Dover v. Kennerly

Holmes, Judge, delivered the opinion of .the court. This was a petition in equity by the grantor in a deed of trust on real estate made to secure the payment of six negotiable promissory notes, and it was brought against' the defendants Kennerly & Co., holders of two of the notes and purchasers at a sale under a deed of trust, praying to have -the trhstee’s deed to them set aside and annulled for the reason that one sale had already been made under a previous notice, and on the ground of fraud in making a second sale. The notes were drawn payable to John O’Failon, Jr., [473] and two of them liad been paid, two of tliem assigned by him to the firm of Kennerly & Co.; and the other two to other persons not named ; and 0?Fallon was also made a ■party defendant. It appears that when the notes held .by the Kennerlys became due, they caused the property tobe advertised for sale under the deed of trust, on the fifteenth day of March, 1861; that at the sale the plaintiff was present and bid the sum of $1,402, having previously made arrangements to gét the' money from other persons to pay the amount of his bid, but that John O’Fallon, Jr., bid one dollar more, and the property was struck off to him ; that O’Fallon failed to pay his bid, not having the money ready, but thought he could make the payment on the next Thursday; that the Kennerlys, on being informed of this by the trustee, consented, to wait; that some ten days afterwards, the money not having been paid, the trustee tendered a deed to O’Fallon and demanded payment of his bid, which he refused; and thereupon the Ken-nerlys directed another sale to be made upon a new notice, and the property was again advertised and sold on the sixth day of May following, after due publication of notice, when the Kennerlys became the purchasers for the sum of $530, and a deed was made to them by the trustee, conveying the land sold. The petition alleges that there was a fraudulent combination between O’Fallon and the Kennerlys to prevent the plaintiff from becoming the purchaser, to deter others from bidding, and to enable the defendants to obtain the land at a reduced price, and that there was a secret agreement between them, whereby the Kennerlys were to become the purchasers for the benefit of O’Fallon, on being paid the amount of their debt." It was also alleged that a payment had been made in goods from a store to O’Fallon before the assignment of the notes to the Kennerlys, of which they had notice, and which had never been credited on the notes; and some other circumstances were charged as amounting to fraudulent conduct on the part of the defendants. [474] The defendants answered, denying any fraud, secret agreement, or fraudulent combination, or notice of any payment on the notes prior -to the assignment; and they deny that any previous sale was actually made. The proofs failed to show any actual fraud on the part of the defendants. There was no evidence whatever of any secret agreement or fraudulent combination between them prior to the actual sale, whereby any person was restrained or prevented from bidding. It was proved that after the second sale had taken place and the Kennerlys had become the purchasers, they agreed with the defendant O’Fallon that they would convey the land to him on being paid the amount of their debt; but this was never done. Nor did the evidence show any payment on the notes of which the endors-ees had notice before the assignment of the notes to them. The court below rendered a judgment for the plaintiff, finding that upon an account taken of the rents and profits of the land sold while in the possession of the purchasers, and deducting the same from the amount due them on the notes which they held, there was a balance due them of $94.36; and that the holders of the other two notes, as well as the amounts due thereon, were unknown to the court: and ordering, first, that the trustee’s deed be and is hereby set aside and annulled; second, that the plaintiff deposit with the clerk of the court, on or before the first day of the next term of the court, the said suní of $94.36 in satisfaction of the balance due the Kennerlys; and, third, that if the plaintiff failed to pay the other notes to the holders thereof, on presentation, before the first day of the next term, “then this bill is to be dismissed.” We do not see any ground or principle on which such a decree as this can be sustained. It is contended for the appellants that the debt of Kennedy & Co., in consequence of the consent given by them that the trustee might wait until the next Thursday for the payment by O’Fallon of the amount of his bid, became thereby the individual indebtedness of O’Fallon, and therefore [475] that they had no right to direct a re-sale of the property. There was.no proof of any agreement beyond this in effect. Doubtless the bidder was bound by liis bid. His contract might have been enforced against him in a court of equity, if the trustee had chosen to hold him to his bargain ; or he might have been held liable at law for damages on a breach of the contract — Gardner v. Armstrong, 31 Mo. 535. But the trustee, in effect, elected to waive the bid; and on a refusal to accept a deed and pay the money, to declare it no sale. 'He might have rejected the bid on the spot unless paid at once, and then proceeded with the sale ; or he might have struck off the property to the next highest bidder. He suffered the time to pass by, and there was simply no sale. There being no sale at that time, it was proper for the trustee to advertise the property again for sale on another day—Barnard v. Duncan, 38 Mo. 170. The proceedings upon the re-sale appear to have been regular, and upon full notice. Nothing amounting to fraud, or a fraudulent agreement or combination, or any unfairness, is established by the evidence. The time may have been unpropitious, or the condition of the plaintiff unfortunate, and the property may have been sold for less than its value; but neither this nor the inability of the plaintiff.to save himself, nor his neglect to attend the sale, can- constitute a ground for the relief which he asks, in the absence of any satisfactory proof that the beneficiaries officiously or unfairly inter-meddled with the duties of the trustee, or did anything to prevent other persons from bidding at the sale, or took any unfair advantage for the purpose of getting the property at a price below its value. In Wooten v. Hinkle, 20 Mo. 290, and Neal v. Stone, 20 Mo. 294, which were cases of sales by the sheriff in partition, there was some evidence of an express agreement and a combination to prevent other persons from bidding, or of such management and contrivance on the part of those who were to reap the advantage of the sale as to prevent the attend476 anee of bidders, and hinder the bidding of those who were present. It may be conceded that, in the view of a court of equity, sales of this kind are to be put on the same footing as judicial sales, as it was intimated in Stine v. Wilkinson, 10 Mo. 94; but we have not found in this case any substantial grounds on which this court can undertake to set aside and annul this sale and deed. We think the judgment that was rendered below1 was not warranted by the facts of the case, and that it was entirely erroneous. Judgment reversed and the cause remanded. The other judges concur.