Lustenberger v. Hutchinson
| Decision Date | 17 September 1938 |
| Docket Number | 35169 |
| Citation | 119 S.W.2d 921,343 Mo. 51 |
| Parties | Frank Lustenberger and W. F. Lustenberger v. Margaret G. Hutchinson, Administratrix of the Estate of Harry H. Hutchinson; Margaret G. Hutchinson; Harry H. Hutchinson, Jr.; Marion F. Hutchinson; Harriet J. Hutchinson; W. C. Gow; R. E. Gardner; Charles W. Purdy; Olive Edith Purdy; Haruten Sarkesian; Seroon Sarkesian; Harry Wright; Esther Godfrey and Leroy Mead, Trustee for H. S. Smith Investment Company, a Corporation, Defendants, Haruten Sarkesian and Seroon Sarkesian, Appellants |
| Court | Missouri Supreme Court |
Rehearing Granted, Reported at 343 Mo. 51 at 63.
Appeal from Buchanan Circuit Court; Hon. Sam Wilcox, Judge Opinion filed at September Term, 1937, April 1, 1938; motion for rehearing filed; motion overruled at September Term 1938, September 17, 1938.
Reversed and remanded (with directions).
Louis Kranitz and Elliott & Crouse for appellants.
(1) The testimony of plaintiff Frank Lustenberger that he never requested the trustee to foreclose, that he had no knowledge of the foreclosure sale or of the credit to his account with H. S. Smith Investment Company as a result of the foreclosure sale, and that for eight years he never even inquired about the interest or principal of the note, is unbelievable. This being an equity case, the court will make its own finding of facts. Fendler v. Roy, 58 S.W.2d 459, 331 Mo. 1083. (2) There was no evidence whatever that plaintiff W. F. Lustenberger, a co-owner of the note, did not, directly or through H. S. Smith Investment Company, request Mr. Gow, the trustee, to foreclose. Since the recital in the trustee's deed, that the legal holder of the indebtedness had requested a foreclosure, is prima facie evidence of the truth thereof under the recitals of the deed itself and under the statutes (Secs. 3064, 3094, R. S. 1929), plaintiffs wholly failed to meet the burden of proving that they did not make such request. Williams v. Maxwell, 82 S.W.2d 270. (3) Appellants, being innocent purchasers, had a right to rely upon the record; and, the record showing a perfect title in appellants' grantors, appellants acquired a good title against the world. Sec. 3040, R. S. 1929; White v. Hughes, 88 S.W.2d 271; Harrison v. Moor, 199 S.W. 188; Adams v. Carpenter, 187 Mo. 634; Odle v. Odle, 73 Mo. 289; Williams v. Mackey, 61 S.W.2d 971. (a) The record of the trustee's deed was notice to all persons, including plaintiffs; and plaintiffs, not having taken any action to set aside the trustee's deed before defendants purchased the real estate, are precluded thereby. Sec. 3040, R. S. 1929; Prewitt v. Prewitt, 188 Mo. 683; Clay v. Walker, 6 S.W.2d 966. (4) Plaintiffs' suit is barred by laches. Snow v. Funck, 41 S.W.2d 2; Wendover v. Baker, 121 Mo. 291; Shelton v. Horrell, 232 Mo. 358; Bliss v. Prichard, 67 Mo. 181; Price v. Boyle, 229 S.W. 206, 287 Mo. 257; Breit v. Bowland, 100 S.W.2d 599; Weniger v. Success Milling Co., 227 F. 548; Leonard v. Marchall, 82 F. 396; 10 R. C. L., p. 400, sec. 147; 21 C. J., p. 210, sec. 211. (5) Under the evidence, H. S. Smith Investment Company was the agent of plaintiffs, and a request by that company upon the trustee would have been a sufficient basis for the foreclosure. Sharp v. Knox, 48 Mo.App. 169; Bonner v. Lisenby, 86 Mo.App. 666. (6) The most that can be said for plaintiffs (which we do not admit) is that they, like defendants, were innocent parties. Therefore, the judgment should have been against plaintiffs and in favor of defendants on well established principles of equity: (a) Where one of two innocent parties must suffer by the act of a third, he who has enabled such third person to occasion the loss must sustain it. White v. Himmelberger-Harrison, 240 Mo. 13; Leonard v. Shale, 181 S.W. 16; Fairgate Realty Co. v. Drozda, 181 S.W. 398; Baade v. Cramer, 213 S.W. 121; Leonard v. Marshall, 82 F. 401; Klebba v. Struempf, 23 S.W.2d 205. (b) Between equal equities, the law will prevail. 21 C. J., p. 207; 66 C. J., p. 1092.
