Hanson v. Neal

215 Mo. 256 | Mo. | 1908

Lead Opinion

LAMM, J.

Plaintiff, beneficiary under a deed of trust covering 1,360 acres of land, more or less, in Ripley county, Missouri, and securing an indebtedness of between $2,000 and $3,000; on the 8th day of February, 1905; brought her suit in equity against A. J. O’Neal, sheriff and acting trustee making a sale under said deed of trust, and George A. Neal and Thomas F. Lane, purchasers at such trustee’s sale, the object and general nature of which was to set aside the sale and the deeds made to them. The decree, nisi, went in favor of plaintiff against all the defendants. The sheriff abides the decree. Neal and Lane appeal.

The petition alleges the execution and record of the deed of trust on the 23rd day of September, 1901, by one Keith and wife to Robert Moore, trustee for plaintiff, to secure notes made by Keith aggregating $3,144.80. That certain of the lands conveyed (describing several tracts) were in sections 7, 17, 18 and 19 in township 24, range 3. These lands comprised about 560 acres and for convenience will be called “tract A.” Certain other lands conveyed (describing several tracts) were in sections 2, 10, 3, in township 23, range 1. The latter comprised about eight hundred acres and for convenience will be called “tract B.” It is averred that the trustee nominated in the deed of trust refused to act and that at the request of the legal holder of the secured notes the acting sheriff of Ripley county, defendant O’Neal, acted as trustee under the powers and terms in the deed of trust and advertised a sale to take place on the 8th day of February, 1905. That on the day preceding the sale, plaintiff through her agent requested the sheriff not to sell the lands till the arrival of the Neeleysville train at Doniphan, the place of ■ sale, so that she might be represented. That the said sheriff before noon and at an unusual hour and before the arrival of said train sold the lands in the absence of plaintiff or any one representing her and Lane and Neal became the purchasers, to-wit: said Lane of tract A at $35, and said Neal of tract B at $152. That the land was reasonably worth $4,000 and was sold at the aforesaid grossly inadequate price. That the train from Neeleysville arrived at Doniphan at about 11:30 a. m. on February 8th, 1905, and if the sheriff had postponed the sale until the arrival of said train plaintiff would have been represented at the sale and would have prevented the sacrifice of said lands by bidding thereon. That the sheriff and acting trustee tendered plaintiff the proceeds of said sale after deducting expenses, which she refused to receive. That in turn she offered to pay the expenses incurred in the sale and still offers and tenders the amount incurred by reason of such expenses. That a deed to the purchaser Lane has not been filed for record and plaintiff had no knowledge as to whether one had been executed.

There was no allegation in the hill that Keith was insolvent, or that plaintiff was without adequate remedy at law.

Defendants demurred to the bill on the grounds:

(a) That by the showing made plaintiff is not entitled “to the recovery or relief prayed by the bill against these defendants.”

(b) That there is a misjoinder of parties defendant.

(c) And a misjoinder of two causes of action in one count.

This demurrer was overruled and no exception saved.

Thereupon defendants filed the following motion:

“Now at this time come the defendants in the above-entitled cause and pray the court to make an order requesting the plaintiff to elect on which cause of action, the one against defendant Lane, or the one against defendant Neal, that plaintiff will proceed to trial in this cause.”

Taken up, seen and heard, the motion to elect was overruled and the point was saved by an exception.

Thereupon the defendant Neal filed a separate answer, viz. : Admitting the execution of the mortgage, the refusal of the trustee to act, the request that defendant O’Neal act, and that he did act by duly advertising the land to be sold on the 8th day of February, 1905; averring that between the hours in the notice mentioned the sheriff offered the land for sale at public outcry and defendant Neal became the purchaser of tract B for the price of $152, which was all the land was worth at the .date of sale by reason of other facts pleaded in the answer, to-wit: that in November, 1903, a judgment was rendered in the Ripley Circuit Court in a suit to quiet title wherein the mortgagor, Keith, was plaintiff and certain parties by the name of Schaffer and others were defendants. That said judgment found Keith was the owner of tract B, but that the said Schaffers were entitled to a first lien thereon for taxes paid in the sura of $468.92, which lien was foreclosed and the lands ordered sold to satisfy the judgment. That in pursuance to that judgment and order on the 7th day of November, 1904, defendant Neal became the purchaser at an execution sale- at the price and sum of $957.96, and received a deed therefor and was the owner of said land at the date of the foreclosure of said deed of trust. Denying all other averments in the petition and alleging that there was a misjoinder of parties defendant and of causes of action in one count of the same petition, the defendant prays to go hence without day and for costs expended.

