Jones v. Sheppard

• Decision Date: 16 November 1909
• Citation: Jones v. Sheppard, 145 Mo.App. 470, 122 S.W. 764 (Mo. App. 1909)
• Parties: SHELBY C. JONES, Respondent, v. JOHN A. SHEPPARD, Appellant
• Court: Missouri Court of Appeals

122 S.W. 764

145 Mo.App. 470

SHELBY C. JONES, Respondent, v. JOHN A. SHEPPARD, Appellant

Court of Appeals of Missouri, St. Louis

November 16, 1909

[Copyrighted Material Omitted]

Appeal from St. Louis City Circuit Court.--Hon. Virgil Rule, Judge.

AFFIRMED.

Plaintiff executed to defendant as trustee a deed of trust conveying certain property in the city of St. Louis, to secure the payment of a promissory note of five hundred dollars, dated October 11, 1905, and payable to the order of Pingree McFerren, on or before April 15, 1906, with interest at six per cent. The conveyance provided for the sale of the property by the trustee if default occurred in the payment of the note, and the trustee covenanted "faithfully to perform the trust" created by the deed. Default having been made in payment, Jacob S. McFerren, the holder of the note when the default happened, called on defendant as trustee to foreclose the deed of trust by selling the property according to the terms of the instrument. This was done and on July 5, 1907, defendant sold the property to the highest bidder, who was Jacob S. McFerren, for $ 3500, and executed a trustee's deed to him on said day. The amount of the note secured by the deed of trust at the date of the sale was $ 552, the trustee's fees and other expenses of the sale amounted to $ 108.86, and these two items added made $ 660.86, leaving a surplus over the price bid of $ 2839.14. The foreclosed deed of trust provided as follows, regarding the disposition of the proceeds of a foreclosure sale by the trustee: that "he should pay first the cost and expense of executing the trust, including lawful compensation of said trustee, and also an auctioneer's fee of five dollars for each parcel of land sold hereunder, and next he shall repay to any person or persons who may or shall under the covenants hereinbefore set forth have advanced or paid any money for taxes, mechanic's liens or insurance, as above provided all sums so by him or them advanced and not already repaid together with interest thereon at the rate of eight per cent per annum from date of such advance till day of payment, and next the amount unpaid on said notes, together with the interest accrued thereon, and the remainder, if any, shall be paid to the party of the first part or his legal representatives." On the day of the sale, plaintiff gave defendant written notice plaintiff claimed any surplus arising from the sale of the property above the amount secured by the deed of trust, and demanded defendant pay the same to plaintiff and to no one else. On the next day, July 6, 1907, plaintiff again notified defendant in writing plaintiff claimed any surplus arising from the sale and asked defendant to furnish plaintiff the name and address of the purchaser of the property, amount bid, amount of the note secured by the deed of trust with interest and the costs of the sale. Instead of turning over the surplus to plaintiff as grantor in the deed of trust under which the sale occurred, defendant credited said surplus of $ 2839.14 on another note for five thousand dollars held by Jacob S. McFerren, which note had been executed by Mary C. Baker and James Baker to Joseph Dormitzer, November 5, 1885, and according to the recitals in the abstract, had been secured by a deed of trust of the same date, executed by said Bakers to Edward Rowse, as trustee for the benefit of said Dormitzer, the cestui que trust, and conveying the same property conveyed in the deed of trust under which defendant had sold. Though the note for five thousand dollars described in the Baker deed of trust had been made to Joseph Dormitzer, it was held by Jacob S. McFerren at the date of the foreclosure sale on July 5, 1907, who also, at that time, held the note for five hundred dollars, secured by the foreclosed deed of trust, the latter note having been assigned to him by the original payee, Pingree McFerren. In the answer filed by defendant, he admitted it was his duty to pay and distribute the proceeds of the foreclosure sale in accordance with the provisions of the deed of trust under which he sold, denied he refused, failed or neglected to pay over to plaintiff the surplus money left after paying all costs and expenses incident to the sale and the debt secured by the instrument foreclosed, and then alleged Jacob S. McFerren was the owner and holder of another deed of trust on the property foreclosed; that plaintiff had assumed and agreed to pay said deed of trust and had failed and neglected to do so, and the note secured by it and the interest thereon were due and payable at the time of the foreclosure. Defendant alleged he gave plaintiff credit on the five thousand dollar note for the surplus proceeds of the sale and that this was in conformity to his duty as trustee, because plaintiff had assumed and agreed to pay said debt of five thousand dollars, but had failed and neglected to pay it. The reply denied the assumption by plaintiff of the five thousand dollar note and deed of trust or agreement by him to pay the same, and denied defendant was authorized to give credit on said note for the surplus arising from the sale, or was authorized to pay said surplus to any one but plaintiff. Plaintiff had purchased the property covered by the two deeds of trust from Pingree McFerren and Mary C. McFerren, his wife, and they had conveyed the same to plaintiff by a warranty deed dated October 11, 1905, wherein the grantors warranted the title to the property "against the lawful claims of all persons whomsoever excepting the taxes for the year 1906 and thereafter, and a certain deed of trust for five thousand dollars recorded in book 770, page 398, of the Recorder of Deeds' office in the city of St. Louis, Missouri." The incumbrance excepted out of the warranty was the Baker deed of trust for five thousand dollars. Plaintiff testified he knew of the existence of said incubrance when he purchased the property, and defendant's counsel attempted to prove plaintiff had endeavored to obtain an extension of that incumbrance from Jacob S. McFerren to whom the note had been assigned by Dormitzer, but this evidence was excluded. Jacob S. McFerren presented the Baker note and deed of trust to defendant on the morning of the sale, and defendant gave credit for the surplus on the note and took a receipt for the credit from Jacob S. McFerren. There had been a foreclosure sale under the first, or Baker, deed of trust, prior to the sale by defendant under the deed of trust to secure the note for five hundred dollars, but defendant testified he regarded the sale under the Baker deed of trust as invalid. Plaintiff was asked while on the witness stand whether he knew, when he purchased the property, of the Baker incumbrance for five thousand dollars and whether he ever made any effort to pay it off. Against the objection of his counsel he was compelled to respond to these questions, and answered that he knew of the incumbrance when he bought and had not endeavored to discharge it. He was also compelled to answer regarding what he paid for the property, and in answering said he did not definitely remember, as there was "considerable detail," and his father had attended to the transaction as his agent. He was then asked whether he had paid any money on the purchase price and, after some discussion of an objection to the question, the court said the witness had gone far enough into that matter. The purpose of the inquiry was stated thus by defendant's attorney: "It might become important for the reason it might be shown that this plaintiff had no interest whatever at any time in this property, no real interest, and it might appear that he was only used in this matter as a convenience." Defendant testified as follows regarding the reason why he paid Jacob S. McFerren the surplus of the proceeds realized by selling under the deed of trust wherein he was trustee:

"Now, Mr. Sheppard, you may state why you declined to pay over to Mr. Jones the surplus, as there claimed, arising out of the sale of the property? A. I considered that the foreclosure of the first deed of trust was not a legal sale and that the property was still--the title, the ownership to that first deed of trust and note, was still in McFerren. The title companies would not pass upon the title. . . . And I considered, as I said, that McFerren was still the legal holder of the five thousand dollar claim against this property; that he had an equitable interest in any surplus created by the sale of the second deed of trust under the first. These were my reasons for making that payment of that surplus on that first deed of trust note."

The last part of the answer was struck out on motion of defendant's counsel. The court gave judgment for plaintiff and defendant appealed, assigning for errors the exclusion of the first or Baker deed of trust and note when offered by defendant, not permitting defendant to testify why he sold under the second deed of trust or the cause of that sale, and in excluding evidence regarding what plaintiff paid for the property when he purchased it from Pingree McFerren. The last assignment of error is in this form: "It was competent to show plaintiff had assumed the payment of the first note also, and had agreed the fund resulting from the sale of the property should be applied to the payment of both of them."

Judgment affirmed.

H. G Offenbacher and Thos. B. Harvey for appellant.

(1) The court erred in rejecting the first deed of trust and note offered in evidence by the defendant. McNutt v. Life Ins Co., 181 Mo. 102; McKnight v. Wimer, 38 Mo. 134. (2) The court erred in not permitting an explanation of the cause of the second sale of the property. (3) It was competent to show that the plaintiff had assumed the payment of the...