Peterson v. Kansas City Life Ins. Co.

• Decision Date: 12 November 1936
• Citation: 98 S.W.2d 770,339 Mo. 700
• Parties: Norine Peterson, Appellant, v. Kansas City Life Insurance Company, a Corporation
• Court: Missouri Supreme Court

98 S.W.2d 770

339 Mo. 700

Norine Peterson, Appellant, v. Kansas City Life Insurance Company, a Corporation

Supreme Court of Missouri

November 12, 1936

Appeal from Jackson Circuit Court; Hon. C. Jasper Bell Judge.

Affirmed and remanded.

Prince & Beery and Johnson, Garnett & Quinn for appellant.

(1) The purported foreclosure sale, by which defendant appropriated the property of plaintiff, and deprived her of her equity therein, was wrongful, and plaintiff, having elected to waive her right to have the same set aside by an action in equity is entitled to recover the value of her equity by way of damages. Stoffel v. Schroeder, 62 Mo. 149; Laclede Natl. Bank v. Richardson, 156 Mo. 279; Wolff v. Ward, 104 Mo. 151; Sherwood v Saxton, 63 Mo. 83; Mo. Real Estate Snydicate v. Sims, 179 Mo. 684. (2) The wrongful foreclosure resulted in the loss to plaintiff of her equity in the property foreclosed. Her damages are equal to the value of that equity, and the trial court was in error in holding that defendant's motion for new trial should be sustained on the ground that the legal measure of damages is the difference between the sale price and the price the sale would have realized had it not been irregular. The true method for determining the value of the equity lost is to take the difference between the actual value of the property, and the mortgage debt. Cole v. Ry. Co., 332 Mo. 999, 61 S.W.2d 344; 41 C. J. 1036; Mo. Real Estate Syndicate v. Sims, 121 Mo.App. 156, 98 S.W. 783; Rogers v. Barnes, 47 N.E. 602; Leimkuehler v. Wessendorf, 323 Mo. 64, 18 S.W.2d 453; 8 R. C. L. 481; Clark v. Morris, 88 Kan. 752; Gibbs v. Meserve, 12 Ill.App. 613; Brimic v. Benson, 216 Ill.App. 474; Enos v. Sutherland, 11 Mich. 538; Booth v. Fiest, 80 Tex. 141, 15 S.W. 799; Harris v. Bank, 194 Iowa 492, 188 N.W. 862; Colgan v. Bank, 69 Ore. 357, 138 P. 1070. (3) The evidence abundantly supports the jury's finding that the actual value of plaintiff's equity was $ 40,000, and the trial court erred in attempting to substitute its opinion for the verdict of the jury by requiring plaintiff to remit all but $ 7500 of the judgment. Mayes v. Cunningham, 204 S.W. 405; 22 C. J. 177; Moffitt v. Hereford, 132 Mo. 518; Wolfersberger v. Miller, 327 Mo. 1150, 39 S.W.2d 765; Matthews v. Railroad, 142 Mo. 666; Connor v. Railroad, 181 Mo. 419; Markowitz v. Kansas City, 125 Mo. 490; Webster v. Ry. Co., 116 Mo. 118; Utz v. Ins. Co., 139 Mo.App. 552, 123 S.W. 538; Cothren v. K. C. Laundry Service Co., 242 S.W. 167; Cox v. McKinney, 212 Mo.App. 522, 258 S.W. 445; Dingman v. St. Louis Pub. Serv. Co., 52 S.W.2d 584.

Frank W. McAllister, James W. Broaddus, Stanley Bassett and L. R. Williams for respondent.

(1) The court should have sustained respondent's demurrer at the close of all evidence and its sustaining the motion for a new trial should be upheld on that ground. (a) Appellant's remedy, if she has a cause of action, is in equity exclusively. Adams v. Carpenter, 187 Mo. 635, 86 S.W. 451; Adams v. Boyd, 332 Mo. 490, 58 S.W.2d 706; Springfield Engine & Thresher Co. v. Donovan, 120 Mo. 428; Gerhardt v. Tucker, 187 Mo. 58, 85 S.W. 555; Young v. Kansas City Life Ins. Co., 329 Mo. 136, 43 S.W.2d 1048. (b) Appellant's evidence showed no cause of action even in equity. Appellant had no evidence of fraud and the court should have held no right of action on this ground. Evidence of fraud must be clear, cogent and convincing. Keiser v. Gammon, 95 Mo. 224; Schwarz v. Kellogg, 243 S.W. 183; Masonic Home v. Windsor, 92 S.W.2d 715. (c) Where trustee conducts sale fairly and according to terms of deed of trust, there is no cause of action. Nations v. Pulse, 175 Mo. 94, 74 S.W. 1014; Rutherford v. Williams, 42 Mo. 24; Oakey v. Bond, 286 S.W. 28; Morrison Bank v. Whertvine, 323 Mo. 600, 20 S.W.2d 529. (d) There is no such thing as conversion of real estate and appellant cannot recover therefor. Glencoe Land & Gravel Co. v. Comm. Co., 138 Mo. 444; Arpe v. Brown, 227 Mo.App. 69, 51 S.W.2d 230. (2) While the price bid in this case was adequate, nevertheless inadequacy of price is not a sufficient ground on which sale may be set aside. Harlan v. Nation, 126 Mo. 102, 27 S.W. 331; Roby v. Smith, 261 Mo. 201, 168 S.W. 967. (2) The trial court was justified in sustaining motion for a new trial on the ground assigned. Deer v. Peoples' Bank, 47 S.W.2d 788; Richardson v. Ashby, 132 Mo. 249, 33 S.W. 809; Stringer v. Geiser Mfg. Co., 189 Mo.App. 345, 175 S.W. 241; Winchester v. Burris, 178 S.W. 287; Koehler v. Franklin Pav. Co., 269 S.W. 400; Addis v. Swofford, 180 S.W. 557; State ex rel. Highway Dept. v. Pope, 74 S.W.2d 270; State ex rel. v. Maloney, 45 S.W.2d 84, 86; Grant v. Hathaway, 118 Mo.App. 609, 96 S.W. 418; Stevenson v. Fireproof Warehouse Co., 6 S.W.2d 677; St. Louis v. Turner, 331 Mo. 841, 55 S.W.2d 944; Krueger v. Licklider, 76 S.W.2d 117.