The defendant Lane answered, pro se, by a general denial and certain admissions and averments, viz. : He admits that he bid off and purchased tract A; avers that the “price bid therefor was a reasonable price for the same at said sale under all the facts and circumstances surrounding the same.” Further answering, he states as follows:

“Defendant further answering, says that he is improperly joined with one George A. Neal in this suit, that the lands bought by these defendants are separate lands and that the defenses are separate and distinct and they have no defenses or interest in common in said suit.

“Wherefore defendant prays the court to dismiss this cause as to this answering defendant and for such other orders as to the court seems right and just.”

The sheriff made answer admitting himself the acting sheriff of Ripley county, Missouri, and denying all other allegations.

The replication was conventional.

The ease made on the facts is this:

It appears plaintiff is a widow and that she-, as well as the grantor and trustee in the deed of trust, resided at Carthage, in Jasper county, and none of them were present at the sale. We infer, too, that J. L. Moore lives there. This J. L. Moore was employed hy Mrs. Hanson to attend the sale as her agent and look after her interests. It seems in journeying by train from Carthage to Doniphan a change of cars is made at Hoxie and another at Neeleysville. In ample time to reach Doniphan on the day before the sale, Moore left Carthage by rail, and, without his fault, missed connections at Hoxie and again at Neeleysville and lost 24 hours. The afternoon of February 7th, 1905, found him at Neeleysville, from which point a line of railroad ran to Doniphan. The last train for that day had left for Doniphan before his arrival. According to him, in this pickle he went to the telephone office and sent a message to the sheriff at Doniphan to the effect that he was at Neeleysville and had missed his train • that he represented plaintiff and asked the sheriff not to sell the Keith lands till he arrived on the next morning-’s train. He took that train for Doniphan on the day of sale and arrived there a little before noon. Going at once to the sheriff’s office he found that official and learned the land had been sold. Inquiring if he had not got his message of the day before, the sheriff replied that he was in the country when it came, but when he got home he was told there was a message for him and he went over to the office and got it, “but that he didn’t hnow exactly what it referred to” — “it was not plain to him, and that he had sold the lands to the highest bidder. ”

Mrs. Mitchell testified she was a telephone operator at Doniphan on the 7th of February, 1905, and received a message from Neelysville to deliver to defendant O’Neal. The substance of it was to not sell the “Keith property” till a certain party got in on the first train next day — that “he had missed his train and could not get here until the next day.” She did not remember whether the message disclosed what interest the sender had in the sale and she did not know by whom, the message was sent. The sheriff came to the office in the afternoon of the same day and the message was delivered to him. On cross-examination she said the message contained a request about the “Keith property,” to'this effect: “Not to sell the Keith property until he got in on the next train — that he had missed his train at Neeleysville. ” She received it at three or four o ’clock p. m. and delivered it to the sheriff an hour later.

As a further excuse for the early sale, the sheriff told Mr. Moore that “some parties who were going away on the next train wanted to bid on it, and for that reason he had hurried the sale up a little in order for them to bid on the land and get away on the train.”

The record shows the bidding was done in the name of the defendant,. Neal, by one Choinski, and that though Neal was in town he'was not present at the sale. As we grasp it, though the bidding was in the name of Neal it was on behalf of his co-defendant, Lane, they dividing the purchase as indicated by tracts A and B.

When Moore discovered the predicament of his principal, he at once went to Lane, Neal not being at hand, and talked with him. His version of that talk is as follows: “I stated to him all the circumstances connected with the matter about the plaintiff being a widow woman, and this money in the land represented the savings of a life time, and would leave her with nothing and that under the circumstances I thought it would be a generous act to simply let the deed be made over to her, and offered them, besides all the expenses, $25 to do it.” But Lane was in a hurry and was also going away “on the next train.” No conclusion was arrived at. Lane did not make a proposition and, on the same day, Moore entered suit.

The sheriff’s account of his conduct of the sale and receipt of the message is, in substance, as follows: He sent the net proceeds, $167.10, by draft to the trustee "but it was returned and was in liis possession at the trial. The- land was sold at about 11:15 a. m., a few minutes before tbe morning train arrived from Neeleysville. It was knocked off to George A. Neal, tbe latter being present according to tbe sheriff. He denied receiving any notice from Moore, as representing Mrs. Hanson, requesting a postponement until after tbe arrival of tbe noon train. Being asked why be sold tbe land at tbe time be did, be replied: ‘ ‘ There were some parties who wanted to bid on this land and get away on tbe noon train” — that Choinski and Neal requested him to make tbe sale when be did in order that Neal, bis wife and Choinski could go away on tbe 12 o’clock train. 'We gather from bis testimony that he went around to parties usually bidding at sheriff’s sales and took some pains to drum up- a crowd of those who have an eye to bargains and are of mind to hazard a venture of that sort. He told these men tbe hour of sale and there were fifteen or twenty of them present when tbe land was knocked off — “as many as be ever saw at any sale outside of tax sales. ’ ’ There were other bidders than Choinski. Moore did not request a readvertisement and the sheriff did not recollect bis asking if there was- no way to sell tbe land over again. He testified be executed the deeds. At this point the court took a hand and the following happened:

