*1 St. Louis Mutual Life Insurance Company, Appellant, v. Anna C. A. Kiesler, Trustee for Walter,
K. H. Kiesler, J. Kjesler, Walter, John E. Gilbert Walter, Frank O. Wal ter, Julia Walter, Wife, His Lucius P. Walter, Frances Wife, His Walter, Russell C. Walter, Elmer G. Walter. Nora L. Huber, Gilbert N. Huber, Husband, Her Denzel Minor, a Walter, W. Walter, Wilburn Minor, Meridith George a Minor, Beulah Walter, Walter, Minor, J. Mecker, Joseph Trustee for Martin Thieret, Thieret, Martin F. Fen wick, Trustee for John A. Unterreiner, John A. Unter Harry A. reiner, R. Lukefahr, W. Edna H. Luke Lukefahr, Clyde fahr, His Wife, Anna M. Lukefahr, DePauw, John R. C. A. Trustee for Fenwick, Walter, Anna K. Schaupert (2d) . 46 S. W. William 166. One, February 11,
Division 1932. *2 Leahy, appellant. & Saunders Walther for & Bond, Damron, Samuel Davis P. B. Hood and Jas. T. Green- respondents. well for
FERGUSON, equity C.—This is a suit in and set aside cancel a trustee’s deed executed trustee named in deed of trust given to secure the of an indebtedness therein described. petition upon tried, The second amended or bill case was though plaintiff assignee ma- value, states before turity, legal of the notes secured the deed of trust and the owner designated holder of said notes and deed of the trustee authority plaintiff’s “knowledge, said deed of trust without capacity sell con- consent” undertook in his as sucb trustee to vey to certain of the de- the land described said deed of fendants; trust a valid exercise the terms of said deed of power upon is conditioned of sale therein conferred the trustee request owner and holder to such trustee trustee but that therein *5 deed, trustee’s pretended pretended made a and executed the sale by request therefor sought, without of which is cancellation authority or consent.” “knowledge, plaintiff’s and without cancelled, set deed prays pretended bill trustee’s be The “that the against judgment plaintiff have naught;” aside for that and held defendants,
one by as a maker of
721 Kiesler, who delivered said notes and the plain- deed of trust to tiff. Plaintiff’s loan directing record bears a notation that collec- tions on this loan “through be made J. H. Kiesler.” Walter and wife were never assigned advised that their notes and had been plaintiff died, transferred to and had no thereof. Walter intеstate, August 16, 1923. paid He had annual interest of year $600 each to J. H. Kiesler at bank. paid He interest for each of the years, death, two 1922, preceding next his by making County notes for Perry amount thereof to the Bank, so that when he died $1200 the bank held his notes for cov- ering years. the interest regularly for these two The Kieslers re- payments mitted the interest plaintiff. ma- to notes tured on 30, 1923, October 1, 1923, under date November plaintiff company wrote inquiring to J. H. Kiesler whether the loan was to be renewed. 27, 1923, again On plaintiff November wrote to J. H. yet Kiesler as follows: “We have not as been advised you in reference to farm loan of Walter Phillip which matured on October 30th last. If it is to be renewed it should taken care of A once.” 1923, letter dated December states: have “We not by you been advised Phillip loan reference farm Walter which last, matured on October 30th it be taken and must care of at if once is same to be renewed.” Under of Decem- date ber 20, 1923, plaintiff wrote: “You have not advisеd us in refer- ence farm Phillip Walter, loan of which pleased we would be taken have care of at once.” Plaintiff J. II. Kiesler to the wrote January same effect 18, 1924, again by letter under date February 4, 1924. 1924, plaintiff On March have wrote: “We yet any you received from definite advice reference to the Phillip Walter farm loan . prefer . . have we would up.” Apparently taken II. reply Kiesler no of these inquiries, April 25, 1924, again stating and on him wrote that on- April 30th interest on Walter loan would amount to $300, making $10,300, a total on* due the loan as of that date of very “we much desire to have loan with off interest full date, 1924.” namely, April mentioned In a above April 28, 1924, letter dated heeds J. H. Kiesler the first time plaintiff’s repeated inquiries With concerning Walter loan. personal assurance of his friendliness for com- and business pany, about he states loan: “Walter died reference to the Walter the middle of last law land cannot be sold August, and under the of a for at least nine months maker after the deаth want sixty-eight $9,500 trust. The heirs can sell acres of it for J. H. legally do this as so.” In meantime soon as can do upon administrator of making had been demands Huber, a loan. G-.B. estate son-in-law of the deceased Walter, was administrator of the estate. negotiations carried on all his reference to the loan Huber who acted all assumption times that J. the payee in the
