Ohnsorg v. Turner

• Decision Date: 01 May 1883
• Citation: 13 Mo.App. 533
• Parties: ALBERT OHNSORG, ADMINISTRATOR, Respondent, v. THOMAS T. TURNER ET AL., Appellants.
• Court: Missouri Court of Appeals

13 Mo.App. 533

ALBERT OHNSORG, ADMINISTRATOR, Respondent,

v.THOMAS T. TURNER ET AL., Appellants.

St. Louis Court of Appeals, Missouri.

May 1, 1883.

After the death of the maker of certain notes secured by a deed of trust there was a default in the payment of the notes and a sale of the property by the trustees, at which the owner of the notes became the purchaser, and under which he went into possession. The amount of the principal note was not realized at the sale and the payee assigned the same for collection, the assignee to pay the expenses of collection, and to retain one-half the amount collected. The assignee employed the trustees, who were attorneys, to make the collection, they to receive a percentage as compensation. Several years afterwards, the payee of the notes discovered that the foreclosure sale was void, because of a failure to comply with the terms of the deed of trust in the matter of the advertisement of sale, and thereupon, under his direction, the trustees resold the property under the deed of trust. The advertisement complied with the terms of the deed of trust but did not state who was the grantor therein. The maker's estate was insolvent, and his widow and minor child applied for an injunction to restrain the sale, or the removal of the trustees and for an accounting: Held, that the bill contained no equity; that the first sale was no cloud upon the title; that the second advertisement was sufficient; that the mortgagee in possession not having refused to account, there was no ground for the appointment of a receiver; that the trustees were not interested in the trust debt, and properly, upon learning of their mistake, reassumed their duties as trustees.

APPEAL from the St. Louis Circuit Court, HORNER, J.

Reversed and dismissed.

THOMAS T. GANTT, for the appellants.

LOUIS GOTTSCHALK, for the respondent.

LEWIS, P. J., delivered the opinion of the court.

The petition states that Albert Ohnsorg is administrator, Catherine Rohn the widow, and Augusta the only child, of August Rohn, deceased; that on the 22d of February, 1876, August Rohn was the owner of a lot on Christy Avenue, in block 166 of the city of St. Louis, having forty feet front on the north side of Christy Avenue, and one hundred and forty-five feet deep; that on said 22d of February, 1876, Rohn and wife executed a deed of trust to Arthur and John. F. Lee, recorded in book 538, page 442, to secure to Thomas T. Turner, trustee of Rebekah Briggs, the payment of seven promissory notes of even date, six of them for $450 each, payable in six, twelve, eighteen, twenty-four, thirty, and thirty-six months after date, and one note for $9,000, payable three years after date, all bearing ten per cent interest after maturity; that the three interest notes payable in six, twelve, and eighteen months from date, were promptly paid by said Rohn; that Rohn died in May, 1878; that in March, 1879, A. and J. F. Lee, trustees, advertised the said property for sale for the alleged reason that default had been made in the payment of the other notes, and attempted to sell, and did sell, the said property to said Turner, for the inadequate price of $6,000, and executed to him a trustee's deed therefor; that at said sale only one bid was made for said property, namely, that made by said Turner; that no money passed by said Turner or said Briggs, or anyone else, to said trustees, or either of them, but that said Lees cancelled said notes for $450, due respectively in twenty-four, thirty, and thirty-six months after date, and placed a credit of about $4,800 on the said $9,000 note; that by the terms of said deed of trust, advertisement for thirty days was required, but that said trustees caused the property to be advertised for only twenty-one days, in clear contravention of the terms of said deed and of their duties as trustees; that at said sale the property was worth at least $18,000, and should have brought at least $15,000 had it been properly advertised; that immediately after said sale and the making to him of a deed, Turner took forcible possession of the property, and has remained in possession ever since, collecting large rents and deriving great profits; that the property is highly improved, having a four-story building containing thirty-eight rooms, the monthly rent of which is worth $125; that after said sale Turner assigned said $9,000 note, on which was a credit of $4,800, to Brainard Million; that Million presented said note for allowance against the estate of Rohn, and procured an allowance, which was affirmed by the circuit court and court of appeals, and an appeal therefrom is pending in the supreme court; that the estate of Rohn is insolvent, and that Million is prosecuting a suit in equity to subject certain real estate held by Albert Ohnsorg to the payment of said judgment and set aside certain deeds made by Rohn in his lifetime; that said A. and John F. Lee are interested in said suits, and the proceeds thereof, should they be realized; that they are acting as attorneys in said suits for said Million and for Turner as trustee, who is also interested; that a short time ago defendants discovered the mistake they had made in not advertising the said property for thirty days; and instead of communicating said discovery to plaintiffs, and having an accounting to ascertain the amount due, they, the said A. and J. F. Lee, advertised the property for sale anew in the Post-Dispatch, and in order to conceal this from the plaintiffs, they omitted to mention that it was the property of Rohn, or that it was to be sold under his deed of trust; that said advertisement was not made at the request of the holder of any of the notes, the payment of which was secured by the deed of trust; that the three interest notes had been fully paid by the rents and profits; that the first sale has never been set aside by any court; that the power of making sale under said deed has been exhausted by said A. and J. F. Lee, in making the first sale; that they are not impartial, but are acting entirely in the interest of Turner; that they are not proper parties to remain trustees; that if the property should be sold under existing facts and without the first sale being set aside, “it would not bring nearly so much as otherwise;” that the amount due on the notes remains unascertained; that plaintiffs believe and charge that only a small amount remains due thereon after full credit for all income derived from said property while in possession of defendants; that if the same be ascertained and fixed, they may be willing to pay off the same without a sale; wherefore, they pray an injunction to prevent the sale advertised to take place on September 3, 1881, and that the court will cause to be ascertained the indebtedness, if any, remaining due from Rohn on the said notes, and for that purpose take an account of the rents and profits of the property since it came into the hands of defendants; that it will set aside the first sale, “and in case plaintiffs refuse or neglect to pay off the remaining indebtedness, if any, to order a resale of the property, and for that purpose to remove said A. and John F. Lee, as trustees, as being interested and improper parties, and appoint a proper party therefor, and to cause the proceeds to be distributed according to the rights of the parties.”

