Landrum v. Union Bank of Missouri

• Decision Date: 31 May 1876
• Parties: WILLIAM M. LANDRUM, Appellant, v. THE UNION BANK OF MISSOURI, AND WILLIAM T. BROWNING, et als., Respondents.
• Court: Missouri Supreme Court

63 Mo. 48

WILLIAM M. LANDRUM, Appellant,

v.THE UNION BANK OF MISSOURI, AND WILLIAM T. BROWNING, et als., Respondents.

Supreme Court of Missouri.

May Term, 1876.

Appeal from Livingston Circuit Court.

A. S. Harris, for Appellant.

I. The deed from Krum as trustee is void. The sale was made in Chillicothe, and Krum, at the time of the sale, was in St. Louis. (Graham vs. King, 50 Mo. 24; Bales vs. Perry, 51 Id. 452.)

II. Under the agreement of Hutchinson & Irelan, the purchase by the bank, at the sale under the Krum-Stagg deed of trust, would have been voidable even if Krum had been present at the sale.

III. Notwithstanding the agreement with Irelan, the bank suffered the property to be sold in August, 1861, four months afterwards, for between $2,200 and $2,400 although at the time worth $20,000 to $30,000, Lane testifying that the amount of his bid was the exact amount of the Krum-Stagg debt, “in dollars or dollars and cents,” because he knew that Kelly, agent for Krum, wanted nothing more than the Krum-Stagg debt. And the bank being the beneficiary and substantially the trustee in the junior mortgage here, Lane's action was directly in violation of the rule as stated in Van Epps v. Van Epps, 9 Paige, 241.

IV. The purchase by the bank at the sale made by Sheriff Gudgell, was voidable and did not cut off the right of redemption of Irelan.

1. The whole value of the property sold by the sheriff was $20,000 to $30,000, and for this property the bank paid only $380. This was strong evidence of fraud. (Ames vs. Gilmore, 59 Mo. 549; Mitchell vs. Jones, 50 Mo., 438.)

2. The bank, through Hutchinson, its president, was trustee in that deed of trust--it was the sole beneficiary and was the purchaser at the sale under it. That makes a clear case for redemption, as against the bank, and it makes no difference that the sale was made by the sheriff, as substitute for or co-trustee of the trustee named in the deed. (Gaines vs. Allen, 58 Mo., 544.) Hutchinson, the trustee named in the deed, was not dead, but absent from the State. As to the right of redemption, see Thornton vs. Irwin, 43 Mo., 160; Reddick vs. Gressman, 49 Mo., 392 McNees vs. Swaney, 50 Id., 390.

V. The time which will bar a suit to redeem is the same which will bar an action of ejectment. (McNair vs. Lott, 25 Mo., 190.)

There are no circumstances here to induce a court of equity to refuse relief on a shorter lapse of time.

There has been no increase in the value of the property since the defendants, or the party through whom they claim, became the purchaser. The record shows that the value has depreciated.

For about three years a part of said premises was occupied by the military forces, and surely the defendants will not seriously impute it against Irelan as laches, that during this period he did not come from California to dislodge the bank. On this head see Hunter vs. Hunter, 50 Mo. 452; Howell vs. McCreery, 7 Dana, 389; see also 2 Sto. Eq., § 1520.

H. M. Pollard, for Respondents.

I. The petition shows that plaintiff has no equity. It shows that he bought with full notice of defendant's title and possession. (1 Sto. Eq., 291-295; 2 Id. 312; Arden vs. Patterson, 5 John. Ch. 44 and cases cited; 5 Doug. 698; Gray vs. Shaw, 14 Mo. 341.) It will not authorize a decree of redemption, inasmuch as it fails to tender the amount of the incumbrance on the property, or to show that defendant has a surplus in his hands. (Perry on Trust, vol. 2, p. 183; Hill. Mort., 137, § 14.)

II. The petition on its face shows that plaintiff is barred by lapse of time. No allegation is made that anything was done by the bank or its grantees, or by Stagg, to prevent Irelan's learning all the alleged frauds immediately on their transpiring; and the petition shows that with full knowledge of those frauds, and nothing to hinder, he waited for almost ten years, and then after lasting and valuable improvements and repairs are made, brings his suit. (Wagn. Stat., vol. 2, p. 918, § 10; McQuiddy vs. Ware, 20 Wal. 14; Ang. Lim., §§ 166-178; Perry Trusts, §§ 864-869-870; Smith vs. Callaway, 7 Blackf., 86; Badger vs. Badger, 2 Wal., 87; Moreman vs. Talbott, 55 Mo., 392; Whitmore vs. Marsh, 21 Wal., 178; Taylor vs. Blair, 14 Mo., 437; Burk vs. Smith, 16 Wal., 401; Broderick's Will, 21 Wal., 503; New Albany vs. Burk, 11 Wal., 107; Perry on Trusts, § 602 W.; Crispin vs. Hannavan, 50 Mo. 548.)

