Hupp v. Murphy Finance Co.

• Decision Date: 12 November 1973
• Docket Number: No. 56325,No. 2,56325,2
• Citation: 502 S.W.2d 345
• Parties: Grace I. HUPP, Plaintiff-Appellant, v. MURPHY FINANCE COMPANY, a corporation, Defendant-Respondent
• Court: Missouri Supreme Court

Page 345

502 S.W.2d 345

Grace I. HUPP, Plaintiff-Appellant, v. MURPHY FINANCE COMPANY, a corporation, Defendant-Respondent.

No. 56325.

Supreme Court of Missouri, Division No. 2.

Nov. 12, 1973.

James J. Raymond, Kenneth J. Bini, Clayton, for plaintiff-appellant.

Morie B. Soule and Hocker, Goodwin, Koenig, Gibbons, & Fehlig, St. Louis, for defendant-respondent.

WINSTON V. BUFORD, Special Judge.

Plaintiff-appellant here seeks reversal of the trial court's order denying her petition in equity to vacate, set aside and enjoin enforcement of a magistrate court judgment rendered against her in defendant-respondent's favor. We have jurisdiction because the amount in conttroversy exceeds the jurisdictional amount in effect, and the appeal was taken before January 1, 1972.

The salient facts of the matter at hand are as follows:

On June 6, 1964, plaintiff, a married woman, executed a note and chattel mortgage in favor of Holland Freezer Company. The note, in the principal amount of $1,098.95, and chattel mortgage were given to finance the purchase of a Holland freezer and pay off another loan or account. The note, chattel mortgage and a 'mortgage appraisal sheet' evidently were prepared by a representative of Holland. The collateral covered by the chattel mortgage consisted of certain items of household furniture and appliances. At the trial of the instant cause, plaintiff testified the subject personal property, with the exception of the freezer and a vacuum cleaner, had been purchased by her and her husband as long as six or seven years before the execution of the note and chattel mortgage in question and had remained in their household at all times thereafter, to and including the date of trial. Plaintiff's husband was not a party to the note or chattel mortgage. At the time the note and chattel mortgage were executed, plaintiff also executed a 'mortgage appraisal sheet' listing these items and fixing their total value at $1,100. At the trial of this cause, plaintiff testified she told 'the man from Holland Freezer Company' that all but two of these items already were mortgaged to another finance company. There is no evidence defendant was so informed at any time prior to January 19, 1965.

Plaintiff makes no complaint concerning the validity of the note and chattel mortgage and questions neither defendant's presumed status as a holder in due course nor that she defaulted in payment.

In December, 1964, plaintiff filed a petition in bankruptcy and subsequently was adjudicated a bankrupt on December 31, 1964. She listed defendant as a secured creditor in the schedules filed in the proceeding and representatives of the defendant attended the first meeting of creditors. Plaintiff subsequently was discharged in bankruptcy. Her discharge encompassed her indebtedness on the note in question and there is no contention her personal liability on the note was not dischargeable. The exact date of her discharge in bankruptcy is not shown in the record, but it antedated commencement of the magistrate court suit which resulted in the judgment here under attack.

On January 19, 1965, which he record indicates was shortly prior to plaintiff's discharge in bankruptcy, a representative of the defendant came to plaintiff's home seeking to take possession of the collateral under defendant's chattel mortgage. In the trial court, plaintiff testified she voluntarily offered possession of all of the collateral to defendant's representative on this occasion but he elected to take only a vacuum cleaner and the Holland freezer after she told him the other items were subject to a prior mortgage in favor of another finance company. This is the only evidence in the record that defendant was ever notified of the existence of the purportedly prior mortgage at any time before being served with plaintiff's petition in the present lawsuit. There is no evidence as to when, if ever, either chattel mortgage was 'perfected' by timely and appropriate filing. By answers to interrogatories introduced by plaintiff at trial, defendant admitted taking possession of the freezer and vacuum cleaner on this occasion and later selling them for $125. Defendant offered no evidence to explain why it did not then take possession of the other collateral.