“Q. That telephone message, bow about that? A. I was out serving some papers that day, and when I got in my wife said they wanted me at central office, and I went up to tbe office and asked the girl if she had a message for me, and she said some one had called me up from Neeleysville, Missouri, and I asked her if she knew who it was from, and she did not, and then asked her what tbe message contained, and she said it was something regarding the sale of some land or property and wanted me to bold off tbe sale, or something of the kind, and that was all she told me about it.

“Q. Wanted yon to hold up the sale until the train got in? A. Yes, sir; something about that.”

Being further pressed by plaintiff’s counsel, he said the operator did not mention the “Keith property.” Being asked if he had any other sales to take place on the 8th day of February, 1905', he said, No. Defendants’ counsel then inquired as follows: “As a matter of fact you don’t know, or didn’t know, whether that message was about this land or any other land.” To this he replied: “No, sir. I couldn’t get much out of the girl about it.”

Not only the 'dear weight, but substantially all, of the testimony (of which there was abundance) showed the usual time for making sheriff’s sales, including trustees’ sales, at the courthouse in Doniphan, unless by agreement of the parties, was in the afternoon from 1 to 3 o’clock. There was an exception to this rule, viz.: Where there were many sales to make on execution the sheriff sometimes took an early start in the forenoon in order to get through in the afternoon.

The usual divergence in witnesses’ estimates on the value of land is in the case. Some for defendants, basing theiy evidence somewhat on the theory the title was clouded, put the value of the lands from twenty-five cents to $1 per acre. On their lowest estimate it was worth say $340'. But we think the great weight of the testimony was to the effect that it was of an average worth of from $3 to $4 per acre, or, say, about $3,000.

An attempt was made by defendants to show that Keith’s title was clouded. The testimony in that regard was not satisfactory. Some witnesses testified that he “dealt in bad titles.” Certain deeds, by which he acquired title, were put in evidence to show he paid little for the land in 1893-6-7, some years before he mortgaged it to plaintiff. A decree of the Ripley Circuit Court in a suit brought since the execution and record of the deed of trust, and to which suit neither plaintiff nor the trustee under her deed of trust ivas a party, was introduced in evidence establishing the title to tract B in Keith, but decreeing a lien and a foreclosure thereof in favor of parties by the name of Schaffer for certain taxes, and Mr. Neal was allowed to testify that he bought tract B under that decree at an execution sale prior to the trustee’s sale and received a sheriff ’s deed for $610'.

On this record it is earnestly argued by learned counsel that reversible error was committed: (1) In overruling the motion to elect; (2) in the admission and exclusion of testimony; (3) in that the decree is inequitable in not adjudging hack to appellants their bid money; (4) further inequitable because plaintiff did not come into court with clean hands; and, further, because the testimony did not show Keith was insolvent — nor show any fraud, mistake, collusion or unfair dealing by appellants, or between them and the sheriff; (5) that the court erred in not sustaining defendants’ demurrer to the bill; (6) and, finally, the bill is challenged because it does not state a cause of action in formulated particulars.

I. Any error in overruling the motion to elect was waived by answering over to the merits. The gist of that motion was a misjoinder of two separate causes of action. It runs on the theory plaintiff must be put to her election in proceeding either on the one against Neal, or the other against Lane. But, to keep life in the point, when that motion was overruled, movents should have proved their faith by their works, that is, by standing on their motion and exception and refusing to answer to the merits. Having joined issue on the merits, invoked a trial and taken their chances on such joinder and trial, it is now too late to-, cnt behind and open the dosed question of misjoinder. [White v. Railroad, 202 Mo. l. c. 561; Paddock v. Somes, 102 Mo. l. c. 235; Hudson v. Wright, 204 Mo. l. c. 424; Jordan v. Railroad, 202 Mo. l. c. 426, et seq.; Aley v. Railroad, 211 Mo. 460.]

True, defendants sought to preserve the point by pleading a misjoinder of parties and of causes of action in their respective answers, but it may not be saved that way — at least, where the petition on its face discloses such defect, if any. [See authorities, supra.]

However, waiving that view, there is no soundness in the point. This, because plaintiff’s cause of action grew out of one transaction, a joint venture of Lane and Neal- — one sale and one bid, with deeds made to further their common enterprise in pursuance of that sale and bid. Lane received his conveyance by reason of a common understanding made before the execution of the deeds, and it was well enough to join him and Neal as parties defendant in one suit depending on the same evidence. The bill was not bad for multifarionsness. There is mutuality in the subject-matter of the suit. [Bobb v. Bobb, 76 Mo. 419.]

