Guels v. Stark

• Decision Date: 31 July 1924
• Docket Number: 23931
• Parties: GUELS v. STARK
• Court: Missouri Supreme Court

264 S.W. 693

GUELS v. STARK

No. 23931

Supreme Court of Missouri, First Division

July 31, 1924

E McGinnis and Walter C. Guels, of St. Louis, for appellant.

Chas A. Houts, of St. Louis, for respondent.

OPINION

LINDSAY, C.

This cause is here on appeal by the plaintiff from a judgment following the sustention of the demurrer of defendant Charles B. Stark, to plaintiff's second amended petition. Since the submission of the cause on appeal, the death of the plaintiff has been suggested, and upon stipulation filed here his administrator, Walter C. Guels, has been substituted as appellant. The plaintiff asked for an accounting to ascertain the balance due from him to defendant; that he be permitted to pay in cash to defendant the amount ascertained; and that defendant be required thereupon, simultaneously with such payment, to reconvey to plaintiff certain pieces of real estate theretofore mortgaged and bought in by and for defendant, and also certain other real estate and certain shares in a mining company bought at sales under executions in favor of this defendant and against the plaintiff.

The petition alleged that title to certain of portions of the real estate was held by Margaret Stark, a sister of Charles B. Stark, for him, and she was joined as a defendant; but, before entry of judgment upon the demurrer, the plaintiff, alleging that since the filing of the suit he had learned that Margaret Stark had conveyed said property to Charles B. Stark, dismissed his suit as to Margaret Stark as being no longer a necessary party. The petition is very long, and sets forth with much detail a series of transactions beginning May 12, 1910, at which time the plaintiff executed to defendant a note for $ 18,500 for money borrowed, and at the same time, and as security, executed to defendant a mortgage on plaintiff's one-half interest in certain real estate situated in Denver, Colo. A statement will be made of the subsequent transactions detailed in the petition and only so much of the petition will be quoted as is necessary to make plain the nature of the issues here to be determined. The main purpose of the petition appears to be to show that at some time, after the execution of the aforesaid note and mortgage by plaintiff, the defendant developed a 'spirit of greed,' and formed the design of acquiring all of plaintiff's properties at prices far below their value; and that, by holding out threats of foreclosure, the making of promises, taking advantage of plaintiff's strained financial condition, and of the generally unsettled financial condition resulting from the World War, the defendant succeeded in having sold and in buying in directly or indirectly all of plaintiff's properties at sales under mortgages and executions, and at prices and for amounts which did not satisfy the indebtedness due, and were only a fraction of the real values of said properties.

At the time mentioned, May 12, 1910, the plaintiff owned an undivided one-half interest in certain improved real estate in Denver subject to an incumbrance of $ 5,000, also the undivided nine-twentieths interest in about 8,000 acres of unimproved land in Chicot county, Ark., referred to as the 'Belle Island tract,' also certain real estate in the city of St. Louis, and certain tracts of timber land situated in various counties in southern Missouri. The statement is that plaintiff received $ 15,000 from defendant, but gave his note for $ 18,500; that it was understood he was borrowing the money to pay off certain mortgages and especially to protect his interest in the Belle Island tract until he could sell it to an advantage. The note for $ 18,500 was due one year after date, and the $ 3,500, a part of the note not received by plaintiff, was a bonus to defendant for any delay in payment of the note after its maturity, and as giving the plaintiff an opportunity thereby to dispose of his interest in the Belle Island tract to an advantage. The plaintiff paid the interest on the $ 18,500 note for about three years, but not longer. Afterward defendant threatened to foreclose the mortgage and to sue upon the note, and demanded that plaintiff execute to him a mortgage upon the Belle Island tract, and plaintiff did execute a mortgage to defendant upon that tract, with power of sale in defendant, with the right to buy at his own sale, and with provision for excluding plaintiff from the right to redeem; the sale to be by advertisement in a newspaper, upon 14 days' notice, the shortest time allowed by the law. This mortgage was executed on June 30, 1915. Afterward defendant attempted to get plaintiff to convey to him, at extremely low prices named by him, the Denver, Belle Island and Missouri properties, and plaintiff refused to do so; defendant brought suit upon the note, and on December 6, 1917, obtained judgment in the circuit court of the city of St. Louis, by default in the sum of $ 23,200, and thereafter filed judgment liens in the counties where plaintiff's timber lands were situated.