owner and holder of said Huber notes and deeds of trust. endeav- arrange ored to with loan, a renewal of the but as some for heirs him that re- Walter were minors Keisler advised foreclosure, newal could not be made. Kiesler where- threatened personally Huber pay offered to three thousand and between four in Kies- thousand dollars cash the indebtedness and asked obtaining money necessary pay ler’s in to the balance assistance $1200 of Walter note proposed the loan. Kiesler if the then charged against his as held bank also the land and included be land a of he would have the sold under the sеttlement of sold at the foreclosure sale deed trust and in the event the land including the price for pay a to the entire indebtedness sufficient payment $1200 in the amount offered accept note he would a cash loan, a of on the deed Huber and make a new secured balance. Pursuant land, in an amount sufficient to cover the Kiesler, arrangement A. IT. Kiesler and C. trustee J. his brother with the whole in familiar apparently the deed of who was conformity published in matter, notice of trustеe’s sale caused that de- of The notices recited with terms deed of trust. re- "at payment the notes and that fault had made in of been Kiesler, trustee, A. C. quest said notes” the holder of time, place at and in the manner would sell the land described sale, August 2, 1924, appointed day for therein set On the out. sale. capacity trustee,'conducted Kiesler, acting in C. A. heirs, no other but by others than adult were made Bids discharge amount the entire amount bids were for an sufficient by the $1200 held note for interest and including all the debt representing cer- by Huber A that amount was bank. bid in land highest received the being the bid tain of the adult heirs and make Kiesler, Huber to trustee, A. told C. The declared sold. immediately, and leaving he was with J. H. as settlement a upon his about receipts return (Huber) give him that he would amount computed the J. IT. Kiesler week later. which had accrued $10,316.81, interest coupon to be note and interest interest bank note with $465, interest notes as coupon above making an $156.15, expenses of sale $1278.94, thereon Kies- J. Huber $12,216.90. On this amount aggregate re- written a executed trustee Kiesler as cash. C. A. $3500 ler in amount. for that 9, 1924, August ceipt under date to Huber trustee, A. by C. was executed deed trustee’s Gilbert Walter, Walter, E. John Walter, P. Frank Lucius O. Walter, Walter, Russell Elmer (all Walter and Nora L. Huber de- herein) grantees. grantees by fendants warranty These deed conveyed August 8, 1924, dated 39.90 Huber acres of land to and his for a consideration $3500. wife stated therein as Nora Huber her husband and other in trust deecl and their joined delivery negotiable prom- wives execution two issory August notes, bearing each date order, interest,
Kiesler or note demand, one of $7300 $1600. amount and the other the amount makers joined of the notes then of trust same date on payment 124.25 acres of land to secure the note $7300, 25.75 trust on acres said land to secure the payee note $1600. J. H. Kiesler as the notes beneficiary these was made C. Kiesler trustee in each of A. accepted Kieslers received and these notes as deeds trust. The $12,400. cash, mаking total them This amount thus received *8 arrangement an surplus $183.10, which, pursuant of to made among paying money, paid out as follows: parties the the was widow, administrator, $14.05 the to Gilbert B. and to Huber, $169.05 Anna K. Walter. J. H. Kies- plaintiff the far as the record shows had since
So inquiry about Walter April 1924, further 28, ler’s letter of made of notes the Walter and plaintiff company loan. The held purchase city of St. Louis and since trust at offices in the its H. Kiesler receipt trust from J. and deed of *9 by appropriated and in deed wаs retained the Kieslers the trustee’s defendants, judg- trial found for entered to their own use. The court appealed. dismissing plaintiff’s bill and ment by in the and reiter- made trial court One contention defendants relating directly of trust here that the clause the deed ated is by may be made power provides of that sale of the sale the exercise right party;” the request third that “at the of the the trustee assignee; sale could be pass that a valid order did not to the such sale of request party” in the deed only the “third upon made the of trustee, upon Kiesler, was A. as by sale made C. and that the party third or the direction of order and at the the trust, and therefore valid beneficiary of w'as named deed passed title to the the power of sale and of the exercise and, being upon without the record who relied trustee’s deed pur- notes, innocent assignment of the were the of actual conveyed “in trust to land is of states that the trust chasers. The deed
