158 Mo. App. 636 | Mo. Ct. App. | 1911
About the eighteenth of October, 1907, plaintiff and his wife, appellants here, took a warranty deed for several tracts of land in Lincoln county, from Fred Naxera and Edward H. Knight and their wives, the deed dated August 15th, 1907, and recorded October 25th of that year. As part consideration for the purchase of this land plaintiff and his wife executed their principal note for six thousand dollars, payable ten years after date to the order of Naxera and Knight, with interest from maturity, at the rate of eight per sent per annum, and
“Without recourse.” (Signed). “E. EL Knight.”
“Without recourse on me.” (Signed). “Ered Nax-era.”
“Pay to the order of any bank or banker for .collection.” (Signed). “Mercantile Bank of Louisana, Missouri. E. B. Rule, Cashier.”
*641 “In accordance -with the judgment and order of the circuit court of Lincoln county, Mo., the makers of this note Wm. P. Kessler and Lena Kessler are hereby released from all personal liability on this note.” (Signed). “Prairie Slough Fishing & Hunting Club.” (Signed). “A. P. Bohlinger, President. Jacob Gerst, Secretary.”
It was admitted that these indorsements on the notes were in this form at the time of the filing of the report in the case in which the Prairie Slough Fishing & Hunting Club was plaintiff and William P. and Lena Kessler were defendants, being the suit before referred to. In due time appellants here, Kessler and wife, appealed from that decree to the Supreme Court of this state, where that cause is now pending on their appeal, they executing an appeal bond in usual form in the sum of fifteen hundred dollars, which was duly approved. Afterwards,- that is after the appeal had been taken in the case of the Club against the Kess-lers, Kuhnle, the trustee named in the deed of trust above referred to, advertised the property' described in it for sale under the terms of the deed of trust, the sale to be held on the 26th of February, 1910.
Whereupon these present plaintiffs, appellants here, instituted this suit to enjoin the sale by the trustee, it being charged in the petition in this cause that the Prairie Slough Fishing & Hunting Club, “or the officers thereof who held said notes for it, have, for the purpose of rendering ineffective any judgment which may finally be rendered in said cause and for the purpose of changing the status of the property embraced in this cause and of jeopardizing the rights and interests therein of these plaintiffs, wrongfully transferred and delivered the said notes to some person or persons who have taken the same with full knowledge of all the facts and circumstances attending said notes and deed of trust, and are now, as al
On the filing and presentation of this petition, the •circuit court issued a temporary injunction. After-wards one Otto F. Karbe appeared and claiming to be the owner of the notes referred to, entered his appearance as a defendant and was substituted as such for the unknown and unnamed defendants. The Club also entered its appearance and answered, admitting the statements in the petition as to the suit referred to but denying that the notes were transferred for the purpose alleged or that there was any fraud connected with their transfer and averring that the defendant ■Club took title subject to these notes, and that they are a subsisting lien on the land and that they took the land subject to this incumbrance and averring that Kessler and his wife were relieved by the decree of
Karbe by his answer, denies all averments in the petition except as thereinafter specifically admitted. He admits all the averments concerning the suit of the Club against the Kesslers and that the notes were brought into court in that suit and admits that the indorsements released the Kesslers from personal liability on the notes, and avers that after the appeal of the Kesslers from the judgment rendered the notes were transferred and delivered “to some person or persons as therein alleged.” He avers that he, Karbe, was such person referred to, to, whom the notes had been transferred and delivered, and that he is now the legal holder of the same. He denies that they were transferred to him for the purpose of rendering inefficient any judgment that might be rendered in the case referred to or that the notes were wrongfully transferred as averred by the plaintiffs in their petition, but avers that the notes were purchased by him in good faith and for a valuable consideration without any fraud or wrongdoing on- his part. Wherefore he prays that the temporary injunction be dissolved and the bill dismissed.
By way of further answer and cross action, and as looking toward equitable relief for himself, defendant Karbe alleges the execution of the notes by Kess-ler and wife, their delivery to the payee, the execution of the deed of trust to Kuhnle, as trustee, securing them upon the land described, the delivery and record of the deed of trust, and that by the terms and provisions of that deed, if any of the notes secured by it were not paid in ten days after maturity thereof, then that all of them should become due and payable, including the principal and the interest notes. Averring that only the first three interest notes have been paid but that the fourth, which fell due on the 18th of October, 1909, was not paid at maturity thereof
The trustee appears not only to have been duly served but to have entered his voluntary appearance in the cause but does not appear to have interposed any pleading.
The court having heard the cause, entered a judgment dismissing the petition of plaintiffs and rendering judgment of foreclosure on the cross action of defendant Karbe, the court ordering as to that, “that the equity of redemption of plaintiffs 'William P. Kessler and Lena Kessler in the following described lands, to:wit (describing them) be foreclosed and that said premises be sold free and clear of any and all claims, interest or estate of said plaintiffs or any one claiming under them to satisfy said mortgage and that special fieri facias be directed to the sheriff of Lincoln county, Missouri.” Plaintiffs duly interposed their motion for a new trial. That being overruled and exceptions duly saved they have brought the case here on appeal.
At the trial of the cause plaintiffs introduced the notes with the indorsements above referred to, as well
Mr. Karbe was recalled on cross-examination by plaintiff and produced his bank book and check book in corroboration of his purchase of the notes referred to.
We have read all the testimony in this case as set out in the abstract, and have concluded that the judgment of the learned trial judge, while sustained by the evidence in the case in so- far as concerns the
First, in entering a judgment of foreclosure of a mortgage or deed of trust and ordering a sale, it is for the court to ñnd and determine the amount of the debt which constitutes a lien against the property to be sold.
In the second place, we think the learned trial court was in error in not providing for the contingency, which might happen, of the property, on a sale under foreclosure, realizing more than the amount of the lien against it held by defendant Karbe. It is evident from a consideration of the facts' in the case that these notes, by the indorsement which was made on them in conformity to the order of the circuit court in the first suit referred to, lost their character as negotiable commercial paper. While the defendant Karbe is the owner of them, he holds them, not as the holder of commercial paper, and as such entitled to the protection of the law merchant or our own law, but he is the holder and owner by purchase of a lien upon these lands, evidenced as to amount by these notes secured by the deed of trust. As such, he is entitled to satisfaction of that claim out of the property, to be released by a sale of it, and his title to the lien, he having purchased it for value, is not dependent on the result of the appeal in the first case. But he took these notes and acquired the. lien under such' circumstances as entitle the plaintiffs here to any surplus that may be realized on the sale of the premises over and above the amount of the lien against it, provided the appeal which the plaintiffs took to the Supreme Court is determined in their favor and the cause reversed and ultimately decided in their favor. This present suit is in equity, and the parties in interest in this controversy are all before the court, some of them parties to the first suit. It is not only within the power, but the bounden duty, of the court to administer equity in the premises.
It will also be necessary, as before said, for the circuit court to find and determine the amount of the debt against the land to the date of the judgment of foreclosure and then order a foreclosure of the property, closing out the equity of redemption both of the Kesslers and of the Prairie Slough Fishing & Hunting Club in the property and directing that in the event of any surplus being realized' at the sale over and above the debt, costs and expenses of the foreclosure,
The judgment' of the circuit court is reversed and the cause remanded with directions to that court to proceed in accordance with this opinion.