Knoop v. Kelsey

• Decision Date: 14 May 1894
• Citation: 26 S.W. 683,121 Mo. 642
• Parties: Knoop, Appellant, v. Kelsey et al
• Court: Missouri Supreme Court

26 S.W. 683

121 Mo. 642

Knoop, Appellant, v. Kelsey et al

Supreme Court of Missouri, First Division

May 14, 1894

Appeal from Pettis Circuit Court. -- Hon. Richard Field, Judge.

Affirmed.

E. R Richardson and Draffen & Williams for appellant.

(1) The circuit court erred in sustaining the demurrer to the petition. The facts stated entitled the plaintiff to equitable relief. The deed of trust was apparently valid. All the parties acted under a mistake of fact, and under the mistaken belief that the deed of trust was for a bona fide debt. The sheriff's sale should be set aside. A court of equity will interfere in cases of mistake. Griffith v Townley, 69 Mo. 13; Heintze v. Bently, 34 N.J.Eq. 562; Bently v. Heintze, 33 N.J.Eq. 405; Hunt v. Fisher, 29 F. 801. (2) "If the inadequacy [of the price realized at the sheriff's sale] can be connected with or shown to result from any mistake accident, surprise, misconduct, fraud or irregularity, the sale will generally be vacated, unless the complainant himself was in fault, or the rights of innocent third parties have become dependent upon the sale." Freeman on Executions [2 Ed.], sec. 309, page 1008; 1 Beach on Modern Equity Jurisprudence, sec. 48. (3) Where all the parties acted under a mistake of fact, equity can and will interfere, and will grant such relief as the facts of the case require. Griffith v. Townley, 69 Mo. 13; Wilchinsky v. Cavender, 72 Mo. 192; Payne v. O'Shea, 84 Mo. 129; 45 Mo. 393. (4) "A court of equity looks not so much to the formalities with which a transaction is clothed as to its very pith and substance." In the case at bar, under the conceded facts, the plaintiff, through the fraud of Kelsey, and by reason of the mistake under which all the other parties labored, failed to realize the amount of his judgment out of the land. Huffman ought not to retain it for the insignificant price paid by him. The holders of the fraudulent mortgage should not be permitted to collect that. The plaintiff, in equity and good conscience, ought to be paid the amount of his debt out of this land. A court of equity can adapt its relief to the exigencies of the case in hand. Luce v. Barnham, 1 W. Rep. 732; King v. Beeson, 6 Cent. Rep., 559. (5) The petition is not multifarious. All of the allegations therein are necessary to authorize the court to set aside the sheriff's sale. The fact that the prayer of the petition is not only that the sheriff's sale be set aside, but also that the deed of trust be canceled, can not make the petition multifarious, even if the court could not grant all of the relief sought. Saline County v. Sappington, 64 Mo. 72. If any of the defendants were improperly joined in the suit, such defendants should have demurred, on the ground that they were not necessary parties. Alnutt v. Leeper, 48 Mo. 319. Where, however, a court of equity has once acquired jurisdiction, it will retain it, for the purpose of doing full, adequate and complete justice between the parties. The same facts that would justify the setting aside of the sheriff's sale would authorize the cancellation of the mortgage. All of the defendants were proper parties. Real Estate Savings Ass'n v. Colonious, 63 Mo. 290.

Silver & Brown and Thomas & Hackney for respondents.

