Tucker v. St. Louis Life Ins.

63 Mo. 588

• Court: Supreme Court of Missouri
• Decided: October 15, 1876
• Status: Published

Opinion

Sherwood, Judge,

delivered the opinion of the court.

Action to foreclose a mortgage executed by defendant, Henry Larrimore, on the 28th day of March, 1870, to the plaintiffs in their firm name, to secure the payment of a note for $1,604.68, as well as to secure the payment of a large number of other debts due by the same defendant to other creditors and co-mortgagees, who were also made parties defendant. The mortgage conveyed both real and personal property, but does not appear to have been recorded. On the 31st day of March, 1870, Larrimore executed to Clark & Holliday, and to Selby & Jameson, as "trustees respectively of the Missouri Mutual Life Insurance Company, and of the St. Louis Life Insurance Company, deeds of trust which were duly recorded and which were designed to secure to each of such companies the payment of notes for $10,000 given for the purchase of life policies. These deeds of trust were duly recorded and conveyed portions of the same land already encumbered by the mortgage aforesaid.

In March, 1873, Larrimore, in order to secure certain notes from him to U. T. Miller and R. H. Tyler, amounting to several thousand dollars, executed to them another mortgage on the same lands.

In May, 1874, this suit was begun, and the last named mortgagees, as well as the St. Louis Life Insurance Company (which had meanwhile become the holder of what insurance notes remained unpaid by Larrimore to the other insurance companies), and the trustees before named were also made parties defendant.

The plaintiffs asked for foreclosure of their mortgage, the application of the proceeds of the sale of the mortgaged property to the satisfaction of the several incumbrances, in the order of their date, and for other and further relief.

At the return term of the writ, the trustees and the St. Louis Life Insurance Company, though served, having failed to answer were defaulted. U. T. Miller and R. H. Tyler, the mortgagees in the second mortgage, that of March, 1873, filed an answer alleging in substance that the deed of tru3t had been made by Larrimore for the benefit of his wife and children, that the notes secured thereby were without consideration and made with intent to hinder, delay and defraud his creditors, and this with full knowledge of sueh fraudulent purpose on the part of the insurance companies who were aware also of the existence of the mortgage now declared on, although not recorded; that the St. Louis Life Insuranee Company was apprised of the fraud before becoming owner of the notes, and that the policies had been canceled prior to the bringing of this suit. The answer concludes with a prayer that they might become second in the proceeds of the mortgaged premises, the deeds of trust and notes canceled and for other apd further relief.

This answer was filed the 28th of November, on the same day that the default in favor of plaintiffs was entered. At the May term, 1875, that at which the default, unless on cause shown, was to be made final, the defaulted defendants appeared, and filed a motion accompanied by affidavit, to set aside the default, but their motion was overruled, and on the next day the cause came on for hearing and final judgment was rendered, not only for foreclosure of the mortgage as prayed in plaintiffs’ petition, but that the deeds of trust and notes-secured thereby, be declared fraudulent and void, the trustees and the insurance companies, as well as the St. Louis Life Insurance Company, the holder of the unpaid notes declared participants therein ; and that Miller and Tyler, the mortgagees in the mortgage of March, 1873, be declared entitled to distribution of the proceeds arising from the sale after the satisfaction of the first mortgage.

Ordinarily we do not interfere with the discretion confided to the lower courts, and not a few of our decisions enunciate this rule in so far as applicable to judgments by default. (Gehrke vs. Jod, 59 Mo. 522, and cas. cit.; Campbell vs. Gaston, 29 Mo. 343; Lamb vs. Nelson, 34 Mo. 501.)

Where, however, there occurs, as in the case at bar, a palpable abuse of that discretion, we cannot remain silent. Granting that the accidental misplacing of papers served on a party, is not of itself a sufficient excuse for failure to answer, although such party may be involved in extensive litigation, and the papers and writs served numerous; granting that the defendants were lacking in promptitude, still it does not thence follow that the action of the trial court was correct. Eor it should be the policy of courts to try causes on their merits whenever such a course will not result in hurtful delay. Thus, in Doan vs. Holly (27 Mo. 256), where a default had occurred, and the refusal to set it aside was approved, yet it was also said: “Notwithstanding this, had an affidavit been made, showing a meritorious defense to the action, time being asked for, to file an answer and prepare for trial, it should have been granted.”

And it is peculiarly noteworthy in that case, that it had been twice before appealed to this court (25 Mo. 357; 26 Id. 186), and the third default had been taken. Similar language is used in Cooney vs. Murdock (54 Mo. 349), and Howell vs. Stewart (Id. 400). Here the affidavit and motion were filed on the day before the cause was called for trial, and an apparently meritorious defense was disclosed, showing that a considerable sum was still due the St. Louis Life Insurance Company, and claiming a priority for the deeds of trust which secured such remaining indebtedness.

But conceding that the motion to set aside the default was properly overruled, yet even this concession will by no means justify the rendition of such a judgment as we find in the rebord; a judgment which, proceeding far beyond the terms and scope of the default (by which those who were thus precluded from further pleading might perhaps without serious loss have abided) absolutely abolishes and obliterates all the rights of the appealing defendants on the mortgaged property, while affording them no opportunity to plead to and put in issue the damaging averments contained in the answer of Miller and Tyler. We cannot give sanction to such a course. The code is not sufficiently comprehensive to embrace every varied phase which a case may assume before reaching judicial determination, and in consequence of this, resort must be frequently had to common law methods of procedure, both in ordinary actions at law, as well as in proceedings looking merely to equitable relief. Numerous decisions of this court exemplify this. (State vs. Culp, 39 Mo. 530; Riley, adm’r, vs. McCord’s adm’r, 24 Mo. 265; Meyer vs. Field, 37 Mo. 434, and cas. cit.; Fithian vs. Monks, 43 Mo. 502; Seimers vs. Kleeburg, 56 Mo. 196; Erisman vs. Erisman, 59 Mo. 367; Primm vs. Raboteau, 56 Mo. 407; Real Estate Sav. Inst. vs. John Collonius, ante p. 290, and cas. cit).

This being the case, and the code not prescribing the method to be pursued where a defendant asks affirmative relief from a co-defendant, except that a judgment giving affirmative relief may be rendered in such cases (Wagn. Stat., 1051, § 2) we must look, to a certain extent to the rules of pleading and practice adopted by courts of chancery. In, those courts when one defendant sought relief against a co-defendant as to matters dehors the original bill, it became necessary for him to file a cross-bill and have process to bring such co-defendant in. This view is taken in Indiana, whose code is similar to ours. (Fletcher vs. Holmes, 25 Ind. 458.) In this State, however, so far as we are informed, it has not been the practice to issue process in such cases; but it has always been customary to afford ample time to a co-defendant to answer as to the relief sought — a time which is generally fixed by the court’s order to that effect. And if in the absence of any statutory rule, we are to be governed by parity of reasoning deduced from cases where relief is sought by petition, at least the same time and opportunity to plead should be granted where relief is sought by an answer in the nature of a cross-bill as when prayed for by petition. For the errors before mentioned the judgment is reversed and the case remanded.

All the judges concur.