Morrison Bank of Morrison v. Whertvine

• Decision Date: 06 August 1929
• Docket Number: 27759
• Parties: Morrison Bank, Appellant, v. Anna Whertvine et al
• Court: Missouri Supreme Court

20 S.W.2d 529

323 Mo. 597

Morrison Bank, Appellant, v. Anna Whertvine et al

No. 27759

Supreme Court of Missouri

August 6, 1929

Rehearing Overruled October 8, 1929.

Appeal from Osage Circuit Court; Hon. R. A. Breuer, Judge.

Affirmed.

J Richard Garstang and Marion R. Garstang for appellant.

(1) A proceeding to set aside a foreclosure sale on the ground of fraud or illegality may be maintained by a bill in equity by any person interested in the subject-matter and whose right is affected by the sale. A judgment creditor by the mortgagor may sue to set aside the sale. So may a creditor of decedent where the estate was insufficient to pay creditors, and the land sold at an inadequate price under circumstances of unfairness in the conduct of the party benefited by the sale. 41 C. J. 1023, sec. 1488; 42 C. J. 227, sec. 1867; Chew v. Baker, 133 Md. 637; Swain v. Lynd, 74 Minn. 72. A junior mortgagee or lien-holder will be protected from a fraudulent or unfair sale. 41 C. J. 1006, sec. 1461; McKee v. Logan, 82 Mo. 528; Speer v. Home Bank, 200 Mo.App. 269; Hayes v. Pace, 162 N.C. 288. A subsequent judgment creditor who has acquired a lien on the equity of redemption may redeem from the mortgagee and then foreclose the mortgage for the payment of the mortgage debt and his unsatisfied judgment. 41 C. J. 886, sec. 1102; Adams v. Keers, 46 Ont. L. 113; Kelly v. Longshore, 78 Ala. 203. (2) A trustee is agent for all parties to the transaction. He must conduct the sale to the best interest of all concerned. Where he acts unfairly to the injury of the complainant the sale may be set aside. Even though the trustee may not have acted in bad faith, where the acts of the trustee show partiality or hostility, coupled with inadequacy of price, the sale may be set aside. 41 C. J. 1024, sec. 1489; 971, sec. 1418, 606, sec. 571; Krug v. Bremer, 292 S.W. 705; Borth v. Proctor, 219 S.W. 72; Hardware Co. v. Brownlee, 186 Mo. 621; Goode v. Comfort, 39 Mo. 325; Vail v. Jacobs, 62 Mo. 130; Pollihan v. Reveley, 181 Mo. 622; Lunsford v. Davis, 300 Mo. 508. Where the trustee failed or neglected to exercise a wise and sound discretion, equity will interfere. Hanson v. Neal, 215 Mo. 256; Goode v. Comfort, 39 Mo. 325; Holdsworth v. Shannon, 113 Mo. 508; Lazarus v. Caesar, 157 Mo. 199. (3) The question of selling the property en masse or in parcels rests in the sound discretion of the trustee, and he should be guided by the effect of a division on the value of the property, his duty being to choose that course which will encourage competition in bidding and result in the largest price. 41 C. J. 973, sec. 1421; Lazarus v. Caesar, 157 Mo. 199. Where the farm is used, occupied as and naturally constitutes one farm, the property should be offered as a whole. 41 C. J. 973, sec. 1421; Lazarus v. Caesar, 157 Mo. 199, 212; Carter v. Abshire, 48 Mo. 302; Tatum v. Holliday, 59 Mo. 428; Kellog v. Carrico, 47 Mo. 157; Merrill v. Nelson, 18 Minn. 366. Sale of the property separately when it should be sold en masse, may authorize setting aside the sale, when coupled with inadequacy of price. 41 C. J. 974, sec. 1422; Lalor v. McCarthy, 24 Minn. 417.

George J. Gove and William A. Davidson for respondents.

The petition shows that the trustee, being requested at said sale to offer the said lands in fragments as well as in whole, and to use his discretion in selling said lands so as to guard the rights of defendants in retaining their homestead rights, as well as the rights of plaintiff, which request as shown by plaintiff's petition, was done by said trustee; and that the trustee sold eighty acres of said land described in the deed of trust for the sum of $ 700, which said sum was sufficient to pay the full amount due on said note so secured by said deed of trust including all expenses of sale; and that the trustee refused to sell the remainder of said land so secured by said deed of trust. This was proper, because the trustee could not and should not sell more of the land than was necessary to pay the debt without injury to defendants, and in so doing he guarded the rights of plaintiff as well as that of defendants, which was his bounden duty to do, and to sell no more of the land described in said deed of trust than was necessary to pay the debt and cost of sale, regardless of what the remaining lands were worth or would sell for. By selling only a part of said land so mortgaged no injury was done to plaintiff.

OPINION

Walker, J.

This is is suit in equity to set aside a sale under a deed of trust of certain land, described in the petition, in Osage County, which deed was made to secure the payment of a promissory note. A demurrer to the petition was sustained by the circuit court on the ground that the facts stated did not constitute a cause of action. From the judgment rendered on this ruling the plaintiff has appealed.

There is much wholly irrelevant matter in this petition. A summary of its material allegations is to this effect:

A promissory note was given by the defendants, the payment of which was secured by a deed of trust on the land described in the petition. A portion of the principal of said note became due...