Drannek Realty Co. v. Nathan Frank, Inc.

• Decision Date: 07 May 1940
• Docket Number: 36562
• Parties: Drannek Realty Company, a Corporation, Appellant, v. Nathan Frank, Inc., a Corporation
• Court: Missouri Supreme Court

139 S.W.2d 926

346 Mo. 187

Drannek Realty Company, a Corporation, Appellant, v. Nathan Frank, Inc., a Corporation

No. 36562

Supreme Court of Missouri

May 7, 1940

Appeal from Circuit Court of City of St. Louis; Hon. Robert J Kirkwood, Judge.

Reversed and remanded (with directions).

Luther Ely Smith and Luther Ely Smith, Jr., for appellant.

(1) Plaintiff, as the holder of the notes secured by the deed of trust, is entitled, upon default and sale of the security, to a judgment against defendant, the maker of said notes, for the balance remaining due after the net proceeds of the sale have been credited on the notes. R. S. 1929, secs. 3063-3064; 3 Jones on Mortgages (8 Ed.), sec. 1583; Reed v Inness, 102 S.W.2d 711; Masonic Home v Windsor, 338 Mo. 877, 92 S.W.2d 713; Hewitt v. Price, 204 Mo. 31, 102 S.W. 647; Mercantile Co. v. Thurmond, 186 Mo. 410, 85 S.W. 333 (1905); Young v. Clifford, 61 Mo.App. 450. (2) Inadequacy of price, standing alone, unaccompanied by illegality, fraud or unfair dealing, does not constitute a defense to a suit for the balance due on the notes after crediting the debtor with the proceeds of the trustee's sale. Green Real Estate Co. v. Building Co., 196 Mo. 358, 93 S.W. 1111; Harlin v. Nation, 126 Mo. 97, 27 S.W. 330; Oakey v. Bond, 286 S.W. 27; Judah v. Pitts, 333 Mo. 301, 62 S.W.2d 715. (3) The price of $ 47,500 bid for the property by plaintiff was adequate. (a) Plaintiff bought the property subject to $ 45,528.32 in liens, making the cost of the property to plaintiff actually $ 93,028.32, instead of $ 47,500 or three-fourths of the estimated value of the property found by the trial court in its memorandum. Harlin v. Nation, 126 Mo. 97, 27 S.W. 330; Phillips v. Stewart, 59 Mo. 491; Keith v. Browning, 139 Mo. 190, 40 S.W. 764; Markwell v. Markwell, 157 Mo. 326, 57 S.W. 1078; Oakey v. Bond, 286 S.W. 27; Reed v. Inness, 102 S.W.2d 711; Masonic Home v. Windsor, 338 Mo. 887, 92 S.W.2d 713; Hewitt v. Price, 204 Mo. 31, 102 S.W. 647; St. Louis City Charter, Art. XXI, Sec. 8. (a) The sale price of $ 47,500 arrived at by competitive bidding on property subject to liens aggregating $ 45,528.32, is the only sound basis for valuing the property. (c) The actual facts and history of the property show that the estimates of defendant's witnesses as to the value of the property are excessive. Cole v. Prudential Ins. Co., 73 P.2d 120. (d) The statement of the trial court in its memorandum that plaintiff "has received or has in its possession property and money aggregating a minimum sum of $ 276,875," is misleading and inaccurate, and is a false basis upon which to ground a judgment. (4) The existence of an economic depression at the time of the trustee's sale is no defense to an action for the balance due on the notes. Lipscomb v. Ins. Co., 138 