McLure v. National Bank of Commerce of St. Louis

• Decision Date: 24 November 1913
• Docket Number: 16165,16168
• Citation: 160 S.W. 1005,252 Mo. 510
• Parties: CHARLES D. McLURE v. NATIONAL BANK OF COMMERCE OF ST. LOUIS et al., Appellants. -- No. 16165.; CHARLES D. McLURE, Appellant, v. NATIONAL BANK OF COMMERCE OF ST. LOUIS et al. -- No. 16168
• Court: Missouri Supreme Court

160 S.W. 1005

252 Mo. 510

CHARLES D. McLURE v. NATIONAL BANK OF COMMERCE OF ST. LOUIS et al., Appellants. -- No. 16165.;

CHARLES D. McLURE, Appellant, v. NATIONAL BANK OF COMMERCE OF ST. LOUIS et al. -- No. 16168

Nos. 16165, 16168

Supreme Court of Missouri

November 24, 1913

Appeal from St. Louis City Circuit Court. -- Hon. Moses N. Sale Judge.

Reversed and remanded (with directions).

Thomas Bond and W. G. Schofield for plaintiff-appellant.

(1) The farm bought in at foreclosure sale was purchased and held by defendant bank only as collateral to secure a debt. 2 Pomeroy's Equity Jur., sec. 1055, note 1; 1 Beach on Trusts and Trustees, sec. 105, note 1; Browne on Statute of Frauds, secs. 96 and 96a; Phillip v. Jackson, 240 Mo. 310; Phillip v. Hendenberg, 181 Mo. 473; Richardson v. Champion, 143 Mo. 538; Leahy v Witte, 123 Mo. 207; Turner v. Johnson, 95 Mo 431; O'Fallon v. Clopton, 89 Mo. 290; Damschraeder v. Thias, 51 Mo. 103; McNeil v. Booth, 42 Mo. 189; Rose v. Bates, 12 Mo. 30; Reilly v. Cullen, 159 Mo. 323, 101 Mo.App. 32; O'Neil v. Capelle, 62 Mo. 202; Cobb v. Day, 106 Mo. 295. (2) The Statute of Frauds does not apply to frauds and trusts nor in cases where one party has fully performed the oral agreement. See cases under point 1; 20 Cyc. 280, 281; Damschraeder v. Thias, 51 Mo. 100; Simily v. Adams, 88 Mo.App. 621; Berg v. Moreau, 199 Mo. 432; Groves v. Fulsome, 16 Mo. 543. (3) The measure of plaintiff's relief is the market value of the farm at the time of the sale to Mrs. Kehlor. Turner v. Jackson, 95 Mo. 450; Reilly v. Cullen, 101 Mo.App. 32; 39 Cyc. 533. (4) In a suit in equity where the petition contains a prayer for general relief, the court may grant any form of relief consistent with the averments of the pleadings. Phillip v. Jackson, 240 Mo. 337. (5) A trustee who makes a wrongful or illegal sale of the trust estate or who is guilty of a breach of trust is not entitled to commissions. Reilly v. Cullen, 101 Mo.App. 39; Harrison v. Craven, 188 Mo. 610; Van Raalte v. Epstein, 202 Mo. 173.

George L. Edwards and Edward D'Arcy for respondents.

(1) Under the pleadings it is clear, as the trial court held, that appellant is entitled only to credit for the net amount received by respondents on the sale of appellant's land, and not for the market value of the land. The petition is clearly a petition for an accounting of the proceeds of the Kehlor sale, and for nothing else. Plaintiff declined to amend his petition, but stood upon the petition as filed, praying for an accounting of the proceeds of the Kehlor sale. The trial court maintains the same view of this question in its memorandum filed at the time of the rendition of the decree, holding that, "There is no actual fraud charged, and the very able counsel for plaintiff time and again during the course of the trial expressly disclaimed making any such charge against the defendants, or either of them, and the amended petition herein fully sustains this disclaimer." While the trial court did allow appellant to introduce some evidence of market value, after having excluded the first witnesses offered by appellant on this point, still the admission was harmless, because it was offered merely as having a tendency to support appellant's theory that a grossly inadequate price gives rise to an inference of fraud, and was expressly restricted by the court to that purpose only. The evidence of value, therefore, cannot now be diverted from its true purpose, in order to sustain a theory of recovery rejected by the court, abandoned by appellant, and inconsistent with his pleadings. The pleadings are the foundation of the action, and that "the point decided must be, in substance and effect within the issue." State ex rel. v. Muench, 217 Mo. 138; Charles v. White, 214 Mo. 204; Hope v. Blair, 105 Mo. 93; Munday v. Vail, 34 N.J.L. 418; Reynolds v. Stockton, 140 U.S. 254; 3 Hughes Gr. and Rud., 49-51. (2) Appellant's second position is that respondents, being trustees ex maleficio, are not entitled to credit for their expenses necessarily incurred in the management and sale of the McLure property. Respondents deny that they were trustees ex maleficio. The facts clearly show that whatever difference of opinion there may have been between these parties as to the law of this case, both parties were acting in good faith, in the protection of their rights as they saw them. There was a difference of opinion, in the first place, as to what the contract between appellant and respondents was, and, in the next place, as to what was the effect of that contract. That is all there is to this litigation.

