White v. Smith

• Decision Date: 18 March 1903
• Citation: 174 Mo. 186,73 S.W. 610
• Parties: WHITE v. SMITH et al.
• Court: Missouri Supreme Court

73 S.W. 610

174 Mo. 186

WHITE v. SMITH et al.

Supreme Court of Missouri, Division No. 1.

March 18, 1903.

MORTGAGES—FORECLOSURE BY ACTION—REDEMPTION —EQUITABLE REDEMPTION—MORTGAGE OF WIFE'S PROPERTY — SURETY FOR HUSBAND—EXTENSION OF TIME—DISCHARGE —SALE OF PROPERTY — SURPLUS — RENTS— APPLICATION.

1. Rev. St. 1899, § 4342, authorizes the foreclosure of a mortgage by judgment, and declares that the equity of redemption may be foreclosed, and the mortgaged property sold to satisfy the amount due. Sections 4343, 4344, provide that when a mortgage or deed of trust is foreclosed according to a power of sale contained therein, the mortgagee may redeem within 12 months. Held that, where foreclosure is had by judgment under section 4342, the mortgagor has no right of redemption after sale.

2. Where a mortgage is foreclosed by judgment, as authorized by Rev. St. 1899, § 4342, providing for a foreclosure of the equity of redemption, a right to redeem in equity after the sale does not exist in the absence of fraud, mistake, or overreaching.

3. Plaintiff's husband borrowed money, to secure which he executed mortgages on his separate property to improve it, and no part of the money borrowed was applied to the benefit of plaintiff's separate estate. After such mortgages had matured, plaintiff and her husband, as additional security, executed a deed of trust on three city lots, numbered 1, 2, and 3, respectively, of which plaintiff owned lot 1 and a half of lot 2, and the husband owned lot 3 and the other half of lot 2. The beneficiaries under such deed had knowledge that it was given to secure the husband's debt, and that the money loaned had not been applied to plaintiff's benefit. Held, that the wife and her property were surety merely for the husband's debt.

4. Where, in consideration of $180 paid by a mortgagor to the mortgagees on the indebtedness secured and the payment of costs of the advertisement of a foreclosure sale of the property, the mortgagees agreed, without the knowledge of the mortgagor's wife, who was surety for the debt, that the sale should not be made as advertised, and that they would not advertise the property for sale under the mortgage until a later date, such agreement constituted a suspension of the mortgagees' right to foreclose the mortgage, which operated to discharge the wife from liability.

5. Where, at the trial of an action of ejectment to recover land sold under mortgage foreclosure, the mortgagor's wife, who was liable only as surety, had no knowledge of an agreement between the mortgagees and her husband extending the time of payment, by which she was discharged from liability, her failure to interpose such defense was no objection to her urging the same in a subsequent bill to restrain the enforcement of the judgment in ejectment, and for the surplus arising on the sale.

6. Where a wife, who was surety for her husband in a second mortgage, including her separate property, to secure his debt, was discharged from liability by an extension of time by the mortgagees, who subsequently purchased a judgment foreclosing the first mortgage, on which the wife was liable, a surplus arising on the sale of the wife's property under the first mortgage was payable to her, and was not applicable to the second mortgage.

7. Where a wife mortgaged her separate property as surety for her husband's debt, and was discharged by an extension of time given by the mortgagees to her husband under an agreement permitting them to collect the rents from the property, together with property owned by the husband, which was covered by the mortgage, the wife was entitled to recover such part of the rent so collected as accrued from the property belonging to her.

Appeal from Circuit Court, Pettis County; Geo. F. Longan, Judge.

Action by Mary B. White against Martha E. Smith and others. From a judgment in favor of plaintiff, defendants appeal. Reversed.

This is a bill in equity for leave to redeem the land in controversy from sale under execution in an action to foreclose a mortgage, or, if not allowed to redeem, then for the surplus arising from the sale, and for an injunction to restrain the enforcement of a judgment in ejectment. The trial court found for the plaintiff, permitted her to redeem upon certain terms imposed, and enjoined the enforcement of the judgment in ejectment. The defendants appealed.

