Reynolds v. Kroff

• Decision Date: 08 June 1898
• Parties: REYNOLDS v. KROFF et al.
• Court: Missouri Supreme Court

46 S.W. 424

144 Mo. 433

REYNOLDS v. KROFF et al.

Supreme Court of Missouri, Division No. 1.

June 8, 1898.

TRUST DEED — SALES — VALIDITY — REGULARITY — ESTOPPEL — TRUSTEE — SUBSTITUTION — RESIGNATION — APPEALS IN EQUITY.

1. At a sale under a trust deed the trustee publicly stated that the creditor would loan the principal of the debt to any responsible buyer, and take the premises for security, provided he would pay the accrued interest and costs of sale, and the offer was accepted. Held not to show fraud or collusion between the trustee and purchaser as against the debtor.

2. A deed of trust appointed a trustee, and in case of his death, refusal, or inability to act, a successor in trust, and provided that they might resign the trust, and on request of the holder of notes it secured should do so, and by a writing appoint such a trustee as the holder should direct, which, when duly acknowledged and recorded, was to vest the trust in their appointee. The original trustee represented the holder of the notes in making grantor the loan, and in the collection, management, and control of same, and when a sale became necessary under the trust deed for convenience he substituted another for himself to carry out the trust by a written instrument in conformity to the trust deed, without joining his successor named therein, but remained in active control of the loan. Held, that the appointment was within the purview of the deed.

3. No express resignation was necessary, since the appointment by the original trustee operated as a resignation, as he expressly abrogated his power, and conferred it on his appointee.

4. Before and at a sale under a trust deed grantor requested the seller to offer the premises in parcels, which was done. He was present at the sale, assented thereto, encouraged parties to buy, told them the highest bidder was his best friend, made several bids himself, and thereafter attorned to and leased a part of the land from the purchaser, paid him rent, and stood by while he improved the place, knowing the purchaser had paid the trustee partly in cash, and secured the balance by a mortgage back on the land. Held, that the grantor waived a want of authority in the person who made the sale, and was estopped from asserting it against the purchaser.

5. Mere inadequacy of price will not avoid a sale under a trust deed, where there was no fraud in its conduct, and every effort appeared to have been made to make the land bring the highest possible price.

6. Where growing nursery stock was reserved by the terms of a sale under a trust deed, the irregularity is cured by the assent thereto of the grantor.

7. On appeals in equity, rulings on the evidence are not passed on when it is all in the record, for only what is competent is considered.

Appeal from circuit court, Greene county; James T. Neville, Judge.

Suit by Mark L. Reynolds against Eugene W. Kroff and others for redemption. Judgment for defendants, and plaintiff appeals. Affirmed.

Rechow & Pufahl, for appellant. Wm. O. Mead and T. T. Loy, for respondents.

ROBINSON, J.

