Rowe v. Scherz

Biggs, J. This is an action on a promissory note. The answer admits its execution and pleads payment. There was a further defense which need not be set forth since it was decided against the defendant, as appears from the written findings of the court. The evidence bearing on the plea of payment is as follows: In 1891, the plaintiff sold to the defendant a farm in Ralls county for $12,000. The defendant paid $500 cash, and for the balance he executed his eleven promissory notes maturing biannually in succession from two to twenty-two years. The first ten were for $1,000 each, apd the last one for $1,500. These notes were secured by a deed of trust on the farm. The deed of trust provided that if any of said notes or the interest thereon were not paid according to their tenor or effect,” then all of the notes shall become due and payable, and the land be subject to sale for the payment of the entire debt,” etc. It contained the further provision that in case of sale “the trustee shall, out of the proceeds of said sale, pay first the cost and expenses of executing this trust, including legal compensation to the trustee for his services; and next he shall apply the proceeds remaining over to the payment of said debt and interest, or so much thereof as remains unpaid,” etc. The defendant paid the first note when it matured. He defaulted on the second, and he also failed to pay the interest on the others. The land was advertised for sale by the trustee and was sold by him on the twenty-fifth day of February, 1896. The plaintiff purchased the land at that sale at the price of $10,500. The amount of the bid, after deducting expenses, was insufficient to pay all the debt. The trustee (without consulting any [91] one) applied the amount of the bid, less the expenses of sale, pro rata on all the notes. This left a balance of over $100 on the note in suit, which was the second note of the series. The contention of the defendant at the trial was and is now, that the proceeds of the sale should have been applied to the payment of the notes in the order in which they matured. The circuit court adopted this view and entered a judgment for the defendant. On this appeal the plaintiff claims that the action of the trustee was right and that under the undisputed facts the judgment ought to have been for him. Promissory Note Secured by Deed of Trust: construction of deed. The question for decision depends upon the proper construction of the above quoted provisions of the deed of trust. The argument against the judgment of the circuit court is that by the agreement maturing the entire debt in ease default should be made as to any one of the notes, the pai'ties intended that m .case of sale under the deed of trust there should be no priority or preference in the payment of the notes. In the case of Mitchell v. Ladew, 36 Mo. 526, it was intimated in the concluding paragraph of the opinion that such a construction might obtain where the mortgage or deed of trust contained similar provisions to those found in the conveyance under consideration. The subsequent case of Hurck v. Erskine, 45 Mo. 484, presented such a state of facts and the supreme court declined to follow the intimation made in the Mitchell case. It was held that the object of the stipulation, maturing the entire debt, was to enable the trustee to make immediate application of the entire proceeds to the discharge of the whole debt which otherwise he might not be able to do where the property had been sold upon default in the payment of a note first maturing. The court in its opinion distinctly negatived the idea [92] that the effect of such a stipulation was to provide for equality in the distribution of the fund, in the event that the proceeds of the sale were insufficient to pay all the notes. This is the last decision of the supreme court, and wp must follow it regardless of our individual opinions. It follows that the judgment of the circuit court must be affirmed. All the judges concur.