Orr v. McKee

• Decision Date: 31 March 1896
• Parties: Orr v. McKee et al.; Bunker et al., Appellants
• Court: Missouri Supreme Court

34 S.W. 1087

134 Mo. 78

Orr v. McKee et al.; Bunker et al., Appellants

Supreme Court of Missouri, Second Division

March 31, 1896

Appeal from Jackson Circuit Court. -- Hon. J. H. Slover, Judge.

Affirmed.

Henry Wollman and Alexander New for appellants.

(1) The court does not find that this property was sold for a grossly inadequate price, but even if it had been there would have been no justification for setting aside the sale. Kline v. Vogel, 11 Mo.App. 211; Million v. McRee, 9 Mo.App. 344; Gordon v. O'Neill, 96 Mo. 350; Walters v. Hermann, 99 Mo. 529; Maloney v Webb, 112 Mo. 585, and cases cited. (2) Equity will never set aside a transaction because of a mistake when both parties have the same knowledge, or the same means of knowledge. Bales v. Perry, 51 Mo. 453. (3) Equity will not set aside a transaction when a party was indolent and made a mistake because of lack of diligence on his own part. Brown v. Fagan, 71 Mo. 568; Schaeffer v Schilling, 6 Mo.App. 49. (4) If they claim this was a mistake of law as to their construction of the instrument, it is a rule of equity that it will never set aside a transaction because of a mistake of law, unless there are circumstances in addition to the mistake of law, such as to excite suspicion of fraud, imposition, deception, or undue influence on the one side and imbecility, credulity or blind confidence on the other. Kleimann v. Gieselmann, 114 Mo. 445. (5) Nothing of that kind is claimed in this case. There were no confidential relations existing between Orr and Bagley, and Orr didn't claim that he relied on Bagley, or that Bagley had any influence over him, or that Bagley was in any better position to know than he. (6) Equity will never interfere on the ground of mistake upon possibilities nor upon a mere preponderance of evidence, but only upon a certainty of error. Sweet v. Owens, 109 Mo. 7.

Teasdale Ingraham & Cowherd for respondent.

(1) Plaintiff being the holder of the first of a series of notes secured by the deed of trust, had the first lien. Mitchell v. Ladew, 36 Mo. 526; Hurck v. Erskine, 45 Mo. 486; Mason v. Barnard, 36 Mo. 384; Winters v. Bank, 33 Ohio St. 253; Richardson v. McKim, 20 Kan. 350; Jones on Mtgs. [4 Ed.], sec. 606; Flower v. Elwood, 66 Ill. 450; Bank v. Bank, 9 Wis. 57; Freeman v. Elliott, 48 Mo.App. 74. (2) Not having requested the trustees to sell, he had the option when sale was made under the second note, to either disregard the foreclosure and seek to enforce the lien against the land, or to affirm the foreclosure and take the proceeds of the sale. Boogher v. Frazier, 99 Mo. 325. (3) The letter from the sheriff to the plaintiff, received May 3, requesting him to bring in his note and receive his share of the proceeds of the sale, indicates that the parties understood that the plaintiff was cooperating in, or bound by the sale. The trustee's deed, recorded April 30, also indicates that the sale was made for default in both notes. (4) The notice of trustee's sale recites that the sale was made at the request of the holder of one of such notes, but does not designate which one. (5) The evidence shows the sale was made for a grossly inadequate price. (6) All the facts in evidence taken together warranted the court in setting aside the sale. Vail v. Jacobs, 62 Mo. 133; Maloney v. Webb, 112 Mo. 585; Holdsworth v. Shannon, 113 Mo. 508. Equitable aid is the only relief after the trustee has once sold. Koester v. Burke, 81 Ill. 439. (7) There is no question about the power of a court of equity to set aside the sale; it is a question of discretion. Hubbard v. Jarrett, 23 Md. 83; Cassady v. Wallace, 102 Mo. 575. (8) And moreover the cases agree in holding that a junior mortgagee is not allowed to divest the lien of the prior mortgage, by any purchase of a lien superior to both. Woodburg v. Swan, 59 N.H. 22; Smith v. Lewis, 20 Wis. 350; Goodrich v. Kimberly, 48 Conn. 295; Strong v. Burdick, 52 Iowa 630. (9) There was no laches on the part of plaintiff. He filed his bill within three days after learning of the sale.

Burgess, J. Gantt, P. J., and Sherwood, J., concur.

OPINION

Burgess, J.

On the eleventh day of January, 1887, Jennie McKee and William McKee, her husband, purchased from the defendant Bunker a lot in Troost Highlands, an addition to Kansas City, Missouri, at the price of $ 3,000, paying in cash $ 1,000, and on the same day executed to defendant Winner as trustee for Bunker, a deed of trust on the same lot, to secure the payment of two promissory notes for $ 1,000 each, given by Mrs. McKee and husband for the balance of the purchase money, one due in one year from its date and the other in two years from its date. Bunker indorsed both notes and sold the last one becoming due to Julia Heath of New Hampshire, and the other to the International Loan and Trust Company of Kansas City. McKee paid the interest on the Heath note regularly until July 11, 1891. When the other note became due plaintiff took it up.

After default had been made in the payment of interest on the Heath note, she, through her agent V. W. Bagley, had the sheriff of Jackson county, the trustee Winner having refused to act, advertise the property for sale under the deed of trust. This was done by notice given in the Kansas City Daily Journal, for more than twenty days before the day of sale, to wit, April 26, 1892. The property was sold on that day by the sheriff at the usual hour, at the front door of the postoffice building and custom house, according to the notice, and was bought in by defendant Withers, an employee of Bunker, for $ 100, and was paid for with the money of the defendant Finley, who was also an employee of Bunker.

Within ten days after the sale, Orr brought this suit to set aside the sale, on the ground of fraud and inadequacy of price, alleging that the property was of the value of $ 3,000 at the time of the sale under the deed of trust, fraud on the part of the defendants, and that he and Julia Heath were mutually mistaken as to the necessity of the holders of the notes, under the provisions of the deed of trust, to join in a request to the trustee to sell the property, and that she, Julia Heath, afterward learning that such was not the case confederated with defendants Withers, Finley, and Bunker to accomplish the sale without the knowledge of plaintiff.

The court made the following finding:

"The evidence in this case is somewhat conflicting, but the conduct of the plaintiff in not attending the trustee's sale can not be explained except upon the idea of a mistake between him and Bagley, concerning the necessity of their presence at the sale. From any point of view the property sold at a very low price, and this, in connection with the evident misunderstanding of the parties directly interested must be held to be sufficient in a court of equity to set aside the sale; and this will be done, and a decree entered accordingly."

From the judgment the defendants Bunker, Finley, and Withers appealed.

While the evidence was conflicting as to the value of the lot at the time of the sale, some of the witnesses on behalf of defendants placing it as low as $ 50, the decided weight of the evidence tended to show that it was worth $ 1,500, some witnesses placing its value at as much as $ 3,000.

There was not sufficient evidence of a fraudulent combination on the part of the defendants to justify setting aside the sale and unless the evidence shows that plaintiff was...