Mo. 17, 39 S.W. 465; Reed v. Inness, 102 S.W.2d 711; Peterson v. K. C. Life Ins. Co., 339 Mo. 700, 98 S.W.2d 770. (5) The action of the trial court in denying plaintiff recovery for the balance due on the notes, because of the depression and conditions arising therefrom, invades the province of the Legislature in violation of Article III and Section 1 of Article IV of the Constitution of Missouri, and deprives plaintiff of its property without due process of law in violation of Section 30 of Article II of the Constitution of Missouri. The power to alter or modify existing contracts, if it exists at all, is a legislative, not a judicial, power, and the Legislature is the sole judge of the necessity for such action. From 1933 to 1937 at least six bills designed to relieve debtors from the effects of the economic depression were introduced in the Missouri Legislature, none of which was passed; facts which this court will judicially notice. State ex rel. Karbe v. Bader, 336 Mo. 259, 78 S.W.2d 835; State ex rel. Tolerton v. Gordon, 236 Mo. 166, 139 S.W. 403; State v. Adams, 323 Mo. 729, 19 S.W.2d 671; Utz v. Dormann, 328 Mo. 258, 39 S.W.2d 1053; Journal of the Senate, 57th General Assembly 1933, pp. 249, 283, 356, 386, 422, 486, 661, 697, 717, 780, 1372-1373; Journal of the House, 57th General Assembly 1933, pp. 76, 145, 191, 443, 547 and 644; Journal of the House, 58th General Assembly 1935, pp. 190, 232, 980; Journal of the House, 59th General Assembly 1937, pp. 336, 405, 474; R. S. 1929, secs. 3060-3077, art. II; Mo. Const. Art. III, Secs. 1, 30, Arts. II, IV; Peterson v. K. C. Life Ins. Co., 339 Mo. 700, 98 S.W.2d 770. (6) The trial court cites no Missouri authority, legislative or judicial, to justify its ruling denying judgment for plaintiff. The decisions which the trial court quoted in its memorandum, from Tennessee, New York and Wisconsin, do not support the judgment below. N. Y. Civil Practice Act, sec. 108; Drach v. Horing, 221 Wis. 575, 267 N.W. 291; Wohl v. H. W. & S. M. Tulegrin, Inc., 222 Wis. 306, 267 N.W. 278. (7) The defendant, by declining to complete its contract of purchase and by refusing to accept plaintiff's offer, even after the trustee's sale, to convey the property back to defendant upon the sole condition that defendant carry out its original contract with plaintiff, has failed to do equity and consequently has no standing in a court of equity to assert an equitable defense and has no claim to equitable relief. Dobbins v. City Bond. & Mtg. Co., 343 Mo. 1001, 124 S.W.2d 1111; Lipscomb v. Insurance Co., 138 Mo. 17, 39 S.W. 465; Pueblo Real Estate, Loan & Inv. Co. v. Johnson, 342 Mo. 991, 119 S.W.2d 274; McNatt v. Maxwell Inv. Co., 330 Mo. 675, 50 S.W.2d 1040; Betzler & Clark v. James, 227 Mo. 375, 126 S.W. 1007; Young v. K. C. Life Ins. Co., 329 Mo. 130, 43 S.W.2d 1048. And nothing in plaintiff's reply or petition precludes plaintiff from urging the force and effect of said tender. Huber Mfg. Co. v. Hunter, 87 Mo.App. 60; Blackman v. McAdams, 131 Mo.App. 410.

