Nodaway County v. Alumbaugh

• Decision Date: 03 July 1941
• Docket Number: 37084
• Parties: Nodaway County v. Charles C. Alumbaugh and Maude Alumbaugh, his wife, Lena B. Rush, and Clyde Roberts, Defendants; Charles C. Alumbaugh, and Maude Alumbaugh, his wife, Appellants
• Court: Missouri Supreme Court

153 S.W.2d 74

348 Mo. 354

Nodaway County v. Charles C. Alumbaugh and Maude Alumbaugh, his wife, Lena B. Rush, and Clyde Roberts, Defendants;

Charles C. Alumbaugh, and Maude Alumbaugh, his wife, Appellants

No. 37084

Supreme Court of Missouri

July 3, 1941

Rehearing Denied July 25, 1941.

Appeal from Andrew Circuit Court; Hon. R. B. Bridgeman Judge.

Reversed and remanded (with directions).

Earl C. Borchers and John P. Randolph for appellant.

(1) A creditor has three remedies for the collection of a secured debt. First, by suit at law upon the primary obligation. Second, by pursuit of a statutory foreclosure. Third, by a foreclosure through suit in equity. Secs. 3223, 3343, 3447 3799, R. S. 1939. (2) There can be but one foreclosure sale of the same property in satisfaction of the same debt. Buford v. Smith, 7 Mo. 489. (3) In this case Nodaway County elected to pursue the statutory foreclosure under order of the county court and received and accepted the purchase money tendered at said sale and upon that consideration the officer making the sale executed and delivered his deed transferring the property together with the legal right to the lien of the mortgage to the purchaser at said foreclosure sale. (4) The record holder of the title to the real estate in question brought his action to quiet the title of the purchaser at the statutory foreclosure sale. Whereupon the purchaser by way of defense pleaded the title she acquired through the foreclosure sale. The holder of the record title, that is to say, the plaintiff, by way of reply denied the validity of the foreclosure sale and to bring himself within the rule entitling him to ejectment against the purchaser at a voidable foreclosure sale, asked the court to determine the amount of the purchase price, improvements made and taxes paid, and award judgment against him accordingly. This being done and plaintiff subrogated to the rights of the purchaser, the voidable foreclosure sale was not set aside, but the rights of the purchaser at the sale accrued to the plaintiff in that action who is the main defendant, Charles C. Alumbaugh, in this action. Wilcoxen v. Osborn, 77 Mo. 621. (5) The beneficiary under a deed of trust or real estate mortgage, in other words, the holder of the note secured by deed of trust or mortgage on real estate, cannot, as a matter of equity and good conscience, retain the purchase price paid by the purchaser at a voidable, or even void, statutory foreclosure sale, in the absence of fraud on the part of the purchaser, and proceed to again sell the same property in foreclosure of the same deed of trust or mortgage.

A. F. Harvey and Wright & Ford for respondent.

(1) "Void" involves the idea of utter ineffectiveness in all situations and for all purposes, leaving the effect of the void transaction the same as if it had not taken place. 67 C. J. 264; Hume v. Eagan, 73 Mo.App. 271; Wilson v. Alexander, 50 S.W.2d 440. (2) The attempted foreclosure having been declared absolutely void, the mortgage lien continued in full force and effect. The school fund bond remained unpaid, and a suit to foreclose the mortgage lien was a proper and legal proceeding. 41 C. J., p. 1008, sec. 1461; p. 1035, sec. 1500; Ford v. Roush, 104 U.S. 112; Polk v. Dale, 93 Miss. 664, 17 Ann. Cas. 754; Crawford State Bk. v. Danks, 243 N.W. 735; Jones on Mortgages (Last Ed.), sec. 2154.

Bradley, C. Hyde and Dalton, CC., concur.

OPINION

BRADLEY

Action to foreclose a school fund mortgage. The trial court entered a decree of foreclosure and defendants Charles C. Alumbaugh and wife, appealed.