(1) The circuit court did not err in sustaining the demurrer to the petition. The facts stated in the petition do not entitle the plaintiff to equitable relief, and the authorities relied on by appellant are not applicable to the facts of this case. (2) Inadequacy of price is not sufficient to set aside a sheriff's sale. Walters v. Hermann, 99 Mo. 529 (land sold for $ 210, worth $ 5,000; Briant v. Jackson, 99 Mo. 598 (land worth $ 8,000 sold for $ 900); Gordon v. O'Neill, 96 Mo. 350; Holden v. Vaughan, 64 Mo. 588. (3) It was incumbent on plaintiff here, who was a party to the suit under which the sheriff's sale was made, if he desired to set it aside for matters in pais to have moved to do so at the return term of the execution. Downing v. Still, 43 Mo. 321. In Harwood v. Railroad, 17 Wallace, 78, a delay of five years on the part of the stockholders in bringing suit to set aside judicial proceedings regular on their face, under which the railroad property was sold, was held inexcusable. So the mere institution of a suit does not of itself relieve one from the charge of laches, and if he fails in the diligent prosecution of the action the consequences are the same as if no action was begun. Johnston v. Mining Co., 148 U.S. 370, and authorities cited. (4) The court should only consider the third amended petition with reference to the demurrer, and on its face the defense of laches is well taken for it appears the sale was had in 1883. No presumption obtains in appellant's favor that the sheriff's sale was assailed in the former petitions. The report of the case on the former appeal shows the contrary; if the supreme court can take judicial notice of the record of a former appeal to determine what was decided therein, the point must still be ruled in our favor. Wharton's Evidence, sec. 3. (5) The five years' statute of limitations had run against plaintiff as to the right to set aside the sheriff's sale before the filing of the amended petition before the court on this appeal. R. S. 1889, sec. 6775 (last part of clause 4.) Where a new declaration or petition is filed setting up a new cause of action, the statute runs until such new petition is filed. Brill v. Transfer Co., 45 Mo. 563; Sims v. Field, 24 Mo.App. 558; Holmes v. Trout, 7 Peters, 171; Miller v. McIntyre, 6 Peters, 61. (6) The policy of the law is opposed to setting aside judicial sales of real estate. State v. Sargent, 12 Mo. 228; S. C., 76 Mo. 557; Hewitt v. Weatherby, 57 Mo. 276; Jones v. Manly, 58 Mo. 559. (7) No fraud or fraudulent misrepresentation is charged or claimed in connection with the sale, and the alleged mistake or misapprehension as to the validity of the mortgage is one of law for which no relief will be given. Norman v. Norman, 26 S.C. 41; Goodnow v. Ewer, 16 Cal. 461. (8) Where in a case like the one stated in the petition, the creditor elects to avoid the mortgage by selling the whole title in the land, the right to deny and contest the validity of the mortgage passes to the purchaser, and does not remain in the judgment creditor. Freeland v. Freeland, 103 Mass. 478. (9) The petition is multifarious in that it improperly unites distinct matters or causes of action, and one not affecting all the defendants to the suit, viz.: A suit to set aside a deed of trust from J. B. Kelsey to C. D. Nixon, trustee in favor of C. T. Kelsey, because alleged to be in fraud of the grantor's creditors and a suit to vacate the sheriff's sale of the land mentioned in the petition to defendant Green Huffman. The demurrer specifically raised the above objection of multifariousness. Alexander v. Warrance, 17 Mo. 228; McGlothlin v. Hemery, 44 Mo. 355; Clark v. Ins. Co., 52 Mo. 272; Mullen v. Hewitt, 103 Mo. 639; Walker v. Powers, 104 U.S. 542.

OPINION

Macfarlane, J.

The suit is to set aside, as fraudulent, a deed of trust on a farm of about four hundred acres, situate in Morgan county, made by defendant J. B. Kelsey to Charles C. Nixon, in trust to secure the payment of a note for $ 3,000 payable to defendant Charles T. Kelsey, and also to set aside a sheriff's sale of the same land to defendant Huffman, under certain judgments against said J. B. Kelsey, one of which was in favor of plaintiff, for about $ 1,700, and also the deeds by the sheriff to the purchaser. The deed of trust was recorded prior to the rendition of the judgment. A demurrer to the petition was sustained, and, from a judgment thereon, plaintiff appealed.

The petition is quite lengthy, but the ground upon which relief is demanded may be briefly stated as follows: Plaintiff, and several others, judgment creditors of J. B. Kelsey, procured his right, title and interest in the farm to be sold by the sheriff, under executions issued thereon. The farm was worth $ 4,000, but was at the time incumbered by the deed of trust above mentioned. At the sale, which was regular in all respects, the land was publicly sold and purchased by defendant Huffman for $ 285, and a deed in due form was executed, acknowledged and delivered to him, purporting to convey the interest of Kelsey in the land. No fraud or misconduct of any kind, for which the sheriff or purchaser is responsible, is charged. The deed of trust, while apparently valid, was, in fact, fraudulent. At the date of the sale the fraudulent character of the deed of trust was not known to either the creditors, the sheriff, or the purchaser, and the sale was made under the mistaken belief, on the part of all persons interested, that it was valid and secured a bona fide existing debt.

Under this state of facts plaintiff seeks to set aside the sheriff's sale and deed, and the fraudulent mortgage, offering to refund the money paid, and to subject the land to payment of his judgment on the ground of the inadequacy of the price paid, the mistake of the parties as to the true character of the mortgage, and both these causes combined.

The case was once tried upon a petition which charged that only the equity of redemption of Kelsey was sold by the sheriff, and upon that trial the relief prayed for was granted. On appeal this court held, in effect, that the creditors could not, in terms, sell the equity of redemption, and afterwards assert that, as to them, the mortgage was void, and in effect say there was no equity of redemption. Knoop v. Kelsey, 102 Mo. 291, 14 S.W. 110.

The case was remanded and an amended petition was filed charging as above stated, that the right, title, claim and interest of the defendant Kelsey only was sold. It was said by this court on the...