Opinion
August 6, 1929.
1. SALE: Under Deed of Trust: Setting Aside. If the trustee conducts a sale according to the terms of the deed of trust and with absolute fairness, there is no sufficient ground for setting it aside.
2. ____: ____: Selling Only Part of Tract. If the trustee sold only so much of the land covered by the deed of trust as was sufficient to pay the debt, interest and costs, the sale cannot be set aside, in a suit brought by the assignee of the note, on the ground that it would have been more advantageous and beneficial to plaintiff and the defendant makers of the note, to have sold the whole tract.
Corpus Juris-Cyc. References: Mortgages, 41 C.J., Section 1489, p. 1025, n. 71; Section 1494, p. 1031, n. 60.
Appeal from Osage Circuit Court. — Hon. R.A. Breuer, Judge.
AFFIRMED.
J. Richard Garstang and Marion R. Garstang for appellant.
(1) A proceeding to set aside a foreclosure sale on the ground of fraud or illegality may be maintained by a bill in equity by any person interested in the subject-matter and whose right is affected by the sale. A judgment creditor by the mortgagor may sue to set aside the sale. So may a creditor of decedent, where the estate was insufficient to pay creditors, and the land sold at an inadequate price under circumstances of unfairness in the conduct of the party benefited by the sale. 41 C.J. 1023, sec. 1488; 42 C.J. 227, sec. 1867; Chew v. Baker, 133 Md. 637; Swain v. Lynd, 74 Minn. 72. A junior mortgagee or lien-holder will be protected from a fraudulent or unfair sale. 41 C.J. 1006, sec. 1461; McKee v. Logan, 82 Mo. 528; Speer v. Home Bank, 200 Mo. App. 269; Hayes v. Pace, 162 N.C. 288. A subsequent judgment creditor who has acquired a lien on the equity of redemption may redeem from the mortgagee and then foreclose the mortgage for the payment of the mortgage debt and his unsatisfied judgment, 41 C.J. 886, sec. 1102; Adams v. Keers, 46 Ont. L. 113; Kelly v. Longshore, 78 Ala. 203. (2) A trustee is agent for all parties to the transaction. He must conduct the sale to the best interest of all concerned. Where he acts unfairly to the injury of the complainant the sale may be set aside. Even though the trustee may not have acted in bad faith, where the acts of the trustee show partiality or hostility, coupled with inadequacy of price, the sale may be set aside, 41 C.J. 1024, sec. 1489; 971, sec. 1418, 606, sec. 571; Krug v. Bremer, 292 S.W. 705; Borth v. Proctor, 219 S.W. 72; Hardware Co. v. Brownlee, 186 Mo. 621; Goode v. Comfort, 39 Mo. 325; Vail v. Jacobs, 62 Mo. 130; Pollihan v. Reveley, 181 Mo. 622; Lunsford v. Davis, 300 Mo. 508. Where the trustee failed or neglected to exercise a wise and sound discretion, equity will interfere. Hanson v. Neal, 215 Mo. 256; Goode v. Comfort, 39 Mo. 325; Holdsworth v. Shannon, 113 Mo. 508; Lazarus v. Caesar, 157 Mo. 199. (3) The question of selling the property en masse or in parcels rests in the sound discretion of the trustee, and he should be guided by the effect of a division on the value of the property, his duty being to choose that course which will encourage competition in bidding and result in the largest price. 41 C.J. 973, sec. 1421; Lazarus v. Caesar, 157 Mo. 199. Where the farm is used, occupied as and naturally constitutes one farm, the property should be offered as a whole, 41 C.J. 973, sec. 1421; Lazarus v. Caesar, 157 Mo. 199, 212; Carter v. Abshire, 48 Mo. 302; Tatum v. Holliday, 59 Mo. 428; Kellog v. Carrico, 47 Mo. 157; Merrill v. Nelson, 18 Minn. 366. Sale of the property separately when it should be sold en masse, may authorize setting aside the sale, when coupled with inadequacy of price. 41 C.J. 974, sec. 1422; Lalor v. McCarthy, 24 Minn. 417.
George J. Gove and William A. Davidson for respondents.
The petition shows that the trustee, being requested at said sale to offer the said lands in fragments as well as in whole, and to use his discretion in selling said lands so as to guard the rights of defendants in retaining their homestead rights, as well as the rights of plaintiff, which request as shown by plaintiff's petition, was done by said trustee; and that the trustee sold eighty acres of said land described in the deed of trust for the sum of $700, which said sum was sufficient to pay the full amount due on said note so secured by said deed of trust including all expenses of sale; and that the trustee refused to sell the remainder of said land so secured by said deed of trust. This was proper, because the trustee could not and should not sell more of the land than was necessary to pay the debt without injury to defendants, and in so doing he guarded the rights of plaintiff as well as that of defendants, which was his bounden duty to do, and to sell no more of the land described in said deed of trust than was necessary to pay the debt and cost of sale, regardless of what the remaining lands were worth or would sell for. By selling only a part of said land so mortgaged no injury was done to plaintiff.
This is is suit in equity to set aside a sale under a deed of trust of certain land, described in the petition, in Osage County, which deed was made to secure the payment of a promissory note. A demurrer to the petition was sustained by the circuit court on the ground that the facts stated did not constitute a cause of action. From the judgment rendered on this ruling the plaintiff has appealed.
There is much wholly irrelevant matter in this petition. A summary of its material allegations is to this effect:
A promissory note was given by the defendants, the payment of which was secured by a deed of trust on the land described in the petition. A portion of the principal of said note became due and remained unpaid in September, 1924. At the February term, 1925, of the Osage County Circuit Court, the plaintiff, who had become the owner of the note by assignment from the original payee and also of the deed of trust given to secure the payment of the same, brought suit and recovered a judgment against the defendants for the amount due and unpaid on the note. Upon the rendition of the judgment the trustee, in conformity with the conditions of the deed, proceeded, in the exercise of the discretion therein conferred on him and as requested by the defendants, to offer for sale eighty acres of the tract of one hundred and sixty acres described in the deed, and the tract offered was sold for the sum of $700, which was sufficient to satisfy the full amount due on the plaintiff's judgment, interest and costs. Thereafter the trustee refused to offer the remainder of the tract for sale. This constitutes the burden of the plaintiff's complaint and the sole ground upon which it is sought to have the sale set aside. The remainder of the petition is devoted to allegations as to the plaintiff's estimated value of the land as a whole and of the advantages that would have accrued to the plaintiff and the defendants if the entire tract had been offered for sale instead of a sufficient portion of the same to satisfy the plaintiff's judgment with interest and the costs and expenses of the sale. The allegations following are pregnant with observations in support of the plaintiff's conclusions as to the result of the trustee's manner of performing his trust, but nothing is alleged which tends to show that the course and conduct of the latter was not well within the power conferred on him by the terms of the deed and manifested a purpose to regard and protect the rights of the parties in interest. Where a trustee conducts a sale according to the terms of the deed of trust and with absolute fairness, no sufficient ground exists for setting aside the sale. [Givens v. McCray, 196 Mo. 311, 93 S.W. 374; Green R.E. Co. v. St. L. Mut. House Bldg. Co., 196 Mo. 358, 371, 93 S.W. 1111.] In short, the petition contains no allegation which, under a reasonable construction, would have authorized the trial court to set aside the sale. The plaintiff has received, or if it has not accepted the amount due it from this sale, it may receive the full amount due as nominated in the judgment, and therefore the petition alleges no ground for equitable relief. The ruling of the trial court is affirmed. All concur.