Wheeler v. Cleveland State Bank

• Decision Date: 02 December 1935
• Docket Number: 31737
• Citation: 174 Miss. 542,164 So. 400
• Court: Mississippi Supreme Court
• Parties: WHEELER v. CLEVELAND STATE BANK

164 So. 400

174 Miss. 542

WHEELER v. CLEVELAND STATE BANK

No. 31737

Supreme Court of Mississippi

December 2, 1935

Division A

1 TRIAL.

Where defense to action on note was that defendant was entitled to credit on note to extent of difference between what property securing note sold for and its fair value, refusal to transfer cause to chancery court held not reversible error since such defense was available in law court, there being no necessity of an accounting (Const. 1890, section 147).

2 MORTGAGES.

Where trustee named in deed of trust securing note employed another to act as auctioneer in sale of realty, sale held valid since personal attendance of trustee at sale was not necessary.

3. MORTGAGES.

That sales of realty and of farming implements mortgaged to secure note were conducted at different times held not to invalidate sales on ground of fraud as against contention that implements constituted part of set-up of operation of plantation and should have been sold with realty.

4. MORTGAGES.

That mortgagee sold property under deed of trust during time of depression although before moratorium law was operative held no defense to action on note secured (Laws 1934, chapter 247).

5. MORTGAGES.

In action on note where defense was inadequacy of price obtained at trustee's sale of property securing note, evidence of sum paid by mortgagee which was forced to protect itself against prior mortgage and take over land when mortgagor abandoned it and which bought at trustee's sale held not to show gross inadequacy of amount paid so as to impute fraud to mortgagee.

6. MORTGAGES.

Where mortgagor and mortgagee agreed that mortgage debt might be renewed and mortgagor signed note and deed of trust in blank, but blanks were not filled in and deed of trust was not acknowledged before notary, renewal was not accomplished, since execution of deed of trust by acknowledgment was a necessary part of alleged contract of renewal.

7. MORTGAGES.

Statute providing for extension of time for payment of deficiency judgment could not be invoked in law court since chancery court only is vested with power to grant extensions under the act (Laws 1934, chapter 247, section 5).

HON. WM. A. ALCORN, Judge.

APPEAL from the circuit court of Bolivar county HON. WM. A. ALCORN, Judge.

Action by the Cleveland State Bank against F. H. Wheeler. From an adverse judgment, the defendant appeals. Affirmed.

Affirmed.

J. C. Feduccia and W. B. Alexander, Jr., both of Cleveland, for appellant.

The court erred in overruling the defendant's motion to transfer this cause to the chancery court for the reason that the defenses presented by the defendant are purely equitable and only cognizable by a court of equity.

Sections 1 and 2, chapter 220 of House Bill, No. 270, pages 518-519, General Laws of Mississippi, 1934.

The pleading of fraud and on the statement of facts hereinbefore stated sets up equitable defenses peculiarly within the jurisdiction of the chancery court, and because of these defenses, the rights of the parties herein can only be determined in a court of equity.

Section 157, Constitution of Mississippi; Section 351, Code of 1930; Surring State Bank v. Giece et al., 246 N.W. 556; Baader v. Mascellion, 166 A. 466; Fruzzynski v. Phillips, 168 A. 168; Federal Title & Mortgage Co. v. Lowensteain, 166 A. 538; Fidelity Realty Co. v. Fidelity Corp., 166 A. 727; Federal Land Bank v. Robinson, 134 So. 180, 160 Miss. 546; Blaisdell v. Home Building & Loan Assn., 249 N.W. 893; Island Savings Bank v. Galvin, 37 A. 809; 266 N.Y.S. 629.

The court erred in excluding evidence offered by the defendant or appellant as to the value of the land and personalty, for the reason that the debt sued on should be credited with the fair cash market value of the property at the time of the pretended sale thereof under the foreclosure, since no valid foreclosure had been had and no trustee's deed introduced in evidence, although the evidence shows beyond dispute that the plaintiff bank now has the land and personalty under a claim of ownership.

The court erred in holding the foreclosure sale valid.

Where property obtained at trustee's sale is so grossly inadequate as to shock the conscience of the chancellor, the sale will be set aside.

A trustee in a deed of trust is the agent of both parties and is bound to act impartially between them; nor may he permit the urgency of the creditors to force the sale under circumstances injurious to the debtor at an inadequate price.

Rohrer v. Strickland, 82 S.E. 711.

The above cited case is very much analogous to the one at bar.

In no instance shall the person who makes the sale become, either directly or indirectly, the purchaser at a sale made by him.

