Sternberg v. Valentine

• Court: Missouri Court of Appeals
• Writing for the Court: LEWIS
• Citation: Sternberg v. Valentine, 6 Mo. App. 176 (Mo. App. 1878)
• Decision Date: 11 June 1878
• Parties: B. N. STERNBERG, Appellant, v. T. W. VALENTINE ET AL., Respondents.

6 Mo.App. 176

B. N. STERNBERG, Appellant,

v.T. W. VALENTINE ET AL., Respondents.

St. Louis Court of Appeals, Missouri.

Jun. 11, 1878.

1. One is not rendered incompetent to act as trustee in a deed of trust to secure the purchase-money by reason of having acted as attorney in fact in the sale of the property to the mortgageor.

2. The mere fact that at the foreclosure sale under a deed of trust the trustee requested a bidder to advance his bid is no ground for setting aside the foreclosure.

3. Where one had a deed of trust upon two contiguous houses and lots, and another had a deed of trust upon one of them, the trustee in the first properly obeyed a request of the holder of the second, and offered for sale first the property upon which was only one encumbrance.

APPEAL from St. Louis Circuit Court.

Affirmed.

FISHER & ROWELL, for appellant: One cannot act as attorney in fact for the creditor, and trustee to enforce collection by a sale of the debtor's property.-- Thornton v. Irwin, 43 Mo. 153; Stoffel v. Schroeder, 62 Mo. 147; Roche v. Farnsworth, 106 Mass. 509; Montague v. Davis, 4 Allen, 369; Stewart v. Severance, 43 Mo. 322. Trustees in deeds of trust with powers of sale to secure debts are considered agents of both parties, and must act with strictest impartiality.-- Goode v. Comfort, 39 Mo. 313; Brown v. Russler, 15 Ill. 507; Howard v. Arms, 3 Metc. 311; Chesley v. Chesley, 49 Mo. 540.

HITCHCOCK, LUBKE & PLAYER, for respondents: Where two pieces of property are first mortgaged together to one party, and one of the two pieces is subsequently mortgaged separately to a second mortgagee, the holder of the second mortgage has a right to have the piece not included in his mortgage sold first to satisfy the first mortgage.--1 Story's Eq. Pl. 564 c; Warren v. Warren, 30 Vt. 530; Lloyd v. Galbraith, 32 Pa. St. 103; Henshaw v. Wells, 9 Humph. 568; Cowdrey v. Carpenter, 1 Abb. App. Dec. 445; Oppenheimer v. Walker, 5 Thomp. & C. 325; 3 Hun, 30; 2 Washb. on Real Prop. 576; Bispham's Eq., sect. 340.

LEWIS, P. J., delivered the opinion of the court.

Plaintiff seeks to set aside a sale made under a deed of trust executed by himself to defendant Wurth to secure an indebtedness of $6,000 and interest to defendant Valentine. The Circuit Court, upon a hearing of the testimony, dismissed the plaintiff's bill.

The first ground of complaint is that the trustee acted in the double capacity of attorney in fact for the creditor, and trustee to enforce the collection by a sale of the debtor's property. The supposed incompatibility is not illustrated by any authority, nor is any reason given us for its recognition as a cause of invalidity in the sale. It appears that Wurth, acting under a power of attorney from Valentine, sold and conveyed to plaintiff two lots on Menard Street in the city of St. Louis. The deed recited the power of attorney from Valentine, the grantor, which had been duly recorded, and was executed and acknowledged by Wurth as attorney in fact. Plaintiff thereupon executed a deed of trust, making Wurth the trustee, conveying the same property to secure the deferred payment of purchase-money. Having thus selected the trustee with full knowledge of the relation in which he stood to the creditor, it is difficult to perceive how the plaintiff can now undertake to invalidate the discharge of the trust because of that relation. The attempt is sanctioned by no principle of justice or equity.

Plaintiff complains, secondly, of an alleged irregularity in the bidding, implying bad faith in the trustee. The only testimony which connected the trustee with the bidding was given by the trustee himself. He said: “Mr. Boeck bid on the property for Valentine. I did not ask Mr. Boeck to bid the property off. He bid it off for Mr. Valentine. When the bid on the house occupied by Sternberg reached $2,700, Mr. Boeck asked me whether he should go higher. I requested Boeck to bid as high as $2,900 for the house occupied by Sternberg.” Upon these statements the plaintiff based his objection that “the trustee had no right to buy at his own sale,” and refers us to several authorities in support of the general proposition. The general rule is unquestionable, but we cannot perceive its application here. The trustee did not buy. He says he did not request Boeck to buy. It was for the plaintiff's interest that the property should bring as much as possible. Valentine, on the contrary, as a purchaser, was interested in getting it at the lowest price. When, therefore, Boeck was about to stop bidding, and the trustee desired him to run the property yet higher, if there was any failure of impartiality, as the plaintiff charges, it was manifestly against Valentine and in the plaintiff's favor. We cannot discover in these proceedings the slightest departure from the impartiality and integrity which should prevail in the acts of a trustee charged with duties affecting the rights of different parties. Nothing in the testimony tends to show that in the matter of bidding at the sale there was any combination between the...