The point is ruled against defendants.

II. Defendants assign error on the exclusion and admission of testimony. In this behalf, it must be kept steadily in mind that this is an equity case and that the exclusion or admission of testimony is rarely reversible error in chancery on appeal. The testimony being here, we can seek equity and do it by considering competent proof offered and excluded, or rejecting incompetent proof objected to and received. Three specifications are made under this head, viz.:

First, the admission of testimony looking to a compromise. As to that, we shall assume that no mote of prejudice got into the piercing and discriminating eye of the learned chancellor, nisi, through that evidence.

Second, defendants sought to show by oral testimony from Moore that Keith and wife gave an additional mortgage on Carthage property to secure the Hanson notes and that the deed of trust on the Ripley county land was additional security. He was not permitted' to testify and error is assigned on that score. As to that, it is apparent his ideas one way or the other were worthless for judicial purposes. If the fact was material, there was better evidence of it. He testified there had been a payment of about $1,200' on the secured notes. Counsel then asked: “Was that paid in cash or land?” An objection was sustained to that question and error is assigned. The relevancy of the question is not apparent. The ultimate fact to be got at was the payment, not how it was made.

Third, defendant Lane was on the stand. He testified he was an abstracter, of some five or six years’ standing. It is not shown he was an attorney or learned in the law and, if that fact had appeared in proof, we shall not assume the chancellor was in heed of enlightenment from him on what constituted a cloud on title. To depress the value of the land, the question was asked of Lane whether he “had any knowledge of the cloud on the title of this land?” He was not allowed to answer, and error is assigned. We are of opinion the ruling was well enough. Not only did the question assume a fact not proved by competent testimony, but the tendency of it was to allow the judgment of Mr. Lane to take the place of the fact itself. If the Keith title was really clouded and that fact affected the bidding, there was a way to prove the cloud. There is no such competent testimony in the record, and no man should bo allowed to' retain land bought at an invalid and unfair sale, by merely disparaging title through assumption or innuendo.

The point is ruled against defendants.

III. It is next argued the decree is inequitable in not restoring to Lane and Neal their bid money. This is so. On this record, on elementary equitable principles, if the laud bought by their bid was taken from them, they as purchasers were entitled to be put into the same situation they were in before the purchase, so far as possible. The chancellor should have seen to it that his decree did not stop' half way, but went on and administered rounded-out justice on every material matter. To that end, he should have decreed to them the return of the net proceeds of the sale held by their codefendant, O’Neal, and required plaintiff to reimburse to them the expenses of the sale, so that they be made whole in pocket. That he whn seeks equity must do equity as the price of his decree is a cardinal maxim steadily applied except when its application furnishes protection to wrong and fraud, as, for example, in Axman v. Smith, 156 Mo. 286.

IY. It is next argued that plaintiff does not come into a court of equity with clean hands. This argument is predicated of the fact that her agent, Moore, wanted to buy appellants’ bargain, thereby (it is argued) disclosing a degree of moral turpitude in not only waiving an unfair sale at an unusual hour, but a resale in the interest of herself and her mortgagor. But plaintiff was guilty of no act of misfeasance, nonfeasance or inadvertence leading up to her predicament. That nonplussed on the spur1 of sharp surprise, her agent cast about for a way out, and (absent counsel and principal) bethought him to throw a tub to the whale by offering the expenses of the sale and a bonus of $25 to allow the deed to be made to Mrs. Hanson, may show a fugitive spasm of forgetfulness of the equities of the situation, but does not bring her within the equitable doctrine relating to unclean hands. She stands rectus in curia so far as concerns her hands. Nothing came of the propostion and it was abandoned by the institution of this suit on the same day. If it had been accepted and the mortgagor was complaining, a different case would be here.

In this connection it is argued the testimony does not show the mortgagor was insolvent or show fraud, mistake or unfair dealing by appellants and the sheriff.

Let us see about that. There is testimony inferentially pointing to the fact that Keith, the payor in the notes, is insolvent. Defendants themselves introduced proof that his equity of redemption in some of his lands was sacrificed by a forced sale under a judgment against him. This is not an indiciwm of solvency, it squints the other way. Again, there was testimony that if this sale was not set aside' the widow Hanson would lose the savings of a lifetime — all she had. Such testimony inferentially smacks loudly of insolvency. If, however, there was no necessity to plead insolvency, then there was none to prove the fact. This phase of the matter will be considered later.

