Brown v. Curtin

52 S.W.2d 387, 330 Mo. 1156, 1932 Mo. LEXIS 500
CourtSupreme Court of Missouri
DecidedAugust 5, 1932
StatusPublished
Cited by6 cases

This text of 52 S.W.2d 387 (Brown v. Curtin) is published on Counsel Stack Legal Research, covering Supreme Court of Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brown v. Curtin, 52 S.W.2d 387, 330 Mo. 1156, 1932 Mo. LEXIS 500 (Mo. 1932).

Opinion

*1158 ELLISON, J.

This suit in equity is based on a petition which the plaintiffs denominate a bill in the nature of a bill of interpleader. Its ultimate object is to enjoin the foreclosure of a deed of trust on real estate in Kansas City executed by plaintiffs to secure the payment of their promissory note, pending a judicial determination of the ownership of the note. The trial court granted a temporary injunction, which, upon motion of the defendants and after hearing evidence, was dissolved. The court refusing to revoke the order dissolving the injunction, the plaintiffs have appealed. The case has not yet been finally determined below on its merits.

The note was for $13,000, due March 27, 3930, bearing interest at seven per cent per annum payable semi-annually. The deed of trust provided that upon default in the payment of interest and taxes when due and on the failure to keep the property insured, the legal *1159 holders of the note might declare the whole debt due and payable and direct the trustee nominated in the deed of trust to foreclose pursuant to the power of sale therein contained. In the fall of 1929 the appellants were in arrears on certain interest payments and taxes, and had failed to keep up the insurance. The respondent holders of the note, being certain heirs and legatees of Timothy Curtin, deceased, thereupon directed the trustee to advertise the property for foreclosure sale, which was done, the sale being set for December 11, 1929. Two days before the sale, on December 9, 1929, the appellants brought this suit, making said heirs and legatees of Timothy Curtin, deceased, and the trustee in the deed of trust, parties defendant. The petition pleads in two counts why the sale should be enjoined.

The first count charges the Curtin heirs and legatees had contracted with the appellants that if the latter would make certain improvements upon the real estate, as they did do, the interest need not be paid until maturity and no foreclosure would be resorted to before that time. This count significantly goes on to say “a great temporary financial stress now exists and for sometime has existed in Kansas City and in the entire country” by reason of which loans upon real estate are unobtainable and the contemplated foreclosure sale would be made at a great loss and sacrifice; but that said financial condition “is now just beginning to disappear” (this was in December, 1929) and will entirely disappear by the time of the regular maturity of the note (in March, 3930) so that appellants can then refund the loan without loss to themselves or the defendants.

The second count is the one chiefly involved on this appeal. It is very long, and denies the Curtins are the legal owners of the note. Condensed the facts stated are as follows. The loan was negotiated by the J. R. Allen Mortgage Company in 1925 and Timothy Curtin got it from that company. It is alleged that at the time of the execution of the loan in 3925 the mortgage company was failing financially and about three years later, on February 29, 1928, was adjudged a bankrupt; that its cash assets inventoried only $1.01 and the proven claims against the bankrupt aggregated over $86,000; that only slightly more than fourteen per cent had been paid on these claims when the bankruptcy proceeding was closed and the trustee discharged in August, 1929.

It. is then charged on information and belief that in 1925 and prior thereto, Timothy Curtin and the J. R. Allen Mortgage Company had an agreement of joint adventure whereby they were to procure, make and hold real estate loans in the name of the mortgage company, contributing equally in money and sharing equally in the profits and losses; that the loan made to appellants and transferred to Curtin was one of these loans; that by reason of said facts Curtin became *1160 jointly liable with the J. R. Allen Mortgage Company for the payment of its debts and the note and deed of trust in litigation, as property of the joint adventurers, should have been listed as an asset ■of the bankrupt estate of the J. R. Allen Mortgage Company and applied to the payment of the proven claims of its creditors; that the transfer of the note to Curtin, in these circumstances, was a fraud upon the creditors of the mortgage company and was made as part of a conspiracy between Curtin and the Mortgage Company to conceal the assets of the latter, to prefer the former over other creditors, and to cloud the title of the real estate owned by appellants and covered by the deed of trust.

It is further alleged the creditors of the J. R. Allen Mortgage Company threaten, intend to and will enforce their claims against the note and mortgaged real estate, and the appellants therefore pray that the'transfer of the note to Curtin be set aside and the true ownership thereof ascertained. The paragraph concludes with the assertion that by reason of the facts pleaded .the respondent Curtin heirs and legatees were not the legal owners of the note when the foreclosure proceeding was started and had no legal right to direct the trustee to advertise and sell under the deed of trust in consequence of which the sale would be void, and appellants cannot protect themselves by buying in the property thereat.

Still another paragraph is added to the petition, stating that under the Federal statutes the State court had power to “make as a party herein one of the proved unsatisfied creditors of said bankrupt estate of said J. R. Allen Mortgage Company” to act in his own behalf and in behalf of other similar creditors; and to make application for the reopening of the bankrupt estate and the appointment of a new trustee; and that thereafter, with said trustee and the other interested persons as parties, the ownership of the note can be ascertained and proper disposition thereof made.

The petition then alleges that unfavorable publicity attending the failure of the J. R. Allen Mortgage Company would cast doubt on the validity of any foreclosure sale and chill the bidding. It is further asserted the respondent Curtins are nonresidents and not financially responsible; and that if appellants should pay them, they (appellants) could not get back their money For this and the other reasons mentioned, a temporary restraining order and injunction were prayed to restrain the contemplated sale on December 11, 1929, and any other sale until the title to the note should be settled; and it was further prayed that the court cause to be made a party to the action a new trustee in bankruptcy to represent the unsatisfied creditors of the J. R. Allen Mortgage Company. There was also a prayer for general relief.

*1161 Upon the filing of tbe petition in the assignment division of the Jackson County Circuit Court, Division 3, a temporary restraining order was made, as prayed, and the defendants gave bond in the sum of $400. Later, on December 23, a temporary injunction was issued and appellants gave a $1,000 injunction bond. At the next term the cause was assigned to Division 3 by stipulation. The trustee in the deed of trust filed answer, a general denial, and in May, 1930, one E. K. Hunter, describing' himself as "one of the legally proven creditors of J. R. Allen Mortgage Co.,” filed a petition for leave to intervene, through his attorney, IT. S.

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Bluebook (online)
52 S.W.2d 387, 330 Mo. 1156, 1932 Mo. LEXIS 500, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brown-v-curtin-mo-1932.