725 payment of a by secure the debt рromissory evidenced certain notes concurrently of executed with this deed trust Walter and K. Walter, parties part, party Anna of first the the and part, order, bearing of third or this the and the same date as and trust described as follows.” The are set further notes then ‘‘ described, appears parties provision: out and after which The part hereby agree first parties covenant and with part, heirs, assigns and their second third successors and follows.” (Italics ours.) specific Nine covenants follow. sixth The covenant that, provided “in may case of sale herein same made at the party,” of the request third is basis of this contention made Reading construing defendants. and the instrument as a we whole ordinary plain provides clearly, language, think it that running party covenants of the third run and shall assigns party enure heirs and of the benefit part. delivery third The execution of the notes and securing of same was one and the same trans trust inseparable. were as action. notes the deed trust thereto, it, signment of as incident the deed the notes carried assignment securing same so and transfer of the trust interest, rights, powers vested in all passed *10 or, by beneficiary we making request the as thereby beneficiary, assignee, the his provision, legal effect of this the construe precedent to a secured, a condition of the notes and holder owner the sale made pow'er sell and to by the trustee valid exercise 726 trustee, having C. A. been made request without such grantees
was not in effectuаl vest title in the the trustee’s deed (Magee Burch, 1078; 108 18 Knight, v. Mo. W. S. Plummer v. App. 1019; Mo. 1380; 137 S. W. on C. sec. Jones Mortgages Ed.) (8 2318) unless, assert, sec. plaintiff as defendants subsequently, with full acts transaction, ratified the making money in receiving Kieslers the sale and them in purpose Huber and the deed for the dis- charging the indebtedness. assignment
Prom and after date thereof notes and plaintiff’s possession in were exclusive office their trust city Louis. Neither in the of St. of the Kieslers thereafter had the any possession pur- or trust or *11 credit on the plaintiff knowledge notes. whatso- At that time had no ever wrongful was agents, its but unauthorized acts of advised and by caused them to remitted believ'e that the amount voluntary payment by de- heirs of the the indebtedness ceased Certainly Walter. circumstances that time and under such acceptance by plaintiff money ratification of this was not a knowledge. unauthorized acts of But which Ki'eslers of it had no though subsequently fully facts all the possessed informed and plaintiff refused to grantees return to in the trustеe’s Huber and the received, part deed money that paid it had by them which elected to retain brought same which it does this suit same, money tender defendants, it paid part who of their that bad holds, unpaid received alleges the amount due the amount of allowing credit after the notes this payment, judgment widow, against asks the makers one of amount, note that be cancelled the trustee’s deed aside, set of the fore- proceeds foreclosed and the By applied payment pleading, closure sale to the balance. its of such here, position plaintiff, taken in the trial court and contention though having brought this full at the time it the facts suit, money elected and elects it is entitled to retain this and asserts do so thereby without held to the unauthorized have ratified agents. acts of its
In this says connection represented Kiesler to it mortgagor heirs of the paying deceased were this sum on the indebtedness and the indebtedness was reduced in that amount in such part. However, subsеquently belief on its filing and before this suit concerning payments learned the facts to the how, Kieslers why and under what circumstances made. were says Plaintiff next plaintiff’s defendants are benefited retention money against “since the indebtedness the land owned them as heirs of Walter has been reduced to that extent.” money paid grantees Avas to the Kieslers in the trustee’s deed purchasers. purchase, parties Nor all heirs were to the grantees the foreclosure sale and in the trust deed. The sum $3500 immediately by Huber, paid deceased, in cash a son-in-laAVof heir, was, shows, AA’ho not an money. AA'as as the eAÚdence his individual $7300 note to amount of created was the Huber, obligation personal of Nora L. and G. B. husband, her Huber grantees in and the other the trustee’s deed and their wives. The $700 makers in cash on this note which was credited $6600, then sold the note thereon and he amount he re therefor, Schaupert. payment to the defendant ceived Huber and personally obligated in the trustee’s dеed AA'erenot these of the Walter notes liable for the secured the Walter They strangers legally, trust. to that indebtedness. were, having fully apprised Plaintiff of all the and, received after been facts transaction, does retain elected retain and money paid by money asks that the them. but keeps Plaintiff their of the deed trustee’s deed and that the lien be cancelled and set aside in security of the Walter trust be declared for the balance *12 apply debtedness It would retain same foreclosed. money, thereby of the debt and enhance reduce the amount strengthen security but other afforded the deed of time same repudiate wise Plaintiff cannot at the the transaction. sharing proceeds of it. repudiate the insist sale and facts, fol of the election it