Daggett Hardware Co. v. Brownlee

• Decision Date: 21 February 1905
• Citation: 85 S.W. 545,186 Mo. 621
• Parties: DAGGETT HARDWARE CO. v. BROWNLEE et al.
• Court: Missouri Supreme Court

85 S.W. 545

186 Mo. 621

DAGGETT HARDWARE CO. v. BROWNLEE et al.

Supreme Court of Missouri, Division No. 2.

February 21, 1905.

TRUST DEEDS — TRUSTEE'S SALE — SETTING ASIDE — INADEQUACY OF PRICE.

Property worth $1,750 was sold under deed of trust for $200. The mortgagor had requested the trustee to postpone the sale pending an effort to obtain money to pay the debt, and the evidence was conflicting as to whether the trustee had promised to do so, but undisputed that the mortgagor thought the sale was to be postponed, and was absent from town when the sale was made to procure the money, and had no knowledge of the sale. Within a few days after the sale the mortgagor tendered to the purchaser the amount of his bid, and tendered into court the amount of the debt. Held, that the sale should be set aside in equity.

Appeal from Circuit Court, Linn County; Jno. P. Butler, Judge.

Suit by the Daggett Hardware Company against W. H. Brownlee and others. From a decree for plaintiff, defendants appeal. Affirmed.

West & Bresnehen, for appellants. C. C. Bigger, for respondent.

GANTT, J.

The plaintiff in this case is a private business corporation organized under the laws of this state, and for a number of years was engaged in the hardware business in Brookfield, Mo., but for a number of years had been out of business. The entire stock of the company was owned by R. T. Smithers and H. B. Daggett, who were, respectively, president and secretary. On June 16, 1894, said corporation owned lots 7, 8, 9, 10, 11, and 12 in block 19 in Helm's Addition to the city of Brookfield. On that date it borrowed from one H. B. Post the sum of $1,500, and by its said officers executed and delivered to said Post its promissory note for said money so borrowed, which note was due in two years, with 8 per cent. interest per annum, and secured the same with a deed of trust in usual form on the above-described premises; the defendant Judge Brownlee being named as trustee therein. In the month of August, 1895, said H. B. Post died testate in Linn county, and Judge Brownlee was appointed and qualified as executor of the last will of said Post, and thereupon took charge of said estate, which included, among other assets, the above-mentioned note. Said note was carried by said executor until in December, 1901, during which time the plaintiff corporation annually paid the interest thereon up to July, 1900. On December 28, 1901, the principal and 18 months' interest being due, the defendant Brownlee, having advertised the same, sold said premises, under the powers vested in him by the said deed of trust, to the defendant Clements, and on the same day executed and delivered to said Clements a deed therefor. On the 18th of January, 1902, the plaintiff brought this suit to set aside said sale and the deed made to Clements and to redeem said property. Two grounds for the relief prayed were alleged in the petition: First, that said Brownlee, trustee and holder of said note, agreed with R. T. Smithers, president of plaintiff, that he would not sell said property until after January 1, 1902, nor would he advertise and sell the same without first notifying said Smithers; and that said Brownlee, notwithstanding said agreement, advertised said premises for sale under said deed of trust, and on December 28, 1901, without informing said Smithers, and during his absence, and without his knowledge, sold the same to the defendant Clements; second, that at said sale said Clements was the only bidder, and said property was sold to him for $200, which was a grossly inadequate price, resulting in the sacrificing of plaintiff's property.

At the trial R. T. Smithers, president of the plaintiff, was called as a witness, and testified that in December, 1901, a short time before the holidays, he had a conversation with the trustee, Brownlee, in which he told him he was about to sell another piece of real estate, and that as soon as he did so he would take up the Post note, and requested said Brownlee to carry, or, as he put it, "to swing the Post matter over until after the holidays," by which time he would have the money, and be ready to meet it; that Brownlee agreed to do so, and further agreed to not make a sale or foreclose the deed of trust without informing said Smithers; that he relied on said agreement, and left Brookfield on business connected with the sale of the property from which he was to procure the money to pay the Post note; that during his absence, and without his knowledge, Brownlee sold the property to Clements for $200; that he first learned of the sale on his return to Brookfield, and something like a week or 10 days after the sale; that he had, during his absence, sold some property, and was prepared to take up the note; that upon learning of the sale he had Mr. Pratt, an attorney, go to Clements, and tender him the $200 which he had paid for the property, and also interest on the money, fees for recording deed, etc., and requested Clements to convey the premises back, but he refused to do so.

The evidence as to the value of the property ranged from $1,000 to $2,400. The court made a finding that it was worth $1,750.

Judge Brownlee, for defendant, testified that he did not promise Mr. Smithers not to sell the property until after January 1, 1902. "We talked about it two or three times, but it was two or three months before. I never at any time, after I had advertised it, promised to hold it off until January. I told him I would hold it off as long as I could. I was notified to make settlement in November, but got it continued over. I told Smithers to hurry it along; that I had to make settlement. I supposed he knew of the sale. It was regularly advertised. I had waited as long as I could. I do not remember telling him that, if the Post heirs wanted some money, I would advance them $100 or $200, and carry it over. I do not think I could have had such a conversation and forgotten it."

Mr. Clements, the purchaser, testified he had spoken to Mr. Daggett on Monday previous to the sale on Saturday, and asked him if "this is a straight sale, or for settlement between you and Mr. Smithers." He said: "No, it is a straight sale. We can't help ourselves. It must be sold." I asked him how much there was against the property, and he said about $1,600. I told him I wanted to buy it for my boy, and would probably be there. I think the reasonable value of the property at that time was about $1,200 — from $1,000 to $1,200. My bid was the only one made. I bought it for $200. I did not go prepared to bid $1,200. We had settled on $1,000 for it. That was our decision on Christmas Day.

Mr. Daggett testified he remembered the conversation with Mr. Clements. "Mr. Smithers had the active management and control of the business of the hardware company always. He attended to all the outside affairs. So far as I know, I could do nothing, because Mr. Smithers was absent on the day of the sale. I knew the sale was to be made, but not the hour."

The court found as follows: "On the issue as to whether any agreement existed between Brownlee and Smithers, president of the Daggett Hardware Company, that the property should not be sold until after January 1, 1902, the court finds the evidence conflicting, and, standing alone, insufficient to maintain the burden of proof required of the plaintiff...