Kennon v. Camp

• Decision Date: 12 February 1962
• Docket Number: No. 48819,No. 1,48819,1
• Citation: 353 S.W.2d 693
• Parties: Velva K. KENNON and Thelma Kennon, Appellants, v. Bob CAMP, Bertha Camp and Home Insurance Company, Respondents
• Court: Missouri Supreme Court

Page 693

353 S.W.2d 693

Velva K. KENNON and Thelma Kennon, Appellants, v. Bob CAMP, Bertha Camp and Home Insurance Company, Respondents.

No. 48819.

Supreme Court of Missouri, Division No. 1.

Feb. 12, 1962.

Charles W. Medley, McClintock & Medley, Flat River, for appellants.

Robert A. McIlrath, Flat River, for respondent.

COIL, Commissioner.

Appellants, who were plaintiffs below, brought an action to set aside a trustee's deed and, in a second count, for damages against defendants-respondents for wrongful foreclosure. The trial court found and adjudged that the trustee's deed was valid and conveyed a good title to defendants, subject to a first deed of trust. Other portions of the trial court's judgment, by which certain funds in the registry of the court were ordered paid to the respective parties, will be hereinafter considered.

Prior to the foreclosure sale hereinafter described, plaintiffs Velva Kennon and his wife Thelma owned real estate (about 7 1/2 acres) improved with a house and barn. There was evidence that the property was worth $10,000. A savings and loan association in Farmington held a first deed of trust executed by the Kennons in September 1953, securing an indebtedness of $5,500 which, at the time of the foreclosure, had ben reduced to $2,737.73. On January 12, 1957, the Kennons executed their six per cent promissory note for $1,514 payable to Lacy Gower and Cecil Hulsey, d/b/a Gower Insurance Agency, due December 31, 1957, secured by a second deed of trust on the above-mentioned real estate. The deed provided that upon default in payment of the note the trustee named therein or, in the event of his refusal to act, the sheriff of St. Francois County might proceed to sell the property to the highest bidder, first giving 30-days' public notice of the time, terms, etc., by advertisement in some newspaper printed and published in St. Francois County. On September 21, 1960, for a consideration of $1,200, ownership of the note and the second deed of trust were transferred to defendant Bob Camp. After some negotiations with plaintiffs relating to a possible sale of their property to a third party, during which no agreement was reached, defendant (defendant or Camp will hereinafter refer to Bob Camp) said that he told plaintiffs something would have to be done toward the payment by them of the note secured by the second deed of trust which he told them he owned or he would have to foreclose the property. Plaintiffs testified that defendant did not at any time say that he intended to foreclose and never did demand payment of the note which had been allowed to continue as past due by the original payees. In the view we take, the conflict in the testimony in that respect is of no consequence.

On or just prior to October 6, 1960, defendant delivered to the St. Francois County Sheriff's office the note, the second deed of trust, and a letter from the named trustee refusing to foreclose on the ground of a conflict of interest, and requested that the sheriff proceed. A deputy prepared a notice of the foreclosure sale and advertised it in a Farmington paper covering the period from October 6 to October 27, 1960, a total of twenty-two days, by four insertions on October 6, 13, 20, and 27, respectively. The sheriff sold the property on October 31, 1960, to defendant, the only bidder, for $4,700. Immediately following the sale, defendant paid the deputy sheriff $105 costs, purchased the first deed of trust for the $2,750.20 principal and interest then due, and received a sheriff's (trustee's) deed reciting that the title to the property was sold and conveyed to defendants for the sum of $4,700.

The evidence showed that plaintiffs had no knowledge of the foreclosure, either of the fact that the sale was held or that the property had been advertised for sale, until November 10, 1960, when a fire occurred in the property, destroying much of the interior of the house. Plaintiffs called the savings and loan association to report the fire and were informed of the foreclosure and were told that they would need to see Mr. Camp. The insurance was written by an insurance agency officing and connected with the association. Subsequent to the purchase of the first deed of trust by Camp, the insurance policy had been transferred or assigned to him without the knowledge of plaintiffs.

This action was filed December 1, 1960. Originally, one of the three counts sought a judgment against the insurance company for the amount of the fire damage. Prior to trial the company paid into court $6,759.59 and was discharged. No issue remains with respect to the company's liability.

Count 1 of plaintiffs' first amended petition alleged that the 'trustee's deed was void, illegal and defective' for 11 stated reasons. All of those (save one to be hereinafter mentioned) charged irregularities in the performance of the foreclosure proceedings. In the view we take it will be necessary to notice only one irregularity. It is undisputed that the deed of trust under which the sheriff acted required 30-days' public notice of the terms and place, etc., and that, as shown by the sheriff's deed, the property was advertised for only 22 or, at the most, 26 days. Presumably, the notice in this case was purportedly given in accordance with the provisions of Sections 443.310 and 443.320; ¹ but, if so, without recognition of the provision in that section that it does not authorize the giving of a shorter notice than required by the pertinent deed of trust, or without taking into account the fact that, as noted, the deed of trust in this case provided that the property be advertised for thirty days.

The failure to advertise the sale for the prescribed period of thirty days was an irregularity in the execution of the foreclosure proceeding. A trustee's deed delivered pursuant to an improperly executed foreclosure sale conveys a valid title to the grantee until such deed is set aside, i. e., the deed is voidable. Roberts v. Murray, Mo., 232 S.W.2d 540, 546. An irregularity in the execution of a foreclosure sale must be substantial or result in a probable unfairness to suffice as a reason for setting aside a voidable trustee's deed. Powell v. Pinkley, Mo., 180 S.W.2d 745, 747[1, 2]. Advertising the property for sale for a shorter period of time than provided in the deed of trust is a substantial irregularity which will support a mortgagor's action to redeem. Adams v. Carpenter, 187 Mo. 613, 86 S.W. 445, 451; Hoffman v. Bigham, 324 Mo. 516, 24 S.W.2d 125, 131[9, 10]. Redemption may be accomplished either by proceeding as provided by statute, Section 443.410 (statutory redemption as of course), or by an action in equity to set aside the trustee's deed where redemption or otherwise putting the purchaser in status quo is the price put upon the court's decree. In Arnett v. Williams, 226 Mo. 109, 125 S.W. 1154, 1157, the court said those 'statutes [redemption statutes] provide for redemption as of course. They are not intended to apply to equity cases to set aside trustees' sales and the deeds following as inoperative to pass title because of irregularities, and where redemption is the mere price put upon the decree in order to do equity.' ...