The case made is this: On October 10, 1888, the plaintiff owned lot 1 and the west half of lot 2 in block 93 of Smith & Martin's First addition to Sedalia. Her husband owned the east half of lot 2 and the whole of lot 3. They lived upon lot 1. Lots 2 and 3 were improved, and the tenement houses thereon were leased. On October 10, 1888, Joseph G. White borrowed $5,000 from the Penn Mutual Insurance Company, and gave therefor his note, secured by a deed of trust, in which his wife, the plaintiff, joined, covering all three lots aforesaid. On February 6, 1890, Joseph G. White borrowed $7,000 from the defendants Martha E. Smith and Sarah E. Cotton, and to secure the same Mr. and Mrs. White executed their note, secured by a deed of trust on certain land owned by Mr. White in Kansas City. At the same time Joseph G. White borrowed $5,000 from L. S. Mitchell, and to secure the same gave him a deed of trust on certain land owned by him in Kansas City. Thereafter the defendant Phil E. Chappell purchased the Mitchell note, and still owns it. S. P. Johns was surety for Joseph G. White, and, to secure him, Mr. and Mrs. White, on November 23, 1896, executed to him a deed on all three of said lots for $3,500. Afterwards Johns had to pay the debt of White, for which he was surety, amounting to $232.05, and was about to foreclose the deed of trust, when, at the request of Mr. and Mrs. White, the defendant Phil E. Chappell, on October 30, 1897, purchased the deed of trust from Johns, and still holds it. On November 23, 1896, Mr. and Mrs. White executed to the defendant Ittel, as trustee for the defendants Mrs. Smith, Mrs. Cotton, and Mr. Chappell, a deed of trust on the three lots aforesaid, as an additional security for the $7,000 borrowed from Mrs. Smith and Mrs. Cotton and the $5,000 borrowed from Mitchell, and then held by Chappell, as aforesaid, and to cover certain unpaid interest due on said loans. As a consideration for this additional security the holders of the notes secured reduced the interest on the loan to 7 per cent. This deed of trust recites that it is subject to the deeds of trust given to the Penn Mutual Life Insurance Company and to Johns, and contained a provision that, if the makers did not pay off the said prior deeds of trust, the parties of the third part (Smith, Cotton, and Chappell) might, at their option, do so, and in such event the same should become a debt due to said third parties, "and be secured by this instrument in the same manner as said notes were secured." The Ittel deed of trust was made to fall due October 20, 1898. None of these deeds of trust were paid by Mr. or Mrs. White, and thereafter, in July, 1899, Mrs. Smith, Mrs. Cotton, and Mr. Chappell caused the trustee, Ittel, to advertise under the deed of trust dated November 23, 1896. Thereupon Mr. White entered into the following contract with Mrs. Smith, Mrs. Cotton, and Mr. Chappell (Mrs. White did not sign the contract, and does not seem to have known of it at that time): "Certain property of J. G. White is advertised to be sold this 22nd day of July, 1899, under a deed of trust made by said J. G. White and Mary B. White, his wife, to Adam Ittel, trustee for Martha E. Smith, Sarah E. Cotton and Phil E. Chappell, dated Nov. 23, 1896, and recorded at the recorder's office in and for Pettis Co., in Book 111, page 526. To which deed of trust and record thereof reference is specially made. In consideration of $180 paid by the said J. G. White to said Smith, Cotton and Chappell on the indebtedness secured by said deed of trust and the payment of costs of said advertisement, said Smith, Cotton and Chappell hereby agree that said sale shall not be made as advertised and also agree to not advertise said property for sale under said deed of trust until after Sep. 11, 1899. On Sept. 12, 1899, said White agrees to deliver possession of the property covered by said deed of trust to the said Adam Ittel, trustee as aforesaid, for the use of said Smith, Cotton and Chappell, and at that time said White is to have the tenants in the houses on said lots two (2) and three (3) attorn to said Ittel as trustee as aforesaid. And said White who now occupies the building on said lot one (1) agrees to rent the said lot 1 at a rental $20.00 per month, payable monthly at the end of each month, and in case of the sale of said property under said deed of trust and a purchase of said lot one (1) by said Smith, Cotton and Chappell, they agree to continue the said White as tenant of lot one (1) and the buildings thereon for one year from Sept. 12, 1899, at a rental of $20.00 per month, payable at the end of each month. Signed and delivered in duplicate by said parties this 22nd day of July, 1899." Pursuant to this agreement Mr. White paid the $180 on the past-due indebtedness, and gave an order to the tenants on lots 2 and 3 to attorn to Ittel, the trustee, which they did, and the trustee has collected the rents ever since. A lease on lot 1 was also prepared for Mr. and Mrs. White to execute, but they refused to do so, and repudiated that part of the contract. In the meanwhile, however, the Penn Mutual Life Insurance Company brought suit to foreclose its deed of trust, and made Mr. and Mrs. White, Mrs. Smith, Mrs. Cotton, Mr. Chappell, Mr. Johns, Mr. Lamm, and Mr. Ittel parties defendant, and on June 3, 1899, a judgment of foreclosure was duly entered as prayed, adjudging the debt to be $5,171.70. No appeal appears to have been taken from this judgment. On October 14, 1899, Mrs. Smith, Mrs. Cotton, and Mr. Chappell purchased the judgment from the insurance...