had full Plaintiff’s after effect, rati to a pursued, in amounts course which it low the making accepting sale and fication of Kieslers the acts in which price in and form purchase manner authority beyond authority or such though did such acts were without plaintiff’s agents, entire they, had and is ratification purchasers transaction between the Kieslers re accept retain beneficial Plaintiff cannot trustee’s deed. 493, sec. C. J. the burdens. [41 sults and at same time avoid fruits, or retains one, When such circumstances under 114.] another, fruits, acts portion of the of the unauthorized as here a acts him, must to have ratified who act for he be held assumes to reject part. accept as a [State whole. He cannot 398; Fritsch Laupheimer Harrington, 100 Mo. 13 S. W. ex rel. v. 1066; (2d) (Mo. App.), S. City v. Bank St. Louis W. National facts in this Knight, legal result of the supra.] v. Plummer it in that class cases wherein may same as case be said be the who, land, full knowl having is an interest held one proceeds sale, sale accepts edge defective foreclosure of a ground fore that such on the asserts claim to the land but thereafter is es- sale and has ratified the foreclosure closure sale was defective Nipp (Mo. Sup.), 30 toрped claiming-the v. from land. [Marsden (2d) which it seeks and W. bars the relief S. Plaintiff’s course 77.] result is same. estoppel ratification the it be whether called affirmed. court is therefore judgment of the trial and decree result; G., C., Hyde, Sturgis, concurs. concurs in the foregoing opinion Ferguson, C., PER CURIAM: The is a- dopted opinion judges as the All court. concur. secured that such sale be
Notes
the deed secured alleged notes; trust, of for unpaid balance to be due on that the lien declared, equity of said deed of trust of re- demption foreclosed, proceeds applied the land sold and thereof payment of said indebtedness. "that, answer of denies under terms of said deed power of and to sell said trustee to foreclose said deed of trust being property request said made was conditioned such sale by assigns pleads that both party part;” the third assignor) and the (plaintiff’s in the beneficiary trust plaintiff as by its trustee deed of trust been constituted had agents agents making in such foreclosure plaintiff’s аnd acted as retaining using part proceeds by receiving, that sale and approved such plaintiffs have ratified and such foreclosure sale sale. very controversy is little about the J. II. There facts. Kiesler engaged Kiesler, brothers, loaning in and C. A. were the business of by money estate, Perryville, on secured deeds trust real at Mis- souri, style They under of Kiesler were officers Brothers. also Perry County Bank, J. Kiesler cashier and active by officer The business conducted executive of the bank. 30, thrоugh On the bank. October was carried at and Brothers Walter, negotiations Phillip with a 1918, completed H. Kiesler in Perry Missouri, for loan amount residing County, in farmer lands 191.93 acres of farm $10,000 secured a deed K. exe- county. Anna Walter Walter wife and his notes, negotiable, promissory each cuted and delivered two 1918, payable $5,000, bearing of October date amount of County Perry years after date at J. H. Kiesler five order of date per per from rate six cent annum Bank, with interest year, as each annuаlly day first of November of payable on the J. H. Kiesler order of notes, payable also to the coupon evidenced was executed County of trust Perry Bank. part and of the second party C. A. Kiesler and wife to beneficiary. third party of the trustee, Kiesler as and J. H. real Kiesler Brothers to time loans From time An abstract by plaintiff. security purchased were estate introduced evi- 1922 was from covering period loans from purchased have been shown to these loans are dence. Some County Perry Brothers from others collec- register directed loan plaintiff’s Notations on Bank. "Ferry through J. H. Kiesler to be made were on such loans tions Kiesler sold J. H. April Of County Bank. date plaintiff, Walter notes the two endorsed J, thereof amount the face cheek issued its
beneficial:y in the deed of
and any continuously possession and were not plaintiff’s had been of Plain- or them. to Kieslers either endorsed or intrusted time pretended of no information company tiff had or carried Huber who sale, and other hand neither foreclosure on the sale, purchasers at the trustee’s negotiations of on in behalf H. Kiesler that J. any grantees deed knew in the trustee’s nor and deeds the Walter notes holder of not the owner and was same, but and assigned assumed trust, and that he had sold thereof. was the owner believed he note $7300 August paid 22, 1925, was and credited $700 On accrued had Kieslers, together with the interest held $6600, for full value thereon, reducing principal thereof to assigned $6600, sold and received, Kieslers then that is seсuring same to recourse) of trust (without and the deed said note Schaupert. defendant company August plaintiff 30, H. Kiesler wrote 1924, On to clean little time will loan: “It