Offenstein v. Gehner

GANTT, P. J. This is an action in two counts, in the first of which plaintiff states that by his deed of [321] trust of the 22nd of July 1896, he conveyed certain real estate in the city of St. Louis to the defendant, Gehner, in trust, to sell the property and pay to the holder or holders of certain notes the sum of $15,000, with interest and costs of sale; that Gehner subsequently sold the property for $25,000, “Leaving after the payment of said notes in said deed of trust and the costs of sale, a balance of $5,000, which defendant has declined and refused to pay although demanded. ” The second count alleged that on the 4th of August, 1897, plaintiff conveyed to the defendant in trust for plaintiff and others, a large tract of real estate in the city of St. Louis; that said conveyance was made to said defendant for the purpose of selling said property and paying certain notes in said deed of trust described, amount not stated; that defendant in June, 1904, sold the property for $7,700, paid the notes in the deed of trust described, and costs of sale, amount not stated, leaving a balance of $5,000' in his hands, which he neglects and refuses to pay plaintiff, although demanded. The answer was a general denial of each and every allegation in the petition and the two counts thereof. As a further defense defendant alleges that the deed of trust executed by the plaintiff and his wife, dated the 22nd of July, 1896, was in trust to secure the payment of a principal note for $15,000' and six interest notes for $450 each, with a covenant therein on the part of the mortgagor to cause all taxes and assessments, general and special, to be paid whenever imposed upon the property, and that all sums, with-interest, which the trustee or the holder of the notes should expend to protect the title or possession of the premises should likewise be secured by the deed of trust; that subsequently the plaintiff and his wife executed a second deed of trust on the property to secure a principal note of $10,000 and interest; that plaintiff made default in the payment of the notes secured by the said [322] deeds of trust, allowed the taxes, general and special, to become delinquent, and judgments to be rendered thereon y that for the protection of the title, the holder of the notes advanced the money to pay the taxes, liens and judgments and that sale was made under the first deed of trust according to its terms. The trustee then sets forth an itemized account charging himself with the amounts realized for the property and taking credit for the payments made under the terms of the deed of trust; each item of credit being set forth in detail, and showing as the result of the account, that more than $2,000 of the debt secured by the deeds of trust remained unpaid, and is still due the creditors by the plaintiff. In his reply the plaintiff did not surcharge and falsify a single item of the account so set forth, but made a general denial. The cause was referred and when called for a hearing before the referee, the plaintiff declined to introduce any evidence. Whereupon the defendant also submitted the case upon the pleadings and asked for judgment in his favor. The referee made the following report and judgment: “There being an utter failure to offer any evidence whatever of the matters, or any part thereof, set out in the petition, and there being no allegations in the answer which can be construed or tortured into an admission upon which the plaintiff would be entitled to judgment, and inasmuch as all matters alleged in the petition are met with' a. general denial in the answer, there is in the judgment of the referee but one finding that can be made, and that is, that judgment be entered in favor of the defendant and the costs awarded against plaintiff. ’ ’ The plaintiff filed exceptions in the circuit court to the report of the referee, but the court overruled his exceptions, confirmed the report and rendered judgment for the defendant. In his motion for new trial, the plaintiff does not specifically refer to his excep [323] tions to the referee’s report, nor does he assign the overruling of his exceptions as a ground for new trial. He does assign-that the judgment “is against the pleadings in the ease” and against the law. The plaintiff appeals. I. The only ground upon which the plaintiff seeks to reverse the judgment of the circuit court is his assumption that the defendant stood in the relation of an ordinary debtor to him, and that the disbursements by the defendant as pleaded in his answer amounted to a plea of payment and therefore the burden was on the defendant to prove the correctness of his account as trustee in the first instance. 'We think the circuit court unquestionably was right. As meager as the plaintiff’s petition is, it discloses that the defendant stood in the relation of trustee to the plaintiff and the holders of the notes secured by the two deeds of trust. The petition did not set out the terms of the trust, did not show the amount of the debt, interest and costs, and furnished no substantial basis upon which to determine a surplus. But the defendant in his answer set forth the full purport of the two deeds of trust, the property, the amount of the debt, the interest and the covenant on the part of the plaintiff that if the holder or holders of the notes or the defendant or his successor in said trust should pay out moneys to protect tbe title to the said premises, then all such moneys should be secured by the deeds of trust. The defendant then showed that there had been a default in the payment of the notes and interest and a request upon the part of the holder that defendant should sell the said property to satisfy the said notes, interest and charges, and that he did sell the said premises in pursuance of his powers as trustee, stating the amount received for each piece of property, and then set forth a full itemized account of the debt, interest and tax charges, both general and special, and struck a balance, from which [324] it appeared that after applying the proceeds, there was still $2,000 unpaid upon the principal note secured by the second deed of trust. The contention of the plaintiff is and was that this was a plea of payment. We do not so understand the law. We think it was an accounting by a trustee, and that plaintiff’s remedy, if any, against the defendant, was to surcharge and falsify the items of the account thus rendered, and that the burden was upon him to establish a breach of the trust on the part of the defendant. The presumption is that the trustee has acted in good faith, and has done his duty and the burden is on the plaintiff to allege and prove the contrary. In 27 Amer. and Eng. Ency. Law (1 Ed.), 293, it is said: “In drawing a bill against the trustee, the pleader must bear in mind that there is a presumption that the trustee has performed his full duty, and he must set forth specifically all facts necessary to rebut this presumption.” We think that the plaintiff had the laboring oar and that when he failed to offer any evidence to substantiate the allegations of his petition, the referee correctly held that he had failed to make his case, and therefore found against him. And we think the circuit court properly confirmed the report of the referee, and that plaintiff has no cause to complain whatever. The contention that the plaintiff should have been allowed to take a nonsuit is without merit, as the plaintiff had ample time to take a nonsuit before the final judgment was rendered against him, but made no request to be allowed to do so. The judgment of the circuit court is therefore affirmed. Burgess and Fox, JJ., concur.