J. V. Gaddy and Ronald S. Reed for respondents.
(1) Appellants' first contention is that this being an equity case, the court will make its own findings of fact, and the testimony of Frank Lustenberger being unbelievable, this court should enter judgment in favor of the appellants. The testimony of plaintiff Frank Lustenberger was quite reasonable and is not contradictory to any evidence in the case in any respect. While the Supreme Court is not bound on appeal by the finding of the chancellor in an equity case, it will keep in mind his superior opportunity to weigh the testimony. Fendler v. Roy, 58 S.W.2d 459, 331 Mo. 1083. (2) The question raised by appellants under Point (2), namely, that the evidence is silent as to whether W. F. Lustenberger requested either personally or through H. S. Smith Investment Company as agent, the trustee to foreclose the deed of trust, was not raised in the answer filed by defendants, no contention thereof was made during the trial of the case, and this objection is being first raised on appeal. (a) As a practical matter, the evidence showed that Frank Lustenberger had possession of the note and deed of trust continuously from the time of the purchase of same and had full authority from his brother to completely handle the loan. The only reasonable inference from such evidence is that W. F. Lustenberger did not make any such request. (b) It makes no difference whether W. F. Lustenberger did or did not request the trustee to foreclose because, first: The deed of trust provided that the legal holder of the deed of trust must request the trustee to foreclose. Such request is a condition precedent to a valid foreclosure. Second: Frank Lustenberger was the legal holder of the note and deed of trust in question. Bank v. Rosenbaum, 177 S.W. 693; Barber v. Stroub, 85 S.W. 915; Art. IV, Sec. 2822, R. S. 1929. (3) The doctrine of innocent purchasers having a right to rely upon the record cannot operate to deprive the respondents of their legal rights by virtue of their ownership of the note and deed of trust. (a) The recording of the trustee's deed was not notice to respondents of the wrongful foreclosure of their deed of trust because they had no reason to rely on any record. The record does not impart any fact not recited in the deed. Clay v. Walker, 6 S.W.2d 961. (4) The doctrine of laches is not applicable to the facts in the principal case. 21 C. J., pp. 210-215-244; Nease v. Coal & Coke Ry. Co., 195 F. 987. (a) Mere delay in asserting a right does not ipso facto bar its enforcement in equity by the greater weight of authority, unless the case is barred by the Statute of Limitations. Marshall v. Hill, 246 Mo. 1, 151 S.W. 131; Kellogg v. Moore, 196 S.W. 15; Workman v. Moore, 177 S.W. 862. (5) The H. S. Smith Investment Company was not the agent of respondents for the purpose of requesting a foreclosure. St. Louis Mut. Life Ins. Co. v. Walter, 46 S.W.2d 166.
Bradley, C. Ferguson and Hyde, CC., concur.
This cause was reassigned. It is in equity to set aside a sale under a deed of trust and to cancel the trustee's deed; to cancel and set aside a warranty deed, and to cancel and set aside a deed of trust, and to have the deed of trust upon which plaintiffs rely adjudged to be a first lien upon the real property involved, and that this lien be foreclosed. The court granted the relief sought by plaintiffs, and defendants Sarkesians appealed.
The cause was filed by Frank Lustenberger as the sole plaintiff, but during the trial it developed that his brother, W. F. Lustenberger, had a two-thirds interest in the note and deed of trust relied upon. When this situation developed, W. F. Lustenberger was made a party plaintiff. The petition was not changed in all places, after W. F. Lustenberger was made a party, to show the plural instead of the singular, but in stating the substance of the petition we use the plural.
Plaintiffs alleged that on May 23, 1927, defendant, Margaret G. Hutchinson, and her husband, Harry H. Hutchinson, were the owners of the described real property, a part of four lots in the city of St. Joseph; that on said date the Hutchinsons executed their 7 per cent note for $ 3000, to R. E. Gardner, due in three years, and payable at the office of the H. S. Smith Investment Company in St. Joseph; that on the same day, the Hutchinsons executed a deed of trust on the property to defendant Gow, trustee, to secure the $ 3000 note; that the deed of trust was recorded May 27, 1927; that thereafter and on the day of May, 1927, Gardner, for value, endorsed the $ 3000 note to plaintiffs, and that plaintiffs became the owners and holders of the note and deed of trust. Plaintiffs further allege that on June 13, 1928, trustee, Gow, without order or direction from them pretended to sell the property under the deed of trust, and on June 22nd thereafter, pretended to execute to defendants Charles W. and Olive Edith Purdy, a trustee's deed, conveying the property to them; that the trustee's deed was recorded June 30, 1928; that thereafter and on June 22, 1928, the Purdys pretended to convey the property by warranty deed to the defendants Sarkesians, but that the Smith Investment Company retained the Purdy deed to the Sarkesians till January 2, 1931, before it was recorded.
Plaintiffs further alleged that on January 11, 1935, the Sarkesians executed a deed of trust on the property to defendant Wright, trustee for defendant Esther Godfrey, to secure their (Sarkesians') note for $ 1000 given to defendant Esther Godfrey, and that the Godfrey deed of trust was recorded April 15, 1935. And plaintiffs allege that since purchasing the Gardner note and deed of trust they have not received any payment on principal or interest.
The Purdys answered by general denial, and...
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Lustenberger v. Hutchinson
...Defendants, Haruten Sarkesian and Seroon Sarkesian, Appellants No. 35169Supreme Court of MissouriSeptember 17, 1938 Reported at 343 Mo. 51 at 63. Opinion of September 17, 1938, Reported at 343 Mo. 51. Bradley, C. Ferguson and Hyde, CC., concur. OPINION BRADLEY On Motion for Rehearing. It is......