Shumate v. Hoefner

• Decision Date: 14 February 1941
• Docket Number: 37222
• Citation: 147 S.W.2d 640,347 Mo. 391
• Parties: A. H. Shumate v. Esther Hoefner and Roscoe Reyburn, Appellants
• Court: Missouri Supreme Court

147 S.W.2d 640

347 Mo. 391

A. H. Shumate v. Esther Hoefner and Roscoe Reyburn, Appellants

No. 37222

Supreme Court of Missouri

February 14, 1941

Appeal from Jackson Circuit Court; Hon. Brown Harris Judge.

Affirmed.

James E. Campbell, Charles B. Turney and Harding, Murphy & Tucker for appellants.

(1) If the appellant, Reyburn, promised respondent that he would take no action upon the note secured by the second deed of trust until after he had notified respondent, which is denied, the promise was without consideration and unenforceable. Sturgeon v. Mudd, 190 Mo. 200; Dobbins v. City Bond & Mortgage Co., 124 S.W.2d 1111. (2) The evidence fails to show that anything said or done by appellant, Reyburn, was intended to, or did, lull respondent into a sense of false security against enforcement of the second deed of trust. Masonic Home of Mo. v Windsor, 92 S.W.2d 713; Schwarz v. Kellogg, 243 S.W. 179; Judah v. Pitts, 62 S.W.2d 715; Phoenix Trust Co. v. Holt, 279 S.W. 714. (3) The appellant Esther Hoefner, purchased the property at the foreclosure sale without knowledge of the alleged conversation between respondent and the appellant, Reyburn. In no event, therefore, can the alleged fraud of the appellant, Reyburn, be imputed to the appellant, Hoefner. Schwartz v. Kellogg, 243 S.W. 179. (4) Neither the appellant, Reyburn, nor the sheriff, acting as substitute trustee, were required to give personal notice to respondent of the foreclosure sale. Reed v. Inness, 102 S.W.2d 711. (5) The price paid at the foreclosure sale was not inadequate, and even if it was, mere inadequacy of price, standing alone, never justifies a court in setting aside a foreclosure sale. East Arkansas Lbr. Co. v. Cotton Co., 24 S.W.2d 1001; Webb et ux. v. Salisbury, 39 S.W.2d 1045; Reed v. Inness, 102 S.W.2d 711. (6) The trial court properly found that the note had not been paid at the time of the foreclosure sale.

Adams, Adams & Adams for respondent.

(1) The note secured by the deed of trust foreclosed by appellant Reyburn was fully paid before the attempted foreclosure. 3 Wigmore on Evidence (2 Ed.), sec. 1466, p. 199; Erhart v. Dietrich, 118 Mo. 418, 24 S.W. 188; Carter v. Carter, 44 Mo. 195. (2) The long delay of appellant Reyburn in asserting a claim on the Baker note raises a presumption of payment. 1 Wigmore on Evidence (2 Ed.), sec. 159, p. 392. (3) If the Baker note was paid prior to the commencement of foreclosure of the deed of trust, the foreclosure and trustee's deed given pursuant thereto are void. Jackson v. Johnson, 248 Mo. 680, 154 S.W. 759. (4) By agreeing to give respondent additional time in which to find the maker of the note, appellant Reyburn lulled respondent into a sense of security, and his foreclosure thereafter, without giving notice to the respondent, was a fraud on respondent. These circumstances, coupled with gross inadequacy of the consideration, justified the court of equity in setting aside the foreclosure sale and the trustee's deed thereunder. Vail v. Jacobs, 62 Mo. 130; Laundy v. Girdner, 238 S.W. 788; Clarkson v. Creely, 35 Mo. 95; Alfred v. Pleasant, 175 S.W. 891; Daggett Hardware Co. v. Brownlee, 186 Mo. 621, 85 S.W. 545. (5) Appellant Reyburn was obligated to give actual notice to respondent for the further reason that the foreclosure sale was not held at the place designated in the deed of trust nor conducted by the trustee named in the deed of trust. Stewart v. Brown, 112 Mo. 171, 20 S.W. 451; Mangold v. Bacon, 237 Mo. 496, 141 S.W. 650; Judah v. Pitts, 333 Mo. 301, 62 S.W.2d 715; Oakey v. Bond, 286 S.W. 27.

