Price v. Blankenship

71 Mo. App. 548, 1897 Mo. App. LEXIS 503
Missouri Court of Appeals·Decided April 7, 1897·Published

Opinions

Bond, J.

Plaintiffs, wbo are minors, by their next friend, and the next friend on her own account, sue for $1,100, which is alleged to be due from defendant by reason of his sale and foreclosure of a mortgage to him executed by the father of the minors, at which sale it is alleged $1,400 was the price for which the [549] property was sold, and the sum secured being only $300, a surplus of $1,100 was left, which defendant failed to collect and pay over to plaintiffs.

Defendant, for answer, admitted the execution of the mortgage as alleged, and pleaded a sale by himself as mortgagee upon an insufficient advertisement thereof, and a conveyance of the property under such sale to one J. Gr. E. Williams, who only paid for such conveyance the amount of the secured debt, wherefore defendant pleaded that the title so conveyed by him was subject to redemption by plaintiffs as the heirs of the mortgagor, and that they had no recourse against him. There was a trial by the court sitting as a jury and judgment for plaintiffs, from which defendant has appealed. The plaintiffs asked no declarations of law, and none were given. Defendant requested six declarations of law, and assigns their refusal as error. The first was a demurrer to the evidence.

M°poTnfnsuffidmt SonTr'ight oT^’ “Take surplus proceeds. The material facts are undisputed. The father and husband of the plaintiffs died intestate, having first given a mortgage to defendant, coupled with a power of sale, dated the twenty-sixth of March, 1884, on eighty acres of land to secure a debt due defendant of about $300. Default having been made in the payment of $262 ^ x " of this debt, defendant advertised, sold and conveyed the property as mortgagee, the purchaser being one J. Gh ' F. Williams. The deed executed by defendant upon said foreclosure recites that thirty days’ notice of sale by advertisement, as required in the mortgage, was given. The affidavit of the printer attached to said deed does not show that the property was advertised for more than twenty-four days. The deed further recites that the property was sold for $1,400 to be paid in cash; that $262 was received and applied to the extinguishment of the secured debt. [550] Plaintiffs represent all the heirs at law of the mortagor. No part of the excess of the sum for which the property was sold over the amount applied to the balance due has been collected or paid to plaintiffs. Upon these facts it is plain that the court did not err in overruling defendant’s demurrer to the evidence. The theory of the learned counsel for defendant is that the foreclosure of the mortgage by the mortgagee upon an insufficient notice of advertisement operated to transfer the legal title to the purchaser, leaving the property in his hands subject to redemption on the part of plaintiffs by suit in equity for that purpose. This proposition is undoubtedly correct. Schanewerk v. Hoberecht, 117 Mo. loc. cit. 30; Kennedy v. Siemers, 120 Mo. 73-86; S. E. & T. Co. v. Donovan, 120 Mo. loc. cit. 427; Sampson v. Mitchell, 125 Mo. 233; Stewart v. Brown, 112 Mo. 171. But the conclusion drawn therefrom that plaintiffs’ only remedy was by. action to redeem, is wholly unwarranted. The beneficial owners of the mortgaged estate are entitled upon an unauthorized sale and foreclosure, either to affirm the same and take the proceeds, in which event they would be concluded and estopped from any proceeding against the land in the hands of the purchaser while retaining the proceeds of such sale. Jones on Mortgages, sec. 1920a; Joyner v. Farmer, 78 N. C. 196; Boogher v. Frazier, 99 Mo. loc. cit. 330, 331. Or, they may disaffirm the action of the trustee or mortgagee in selling the property, in which event they would be entitled, upon tendering the debt secured, to bring a bill against the purchaser to redeem the property, on the ground that there could be no foreclosure of the equity of redemption, except upon a sale had in strict accordance with the terms and contract contained in the mortgage.' In the present case the plaintiffs elected to pursue the former remedy. When defendant as mortgagee, [551] intrusted with power of sale, sold and conveyed the property in question, the legal title was thereby conveyed to the purchaser, whether such sale was had upon sufficient or insufficient advertisement, and all further power and authority on the part of defendant to execute his trust was extinguished. Schanewerk v. Hoberecht, 117 Mo. loc. cit. 30; 2 Perry on Trusts, 602k. Defendant is estopped by his deed of conveyance of plaintiffs’ land to question their right to the proceeds of the sale. Neither does it affect his liability for the surplus proceeds, that he has failed to collect from the purchaser. Thompkins v. Drenner, 56 Fed. Rep. 694. Nor does it concern his defense to this .action that plaintiffs were entitled to proceed in equity against the purchaser of the land. No such suit was brought when this one was instituted. Defendant can not shift his own liability by pointing out a cumulative remedy which plaintiffs might have pursued before bringing the present action. Should plaintiffs hereafter sue the purchaser of the land by bill in equity to redeem, it is clear that no court would set aside the foreclosure without requiring them to refund what had been received under the present proceeding.

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Price v. Blankenship, 71 Mo. App. 548, 1897 Mo. App. LEXIS 503 (Mo. Ct. App. 1897).

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