Lashly, Lashly, Miller & Clifford, Jacob M. Lashly and Louis B. Sher for respondent.

(1) This court will affirm a judgment, order or decree appealed from where it is sustainable on any legal ground or theory disclosed by the record regardless of the ground or reason assigned by the trial court to be the basis of its ruling or action. Hinton v. McDowell, 199 S.W. 256; McEwen v. Sterling State Bank, 222 Mo.App. 660, 5 S.W.2d 702; Sessinghaus v. Knoche, 137 Mo.App. 323, 118 S.W 104; Burman v. Vezeau, 231 Mo.App. 1109, 85 S.W.2d 217. (2) The evidence shows that plaintiff-appellant has waived or is estopped to assert any deficiency claim it may have originally had, if any, against defendant-respondent. Stuhlbarg et al. v. West Norwood B. & L. Co., 60 Ohio App. 285, 20 N.E.2d 725; Witherell v. Kelly, 195 A.D. 227, 187 N.Y.S. 43; Betchtel v. Baglieto, 13 Cal.App. (2d) 495, 57 P.2d 192; Bank of America Natl. Trust &. Savs. v. Stotsky, 194 Wash. 246, 77 P.2d 990; Pfeiffer v. Mo. State Life Ins. Co., 177 Ark. 1013, 8 S.W.2d 505; Wyrick v. Cumberland Trust Co., 17 Tenn.App. 293, 66 S.W.2d 1045; Crawford v. Woodward, 191 So. 311; Fite v. Thweatt, 46 Ga.App. 82, 166 S.E. 682. (a) The defense of waiver or estoppel is available to defendant-respondent for the purpose of sustaining the judgment appealed from, even although defendant's amended answer does not specifically plead either of these defenses. And this is so, for the reason that plaintiff-appellant failed to make any objection in the trial court to the introduction of evidence showing waiver or estoppel grounded upon the theory that neither of these defenses was pleaded in defendant's amended answer. Cape Girardeau Term. Railroad Co. v. St. L. & Gulf Ry. Co., 222 Mo. 461, 121 S.W. 300; Williams v. Everett, 200 S.W. 1045; Wilkinson v. Lieberman, 327 Mo. 420, 37 S.W.2d 533; Took v. Wells, 331 Mo. 249, 53 S.W.2d 389; St. Louis Perfection Tire Co. v. McKinney, 212 Mo.App. 335, 245 S.W. 1100; Spangler-Bowers v. Benton, 229 Mo.App. 919, 83 S.W.2d 170; Porter v. Equitable Life Assur. Soc., 71 S.W.2d 766; Colley v. Natl. Live Stock Ins. Co., 185 Mo.App. 616, 171 S.W. 663; Coleman v. Central Mut. Ins. Assn., 52 S.W.2d 22. (b) Affirmative pleading is unnecessary where (as here) facts constituting the defense of waiver or estoppel appear in plaintiff's case. Oneill v. St. Louis, 292 Mo. 656, 239 S.W. 94; Brown v. MacArthur Bros. Co., 236 Mo. 41, 139 S.W. 104; McKittrick v. Arkansas Mo. Power Co., 339 Mo. 15, 93 S.W.2d 893; Grafeman Dairy Co. v. Northwestern Bank, 315 Mo. 849, 288 S.W. 368; Ornellas v. Moynihan, 16 S.W.2d 1011. (c) The defense of waiver or estoppel is not open to the objection made by plaintiff-appellant, namely, that "even if plaintiff's president had stated that plaintiff would not collect the balance due on the notes, such a statement would have been without authority and without consideration, and would not be binding on plaintiff." Sparks v. Despatch Transfer Co., 104 Mo. 531, 15 S.W. 419; Bambrick v. Campbell, 37 Mo.App. 463; Bank of American Natl. Trust & Savs. v. Stotsky, 194 Wash. 246, 77 P.2d 990; Davis v. Consolidated Coal Co., 41 Wash. 480, 84 P. 22; McDowell v. Fed. Land Bank, 156 Miss. 820, 127 So. 288; Christensen v. Hamilton Realty Co., 42 Utah 70, 129 P. 412; Mitchell v. Deisch, 179 Ark. 831, 18 S.W.2d 369; Bloom v. Vehon Co., 341 Ill. 200, 173 N.E. 272. (3) Plaintiff-appellant was not and is not entitled to a deficiency judgment against defendant-respondent because appellant failed to prove a vital condition precedent to a deficiency judgment, namely, a prior valid foreclosure sale, or otherwise stated, that notice of the foreclosure sale was given in the manner prescribed by statute (R. S. 1929, sec. 3077, as amended by Laws 1931, p. 174), or as provided for in the deed of trust conferring power of sale upon the trustee named therein upon default of the debtor (defendant-respondent). No presumption of regularity prevails as to trustee's sales...