Vannoy v. Duvall Trust Co.

• Decision Date: 11 June 1930
• Docket Number: No. 28569.,28569.
• Citation: Vannoy v. Duvall Trust Co., 29 S.W.2d 692 (Mo. 1930)
• Parties: VANNOY et al. v. DUVALL TRUST CO. et al.
• Court: Missouri Supreme Court

29 S.W.2d 692

VANNOY et al. v.DUVALL TRUST CO. et al.

No. 28569.

Supreme Court of Missouri, Division No. 2.

June 11, 1930.

Appeal from Circuit Court, Polk County; C. H. Skinker, Judge.

Suit by Nancy A. Vannoy and husband against the Duvall Trust Company and others.Judgment for defendants, and plaintiffs appeal.

Reversed and remanded, with directions.

James Davidson, of Kansas City, Henry P. Lay, of Warsaw, Herman Pufahl, of Bolivar, and Ralph Nevins, of Hermitage, for appellants.

William A. Dollarhide, of Hermitage, John S. Haymes, of Buffalo, and Irl R. Chrisope, of Hermitage, for respondents.

DAVIS, C.

This is a suit in equity involving title to real estate.The substituted trustee, by virtue of the powers of the deed of trust (tantamount to a mortgage), upon default in the payment of one of the notes, and after advertisement, sold the real estate at public vendue, thus foreclosing plaintiffs' equity therein.Plaintiffs prayed that the foreclosure sale be set aside; that the deeds to the purchaser thereat and subsequent vendees be canceled; and that they be permitted to redeem.By consent and agreement of the parties the venue was changed to Polk county.The trial court rendered judgment for defendants.Plaintiffs appealed.

The evidence submitted in behalf of plaintiffs warrant the finding that plaintiffs, husband and wife, in 1924 were the owners of 163 acres of land in Hickory county, described as follows: "The East half of the Southeast quarter of section twenty-five (25) in township thirty-seven (37) of range twenty-three (23) and lot two (2) of the southwest quarter of section thirty (30) in township thirty-seven (37) of range twenty-two (22) and containing in all 163.28 acres more or less."

The Duvall-Percival Trust Company, a corporation the name of which was later changed to Duvall Trust Company, was located at Butler, Mo.In 1924 the said trust company granted plaintiffs' application for a loan of $4,800 on said property, with interest at 7 per cent. per annum.One per cent. of the interest, however, was to cover the commission of the trust company in making or procuring the loan.Pursuant thereto, on October 24, 1924, two deeds to trust, called respectively the first and second, were executed by plaintiffs, conveying the above-described land in trust to secure the respective notes.The second deed of trust was subject to the first.The first deed of trust secured a principal note for $4,800, executed by plaintiffs, which bore interest at the rate of 6 per cent. per annum.The second deed of trust, which covered the trust company's commission and was payable to it, secured a note for $336, payable in seven annual installments of $48 each, the first of which was due on October 24, 1925.Plaintiffs failed to pay the first installment of $48 when due on said note, and thereupon the substituted trustee, at the instance of the trust company, owner of said note, foreclosed the second deed of trust, and, on August 21, 1926, sold the land at public vendue.

The deed of trust provided that, upon the failure to pay any installment when due, the rest became due and the trustee, at the instance of the holder of the note, was authorized to sell.It also provided for the appointment of substitute trustee when the original trustee failed or refused to act.

When the annual interest became due on the $4,800 note, secured by the first deed of trust, plaintiffs defaulted in the payment of same.They also failed to pay the taxes when due.Homer Duvall was named trustee in the second deed of trust.Thereupon, when Homer Duvall refused to act, the trust company, holder of the $336 note secured by it, in writing appointed Charles R. Bowman substitute trustee as the second deed of trust provided.Said Duvall was vice president of the trust company.Bowman was not an officer or stockholder, but was an employee of said trust company, and, before the trust company granted the application for the loan, he viewed and valued the land in controversy.Bowman, as substitute trustee, at the instance of the trust company, advertised in the Hermitage Index, a newspaper published in Hickory county, the sale of the land to take place at public vendue on August 21, 1926.As no controversy appears relative to the publication, we dismiss it from further consideration.

Bowman proceeded to Hermitage, the county seat of Hickory county, to sell the land in pursuance to the advertisement.Prior to the crying of the sale, he was accosted by one Bentley, an abstractor, who resided in Hermitage.DefendantLuke M. Gardner desired to purchase the land in question.He advised Bentley of his desire and agreed to pay him the sum of $100 for his services, provided he was able to purchase the land for him at the foreclosure sale for the accumulated amount due against it, which seemingly included the amount of the note and interest secured by the second deed of trust, as well as accrued interest on the first deed of trust and taxes.Pursuant to the agreement Bentley saw trustee Bowman.He told Bowman that he desired to purchase the land as low as possible, but that, notwithstanding the amount of his bid, the trustee would be paid the full amount of the note and accumulated interest secured by the second deed of trust, and the accrued interest on the first deed of trust and taxes, and the expenses of the sale.The trustee, employee of the trust company, which owned the $336 note and which was interested in seeing that interest on the $4,800 note and the taxes were paid, agreed that the trust company would make no bid, but that Bentley might bid as he desired, with the understanding that Gardner would take care of the charges against the property.Bentley at the crying of the sale first bid a small sum.One Kelly Moore then bid $100.Bentley eventually bid $250, and the land sold at that figure.The trustee testified that he did not have any one make a bid for the company on account of Bentley's assurance to him that the full amount of the charges against the land would be paid.Later Gardner paid all such charges, which were largely in excess of the bid of $250, and a trustee's deed was delivered to Gardner conveying the land to him.

Plaintiff Vannoy testified that he was present at the sale and requested the trustee to announce to the people present the kind of farm it was, its situation, and how it was selling.The trustee replied that he supposed most of the people around that country understood what kind of a tract of land it was.Vannoy was standing there and in a position to hear any announcement made, but he heard none as to the amount of the first mortgage or as to anything of the kind.The trustee did not state, after reading the notice, that the land was subject to a first deed of trust for $4,800, two years' interest, one year delinquent taxes and more coming due, and that the purchaser would take the land subject to those items.

Kelly Moore, ex county sheriff and ex county judge, testified that he bid $100.He said that he then asked regarding the incumbrances on the land, but he was unable to ascertain what was against it, and that caused him to stop bidding.Vannoy asked the trustee to explain conditions, but he said he supposed the people knew all about it.Witness was right there, but he heard no announcement as to the amount of the first deed of trust.Plaintiffs' evidence was to the effect that the land was reasonably worth from $65 to $75 an acre, or from $10,595 to $12,225 in the aggregate.

Plaintiffs, prior to the time the trustee made the sale at public vendue, to wit, on August 21, 1926, served the trustee with a written notice...