III. The proof shows conclusively that at the Krum sale as well as the sheriff's the property was incumbered for all it was worth at the time, and plaintiff cannot now redeem when the land has increased greatly in value by building and time, unless he shows substantial equity. (Bent vs. Peters, 59 Mo. 479.)

IV. The mere fact, all else being right, a full consideration being paid, that the trustee delegated his power to one who the proof shows acted exactly as the trustee himself would have done, will not permit the plaintiff to redeem. He cannot do so unless some act was done injuring him, or unless there was a fraud; neither was shown. (Turner vs. Timberlake, 53 Mo., 371; Perry on Trusts, § 602; Hamilton vs. Lubukee, 51 Ills., 415; Beattie vs. Butler, 21 Mo., 313.)

V. Although the consideration is inadequate, that alone, unless so gross as to indicate fraud on the part of the purchaser, will not set aside a sale. (Phillips v. Stewart, 59 Mo., 491.)

VI. Irelan told the bank he expected and intended to return in eighteen months; and the bank did wait over two years before it sold--and Irelan has not yet returned--and the preponderance of the evidence shows there was no agreement to wait a day for him. (McNew vs. Booth, 42 Mo., 189.)W. P. Hall, for Respondent, cited: 17 Wal., 78; 15 Id., 151; 21 Id., 178; 3d. Cent. Law Jour., 98; 50 Mo., 278; 2 Ohio, 511; 55 Mo., 397; 4 Paige, 97; 32 N. T., 105; 6 Ind., 289; 5 N. T., 394; 1 Sto. Eq. Jur., § 384; 17 Ills., 522; 12 How., 156; Gwinn vs. Biddle, 8 Wheat., 78; 34 Barb. 58; 43 Mo. 561; 2 Wal., 95.)

WAGNER, Judge, delivered the opinion of the court.

From the record it appears substantially that on the 28th of June, 1860, Lambert Irelan, being the owner of lot seven (7) in block thirty-three (33) in Chillicothe, on which was situated the hotel building known as the Craig House, or Harry's Hotel, conveyed the same to John M. Krum, of St. Louis, in trust to secure the payment to Henry Stagg of the sums of money specified in seven promissory notes of that date, one of which was for the sum of two thousand dollars, payable three years after its date, and six of them were for one hundred dollars each, interest on the principal note, and payable respectively six, twelve, eighteen months and so on, after their date; and it was stipulated in the deed of trust that if either of the notes should not be paid at its maturity, all of them might be considered due, and the trustee might proceed to sell, etc.

On the 8th day of May, 1861, Irelan, his wife joining with him, made another deed of trust of the same hotel property to Jno. C. Hutchinson, president of the Branch of the Union Bank of Missouri, at Milan, for the purpose of securing the payment of a note of Irelan, for six thousand dollars, dated March 29, 1861, and payable four months after its date to said bank.

In August, 1861, at Chillicothe, a sale of the hotel property under the deed of trust to Krum, for the benefit of Stagg, was made. Judge Krum, the trustee, was not present at this sale, but was in St. Louis and acted through a Mr. Kelly.

At this sale, William A. Lane, cashier of the said branch of the Union Bank, became the purchaser in the name of his bank. In his deposition, taken by the respondents, he says he bid the amount of the Krum debt and interest, which he had figured up and found to be between $2,200 and $2,400. He said he did not recollect any arrangement with Kelly, or any one else, as to the amount he was to bid, but he says: “I had determined to bid the amount of the debt, and that was all Kelly wanted as agent for Krum, the trustee.”

A few days after this sale, Krum, as trustee, in pursuance of Lane's purchase, executed and acknowledged, at St. Louis, a deed conveying to the Union Bank the property alleged to have been sold by him as aforesaid.

In August, 1863, Gudgell, as Sheriff of Livingston County, (Hutchinson, the trustee named in the deed, being absent from the State) assuming to act under the powers contained in the deed of trust made by Irelan and wife to Hutchinson as trustee for the bank, and which authorized the sheriff to act in case of the absence, etc., of the trustee, sold all the property embraced in the deed, and the Union Bank, through the same Mr. Lane, cashier of its Branch at Milan, became the purchaser of the whole of it, at the sum of three hundred and eighty dollars and took from Sheriff Gudgell as trustee a deed conveying the property to it.

In May, 1865, the bank, by deed of quit-claim, for the consideration of ten thousand dollars, conveyed the hotel property to the respondents and one Downing, who afterwards conveyed his interest to his co-tenants, some of whom have held possession ever since the purchase frem the bank, the bank having taken possession in August, 1862.

In May, 1861, Irelan left for California, taking with him a lot of horses for sale, and arrived there September, 1861, having, before he left Missouri, as the petition alleges, made a contract with the bank, through Hutchinson, its president, and trustee in the last named trust deed, by which the bank, in consideration that he would give the security of the trust deed, agreed to release the indorsers on his note to the bank, and also to protect his property from sale under the Krum-Stagg deed of trust until such time as he could take his horses to California, dispose of them, and return to Missouri.

In May, 1871, Irelan and wife conveyed the...