the use of the abstract when he needed it for the purpose of raising the money to pay off the loan, in other words, that defendant had the right to arrogate the exclusive use of the abstract to himself and to compel plaintiff to procure another abstract to use in negotiating a loan to pay off his loan. The petition further alleges that defendant took the abstract away from plaintiff with the willful and deliberate purpose of preventing plaintiff from paying his note which was nearly due and with the purpose of foreclosing the mortgage when the note became due, selling plaintiff's said property at foreclosure sale and buying it in himself, and that after the note fell due defendant carried out his said scheme and bought in the property at the foreclosure sale for only enough to pay the note and cost of foreclosure proceedings. (3) Defendant's counsel, in their argument on the demurrer in the trial court, took the position that, during the existence of the mortgage, the defendant had the exclusive right to the use of the abstract. In answer, it should be said that, even if that position were correct, defendant nevertheless waived any such exclusive right by his act in actually delivering the abstract to plaintiff for the express purpose that plaintiff should use it in negotiating a new loan on the property to pay off his loan. After defendant had delivered the abstract to plaintiff for the above-mentioned purpose, and plaintiff had acted in reliance upon defendant's promise that he should have the use of the abstract for that purpose, defendant will not be allowed to change position and require the abstract to be surrendered back to him before the accomplishment of that purpose. Griffith v. Gillum, 31 Mo.App. 41. (4) But considering this matter from still another point of view, even if we should concede that defendant as mortgagee had the exclusive right to the abstract, yet his act in delivering the abstract to plaintiff for the purpose of being used by plaintiff for the object above stated would under the law constitute a bailment, and the plaintiff would be constituted a bailee with all the legal rights of a bailee. 6 C. J. pp. 1099, 1100, 1100, 1143, 1165; 3 R. C. L. pp. 80, 84, 136. Even if we should concede defendant's position that he had the exclusive right to the use of the abstract as long as the mortgage to him remained unsatisfied, yet his delivery of the abstract to plaintiff for the purpose of being used by plaintiff in securing another loan on the property in question to take the place of defendant's loan would constitute a bailment of the abstract, and defendant would have no right to a return of the abstract until the object of the bailment was accomplished, that is, until a new loan was secured by the use of the abstract. And upon defendant having forcibly taken the abstract from plaintiff before the accomplishment of said object -- before plaintiff's negotiations had yet secured a loan -- plaintiff is entitled to bring this action for damages, it being alleged in the petition that defendant's act in taking the abstract from plaintiff prevented him from raising a loan and paying off defendant's note, it being also alleged that defendant after said note became due foreclosed the mortgage and had the land sold therunder, it being bid in by defendant himself at just enough to pay the indebtedness and costs of foreclosure proceedings and at about $ 7,000 less than its actual value. By the conduct of defendant, plaintiff lost every cent of the valuable equity which he owned in this land, and the same was acquired by the defendant without any compensation to plaintiff.

Harry S. Rouse, Frank & Stewart and James C. Dorian for respondent.

(1) Where the owner of lands furnish the party making a loan on his lands and taking a mortgage thereon, an abstract of title, the abstract becomes a part of the security for the loan and the mortgagor is not again entitled to it until the mortgage is paid. 6 Ballard on Real Property, par. 18; Warville on Abstracts, p. 11; 11 Add. Pr. (H. S.) 113. The defendant was entitled to the possession of the abstract, he loaned the same to the plaintiff, and upon the plaintiff refusing to return the same to him he forcibly took possession of same. Is this more than a trespass? And who has a right to say to a man just how long he shall trust his property to another? In other words, if the abstract was the property of the defendant, did he have to wait the convenience of the plaintiff or anybody else to determine just when he was to take possession of his property, his security. We do not undertake to defend the alleged taking possession of same by force, but that could be nothing more than a mere trespass, and that would be all the defendant would be liable for, if anything, and does not in any way tend to justify the suit for the loss of plaintiff's equity in the lands. This point alone would justify the action of the trial court in sustaining said demurrer. (2) The petition states that plaintiff delivered the abstract to defendant at the time of making the loan. It then became part of the security for the loan. The plaintiff then states that at his request the defendant re-delivered it back to him, so he could exhibit it to prospective lenders as an evidence of plaintiff's title to the land. Was there any consideration passing from plaintiff to the defendant for the re-delivery of the abstract? And if not, was there any reason why defendant could not again take possession of his property without being responsible in damages? Defendant was under no legal obligations to let the plaintiff have the abstract, his security, for any given period of time, unless here received a valuable consideration therefor. There was no valid contract or agreement that bound the defendant, or anybody else. There is not in the petition one line that shows anything of value passed from the plaintiff to the defendant by virtue of...