OPINION

Clark, J.

Defendants (appellants) appeal from a decree setting aside a trustee's deed under foreclosure of a deed of trust.

The chancellor made a detailed finding of facts which we condense and rearrange as follows: in 1923 appellant Reyburn owned the property in controversy, holding title in the name of a "straw man;" he sold the property and caused it to be conveyed to R. B. Baker subject to a first deed of trust for $ 3,500 and a second deed of trust for $ 2,250; the second deed of trust was payable $ 40 per month to a "straw man" and immediately endorsed over to Reyburn without recourse; respondent purchased the property June 29, 1932, under a contract which mentioned the first deed of trust, but not the second; on July 7, 1938, respondent received a letter from Reyburn stating that he held the second deed of trust and that a balance of $ 50 principal and $ 30.50 interest was due; respondent went to Reyburn and stated that he would pay the indebtedness, but wanted time to confer with Baker to see why the land was sold to him free of the deed of trust; if Reyburn insisted he would pay him at any time he could call at respondent's store at 1505 East 12th Street; Reyburn consented to this arrangement and respondent was thereby lulled into a sense of security; the trustee named in the deed of trust being dead, Reyburn caused the sheriff to advertise and sell the property under the deed of trust and convey it to appellant Hoefner on October 28, 1938; at the request of Reyburn, the property was bid in by one Willis for appellant Hoefner; Willis bid $ 150 which he paid and which was afterward repaid to him by Reyburn; appellant Hoefner was acting for appellant Reyburn; the value of the property is $ 2,750; the sum of $ 455 was still due on the first deed of trust; if any of the principal sum was due under the second deed of trust, it was $ 50; the costs of sale totaled $ 40.94 which was deducted from the bid and the difference, $ 109.06, was paid to and receipted for by Reyburn; the excess of the bid over the balance of the note and costs was never paid to respondent, but was kept by Reyburn; Reyburn knew the address and telephone number of respondent; the notice of sale was published in a newspaper and no notice was sent to respondent, as is the custom in Kansas City; respondent had no actual knowledge of the running of the notice; the deed of trust provided for sale at the south front door of the old courthouse at Fifth and Oak Streets; the sale was held at the north front door of the new courthouse at Twelfth and Oak Streets; the property was sold at a grossly inadequate price; respondent was not present at the sale, due to the fact he had no knowledge thereof and had been lulled into a sense of security by Reyburn; respondent was deprived of his statutory right to redeem by his lack of knowledge of the sale and Reyburn's use of a straw purchaser; in his petition respondent offered to do equity by paying the amount claimed by Reyburn to be due on the note together with the costs of foreclosure; he renewed this offer in open court and deposited sufficient money therefor, to-wit, $ 121.44.

The decree ordered the clerk to pay the amount so deposited to Reyburn in full satisfaction of the note; that the trustee's deed be canceled and set aside and the title vested in respondent.

Appellant's assignments of error are directed at the sufficiency of the evidence to support the chancellor's finding of fact. The points briefed and argued by appellants are: that the chancellor properly found that the note had not been paid at the time of foreclosure; that, if Reyburn promised respondent he would not foreclose until he notified respondent, the promise was without consideration and unenforceable; that the evidence fails to show such promise; that appellant Hoefner had no knowledge of the conversation between Reyburn and respondent and is not bound by the alleged fraud of Reyburn; that neither Reyburn nor the sheriff were required to give personal notice of the foreclosure to respondent; that the price paid at the foreclosure sale was not inadequate and, even if it was, that fact alone does not justify setting aside the trustee's deed.

This being an equity case we are not bound by the chancellor's finding of fact, but must, of necessity, give great weight to such finding. This rule of law is conceded by both appellants and respondent, but each seeks a different application of the rule. Respondent says the chancellor did not find that there was a balance due on the note at the time of foreclosure and if he did, the evidence is insufficient to support such finding, but respondent wants us to defer to the chancellor's finding on all other questions. Appellants say that the chancellor did find that the note was not fully paid and we should defer to such finding, but that the...