Section 461, Code of 1930.

The court erred in refusing to permit the defendant to recoup his damages against the plaintiff's debt under the allegation of the defendant's special plea and the proof in the case as shown by the record.

The defendant in the special plea insists that since the circuit court is attempting to assume jurisdiction of the matter they ought under the allegations of the plea and the proof in the case allow the defendant to recoup his damages against the plaintiff's debt.

24 R. C. L. 795, sec. 5; Meyers v. Estell, 47 Miss. 4; Estell v. Meyers, 56 Miss. 800.

The court erred in granting a peremptory instruction for the plaintiff for the reason that was shown that the old notes had been cancelled, and new note and trust deed had been signed in lieu thereof, but had not been filled out by plaintiff as per agreement; thus, the notes the suit having been brought on were fully cancelled, and, therefore, this suit is improperly brought.

The payment of additional interest for a stipulated period is good and valid consideration for a renewal or a forbearance to sue or foreclose.

8 C. J. 431, sec. 636; Moore v. Redding, 13 So. 849.

The court erred in charging the jury to find peremptorily for the plaintiff, in the amount of twenty-one thousand five hundred sixty-eight dollars and twenty-four cents, when it is quite apparent that such judgment was a deficiency judgment, and expressly prohibited by section 5, chapter 247 (House Bill No. 270) of the General Laws of the state of Mississippi of 1934.

Shands, Elmore, Hallam & Causey, of Cleveland, for appellee.

The law cannot concern itself with motives of parties when their acts are legal and violate no principle of right.

Weir v. Jones, 84 Miss. 602, 608; Dickerman v. Northern Trust Co., 20 S.Ct. 311, 44 L.Ed. 435.

It is said that because Mr. Shands cried off the land at the courthouse at the request of the trustee on the day the land was sold, and was present at the barn lot with the trustee at the time the personalty was sold, that that, in some way, not disclosed by the record, caused the property to be sold, at what appellant contends, was an inadequate price.

There is no proof that the presence of Mr. Shands chilled the bidding or the bidders, or that he did not give every one present an opportunity to buy a one hundred and sixty acre farm, or an opportunity to buy the whole farm, or that he in any way influenced the sale of any of the property, real or personal.

Appellee purchased the land for three thousand dollars, which, added to the secured debts, means that the land brought at the sale very near fifty dollars per acre.

Wilkinson v. Wilson, 154 Miss. 726, 123 So. 847; Schwartz v. Kellogg, 243 S.W. 179, 184.

We say that as a matter of law the price for which property may be sold at a trustee's sale is not inadequate where the bid is one-third or one-fourth of the value of the property. When we begin to measure the consideration for which this property was sold to the appellee, and add to the bid the incumbrances which stand between the trustee's deed and the full title, we find that the property sold for very near fifty dollars per acre. The highest estimate of the value of the property as fixed by any witness was around seventy-five dollars per acre, therefore, we see that this property sold for at least three-fourths of the estimated value of the property as fixed by the appellant and his witnesses.

Newman v. Meek, 1 Freem. Ch. 441; Fischer v. Spierling, 93 N.J.L. 167, 107 A. 420; Smith v. Deeson, 14 So. 40; Dunton v. Sharpe, 70 Miss. 862, 12 So. 80.

There is no proof at all in the record that Mr. Shands or the trustee, or the bank, acted in bad faith, or did any act other than to undertake to collect the debt.

It is not difficult to charge on paper, and by the lips proclaim that a party is guilty of fraud, but when such charges are made to a court, the person making them must sustain them.

Locke v. Friedman, 43 So. 673.

In this case there is no proof of any fraud whatsoever.

Appellant cannot recoup damages because he has no right to complain.

57 C. J., page 358; Myers v. Estell, 47 Miss. 4; Estell v. Myers, 54 Miss. 174; Hoover Commercial Co. v. Humphrey, 107 Miss. 810, 66 So. 214.

A party cannot avail himself of a matter as a set-off, unless it is a legally subsisting cause of action in his favor upon which he could maintain an independent action, and the same rule applies where defendant in an action endeavors to set up his alleged claim by way of recoupment.

57 C. J. 387.

This was not a proper case to be transferred to the chancery court.

Another obstacle in the way of appellant which now prevents him from claiming that the trial court committed error, in refusing to remove the cause to the chancery court is section 147 of the Constitution of 1890.

Federal Compress & Warehouse Co. v. Coleman, 143 Miss. 620, 109 So. 20; White v. Willis, 111 Miss. 417, 71 So. 737.

The appellant claims that the judgment rendered in this case...