Hoffman v. McCracken

Decision Date11 March 1902
Citation168 Mo. 337,67 S.W. 878
CourtMissouri Supreme Court
PartiesHOFFMAN et al. v. McCRACKEN et al.<SMALL><SUP>1</SUP></SMALL>

3. Land worth $4,500 was sold under a second mortgage, securing a debt of $4.50, for $40. The first mortgage was for $900, and had been paid off and released before the sale, but the release was not recorded, and neither the second mortgagee nor the purchaser had any knowledge of such fact; and the land was advertised as being subject to a first mortgage, which fact prevented other bids. The mortgagee was unable to get personal service on the mortgagor in the foreclosure suit. Held sufficient to authorize the setting aside of the foreclosure sale.

4. The fact that the mortgagor failed to record the release of the first mortgage did not estop him from maintaining an action to set aside the sale, as he was under no duty to record the release.

Appeal from circuit court, Polk county; Argus Cox, Judge.

Suit by Henry Hoffman and others against H. C. McCracken and others to set aside a mortgage foreclosure sale. From a decree for plaintiffs, and an order denying a new trial, defendants appeal. Affirmed.

Rechow & Pufahl, for appellants. J. B. Upton, John W. Ross, and F. S. Sea, for respondents.

BURGESS, J.

This is a suit in equity to set aside a trustee's sale under deed of trust of the following described land situate in Polk county, Missouri, to wit: The S. ½ of the N. ½ and the N. W. ¼ of the N. E. ¼ of section 20, and the S. ½ of lot 1 of the S. E. ¼ of section 31, township 35, of range 22. The trial resulted in a judgment and decree in favor of plaintiffs, setting aside the sale, from which defendants, after unavailing motions for new trial and in arrest, appeal.

The petition alleges: That on the 7th day of July, 1896, the plaintiff Henry Hoffman was the owner of said land. That defendants Adams, McKinney & Leavitt were loan agents for the Missouri Trust Company, and, as such, made to the plaintiff a loan on said land for $900, at 7 per cent. interest, payable semiannually on the 1st of January and July. That plaintiffs executed their note for the $900, with 6 per cent. interest, payable as above stated, and that he and his wife executed a deed of trust on said land to secure the payment of said note and interest. That on the same day they executed 10 notes, for $4.50 each, payable to defendant Adams. That this represented the other 1 per cent. interest. That they executed a deed of trust on the above land to T. G. Rechow, as trustee, to secure the payment of these notes, which recited that it was subject to the deed of trust for $900. That it was agreed and understood that plaintiffs should have the privilege of paying off said loan at any time, and, in case of doing so, all interest coupons maturing after such payment should be void. That, in order to express such agreement, the following clause was inserted: "It is understood and agreed, however, that in case Henry Hoffman shall fully pay off the aforesaid nine hundred dollars to the Missouri Trust Company on or after July 1st, 1898, all of the said notes falling due after said payment be canceled and returned to Henry Hoffman." That they understood from that clause that, if they at any time before maturity paid the principal bond, all the small notes would be considered paid and canceled. That plaintiff promptly paid the notes, including the one that fell due January 1, 1898, and on the 31st day of March paid off the bond and interest, amounting to $918. That the trust company returned his bond, duly canceled, and also a deed of release, releasing the land from the lien of said deed of trust. That plaintiff thought that the payment of the $900 bonds fully discharged the unpaid small notes. That the land is worth $5,000. That it was sold in bulk on the 15th day of December, 1898, and was bought by H. C. McCracken for $40. That it was the belief that the $900 mortgage was outstanding. That the trustee made the deed it is now sought to set aside to H. C. McCracken. That there were but few persons at the sale, and only two bidders. That the notice of sale failed to describe the notes the mortgage was given to secure, and failed to show why said sale was being made. It fails to show any authority in the trustee to make the sale. It says the land will be sold subject to a prior mortgage, without reciting the amount of such mortgage, or giving information of what mortgage was intended, or any means by which such information could be obtained. That the inadequacy of the consideration is gross, and the land was sold in bulk. That by reason of the failure of plaintiffs to file their deed of release of the $900 mortgage, it was supposed the same was still outstanding. There is no fraud or misconduct charged, unless it is contained in the allegation...

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