On the other branches of the argument, it will suffice to say that, in and about this sale, the sheriff owed no duty to speculators in land titles. He had no call of duty to consult their convenience. The eye of duty should have been fixed elsewhere. Drumming up a crowd of speculators shows over zeal to make an appearance of fairness. The stiff rule of law is that he was the agent of the debtor and creditor. He lay, therefore, under the primary and bounden obligation to consult his principals’ interests and convenience— not that of others. The right doctrine is nowhere more felicitously and justly stated than by Wagner,, J., in Goode v. Comfort, 39 Mo. l. c. 325, et seq. Speaking to the point, he there says:

“Trustees are considered as the agents of both parties — debtor and creditor — and their action in performing the dntie-s of their trust should be conducted with the strictest impartiality and integrity. They are entrusted with the important function of transferring one man’s property to another, and therefore both reason and justice will exact of them the most scrupulous fidelity. Courts of equity have always watched their proceedings with a jealous and scrutinizing eye; and where it is clearly shown that they have abused their trust, or combined with one party to the detriment of the other, relief will be granted. Not that a sale made by them will be set aside on slight and frivolous grounds; but where it appears that substantial injury has resulted from their action, where, in pursuance of their powers, they have failed or neglected to exercise a wise and sound discretion, equity will interfere. It is impossible in the very nature of things to lay down any precise rule applicable alike to all cases which may arise, but every case must be decided on the especial facts and circumstances which surround it and upon which it is founded.”

How did this sheriff measure up. to the foregoing standard of duty? Not at all. Let the record tell the story. At the instance of appellants he made the sale at an unusual hour — itself a badge of fraud in the absence of a request from the parties in interest. He made it in the teeth of a reasonable request from the mortgagee to- await the usual hour. While inadequacy of consideration as a general rule is not of itself a distinct principle of relief in equity (1 Story Eq. (11 Ed.), sec. 245), yet in this instance he permitted the property to pass at so gross an inadequacy of price as to “shock the conscience,” and, when the conscience is shocked, the ear of the chancellor opens. [Ibid, sec. 246.] He did this at the request and to suit the by-ends (the so-called convenience) of bidders who were itching for a quick sale and a fetching bargain, and persuaded him to make it before the representative of the mortgagee could arrive from Neeleysville. Not only so-, but the mortgagor had a representative in Doniphan (Mr. Langford) who testified he was not present because of the untimely hour. The sale, then, was in very truth and fact made for the benefit of those- who wanted to feather their own nests by sacrificing the interests of both mortgagor and mortgagee, and succeeded in doing' that very thing. If such sale is not blinking all just ideas of mine and thine, if it is not unfairly taking the property of one man and giving it to another, what is it? To my mind, it is but paltering and toying with thé situation to give any weight to- the excuse of the sheriff that he did not “understand” the message from Neeleysville, and could not “get much out of the girl about it.” If he'had given half the time and attention to grasping the significance of that message that he did to ignoring it and forgetting his duty as agent of the mortgagor and mortgagee, he would have understood and acted on it. If Mrs. Mitchell is to be believed, he knew the message related to the sale of the Keith property. If he is to- be believed, it related to no other, because there was no other advertised. There is no testimony that Choinski, Neal and Lane would not have been represented at an afternoon sale. They were in Doniphan to attend that very sale. There is not a scintilla of testimony to show they would have left town before thé sale. The chancellor, then,, could well (and doubtless did) find that their anxiety to have the sale made under pretense of wanting to leave Doniphan at noon was a mere cloak for their real anxiety, to-wit, to have it over before the parties in interest, detained by a train of circumstances (or the circumstances of a train) reached the ground. Collusion in the form of wrongful combination for an improper purpose is' shown, however tenderly the testimony be viewed. We have no trouble with the decree on that score, and, unless something else is in the way, it is buttressed on reason and authority. [Axman v. Smith, supra; Davis v. McCann, 143 Mo. 172; Polliham v. Reveley, 181 Mo. 622; Holdsworth v. Shannon, 113 Mo. 508; Stoffel v. Schroeder, 62 Mo. 147; Vail v. Jacobs, ibid, 130.]

V. Of error assigned in the overruling of the demurrer, this may be said: No exception was saved to that ruling, but none was necessary. [Thorp v. Miller, 137 Mo. l. c. 239.] However, it is trite doctrine that a defendant waives his demurrer by answering over (Pickering v. Tel. Co., 47 Mo. 460), at least, as to every ground except a question of jurisdiction, or, except the 6th specification in the statute, Revised Statutes 1899, section 598. [Jones v. Railroad, 178 Mo. 528; Hudson v. Cahoon, 193 Mo. 547.]

Hnder the code, a demurrer must specify the grounds of objection. [R. S. 1899, sec. 599.] The 6th statutory ground of demurrer (sec. 598, supra), is: “That the petition does not state facts sufficient to constitute a cause of action.” Prom my individual viewpoint, the demurrer in question does not with certainty make that specification. Its grounds are a misjoinder of parties and of causes of action coupled with this added, viz.: “That it appears by the plaintiff’s own showing by said bill that she is not entitled to the recovery or relief prayed by the bill against these defendants.”

