Savings Trust Co. of St. Louis v. Skain

• Decision Date: 05 September 1939
• Docket Number: 36487
• Citation: 131 S.W.2d 566,345 Mo. 46
• Parties: In Re Savings Trust Company of St. Louis, in Liquidation, v. Margaret Skain, Appellant
• Court: Missouri Supreme Court

131 S.W.2d 566

345 Mo. 46

In Re Savings Trust Company of St. Louis, in Liquidation, v. Margaret Skain, Appellant

No. 36487

Supreme Court of Missouri

September 5, 1939

Appeal from Circuit Court of City of St. Louis; Hon. Robert J Kirkwood, Judge.

Reversed and remanded.

H A. & C. R. Hamilton and Robert A. Hamilton for appellant.

(1) The contract of sale executed by the Commissioner of Finance after authorization by the court, is as valid and effectual, for all purposes, as though the same had been executed by the officers of the Savings Trust Company by authority of its board of directors. R. S. 1929, sec. 5332. (2) A contract of sale of real estate vests in the purchaser an equitable interest in the land, which clothes him with the right to the legal title upon the performance of the terms of the contract. Levine v. Humphreys, 297 Mo. 555, 249 S.W. 395; Manning v. North British & Merc. Ins. Co., 123 Mo.App. 456, 99 S.W. 1095; Mahan v. Home Ins. Co., 205 Mo.App. 592, 226 S.W. 593; Standard Oil Co. v. Dye, 223 Mo.App. 926, 20 S.W.2d 946. (3) The contract made by the Commissioner of Finance by authority and direction of the court is in reality the contract of the court and cannot be annulled or revoked by the court, except upon the same conditions as are applicable to the breach of an engagement by a private individual. After contracting with the Commissioner under authority of the court, Margaret Skain became a party to the liquidation proceedings in respect of the court's future dealings with her and her rights under the contract. 53 C. J., p. 157, sec. 196; Farmers Loan & Trust Co. v. Eaton, 114 F. 14; American Bonding & Trust Co. v. Baltimore & O. S.W. Ry. Co., 124 F. 866; McAnally v. Glidden, 65 N.E. 291; Mudge v. Hughes, 212 S.W. 819; Moren v. Ohio Valley Fire & Marine Ins. Co., 6 S.W.2d 1091. (4) A court cannot set aside a final judgment, finding or order without giving the parties in interest reasonable notice and an opportunity to be heard. The court must also act upon reasonable grounds and its action must not be arbitrary. In re Zortman's Adoption, 334 Mo. 237, 65 S.W.2d 951; Kelso v. Ross Const. Co., 337 Mo. 202, 85 S.W.2d 527; Nelson v. Ghiselin, 17 Mo.App. 663; Carr v. Dawes, 46 Mo.App. 398; State ex rel. Wendling v. Arnold, 197 Mo.App. 1, 193 S.W. 292.

Igoe, Carroll, Keefe & McAfee and J. W. McAfee for respondent.

(1) The statutes relating to the Department of Finance and to banking institutions provide a complete and exclusive scheme for the liquidation of insolvent banks, and the functions of the Commissioner of Finance, as liquidator, are limited strictly to the powers and duties prescribed therein. State ex rel. Moberly v. Sevier, 337 Mo. 1174, 88 S.W.2d 154; State ex rel. Banister v. Cantley, 330 Mo. 943, 52 S.W.2d 398; R. S. 1929, chap. 34. (a) The Commissioner of Finance has authority to sell real estate only upon such terms as the circuit court shall direct. R. S. 1929, secs. 5330, 5332. (b) The Commissioner of Finance is not a statutory receiver. State ex rel. Songer v. Fidelity & Deposit Co., 53 S.W.2d 1041. (2) The purported contract of sale to appellant, dated July 29, 1938, was never approved by the circuit court and is not binding upon the estate herein. R. S. 1929, secs. 5330, 5332; Stone v. St. Louis Union Trust Co., 183 Mo.App. 261, 166 S.W. 1095. (a) The court's order of July 29, 1939, granted authority to the Commissioner of Finance to sell, and, absent a showing of direct authority delegated to J. S. Lockett (who signed the alleged contract), the contract is not binding upon the estate. R. S. 1929, secs. 5323, 5332. (3) By its order of July 29, 1939, the court merely gave the Commissioner of Finance authority to sell, and until the sale was actually consummated the commissioner was under no obligation to exercise the authority and the court had power to withdraw same. People ex rel. Nelson v. Ridgeway State Bank, 287 Ill.App. 112, 4 N.E.2d 647; State ex rel. Sorenson v. Denton, 126 Neb. 486, 253 N.W. 670; State v. Amer. State Bank, 122 Neb. 42, 239 N.W. 214; 9 C. J. S., p. 983, sec. 516. (4) The action of the court in setting aside its order during the term at which it was rendered is presumed to be warranted, and the burden is upon the party seeking review to show that the trial court acted illegally. Nelson v. Chiselin, 17 Mo.App. 663. (a) The burden is on appellant to show, prima facie, that if the court's order vacating the order of July 29, 1938, is set aside it has a meritorious defense to the Commissioner's motion to set aside said order of July 29th. 34 C. J. 329, sec. 550. (5) The granting or withdrawal by the court of authority to the Finance Commissioner to sell real estate is an administrative action within the court's supervisory power and is not subject to review on appeal. R. S. 1929, sec. 1018; Hurley v. Universal Clay Co., 278 Mo. 408, 213 S.W. 28; Harduval v. Merchants, etc., Savings Bank, 80 So. 52, 204 Ala. 187; 3 C. J., p. 578, sec. 413. (a) No valid contract of sale was made with appellant and, as a mere prospective purchaser, she was not "aggrieved" by the court's action and is not entitled to a review on appeal. R. S. 1929, sec. 1018; Thomas v. Elliott, 215 Mo. 598, 114 S.W. 987; Sandrowski v. Sandrowski, 230 Mo.App. 1056, 93 S.W.2d 81.