Afterward, by threats of foreclosure of the mortgages and sales under the judgment, defendant induced plaintiff to execute and deliver deeds in blank as to name of grantee to the interests in the Denver and Belle Island properties; the defendant having offered plaintiff a few months of delay if he would execute said deeds in blank. Afterward, defendant from time to time offered further delay in enforcement of payment, if plaintiff would execute further deeds conveying all of plaintiff's other properties at a named price for all of $ 15,000. This the plaintiff refused to do. The defendant then proceeded to foreclose. The transaction of the foreclosure of the mortgage upon the Belle Island tract is here given in the language of the petition.

'Despairing of thus getting said properties, said Stark then advertised for sale, under the mortgage to him, the Belle Island property, for July 8, 1918, and under his said deed of trust the Denver property for July 22, 1918.

'Said Stark on July 8, 1918, appeared at Lake Village, Chicot county, Ark., where the advertised sale of the Belle Island property was on that day to be made, and as the said mortgagee, with power of sale in himself and the right to buy at his own sale, conducted said sale. But the advertisement notice of the sale was defective and misleading in its description of the property to be sold, and said Stark at the sale attempted to correct the error by an oral announcement he then made.

'The description in the mortgage is as follows: 'An undivided nine-twentieths interest in and to the Belle Island tract, being bounded on the west by the Mississippi river, on the south and east and north by Lake Lee and the channel of the Mississippi river from the upper end of Lake Lee to the present channel of the Mississippi river, excepting fractional sections 33, 34, and 27, in township 16, range 1 east, situated, lying, and being in the county of Chicot in the state of Arkansas.'

'The description in the newspaper advertisement for the sale is as follows: 'A nine-twentieth interest in and to the following-described real estate situated in the county of Chicot in the state of Arkansas, to wit, bounded on the west by the Mississippi river, on the south and east and north by Lake Lee and the old channel of the Mississippi river from the upper end of Lake Lee to the present channel of the Mississippi river, excepting fractional sections 33, 34, and 27 in township 16, range 1 east, known as Belle Island.'

'It thus appears from the newspaper advertisement for the sale that the land 'known as Belle Island' was excepted from the sale, and that the land 'known as Belle Island' was in township 16, and that it contained three fractional sections, or less than 1,920 acres -- where as the fact is that nearly all of the land 'known as Belle Island' is not in township 16 but is in township 17 and contains about 8,000 acres. Thereupon said Stark at said sale, finding that parties present at the sale had discovered said error, illegally sought to correct it by orally announcing, before calling for bidders, that the land being offered for sale was not described correctly, as the greater part of same was in township 17, range 1 east, instead of township 16, range 1 east, as described in the advertisement, but it was known as Belle Island. Said error and said illegal oral announcement by said Stark frightened intending bidders present at the sale, and they refrained from bidding, and one intending bidder who came from another county to bid at the sale refused to bid; saying that under the circumstances he was afraid the sale would not hold good. Neither the plaintiff nor any one representing him was present at said sale.'

The defendant bought in the Belle Island tract for $ 3,000, and put the title in the name of Margaret Stark, by his deed made as mortgagee with power of sale, and also wrote the name of Margaret Stark as grantee in the deed executed by plaintiff in blank, as above mentioned. The petition does not charge the defendant with fraud prior to the sale of the Belle Island property. It charges him with developing 'a spirit of greed' and with 'assuming a dictatorial attitude' toward plaintiff in demanding payment, or more security, or conveyances of plaintiff's property. After alleging the sale of the Belle Island tract as above, the petition alleges:

'Because of said facts and circumstances said Stark had no legal right to proceed with said sale, but nevertheless he fraudulently and illegally did proceed.'

The petition further in its substance charges that, since the sale of the Belle Island tract, as was done, was illegal, it was illegal and fraudulent to sell the other properties for the same debt.

The defendant also caused to be sold by the trustee...