In technical pleading, technicalities count. For is it not written that he that taketh the sword, may perish by the sword? It has been held that the use of the statutory language of the 6th ground of demurrer is a sufficient specification. In this instance, the pleader’s language, liberally construed, may mean the same as the statutory language, and then again may not. The object of the statute was to sharply direct the trial court’s mind to the precise ground of objection relied on. This, to treat the trial court fairly and subserve the will and purposes of the statute [R. S. 1899, sec. 864]. It is well, therefore, in demurrlug, to be plain about the grounds, to keep within the statutory way, as a beaten path; but from what follows in the next paragraph the point is not vital and hence is not decided.

VI. It is argued the bill does not state facts sufficient to constitute a cause of action. The point, in its nature, seems jurisdictional and is made in this court for the first time. [Cantwell v. Lead Co., 199 Mo. l. c. 42; Hudson v. Cahoon, supra.] When the trial began, there was no objection made to the introduction of any testimony because the bill did not state facts sufficient to constitute a cause of action. At the end, there was no motion in arrest challenging the sufficiency of the petition. In the absence of the one or the other or of a demurrer put on that distinct ground, it might be said defendants tried their case below on the theory the petition did state facts sufficient to constitute -a cause of action, and that by raising the point for the first time in this court they, in effect, change.their theory of the case on appeal; but as the question has been held jurisdictional we will consider it.

It is contended there are several vital omissions in the bill. To our minds, the only serious one is the failure to allege the insolvency of the maker of the notes secured by the deed of trust. Counsel stoutly argues such omission is equivalent to an admission that plaintiff has an adequate remedy at law. He says that if the maker of the notes was solvent, so that the residuum of the debt could be collected by a suit at law on the notes, plaintiff is not entitled to have the breath of life breathed into her exhausted and defunct deed of trust by setting aside the sale and the deeds following it and, in effect, reinvesting into the trustee the legal title to the lands for the purposes of a landed security.

Is this position sound? To my mind, No. And this, because:

The general doctrine is thus put by Story (1 Story Eq. (11 Ed.), sec. 33): “Perhaps the most general, if not the most precise, description of a court of equity, in the Einglish and American sense, is, that it has jurisdiction in cases of rights, recognized and protected by the municipal jurisprudence, where a plain, adequate, and complete remedy cannot be had in the courts of common law. The remedy must be plain; for, if it be doubtful and obscure at law, equity will assert a jurisdiction. It must be adequate; for, if at law it falls short of what the party is entitled to, that founds a jurisdiction in equity. And it must be complete; that is, it must attain the full end and justice of the case. It must reach the whole mischief, and secure the whole right of the party in a perfect manner, at the present time, and in future; otherwise, equity will intervene and give such relief and aid as the exigency of the particular case may require. The jurisdiction of a court of equity is, therefore, sometimes concurrent with the jurisdiction of a court of law; it is sometimes exclusive of it; and it is sometimes auxiliary to it.”

The rule is announced tersely in 16 Cyc. p. 41, thus: “The existence of a remedy at law does not deprive equity of jurisdiction unless such remedy be adequate. By this is meant that it must be clear, complete and ‘as practical and efficient to the ends of justice and its prompt administration as the remedy in equity.’ ”

It has been stated that: ‘ ‘ The rule requiring that it should be shown that no adequate legal remedy exists would seem to be sufficiently complied with where the hill states facts from which it appears that such is the case. Where the fact that the remedy at law is inadequate sufficiently appears from the bill, it is unnecessary for it further to allege in terms the nonexistence of a legal remedy or its inadequacy.” [18 Ency. Pl. and Pr., 110’.]

In Martin v. Graves, 5 Allen 601, Merrick, I., speaking to the adequate remedy at law, said: ‘ ‘Whenever a deed or other instrument exists which may he vexatiously or injuriously used against a party after the evidence, to impeach or invalidate it is lost, or which may throw a cloud or suspicion over his title or interest, and he cannot immediately protect or maintain his right by any course of proceedings at law, a court of equity will afford relief by directing the instrument to be delivered up and cancelled, or by making any other decree which justice and the rights of the parties may require.”

