Plum v. Studebaker

• Decision Date: 07 June 1886
• Citation: 1 S.W. 217,89 Mo. 162
• Parties: PLUM v. STUDEBAKER and another.
• Court: Missouri Supreme Court

1 S.W. 217

89 Mo. 162

PLUM v. STUDEBAKER and another.

Supreme Court of Missouri.

June 7, 1886.

1. MORTGAGE — TRUST DEED — FORECLOSURE — SALE.

Under the Missouri system of trust deeds a trustee's sale operates as a complete foreclosure, and extinguishes all junior incumbrances as effectually as an equitable decree of foreclosure could do.

2. SAME — FORECLOSURE — WHO MAY PURCHASE.

In the absence of fraud, any defendant, owing no contract duty, or trust towards junior incumbrancers, may purchase at the sale, and will thereby acquire title paramount to all incumbrancers.

Appeal from Johnson circuit court.

Proceedings in equity to enjoin the sale of land, plaintiff claiming the land under the purchaser at a trustee's sale under a trust deed, and defendants claiming as beneficiaries under a subsequent trust deed of the same land. Decree for defendants, and plaintiff appeals.

White & Allen, for respondent, William H. Plum. Orr & Cockrell, for appellants, Studebaker Bros.

BLACK, J.

This is an appeal from a decree of the Johnson circuit court, enjoining the defendants from selling the property in question under their deed of trust. On the twenty-third April, 1879, H. C. Bettes, and Amanda, his wife, made a deed of trust to Cope to secure a debt of $9,000, due from W. H. Bettes & Co. to Mary Atherton. This firm was composed of W. H. and J. J. Bettes, and they and their wives also joined in the deed, which conveyed the 10 or 11 acres of land here in question, owned by Amanda, and a storehouse and two outlots not owned by her. In March, 1881, the same grantors made another deed of trust on the same property to secure a debt of H. C. Bettes & Sons, due to the defendants, the Studebaker Bros. This deed, on its face, is made subject to the prior one, and is the deed under which the sale was about to be made. Thereafter, and in September, 1881, W. H. Atherton, who represented the Mary Atherton debt, purchased the whole of the property at the trustee's sale under the first deed of trust for $6,155, paying for the property in question the sum of $250. Subsequently, and in the same month, Atherton, by warranty deed, conveyed the 10 acres in question to Amanda Bettes, for her sole and separate use, at the price of $1,156. In October, 1882, Amanda Bettes sold and conveyed the property to the plaintiff, Plum, who paid therefor the full value. These deeds and deeds of trust were put to record at their respective dates.

Whatever rights the defendants, as second mortgagees, have, must be determined from the face of the recorded deeds, for there is no evidence in the case which impeaches the fairness of any of the deeds or sales through which the plaintiff derives his title. The claim of the defendants is, and must be, that when Amanda Bettes acquired the property back from Atherton, the purchaser under the first deed of trust, their deed of trust became a subsisting charge on the property, and continued such against Plum. The general rule is stated in Jones, Mortg. (3d Ed.) § 1887, as follows: "A mortgagor may purchase at a sale under his own mortgage; but, if he has given a subsequent mortgage upon the same property, his purchase will not defeat this, but will operate for the benefit of it in the same way as a discharge, or a transfer of the mortgage to himself."

In Hilton v. Bissell, 1 Sandf. Ch. 407, B. purchased the premises subject to two mortgages, both of which he assumed to pay. The senior mortgagee foreclosed his mortgage, making the junior mortgagee, the mortgagors, and B. defendants. B. became the purchaser at the sale for the amount payable on the first mortgage under the decree of foreclosure. The second mortgagee subsequently sought to foreclose his mortgage, and B. set up his purchase under the first foreclosure sale, and claimed to hold the premises discharged of the second mortgage. This plea the court disallowed, and...