The real estate involved is the south half of lots 7 and 8, block 22, town of Barnard, Nodaway County. November 1, 1920, Frank Alumbaugh and his wife, Laura, then owners of the property, borrowed $ 500 at 6% from the county school fund, and to secure the loan, gave a school fund mortgage on the property and also the usual bond. Frank Alumbaugh paid the interest to January 1, 1929, but no part of the principal. Laura Alumbaugh died in 1924, and Frank died in April, 1929. Thereafter, his estate paid the interest on the loan to January 1, 1930. Defendant, Charles C. Alumbaugh, is a son of Frank and Laura, and inherited an interest in the property, and on September 5, 1931, acquired by deed the interest of the other heirs. In November, 1936, the county court took steps to foreclose the school fund mortgage, and on December 11, 1936, foreclosure sale was made by the sheriff. Defendant, Lena B. Rush, was the purchaser at the foreclosure sale on a bid of $ 77.50, which she paid to the sheriff, who executed and delivered to her a deed which was duly recorded. All of the $ 77.50 was credited on the school fund loan under date of "Dec. 1936." Mrs. Rush, by her tenant, went into possession of the property and made repairs.

Thereafter, defendant, Charles C. Alumbaugh, brought suit against Mrs. Rush and her husband to determine title to the property and in ejectment. Mrs. Rush relied on her school fund mortgage foreclosure deed. The cause went on change of venue from Nodaway County to Caldwell County, and on July 1, 1937, was decided in favor of Charles C. Alumbaugh. The court found that the notice of the school fund mortgage foreclosure sale was "void and of no effect and that the sheriff's deed issued in pursuance thereof was void and transferred . . . no right, title or interest in and to said real estate." And it was further found "that under the evidence and the pleadings of plaintiff and defendants that defendant Lena B. Rush is entitled to have and recover of plaintiff the sum of one hundred seventy-seven dollars and thirty-nine cents ($ 177.39) for monies paid out and expended for the purported purchase price of said real estate and repairs and labor as the improvements on said real estate," and it was so adjudged. And it was further adjudged that Charles C. Alumbaugh "be subrogated to the right of the defendant, Lena B. Rush, to the recovery of said alleged purchase price paid by the said defendant, Lena B. Rush."

The present cause was filed June 10, 1938, and went on change of venue to Andrew County, and was decided November 13, 1939. Plaintiff county, in the petition to foreclose, took cognizance of the interest payments made by Frank Alumbaugh during his life, and the interest payment made by his estate, but did not mention the credit of $ 77.50 paid by defendant, Lena B. Rush, on her bid at the foreclosure sale and credited on the school fund loan. Nor did plaintiff county make any reference in its petition to foreclose to the foreclosure theretofore attempted, except to allege that Mrs. Rush "appears of record to have some claim or interest in or to said real estate" by virtue of a deed recorded "in book 227 at page 128 of the deed records of Nodaway County, Missouri, and which conveyance plaintiff says is absolutely void and has been so adjudged by a good and sufficient judgment and decree." The deed referred to was the deed executed by the sheriff to Mrs. Rush upon the foreclosure sale.

In the present case, Charles C. Alumbaugh and his wife, Maude, answered separately. Maude denied generally and alleged that Charles C. was the owner of the property concerned. Defendants, Lena B. Rush and Clyde Roberts, a tenant, did not answer. Defendant, Charles C. Alumbaugh, in his answer, among other things, pleaded the decree in his suit against the Rushes, adjudging title to be in him. He also pleaded that plaintiff county, by receiving the $ 77.50 paid by Mrs. Rush, and by failing to refund said amount to her or to him "is estopped in equity and in justice from further pursuing said cause."

Allowing credit for the interest payments made by the borrower and his estate, and also the $ 77.50, the court found that there was a balance of $ 796.75 due on the school fund loan; that Lena B. Rush had no interest in the property; that Charles C. Alumbaugh was the owner, subject to the school fund mortgage, and, as stated, foreclosure decree was entered.

In the brief appellants say that the controversy is "around the question as to whether or not there can be a second foreclosure of the same mortgage and sale of the same property covered thereunder in satisfaction of the same debt." We might first say that no debt was satisfied. As supporting the contention that there can be only one foreclosure of...