GRAVES, J. Bond, J., having been of counsel, did not sit.

OPINION

In Banc.

GRAVES J.

Upon our docket appear two cases, styled and numbered as above indicated. They are in fact cross-appeals in the same case, and the brief and arguments were made in case No. 16168, in which the plaintiff is appellant. The defendants have abandoned their appeal and now urge that the judgment below be affirmed. The force of their brief with us is fully spent combatting the plaintiff's contentions for a new trial. This position of counsel in this court somewhat shortens the statement. The facts found by the chancellor below, may, owing to the attitude of defendants here, be taken as correct, except so far as they are questioned by the plaintiff.

Plaintiff sues in equity for an adjustment of his accounts and transactions with the National Bank of Commerce in St. Louis. Pleading and proof can be fairly covered by a short resume of the facts. As a starter it appears that the Bronx Investment Company, one of the defendants, is a subsidiary corporation of the National Bank of Commerce in St. Louis. In the transaction here involved it acted for its creator, the Bank of Commerce. Some data of the transaction, both pleaded and proven, are required for a thorough understanding of the case. On and prior to April 26, 1905, the plaintiff owned 65.43 acres of land in St. Louis county, which in 1908 was near a car line and about a half mile of the city limits of the city of St. Louis. This tract had cost plaintiff $ 55,000 at the date of purchase and had been considerably improved by him thereafter. He alleges and swears it to be worth $ 75,000 in 1908 and thereafter. In April, 1905, plaintiff gave a deed of trust on his land to secure the payment of a note made by him to the Mercantile Trust Company in the sum of $ 32,000. On this note he had paid $ 15,000 of the principal and all the interest to October 26, 1907. On and prior to May 20, 1907, the plaintiff owed to the defendant National Bank of Commerce in the city of St. Louis on his note the sum of $ 42,897.72, due upon demand, which was secured by the deposit of some stocks under a collateral contract with the bank. The Bank of Commerce in May, 1907, demanded more collateral, and the plaintiff thereupon executed his note to Jesse B. Mellor, his private secretary, in the sum of $ 20,000, and secured its payment by a second deed of trust on the St. Louis county land. This note was deposited with the National Bank of Commerce as additional collateral for the note of $ 42,897.72, thus giving said bank a second lien upon the land, subject to the unpaid balance due the Mercantile Trust Company of $ 17,000, and accrued interest. On this $ 17,000 balance the plaintiff defaulted, and Moberly, the trustee in the deed of trust, at the request of the Mercantile Trust Company, advertised the property for sale on August 3, 1908. The facts from this date on constitute the crux of this case. In describing the plaintiff's claims in his petition, counsel for National Bank of Commerce, thus outline the position of the plaintiff upon these subsequent facts, as they claim such facts are stated in his petition:

"That on August 1, 1908, plaintiff was in default in the payment of the notes secured by the first deed of trust, and the property was advertised for sale there-under;

"That the Bank of Commerce and plaintiff agreed that if plaintiff would permit the property to go to sale under the first deed of trust, the bank would buy in the property on behalf of plaintiff and take title to the property and hold same in trust for plaintiff, who should have the right, at any time within one year from the date of such sale, to redeem said property;

"That the Bank of Commerce did buy in said property at the first deed of trust sale for $ 18,031.59;

"That since said purchase by the Bank of Commerce, plaintiff has reduced his indebtedness to said bank by $ 20,040;

"That said real estate is reasonably worth $ 75,000;

"That in July, 1909, the Bank of Commerce sold said real estate to Lamira W. Kehlor for a purchase price, as plaintiff is informed, of $ 38,000, a price far below the actual value of said property."

The foregoing is the outline of that part of the plaintiff's petition as given by counsel for the bank. Other portions of the petition counsel for plaintiff construe one way and counsel for defendant construe another way, and this difference will call for a discussion in the course of the opinion. Upon the question as to what the agreement and understanding was as between plaintiff and defendant upon the manner in which the property should be handled at the sale under the first deed of trust on August 3, 1908, the trial court in his findings and decree, thus speaks:

"Now on this 19th day of February, A. D. 1910, come the plaintiff and the defendants by their respective attorneys, and this cause coming on to be heard upon the petition and answer and the evidence adduced thereunder, and having been argued by counsel for the respective parties and the court being advised and having duly considered the same, doth find the issues herein joined in favor of the plaintiff and against ...