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

OPINION

HYDE

This is an action at law for damages for wrongful foreclosure of a deed of trust, conveying certain real estate in the city of Independence to secure the payment of a note for $ 30,000 (reduced to $ 24,000), made to and held by defendant. Plaintiff had a verdict for $ 46,000 actual damages and $ 20,000 punitive damages. Thereafter, the trial court ordered plaintiff to remit all of the punitive damages and all of the actual damages in excess of $ 7500. Plaintiff refused to file a remittitur and the court sustained defendant's motion for a new trial. Plaintiff has appealed from this order granting defendant a new trial. Defendant contends that, regardless of whether the trial court's order can be sustained on the ground assigned, it was proper because plaintiff was not entitled to maintain an action at law for damages. If that contention can be sustained it will be unnecessary to consider other grounds urged.

In 1927, plaintiff constructed, on her land in Independence, a brick office and garage building which she called the Liberty Building. At that time she borrowed $ 30,000 from defendant and gave as security a first trust deed on the Liberty Building. The note provided for semi-annual payments on the principal and all of these which were due prior to the date of foreclosure (November 23, 1931) had been paid (they were paid three years in advance by a $ 5000 payment in 1928), reducing the principal balance due to $ 24,000. Plaintiff, however, failed to pay the semi-annual installments of interest due in 1931 (January 8th and July 8th); taxes totaling about $ 1300 were delinquent; and an insurance premium of $ 234 was paid by defendant to keep the property insured. All of these things constituted defaults under the covenants of trust deed which gave defendant the right to foreclose. Plaintiff had sold the building in 1928 and had carried a second mortgage on it for part of the purchase price. This purchaser had failed to make the payments to plaintiff which the second mortgage required and plaintiff foreclosed it. Apparently this foreclosure was completed early in 1931.

Plaintiff does not deny these defaults and does not now question defendant's right to commence foreclosure when it did or to sell the property on the day advertised. The pleadings are summarized in plaintiff's brief, as follows:

"Plaintiff's petition alleges that the sale was wrongfully conducted about three o'clock P. M. on the day fixed in the advertisement of sale, and that the usual and customary time for holding such sales was at two o'clock P. M.; that the courthouse at Independence, where the sale was held, has four front doors, while the advertisement of the sale recited only that the sale would occur at the 'front' door, without specifying the particular door intended. The petition further alleges that as the result of the uncertainty as to the exact place of the sale, and the unusual time at which the pretended sale occurred, there was no bidder in attendance except defendant, who wrongfully acquired the property for the grossly inadequate consideration of $ 18,000.00, and that, at the time of the sale the property was of the reasonable value of $ 64,000.00. It is also alleged that plaintiff was, by the wrongful and grossly inadequate sale, subjected to liability for a deficiency of about $ 6,000.00 on the note which the mortgage secured; that the sale was fraudulent, wrongful and intentional. The prayer of the petition is for $ 46,000.00 actual and $ 25,000.00 punitive damages. The answer admits the mortgage and the foreclosure, and denies generally the other allegations of the petition."

The theory upon which the case was tried, is thus stated in plaintiff's reply brief:

"The case was not tried, by either party, on the theory of fraud. The action, as was the theory of both parties in the trial below, is for damages for a foreclosure which was wrongful because of the form of the notice and the lateness of the hour at which the sale was conducted, resulting in a sale without competitive bidding." (We take it that plaintiff means to make no claim of a prior fraudulent intent on the part of defendant, but that it was a wrongful act to proceed with the sale at three o'clock, and under the alleged defective notice.)

The evidence considered most favorably from plaintiff's standpoint, for the purpose of ruling the question of whether defendant's demurrer to the evidence should have been sustained, tends to show the facts hereinafter stated concerning the events of the day of sale and just prior thereto. Because of the death of the named trustee, the advertisement and sale was made by the sheriff of Jackson County as substitute trustee. The sheriff had nine foreclosures advertised for November 23rd. Eight of these sales were to be at the courthouse in Kansas City and this one, questioned here, at the courthouse in...