Stone v. Stone

• Decision Date: 03 January 1944
• Docket Number: 38635
• Citation: 176 S.W.2d 464
• Parties: STONE et al. v. STONE et al
• Court: Missouri Supreme Court

176 S.W.2d 464

STONE et al. v. STONE et al

No. 38635

Supreme Court of Missouri, First Division

January 3, 1944

R.P Smith of Cape Girardeau, for appellants.

Rush H Limbaugh of Cape Girardeau, for respondents.

OPINION

VAN OSDOL, Commissioner.

Action to try, ascertain and determine title, and in ejectment, of parcels of real property in the city of Cape Girardeau.

The two counts of the petition are in conventional form. The answer of defendants, Charles and Ruby Stone, husband and wife denied ownership of the land in plaintiffs, and alleged that plaintiffs' claim of title is under a false and fraudulent sheriff's deed in a purported foreclosure of a deed of trust, a second lien on the property; and that long prior to the purported sale the deed of trust had been released. The answer also prayed that the estates, title and interests of the parties be tried, ascertained and determined; for judgment by way of counterclaim for alleged slander of defendants' title; or, in the alternative, if the sale had legal effect, a judgment for a loss ($ 600) occasioned by the refusal of plaintiffs to pay the amount of a bid made by them at such sale. The reply alleged that if a deed releasing the deed of trust was executed, the execution of it was subsequent to an assignment of the secured note by the original payee to plaintiffs. It was admitted by the pleadings that defendant, Jackson Building and Loan Association (hereinafter referred to as 'Loan Association'), holds a first lien on the property. The cause was tried by the court, the services of the jury being waived; the 'Judgment and Decree' was for plaintiffs upon all issues. Defendants, Charles Stone and Ruby Stone (hereinafter referred to as 'defendants'), have appealed.

It is necessary to determine whether the case is to be reviewed as one at law or in equity. Counsel for the parties in their printed arguments seek to invoke the principles of equity, but no facts are pleaded in the petition or in the answer which call for equitable relief, nor is there a prayer in any of the pleadings for affirmative equitable relief. Issues raised by the petition are those of legal title and the right of possession; and issues raised by the answer are those of title, and of counterclaims cognizable in a court of law. Issues were tendered involving the legality of a foreclosure sale, but no cancellation of the trustee's deed, or of the note and deed of trust, was sought by defendants; nor was a cancellation of the release deed sought by plaintiffs. Whether the action is one at law or in equity must be determined by the pleadings. Richards v. Earls, 345 Mo. 260, 133 S.W.2d 381. The case will be reviewed as one at law.

Errors of the trial court are assigned in findings, (1) that the deed of trust was assigned and delivered for value prior to January 7, 1938 (the date of the execution of the alleged deed of release); (2) that the deed of release did not discharge the lien of the deed of trust; (3) that the plaintiffs acquired title by a (second) foreclosure sale; and (4) that the defendants were not entitled to recover for the loss occasioned by the failure of plaintiffs to pay the accepted bid at a (first) foreclosure sale.

Declarations of law were not requested, nor given. Substantial evidence was introduced tending to show the following facts: Plaintiff, James A. Stone, and defendant, Charles Stone, were reared as brothers in the home of Alice P. Stone who was the grandmother of plaintiff, James A. Stone, and the wife of one Willard A. Stone. October 5, 1929, defendants made a note for value in the principal sum of $ 215 payable to Alice P. Stone, and executed a deed of trust to secure the note, the lien being subject to a first deed of trust, Loan Association, beneficiary, to secure the payment of a note in the (then) principal sum of $ 700. In the year 1934, it became necessary to release the second deed of trust that defendants could refinance the loan of Loan Association, defendants thereafter executing a deed of trust (under which the sale was made) to secure the debt owing Alice P. Stone. In May, 1937, Alice P. Stone and her husband, Willard A. Stone, being pressed for debt, called upon plaintiffs and defendants for financial help; the plaintiff, James A. Stone, paid obligations of Alice P. Stone and husband of 'a little over $ 400'; and in early June, 1937, Alice P. Stone and husband endorsed and delivered the $ 215 note to plaintiff, James A. Stone, according to the witness Willard A. Stone, 'to help repay him (James A. Stone) for taxes and obligations he paid for us.' The $ 215 note was never paid. However, testimony was introduced tending to show that Alice P. Stone and husband, January 7, 1938, as stated, executed a quitclaim deed to defendants releasing the lien of the second deed of trust; they later made an affidavit of the loss, or destruction, and payment of the note. Alice P. Stone died March 11, 1938. June 26, 1939, the sheriff of Cape Girardeau County, a substitute trustee, at the request of plaintiffs undertook to sell the property under the lien of the second deed of trust; the foreclosure sale, held at the 'east porch' of the courthouse at Cape Girardeau, was attended only by the plaintiffs and their counsel; by defendants and their counsel; by the mother of the plaintiff, James A. Stone; and by the sister of defendant, Ruby Stone. Prior to the sale of the property defendants' counsel publicly announced 'that the mortgage which was about to be foreclosed had been released of record.' Plaintiff, James A. Stone, was the one bidder, bidding the sum of $ 700. Upon trustee's acceptance and demand for the full sum of the bid, plaintiff, James A. Stone, refused to pay. He understood his bid 'to cover' the first deed of trust, 'which was approximately $ 600.00 I understood was owed on it. * * * and after the sale I learned the $ 700.00 was to be paid to Charles Stone. Well, I didn't understand that it was, and I was just bidding to cover the first deed of trust, which was $ 600.00, and I told the sheriff so, and there was a resale and I bid it in for $ 100.00, which was my intention, to bid $ 100.00 more than the first mortgage.' The demand and refusal were within the hall of the courthouse. Thereafter, the trustee went again to the east porch of the building and exposed the property to the second bidding. During the time intervening, 'a matter of five, ten or fifteen minutes,' between the first bid in the sum of $ 700, and the sale for $ 100, defendants had left the vicinity of the courthouse. There was evidence, however, that defendants' counsel remained and was present at the time the trustee cried the second sale. Of the purpose of defendants' presence at the foreclosure sale, defendant, Charles Stone, testified, 'I was present at the foreclosure sale. * * * My wife was there. I couldn't figure out why he was in possession. I was standing on all the legal rights I had. I didn't figure on bidding at the sale. I didn't have the money. He bid $ 700.00 and I couldn't bid. If I had seen somebody else was going to get it I would have bid on it. I didn't expect anybody was going to get it at that sale. I was standing on all the legal rights I had.'

Of the assignments of error (1) in finding that the note had been assigned to plaintiffs prior to the execution of the release deed. Substantial evidence supports the finding of the trial court upon that issue. The note having been so transferred, (2) any release of the lien of the deed of trust thereafter by the original payee (beneficiary), assignor of the note, was ineffectual. Cooper v. Newell, 263 Mo. 190, 172 S.W. 326, and cases therein cited; Hellweg v. Bush, 228 Mo.App. 876, 74 S.W.2d 89.

(3) Did the plaintiffs acquire title by the (second) foreclosure sale?

No fact was proved (or alleged) from which it could be inferred that there was fraud on the part of the substitute tru...