Testing the bill at bar by the foregoing general rules, it is clear that the point must be disallowed to defendants. Because:

This is not a suit to collect the secured notes. It is a suit to re-establish the lien of a deed of trust exhausted and lost by an unfair and wrongful sale. In other words, the result to be attained is to vest out of appellants and into the trustee (where it once was) the legal title to 1,360' acres of land, to be held as security for a debt due plaintiff. What legal remedy would pldintiff have to that end? None that Í know of. (Ubi jus, ibi remedium.) Does it lie in the mouth of appellants to say in one breath: “We got the land unfairly, the facts are against us on that proposition;” and with the next, say: “But the widow is only entitled to collect her debt — if she can get it on execution in a court of law, she has suffered no injury, ergo, we will retain from hér what we have no right to?” It would be droll and lame equity that would respond to such a non sequitur. The plaintiff started out with two remedies. She was entitled to both even in a case of solvency. Why should she lose either? One of them was a suit, a judgment, a fi. fa., and sale. This remedy might be adequate or might not. No' court can peer into the future and see whether it would collect her debt. Verily! the vicissitudes of fortune are sharp and incessant and riches take wings and fly away! Who may know what a day will bring forth in that regard? Her other remedy lay on another road. She had a certain, continuous., permanent security on land —good for the future, free from the ups and downs of fickle fortune. The legal title to that land was put in a trustee for her use. Armed with that security she could realize on her notes by foreclosure sale or by a transfer of the paper to an indorsee. Disarmed of that security, it is beyond the ken of any earthly court to know whether she would recover a penny, though her debtor be technically solvent at the moment of trial. To say that the present solvency of the maker of the notes affords her an adequate, plain, complete remedy at law, attaining (in the language of the books) to the full end and justice of the case, reaching the whole mischief and securing her whole right, in a perfect manner, at the present time and in the future, is judicial nonsense in my opinion.

Take the case at bar. If it was necessary for plaintiff to allege the insolvency of Keith, then it was necessary to prove it. Suppose she failed in her proof? then the judgment would go against her on that theory. Her remedy in equity passed into a thing adjudicated —is gone. Now, why should these appellants, who have no right to a rood of the land, puzzle a court of justice with the insoluble problem of whether Mrs. Hanson would eventually suffer loss in the collection of her money on a ft. f.af A bird in hand is worth two in the bush, as the proverb- saith. So, is not an existing, live-, recorded real estate mortgage securing a note, for all practical purposes, worth a hundred-guesses of any court on the probability of being able to collect that note on execution?

The averments of fact in her petition showed she had no adequate remedy at law. That was enough. Why allege she had no adequate remedy at law when her bill showed it? The present solvency of Keith was no remedy coming up to the high-water mark of the rules laid down, therefore it was not necessary to allege his insolvency.

If appellants were innocent purchasers for value or had equities outside the return of their bid, if they were not wrongdoers and their covin did not suffocate their right, another question might be here.

The logic of Axman v. Smith, supra, is with the conclusion announced. There, insolvent mortgagors sued to set aside an unfair mortgage sale. • They were met with the proposition that they were confessedly insolvent and their bill did not offer to redeem. It was sought to defeat recovery on the strength of the maxim that he who seeks equity must do equity. Impliedly, at the very root of the argument used was the proposition that those insolvent mortgagors were not injured by the unfair sale. Judge Valliant, in disposing of the point, among other things, said: “But those facts do not absolve the trustee from his duty, nor destroy the plaintiffs’ rights to have the property sold to the best advantage according to the terms of the deed of trust, to the end that it will go as far as may towards (he payment of their debts. That is a right they have for their own interest and a duty they owe to their creditors. ’ ’

If mortgagors, independently poor and insolvent and therefore on the surface measurably immune from injury by an unfair mortgage sale, may go into equity, why may not a mortgagee who peradventure with good luck might collect his debt at law, go into a court of equity to have restored to him the real estate security of which he was wrongfully deprived?

The authorities point out that there are cases alone cognizable in equity and with which the law has nothing whatever to do. The jurisdiction of equity is said to be exclusive in such cases. Then there is a class of cases in which the jurisdiction of equity is concurrent with that of courts of law. Then another class in which equity has jurisdiction because of the inadequacy of the remedy at law, and still others in which the chancery side of this court is invoked in aid of an existing remedy at law. The case at bar naturally falls in that class of which equity alone has jurisdiction. But the bill may be sustained on the theory also, as said, that the remedy at law is wholly inadequate as that term is defined in the books.

Since writing this opinion in division my attention has been called to Thorn & Hunkins Lime & Cement Co. v. Citizens Bank of St. Louis, 158 Mo. 272. That was a suit in equity to subject a fund in the treasury of the city of St. Louis to the payment of claims for material furnished by the lime and cement company to a contractor. A contractor’s bond was outstanding giving a remedy at law. It was contended there was an adequate remedy at law by a suit against third parties, to-wit, the sureties on the bond, precisely as it is contended here there is an adequate remedy at law by a suit against a third party, to-wit, the payor of the note, Keith. In disallowing- that contention this court, speaking through Valliant, J., used language in point and said:

“The first point advanced by appellant is that the plaintiff has no right to maintain this suit in equity because it has an adequate remedy at law on the bond1 executed by the construction company to the city.