OPINION

Ellison, J.

On July 29, 1938, Division 2 of the Circuit Court of the City of St. Louis made an order authorizing R. W. Holt, Commissioner of Finance in charge of the liquidation of the Savings Trust Company of St. Louis (hereinafter called the respondent) to sell certain of the bank's real estate to the appellant for $ 37,000, less the amount of certain cash adjustments; and further authorizing the respondent to pay $ 755 broker's commission each to the Joseph F. Dickmann Real Estate Company and the Glick Real Estate Company. This order is hereinafter referred to as the sale order of July 29.

On the same day and pursuant to said sale order the respondent through his special deputy, J. S. Lockett, executed a contract for the sale of said real estate to the appellant and accepted a payment from her of $ 1000 to apply on the purchase price. Shortly thereafter he received $ 1000 more. About a month later on August 26 the same court made another order in the same cause at the same term, on its own motion, vacating said sale order of July 29, without notice, hearing or findings of fact, and in the absence of appellant and her counsel. For that reason she contended below and contends here that the order was void, or at least the trial court arbitrarily and oppressively abused its discretion. This second order is hereinafter called the vacating order of August 26.

While, as we have just stated, the trial court's reasons for making the vacating order of August 26 were not set out in its record, nevertheless they are shown in the abstract filed here. They were founded on the belief or suspicion that the sale of the real estate was the result of fraudulent collusion between the appellant, or her broker, the Glick Real Estate Company, and the broker for the respondent, the Joseph F. Dickmann Real Estate Company, whereby the real estate was sold for less than its fair market value. But that question on its merits is not involved on this appeal. The determinative issues are: (1) the proper interpretation of the statutes, sale order and sale contract; (2) the rights of the appellant thereunder; (3) the status of the Commissioner of Finance as a liquidating officer under the statutes; (4) and the power of the court to make orders of the kind assailed without notice or hearing.

The abstract states that the appellant signed a sales contract and presented it to the respondent's deputy, Mr. Lockett, as a proposal to purchase the real estate. On the same day he filed his petition in the circuit court recommending the approval by the court of the sale and praying an order authorizing him to accept the offer. After hearing evidence, the abstract says, the court on the same day entered said sale order of July 29, providing: "that R. W. Holt, as Commissioner of Finance of the State of Missouri, be, and he is, authorized for and on behalf of the Savings Trust Company of St. Louis to sell for $ 37,000 in cash, less the sum necessary to adjust rents, interest, taxes, insurance and other items to date of sale, to Margaret Skain," the real estate above mentioned. The respondent through his deputy, Lockett, thereupon accepted the first installment of the purchase price and signed the sale contract. One of the terms thereof was that the sale be consummated on or before September 30. It also recited that the property "is this day sold" to appellant.

About two weeks later on August 12, the respondent filed a motion to set aside the sale order. The motion was not based on any alleged infirmity in the proceedings theretofore had, or on any lack of authority in the deputy Commissioner to sign the sale contract; but simply stated certain facts pointing to collusion between the Glick Company and the Dickman Company. It is unnecessary to set them out in this opinion, other than to say the motion detailed, among other things, certain maneuvers and private conferences between the representatives of the two companies in and about the courtroom at the very time the sale order of July 29 was made, and also certain shifting and withdrawal of bids, as well as a failure of the Dickman Company to report advantageous bids. It charged on partial investigation and belief that appellant's offer of $ 37,000 was less than the fair market value of the property, and that a man named Sam Michelson had offered $ 38,500. Appellant concedes for the sake of argument that if the allegations of the motion were sustained by proof the court might be justified in setting aside the...