Sherwood v. Saxton

• Decision Date: 31 May 1876
• Citation: 63 Mo. 78
• Parties: WILLIS M. SHERWOOD, Appellant, v. ALBE M. SAXTON, Respondent.
• Court: Missouri Supreme Court

63 Mo. 78

WILLIS M. SHERWOOD, Appellant,

v.ALBE M. SAXTON, Respondent.

Supreme Court of Missouri.

May Term, 1876.

Appeal from Buchanan Circuit Court.

Hunter, Mossman & Ramey, for Appellant.

Defendant is not here sued as a trustee, but for injuries sustained by reason of his tortious agreement to release the bidders at the first sale. He had authority to make that sale, but in the sale of the land, his powers were ended, his trust was closed, he had no power to discharge the bidders, his power to adjourn the sale (see Judge vs. Booge, 47 Mo. 550; Richard vs. Holmes, 18 How. 147; Gardner vs. Armstrong, 31 Mo. 535; Dover vs. Kennerly, 38 Mo. 469; Bernard vs. Duncan, 38 Mo. 170,) gave him no such right. And when by the second sale eight hundred and six dollars were lost to the plaintiff, he had his cause of action against the trustee, and the suit was properly an action at law for damages. (Rutherford vs. Williams, 42 Mo. 32, 35, 36; 7 Johns. Ch. 14; 6 Ark. 612; 2 Sch. & Lef. 630; 4 Johns. Ch. 654; 2 Ves. Sr. 19; 1 Bald. U. S. Cir. Ct., 420, 421, 422--3; 11 Wheat. 250; 2 Wheat 56; 9 Watts. 32; 10 Watts. 318; 17 Ves. 273; 2 Sto. Eq. § 794; 31 Mo. 535.)

Plaintiff may elect to pursue the trust property or to hold the trustee personally, as he has done. (Oliver vs. Pratt, 3 How. U. S. 333; Flagg vs. Mann, 3 Sumn. 486; Jarritt vs. Moreton, 44 Mo. 275.) Such being his right, the question of the validity of the second sale is immaterial, he has chosen to affirm the first sale, he cannot enforce his rights under it as against the purchasers, he was not a party to the contract of purchase; (Paige vs. Becker, 31 Mo. 466; Gardner vs. Armstrong, Id. 535; Jones vs. Miller, 12 Mo. 408,) and defendant bartered away his rights under the sale. But when the trustee released the purchasers, he in effect guaranteed that no loss should result to plaintiff, and against him plaintiff never lost his rights or his remedies. (Peacock vs. Nelson, 50 Mo. 256.)

If the defendant wishes to rely on the statute of frauds as a defense he must plead it. (Gardner vs. Armstrong, 31 Mo. 539-40.) But even in that shape defendant cannot set up the invalidity of his own acts as a defense to this action for damages. (See 47 Mo. 84, and 51 Mo. 23; Clarkson vs. Creely, 40 Mo. 114; Henderson vs. Henderson, 13 Mo. 151; Hamilton vs. Scull, 25 Mo. 165; Fenton vs. Hamilton, 35 Mo. 409.)

Bennett Pike, for Respondent.

I. The mortgagor is not entitled to sue respondent as trustee for difference in bids of purchasers at the two sales, for he thereby affirms the last sale, and the act of his agent, the trustee, in making it, and the affirmation of the second sale is a repudiation of the first one. In other words he is estopped from objecting to the first sale and from claiming any damages arising therefrom.

II. The petition does not show that the trustee could compel Albin and Weakley, the bidders at the first sale, to pay their bids. There is no averment therein showing any written contract signed by them, by which they were bound to pay their bids. A memorandum signed by the trustee would not bind them. (Tull vs. David, 45 Mo. 445; Ennis vs. Waller, 3 Blackford, 472.)

III. The petition shows the land to have been purchased by the cestui que trust, at the last sale. As a result, if the cestui que trust has been guilty of any fraud in connection with the sale of the mortgaged premises, or the trustee has been guilty of any unfair conduct therein, then the mortgagor will be permitted to redeem, and this remedy is necessarily exclusive of any other as there cannot properly be concurrent remedies in law and equity for the same wrong.

IV. If the trustee had been guilty of any wrong or fraud in the execution of his duties under the trust, and the property by his act had passed into the hands of an innocent purchaser, then the trustee might be held accountable, in a court of equity, for the full value of the property on the sole ground that the trust property had passed out of the reach of the court.

WAGNER, Judge delivered the opinion of the court.

This case comes before us for review upon a judgment on demurrer rendered in favor of the defendant. It will be necessary therefore, to determine whether the petition stated a cause of action. The petition in substance stated that Sherwood, the plaintiff, on the 18th day of December, 1871, borrowed twelve hundred dollars of one Ashton, for which he gave his note, due one year after date; and to secure its payment, he executed a deed of trust on certain real estate therein described, in which deed Saxton, the defendant, was trustee; that Saxton accepted the trust, and default being made in the payment of the note, he proceeded to sell the real estate, and at the sale, Albin and Weakley became the purchasers at the sum of seventeen hundred and forty-six dollars; that Saxton neglected to execute and deliver deeds to the purchasers, and neglected to demand, sue for or recover the amount of the bids, and neglected to enforce specifically the contract of sale entered into by Albin and Weakley; but on the contrary, he entered into an arrangement with Albin and Weakley, by which it was agreed that if they would pay the costs and expenses of a re-sale of the property, he would release them from their bids, and that in pursuance of said agreement, Albin and Weakley paid the costs and expenses of the second sale, which was made by the defendant as trustee; that at the second sale, Ashton, the beneficiary in the trust deed, became the purchaser of the real estate described and conveyed, for the sum of nine hundred and forty dollars, and that the defendant executed to him a deed therefor.

It is further alleged that the lands were of the value of two thousand dollars, and that Albin and Weakley, the purchasers at the first sale, were entirely responsible, and that the agreement entered into by which they were released was in fraud of the plaintiff's rights; and the petition claims damages against the defendant in the sum of eight hundred and six dollars, the difference between the amount which the property was sold for at the first and second sales.

The main grounds taken in the demurrer are that the plaintiff cannot sue at law, and that if he has any remedy it should be in equity, and that the petition does not show that the first sale was valid, because it is not averred that any note or memorandum thereof was made in writing.

The trustee in a deed of trust to secure an indebtedness, is the agent of both parties, debtor and creditor, and his duties should be performed with the strictest impartiality and integrity. (Goode vs. Comfort, 39 Mo. 313; Carter vs. Abshire, 48 Mo. 300; Chesley vs. Chesley, 49 Mo. 540.)

If the trustee fail in using reasonable diligence, or is guilty of a breach of trust, or an abuse of his discretionary...