“The rule that equity will not grant relief where there is an adequate remedy at law applies only when on the case stated there is a legal remedy.

“A distinction is to be observed between a case cognizable at law but for which the law has no adequate remedy, and a case that can be adjudicated upon its merits only in a court of equity; in the one the equity court is invoked only for a remedy, in the other for an adjudication of the rights of the parties on the facts. A distinguished writer on this subject would class the one under the head of equity jurisprudence and the other under that of equity jurisdiction. [Pomeroy, Eq. Jur., sec. 131.]

“If on the facts stated the case is of a nature cognizable only in a court of equity the plaintiff will not be shut out of that court on the suggestion that on another state of facts he might recover that which would be equally satisfactory in another tribunal. If one has a mortgage on certain land for his debt, equity will not refuse to hear his suit for a foreclosure upon the suggestion that his debtor is solvent and the debt can be collected through a judgment and execution at law. If the right asserted is a subject of original equity jurisdiction the court will entertain it even though there may be a remedy at law. [Stewart v. Caldwell, 54 Mo. 536; Pratt v. Clark, 57 Mo. 189; Real Estate Sav. Inst. v. Collonious, 63 Mo. 290; Story, Eq. Juris., see. 80.] And the fact that a plaintiff may have a remedy by suit at law against a third person, as in this case against the surety on the bond, is no ground for refusing relief in equity. [Roll v. Smelting Co., 52 Mo. App. 60.]

“The right which the plaintiff seeks tc establish in this suit is in its nature such as can be established only in a court of equity . . .

“Nor does the fact that a suit by the plaintiff on the bond was pending when this cause was tried affect the plaintiff’s right to maintain this action. That suit was of a different nature, having a different purpose from this and between other parties.”

Appellants’ learned counsel strongly relies on Benton County v. Morgan, 163 Mo. 661, but that case is not in point. There, the mortgagor and the mortgagee, in a school mortgage, jointly sued to- set aside an irregular sale. It was held, in effect, that the sale being utterly void the mortgagor had a legal remedy in ejectment. It was held that as the sheriff had no certified copy of the order of foreclosure, and as snch certified copy under the statute took the place of a fieri facias, that, absent snch fi. fa., he had no authority to sell. That no title passed and therefore there was no use to invoke equitable aid to undo that which was absolutely void. In other words, the county could sell over again. It will be seen that the legal remedies in the way of relief in that case related to the very thing sought. In the case at bar, the alleged remedy at law .relates to a right not directly in suit, to-wit, the incidental matter of the collection of the note.

The amount of appellants’ bid was shown to be $187. The sheriff has in his hands $167.10. For the reasons pointed out in paragraph 3 of this opinion the decree was inequitable in not returning appellants their bid.

The premises considered, the cause is reversed and remanded with directions to' enter a decree setting aside the trustee’s sale, re-establishing the deed of trust as a live security, and cancelling and annulling the deeds of Lane and Neal, on condition that plaintiff within sixty days cause to be deposited with the clerk of the Ripley Circuit Court for appellants’ use $19.90, to cover the expenses of the sale. It is further directed that the court order and adjudge the defendant 0 ’Neal to turn over to his codefendants, appellants, the aforesaid net proceeds of the sale now in his hands.

Graves, J., concurs. Woodson, J., dissents as to the fifth and sixth paragraphs of the opinion. He is of opinion that the cause should be reversed and remanded with permission for plaintiff to amend by alleging the insolvency of the maker of the notes and the absence of remedy at law. Valliant, P. J., absent. A majority of this Division not concurring, the cause is sent to Banc.

PER CURIAM.

On reconsideration in Banc the divisional opinion of Lamm, J., was adopted as the opinion of the court. All concur. The cause is reversed and remanded with the directions there given.

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Rehearing

ON MOTION FOR REHEARING.

PER CURIAM.

On motion for rehearing and on motion to modify direction to enter judgment, nisi.

The motion for a rehearing is overruled. It appearing that plaintiff repaid to the sheriff the expenses of the trustee’s sale and that by inadvertence that fact was not shown by the record, the directions to the court below will be modified by eliminating the clause requiring plaintiff to deposit with the clerk of the circuit court within sixty days $19.90, for appellants’ use, to cover the expenses of the sale, and further modified so as to require the court to enter a decree requiring the sheriff to return to appellants their whole bid of $187 now in his hands.

Case Details

Case Name: Hanson v. Neal

Court Name: Supreme Court of Missouri

Date Published: Dec 16, 1908

Citation: 215 Mo. 256

Court Abbreviation: Mo.