The defendants, Thomas T. Turner, for himself and as trustee of Rebekah Briggs, John F. Lee, Jr., and Arthur Lee, answered this petition, saying: First, that they admitted the making, on the 22d of February, 1876, of the deed of trust referred to in the petition, but not made an exhibit thereof, by which A. Rohn secured the payment of a note for $9,000 and notes for interest, payable semi-annually, all the notes bearing ten per cent after maturity; that A. and John F. Lee made an ineffectual attempt to make sale of the property in 1879, and the writing they then executed was an absolute nullity; deny that the property was then worth $15,000; allege that the taxes and all interest for 1878 were unpaid in 1879; that on the 10th of March, 1879, when said sale was attempted, there was due to said Turner $10,920; that the property had greatly depreciated since the making of the deed of trust, and was, in March, 1879, worth $5,500, and no more; that all which was done at that sale, and as a consequence of it, was a nullity, being founded in error of fact, and the estate of Rohn was entitled to no credit by reason of the bid thereat of said Turner; deny that Turner took forcible possession of the property; admit that he took possession, but peacefully and in assumed conformity with the sale under the deed of trust; that, supposing himself to be the purchaser of said property, he paid taxes, made necessary repairs, rented the property and received the rents as of property to him belonging; deny that at any time since it came to Turner's possession the rents of the property were worth $125 per month; that they were only $75 per month, out of which all expenses of managing the property, and the taxes were to be paid; that this he received up to the 2d of July, 1881, when he rented the same for $285, payable every six months, and the taxes; that this was the best rent obtainable, and that a balance of more that $11,900 is due to Turner on the notes of Rohn, charging Rohn with the notes and interest and crediting him with the net rents of the property; that on the 1st of August, 1881, he discovered that the sale made in March, 1879, was void, and called on the trustees to readvertise the property for sale in order to raise the said amount; that the trustees proceeded to advertise, and would have made sale if not prevented by the order of injunction in this cause.

That at no time was there any cause, pretension, or excuse for plaintiffs to say that they could not ascertain the amount due to said Turner on the said deed and notes; that plaintiffs never demanded from him any statement of the account between...