East Ark. Lumber Co. v. Cotton Co.

• Decision Date: 19 February 1930
• Docket Number: No. 28202.,28202.
• Citation: 24 S.W.2d 1001
• Court: Missouri Supreme Court
• Parties: EAST ARKANSAS LUMBER COMPANY, Appellant, v. RAINER & CONNELL COTTON COMPANY ET AL.

24 S.W.2d 1001

EAST ARKANSAS LUMBER COMPANY, Appellant, v. RAINER & CONNELL COTTON COMPANY ET AL.

No. 28202.

Supreme Court of Missouri, Division No. 2.

February 19, 1930.

Appeal from Pemiscot County. — Hon. Henry C. Riley, Judge.

AFFIRMED.

Von Mayes and C.G. Shepard for appellant.

(1) The holder of a junior deed of trust may sue to set aside sale under senior deed of trust. Platte Valley Bank v. Farmers & Traders Bank, 14 S.W. (2d) 12; Olmstead v. Tarsney, 69 Mo. 396. (2) Where property is sold under a deed of trust for a grossly inadequate price and the beneficiary or mortgagee is the only bidder at the sale, such sale will be set aside for the purpose of permitting the mortgagor, or a mortgagee in a junior deed of trust, to redeem. Meyer v. Jefferson Ins. Co., 5 Mo. App. 245; Judge v. Booge, 47 Mo. 551; Vail v. Jacobs, 62 Mo. 133; Holdsworth v. Shannon, 130 Mo. 521; Hardware Co. v. Brownleaf, 186 Mo. 629; Lunsford v. Davis, 254 S.W. 885. (3) The trustee under a trust deed, in exercising the power of sale, must act fairly to protect all parties concerned, and the fact that unfair conduct was without conscious intent to act unfairly will not relieve sale from its taint. Krug v. Bremer, 292 S.W. 702. Where property is sold under a deed of trust for a grossly inadequate price the presumption of unfairness on the part of the trustee arises, especially when he is the attorney of the mortgagee and the mortgagee is the only bidder at the sale. 41 C.J. 1028. (4) Plaintiff had a lien upon the building for material furnished separate and apart from the land and plaintiff, to accommodate defendants, satisfied its judgment and in good conscience and equity should be entitled to an equitable lien on said building for the amount of its debt if not permitted to redeem in this action. Sec. 7216, R.S. 1919.

WHITE, J.

In the Circuit Court of Pemiscot County a demurrer was filed to plaintiff's petition, a bill in equity, and by that court sustained. The plaintiff failing to plead further, his bill was dismissed, and he appealed to this court.

The petition alleges that the plaintiff is a corporation organized and existing under the laws of Delaware; that the defendant Rainer & Connell Cotton Company is a corporation organized and existing under the laws of Tennessee; and that the defendant Southeast Missouri Joint Stock Land Bank of Cape Girardeau is a corporation organized and existing under the laws of the State of Missouri. It is further alleged that, at a date not given, the owner of a tract of land in Pemiscot County, described in the petition as consisting of about two hundred acres, became indebted to the plaintiff for material furnished to the owner and used in the construction of a dwelling house on an acre of land in the tract described. That the account for said material furnished by the plaintiff was not paid, and that in due course and in due form the plaintiff filed his mechanic's lien and brought his suit thereon, and procured a judgment against the acre of land upon which the house was situated in the sum of $854.53, the value of the material so furnished, with interest from the date of the judgment; that the judgment was a lien upon the amount of land described in the proceeding, subject only to a deed of trust on the entire tract in favor of the defendant Rainer & Connell Cotton Company. The amount of the prior deed of trust of that company is not stated. Afterwards the Rainer & Connell Cotton Company desired to take a renewal mortgage on some land and cancel the mortgage they then held; and the defendant Southeast Missouri Joint Stock Land Bank desired to make a loan to the owners of said land in the sum of $8,000, to be secured by a mortgage; that the Rainer & Connell Cotton Company was to take a second mortgage, subject to the mortgage of the Southeast Missouri Joint Stock Land Bank. In order to carry out that purpose, the plaintiff agreed to waive the priority of its lien judgment, and take a third mortgage on the entire tract of land for the amount of its mechanic's lien. That the several mortgages were executed and delivered according to said agreement "and the judgment aforesaid was marked satisfied on the record for the aforesaid purpose and in order to accommodate defendants and said owners, but plaintiff did not thereby intend to waive its aforesaid paramount lien upon said house and in equity and good conscience should still retain said lien upon said house; and that defendants deny that this plaintiff has any lien whatsoever upon said house; that said material out of which said house was constructed still remains wholly unpaid for and said owners are insolvent and non-residents of this State."

The petition then alleges the Rainer & Connell Cotton Company caused their said renewal mortgage upon said land to be foreclosed, and the same was sold under said second mortgage by the trustee, and bought in by said Rainer & Connell Cotton Company for the sum of $1300, and the land was conveyed to them for that sum. It is further alleged that the price for which the property was thus sold at trustee's sale was grossly inadequate; that the value of the property was reasonably worth $20,000; that since the sale, which...