Plaintiff, being the owner of a farm of 326 acres in Dallas county, on March 9, 1891, conveyed same to one of the defendants, Leverett B. Sidway, as trustee, to secure the payment of two principal notes of $1,800 each, of even date therewith, payable on the 1st day of June, 1896, and five coupon interest notes of $125 each, with interest thereon at the rate of 10 per cent. per annum after maturity, payable, respectively, on the 1st day of January in each and every year thereafter until the maturity of said principal notes; all of said interest and principal notes being payable at the office of Sidway, Bogue & Co., Chicago, Ill., to the order of plaintiff, and by him indorsed in blank. The trust deed provided that in case of default in the payment of the principal and interest notes, or any part thereof, according to the tenor and effect thereof, or, in case of the nonpayment of taxes, the whole of said principal sum and interest secured by said notes shall thereupon become due and payable. The deed of trust further provided "that in case of the death, refusal to act, or inability to act of the said party of the second part, then Henry T. Sidway, of said city of Chicago, is hereby appointed successor in trust to said party of the second part under this deed, with the same power and authority as said trustee. And it is further understood and agreed that said Leverett B. Sidway and his successor and successors may, and upon the request of the legal holders of said notes secured thereby shall, at any time or times hereafter, resign the trust hereby created, and shall, upon such resignation, by a writing under his or their hands and seals, duly and properly acknowledged, appoint a trustee or trustees, as may be directed by the holder of said notes, as his or their successor or successors in said trust, and upon the filing of such instrument of appointment duly acknowledged, and with the proper certificate of acknowledgment appended thereto, as required by law in the case of conveyances of real estate, for record in the recorder's office of the county in which said lands are situate; and the said premises and the title thereto and the trust aforesaid shall thereupon, and by force of said appointment, and of the filing thereof for record as aforesaid, become immediately vested in such appointee or appointees upon the trusts with all the powers aforesaid." This deed of trust was duly signed, acknowledged, filed for record, and recorded in the recorder's office of Dallas county on April 3, 1891. Default having been made in the payment of the interest coupon notes falling due on the 1st of January, 1894, amounting to the sum of $270, the trustee, Leverett B. Sidway, in pursuance of the powers conferred by said deed of trust, on March 7, 1894, by an instrument in writing, appointed the defendant Childers as trustee, in place of himself and in his stead, to execute and carry out the trusts and powers contained in and given by the deed of trust. This deed of appointment was signed and acknowledged by Leverett B. Sidway, and filed for record on the 21st of March, 1894, in the recorder's office of Dallas county, and thereupon the defendant Childers, in pursuance of the powers contained in the deed of trust, advertised and sold the mortgaged premises on April 30, 1894, at public vendue, and conveyed the premises to defendant Kroff for $4,176. At the time the sale took place under the deed of trust, plaintiff was in possession of the mortgaged premises, and in July, 1894, surrendered possession of a portion thereof to defendant Kroff, and in September following leased the remaining portion of said premises from Kroff for a term ending March 1, 1895, and turned over to said Kroff a portion of the crop grown on the land in payment therefor. Plaintiff continued in possession of that portion of the premises so leased by him until the expiration of his tenancy, and at the expiration of the time for which he had leased the premises he commenced this proceeding in the Dallas circuit court against Eugene W. Kroff, Leverett B. Sidway, and James Childers, to set aside the sale under said deed of trust and redeem. The petition for grounds of relief set out, among other things, in substance, after reciting the facts in relation to the plaintiff's ownership of the land and the execution of the notes and deed of trust under consideration, that, notwithstanding the power of the appointment of a successor did not lie in Leverett B. Sidway, yet he attempted the exercise of such power, and, without any legal authority to do so, by an instrument in writing, appointed defendant Childers as trustee to execute the trust and powers in the deed of trust specified; that in April, 1894, said Childers, presuming to act under the powers contained in the deed of trust, sold the premises in question, and defendant Kroff became the purchaser thereof for the sum of $4,176, and took from the defendant Childers a trustee's deed conveying the real estate to him, which deed is duly recorded in the recorder's office in Dallas county. The petition further alleges that the said premises are reasonably worth $10,000; that in pursuance of a combination to cheat and defraud plaintiff out of said premises defendant Kroff instituted five ejectment suits against plaintiff and his tenants for the possession of said premises, and notified him that he would apply for the appointment of a receiver, thereby harassing and annoying plaintiff until he was finally induced to lease said premises from said Kroff, and recognize him as his landlord; that at the time of the execution of the lease plaintiff was not aware that the deed of appointment and sale thereunder were not made in accordance with the power given in the deed of trust, or that the alleged combination existed between Childers and Kroff. The petition further charges that on the day of the sale, in pursuance of certain negotiations between the plaintiff and the defendant Kroff and his father, Charles Kroff, a lawyer, who was acting for his son in the matter of the purchase of said premises, it was mutually agreed that, in the event Charles or Eugene Kroff became the purchaser at the trustee's sale, they would convey to plaintiff's wife the homestead, containing about 17 acres of land, upon the payment of $250; that plaintiff, not knowing of the combination, or want of power in the trustee, and believing that a valid title would pass by such sale, was thereby lulled into security, and made no effort to find parties able to make the property bring its fair market value; and that by...