Hardwicke v. Hamilton

• Decision Date: 08 May 1894
• Citation: 26 S.W. 342,121 Mo. 465
• Parties: Hardwicke v. Hamilton et al., Appellants
• Court: Missouri Supreme Court

26 S.W. 342

121 Mo. 465

Hardwicke v. Hamilton et al., Appellants

Supreme Court of Missouri, Second Division

May 8, 1894

Appeal from Ray Circuit Court. -- Hon. Joseph E. Black, Special Judge.

Reversed.

F. W Griffin, F. M. Hayward and James L. Farris for appellants.

(1) On the evidence the judgment ought to be reversed, the facts not warranting the decree entered. (2) No fraud can be predicated of a neglect to pay a debt. (3) The concession made by plaintiff that the trustee and cestui que trust acted in all things bona fide operates to preclude him from relief in this suit. (4) The Sextons should have been made parties.

H. F Simrall, T. N. Lavelock and Claude Hardwicke for respondent.

(1) As the Sextons were not shown to have any interest in the property in controversy, after the trustee's sale, they were not necessary parties. Fox v. Meyer, 54 N.Y 130; Buffington v. Harvey, 95 U.S. 103; Campbell v. Jones, 25 Minn. 155; Potter v. Phillips, 44 Iowa 357; Waite on Fraudulent Conveyances, sec. 129. (2) Inadequacy of price at which property sold was sufficient notice, aside from other knowledge the purchaser had, that fraud was committed by the sale. Runkle v. Gaylord, 1 Nev. 123. (3) The inadequacy of the price for which the property sold was so great that the trustee should not have closed the sale when there were but two bidders present, unless he knew that all persons interested were present or had assented to a sale at such inadequate price. Vail v. Jacobs, 62 Mo. 130; Stoffel v. Schroeder, 62 Mo. 147; Jacobs v. Alexander, 11 Paige (N. Y.) 619. (4) As the land consisted of two separate, distinct and non-contiguous tracts and, according to the evidence, would have sold better in separate parcels, the trustee failed to show proper regard for plaintiff's interest by selling en masse. Chesley v. Chesley, 54 Mo. 347; Tatum v. Holliday, 59 Mo. 422; Goode v. Comfort, 39 Mo. 313; Gray v. Shaw, 14 Mo. 341; Taylor's Heirs v. Elliott, 32 Mo. 172, 175. (5) The respondent, being second mortgagee and having his mortgage properly recorded before sale under or default in payment of interest under the first deed of trust, was entitled to the same consideration by the trustee as the mortgagor was entitled to; and the sale should not have been made by the trustee without any regard for his interests.

OPINION

Burgess, J.

Action to set aside a sale by trustee under deed of trust. On the fifteenth day of November, 1887, Mina R. Sexton and Warren B. Sexton, her husband, were the owners of two hundred and forty acres of land in Ray county, upon which they, on that day, negotiated a loan with the Missouri Trust Company of Sedalia, Missouri, for the sum of $ 1,700, and gave their note in payment thereof, secured by deed of trust which was duly recorded; said note became due and payable on the first day of November, 1892, and had ten interest coupons thereto attached whereby they promised to pay interest on said principal sum semiannually at the rate of seven per cent. per annum from the date of the note to its maturity.

It is provided in said deed of trust that if said coupon notes or coupons or either of them should not be paid when due, then all of said notes might, at the option of the holder thereof, become due and payable and the said B. H. Ingram, trustee, should proceed to sell said real estate, for cash, at the courthouse door, in the county of Ray, first giving twenty days notice of the time, terms and place of sale, by publication in some newspaper published in said county, for the purpose of satisfying said note.

On the eighth day of July, 1887, said Warren B. Sexton and his wife, Mina R. Sexton, became indebted to the plaintiff, Hardwicke, in the sum of $ 1,700, to secure the payment of which, they executed to him their promissory note, due on the eighth day of July, 1889, the interest, if not annually paid, to become as principal and bear the same rate of interest, and for the purpose of securing its payment they executed and delivered to the plaintiff, Haff, as trustee, their certain deed of trust on said land, which was also duly recorded in said Ray county.

The land, at the time of the sale, was worth $ 4,000 and brought $ 1,850. It was all sold in one body, but the grantors in the deeds of trust did not request that it be sold otherwise. One forty acres of it was sold a few days after the trustee's sale to the defendant Deacy for $ 800.

None of the parties to the first deed of trust are made parties to this action. The petition contains the following allegations:

"Plaintiffs state that, although said note to said Missouri Trust Company was not due for so long a time, yet the said Warren B Sexton, conspiring with defendants, the Central Bank and defendant Hamilton, to cheat, wrong, swindle and defraud said Hardwicke, who had a subsequent lien on said land, declined to pay the interest on said note to said company, and, by false statements and representations made to them, the said trust company (at a time when the said trust company did not want to make a sale under said deed of trust) procured that said lands should be offered for sale by said B. H. Ingram, the trustee for said trust company under their said deed of trust, and plaintiffs state that by a false and fraudulent representation made by said Sexton he did procure that said lands should be set up under a pretended advertisement and that the same was exposed for sale at a pretended sale of said lands by said Ingram on the twentieth day of August, 1888.

"Plaintiffs state that said Sexton, in conspiracy with defendant Central Bank procured that said lands be bid in at said pretended sale by their mutual counsellor as also their mutual confidential adviser, Robert H. Hamilton, defendant herein, and that a pretended deed be made to said defendant Hamilton, the same that is recorded in record book 44, page 183, of the deed record of Ray county, Missouri.

"Plaintiffs state that said deed so made to said Hamilton is void and is inoperative, except as an assignment of the interest of the said Missouri Trust Company on account of the following facts:

"Prior to making of said pretended sale by said Ingram, said Warren B. Sexton and defendant Robert H. Hamilton and defendant Central Bank confederated and conspired to cheat and defraud plaintiff Hardwicke out of his said debt and his security therefor in this, that said Hardwicke lived in Clay county Missouri, and did not take the newspaper in which said real estate was pretended to be advertised; that the defendants aforesaid knew these facts; that said Warren B. Sexton was, or claimed to be, indebted to said Central Bank, which indebtedness was unsecured, and in order that said Central Bank might overreach and take advantage of said Hardwicke and defeat him in collecting his said debt and deprive him of the benefits of said deed of trust to plaintiffs and defeat his lien on said real estate and vest the title to said real estate in said Central Bank or secure one for their benefit for securing the debt of said Central Bank for a nominal consideration free and clear of the deed of trust securing the debt of plaintiff Hardwicke, said defendant conceived the idea of allowing default to be made in the payment of the interest on said note to said Missouri Trust Company and by fraudulent representations to said Missouri Trust Company and said Ingram procuring a sale of said real estate collusively and without plaintiff Hardwicke's knowledge and having said Hamilton buy in said real estate for the benefit of said Central Bank at a nominal consideration and that, pursuant to such fraudulent arrangement, said Sexton failed and refused, without defendant Hardwicke's knowledge, to pay off and discharge one of said interest or coupon notes when the same became due, and fraudulently and falsely represented to said Missouri Trust Company and said Ingram that he had sold said real estate to a person who assumed the payment of the note to said Missouri Trust Company and who had refused to pay said interest or coupon...