take reference to the Walter we with some did up willing this do this loan we are to in six months deposit due before, others issue our certificate up if cleaned six sooner per cent, privilege paying off with the 724' $1,000 interest before The heirs raise cash and the that time. can yonr you place sending will hands date and we take note off Plаin- $1,000 interest.” such certificate less the amount of cash suggests replied September 1924: “Our 2, president tiff letter of is com- carry estate that we this loan until the administration you together with pleted. suggest $1,000 remit the cash We also Walter proper interest on the date and we will endorse credit for 1, 1924, sent a draft plaintiff note.” On H. Kiesler October stating: $1653.33 “I draft $1653.33 with a letter enclose interest, payment $1100 note re- $533.33, 1, get expect to October 1924. the Walter loan We arranged credit- up time.” Plaintiff and takе the rest within a short 24, July May 1925, 13, ed this On on the Walter notes. 1925, 1925, plaintiff J. H. Kiesler relative October wrote have unpaid he loan, balance on the Walter but does not seem inquiries. early part reply made to these Some time presi- October, thereupon the Kiesler bank was closed and Perryville company purpose dent went to for the company personally investigating of loans status held bank. purchased which had and the been from the Brothers investigation learned plaintiff for first time In the сourse of this pretended the Walter deed of sale, foreclosure under grantees was Huber the trust deed learned and it then that and the and deed plaintiff company owned the notes for the first time fully of all the facts and informed of trust. Plaintiff advised day November, filed its transaction, and on 29th original defendants, parties bill two were made herein. The Kieslers testify trial. default, nor of them at the but both made did either exception $1653.33 With the the remittance purchasers money paid to company, them
to and security deed of there beneficiary conferred trust Cramer, 278 213 payee 516, Mo. the notes. v. [Baade 326; 263 Mo. 172 S. Cooper Newell, Lipscomb v. 121; W. S. W. 798; Rohrer, 1, 147 Bank v. Talbott, 243 S. W. First National v. Mo. (Mo. Sup.), 1047; Bray American Bank v. 39 W. Mo. S. 1016; 41 C. sec. (2d) S. W. 1098.] request was “at that the sale made The trustee’s deed recited promissory notes.” While the recitals legal of said of the holder evidence the truth thereof prima-faeie are trustee’s deed in a 1929) they in this instance not conclusive and (Sec. S. are 30 94,R. clearly shows that the evidence overcome rebutted and are request plaintiff com pretended sale was trustee’s knowledge, its notes or with and holder owner pany, the placed The deed consent. authority, acquiescence Huber, rep delivered. it executed and at the time was record in all sale ne purchasers at the trustee’s resentative both actual notice and constructive gotiations Kieslers, had with the of trust. He testified that of the deed provisions terms and examined аnd occasions negotiations he had several during these provides The deed of trust thereof. consulted record request only upon or at power sell shall have trustee
deed of for collection other except coupons being pose, which, P'erry interest at the Coun- annually to J. These ty Bank, were sent for collection. thereof coupons by him and remittance Were collected plaintiff between com- plaintiff. correspondence Prom the made tо agents pany apparent that the Kieslers and J. H. Kiesler it is were with plaintiff purposes certain in connection loans for purchased them, from the collection of plaintiff company plaintiff approval for its interest, preparation and submission re- title when and deeds of trust and abstracts of of renewal notes they might au- be inferred that were made and it were to be newals upon maturity of payments the notes. thorized receive plaintiff any in- claim conduct that do Dеfendants act that Kieslers were authorized to or to believe led them duced they upon or foreclosing that relied plaintiff in Kieslers, dealing authority that kind apparent represented either of Kieslers show that nor does evidence acting capacity they that were stated to defendants either they held the notes and deed agents plaintiff or that themselves and deed of trust thinking did hold the notes trust, but Huber the Kieslers aware that Huber assumption, and acted advantage of situa- took assignment undue not know of did plaintiff com- reposed both the them confidence tion both conspired connived defraud pany and defendants authority to express had no J. IT. Kiesler and defendants. in- authority be trust, nor can such the deed of order a sale under agent purposes for the jilaintiff’s fact he ivas from the ferred stated. above immediately fol- company investigation In all the facts closing Kiesler bank it learned lowing Huber, sale, the foreclosure negotiations J. H. Kiesler and between paid. and how' same was money the Kieslers payment $1653.33 in remitted Following sale foreclosure plaintiff entered for which payment indebtedness