On December 1, 1965, defendant filed a replevin suit against plaintiff only in the magistrate court for the seventh magistrate district of St. Louis county. By its replevin suit, defendant sought possession of the above-mentioned collateral. The petition and affidavit, in conventional form, alleged defendant's right to possession, plaintiff's wrongful detention, the value of the property and damages sustained by reason of plaintiff's detention of the property. No complaint is made regarding the sufficiency of this petition or affidavit. In its affidavit, defendant swore the value of the property to be $1,240 and additionally laid its damages at $400. At the trial of the present case, plaintiff testified the true value of the property at the time the replevin suit was filed was $211 at most, denied any injury to the property while in her possession and, on the basis of her January 19, 1965 offer to surrender the collateral voluntarily, denied wrongful detention.

There is no evidence in this record that defendant attempted to obtain possession of this collateral in any fashion or made any demand for it at any time between January 19, 1965, and commencement of the replevin suit. In the magistrate court proceedings, defendant did not post a replevin bond and, consequently, did not take possession of the property pending trial of the replevin suit, nor has it ever done so.

The record before us demonstrates plaintiff was duly served with process in the replevin suit and she makes no complaint as to service or lack or notice of hearing in the magistrate court.

Plaintiff failed to appear at the return date of the summons and, on March 4, 1966, the magistrate court rendered a default judgment against plaintiff for the assessed value of the property in the amount of $1,240 and damages for its detention in the amount of $400, defendant having elected to take a money judgment in lieu of recovery of the property pursuant to § 533.380, RSMo 1969, V.A.M.S.

On April 22, 1966, defendant transcribed its magistrate court judgment to the circuit court of St. Louis county and thereafter caused seven successive garnishments in aid of execution to be issued and served upon plaintiff's employer, resulting in collection of $617.58 on the judgment.

On September 13, 1967, plaintiff filed her two-count petition in this cause. In Count I she sought to invoke the equitable powers of the trial court to set aside the magistrate court judgment and enjoin further efforts by defendant to enforce it. In Count II and in the event she were granted the equitable relief prayed in Count I, plaintiff sought actual and punitive damages in the sum of $59,500 by reason of defendant's allegedly wrongful executions upon the magistrate court judgment.

This cause duly came on for separate trial to the court below as to Count I only with further proceedings under Count II held in abeyance pending disposition of the issues joined under Count I. On September 25, 1970, the trial court found for defendant on Count I of plaintiff's petition 'for the reason that the evidence fails to prove fraud on the part of defendant sufficient to authorize this court to set aside the magistrate court judgment.' Following unavailing after-trial motions in appropriate form, plaintiff timely perfected her appeal to this court.

Technically, this appeal is premature inasmuch as Count II is still pending and the trial court did not designate the instant 'judgment' final for purposes of appeal pursuant to former Rule 82.06 (now Rule 81.06), V.A.M.R. However, plaintiff clearly predicated her claim for damages under Count II upon a successful attack on the magistrate court's judgment under Count I. That attack having failed, her claim for relief under Count II now stands effectively foreclosed so that we treat the trial court's 'judgment' as final for purposes of appeal, P.I.C. Leasing, Inc. v. Roy A. Scheperle Const. Co., Inc., 489 S.W.2d 219, 221(5) (Mo.App.1972).

The precise grounds here presented in support of plaintiff's attack on the magistrate court judgment are not readily discernible from her brief but, this being an appeal in equity, we have fully considered the entire record and therefrom deduce them to be essentially as follows:

1. The judgment was procured by fraud upon the magistrate court in that defendant falsely swore the value of the property in question to be $1,240, its true value being only $211 or less; defendant falsely swore plaintiff wrongfully detained the property when in fact she had tendered possession to defendant some eleven months earlier, which tender and offer defendant declined, and defendant falsely represented to the magistrate court the property in question was plaintiff's sole property when in fact it was 'jointly owned' by plaintiff and her husband;

2. The magistrate court judgment was a nullity because brought against only one of the two 'joint owners' of the property in question; and,

3. Both entry of the judgment and its enforcement are precluded by plaintiff's discharge in bankruptcy.

We consider these contentions seriatim.

With respect to plaintiff's first contention, we preliminarily observe that:

'. . . Equity will not interfere with or hold void a judgment at law unless there was fraud in the procurement of the judgment extrinsic to the matters upon which the judgment was rendered Intrinsic fraud which pertains merely to an issue involved in the action in which the judgment was obtained, is not sufficient to afford equitable relief.' Drainage District No. 1 Reformed v. Matthews, 361 Mo. 286, 234 S.W.2d 567, 573 (Emphasis ours).

More closely to the points at hand, neither fraud in the cause of action itself, in false...