Donaho et al. v. Bales
No number in original
Court of Chancery Appeals of Tennessee
Reported at 59 S.W. 409
October 6, 1900, Decided
SUBSEQUENT HISTORY: Affirmed orally by supreme court, November 17, 1900.
PRIOR HISTORY: Appeal from chancery court, Greene county; John P. Smith, Chancellor.
Suit by C. L. Donaho and others against T. H. Bales. From a decree in favor of defendant, complainant Donaho appeals. Reversed.
DISPOSITION: Chancellor's decree reversed.
COUNSEL: Park & Park, for complainant. C. T. Rankin, for defendant.
JUDGES: Niel, J.
OPINION BY: Niel
OPINION: NIEL, J.
The chief complainant is J. P. Donaho. His real estate, consisting of two lots in the town of Mossy Creek, Jefferson county, was under mortgage, of date February 17, 1894, to F. C. Kaiser, trustee, to secure a note of $230 due Kaiser Bros. The defendant, Bales, bought the mortgage note on March 20, 1899, had the mortgage foreclosed May 8, 1899, and bought the land himself at the trustee's sale, and took the trustee's deed therefor. The bill alleges: First, that Bales agreed to buy the land for complainants, and that, trusting him to carry out his undertaking, they did not look after the sale; secondly, that this land was worth between $300 and $400, and that Bales bid only $50 for it, and had the deed made to himself, and that this was an inadequate price. Both grounds were denied in the answer. The chancellor rendered a decree in favor of the defendant, and the complainant has appealed and assigned errors.
The first ground is not made out. The proof fails to sustain the allegation of trust and confidence in Bales, and the alleged undertaking on his part to buy for the complainants.
The second ground is made out. The testimony shows that the real estate in controversy, at the time defendant, Bales, purchased it, was worth between $300 and $400, and that he purchased it at the trustee's sale for $50, and took a deed absolute to himself. The price was shockingly inadequate, and the sale should be set aside on this ground.
[Non-pertinent legal material snipped.]
A decree will be entered here reversing the chancellor's decree, and setting aside the sale made to Bales under the mortgage referred to, and canceling the deed made to him in furtherance thereof. This special relief is not prayed for in the bill, but it falls within the scope of the facts alleged in the body of the bill, and may be granted under the prayer for general relief. The bill also alleged that the defendant, Bales, had sued complainant, before a justice of the peace, on the mortgage note, for the balance left after crediting the $50 proceeds of the above-mentioned sale, and prayed for an injunction against that suit. A preliminary injunction was granted, which has been kept alive by the appeal. This injunction will not be continued by the decree above directed. Of course, it results from this decree setting aside the sale that the credit on the note, put there by reason of the sale, is abrogated. The defendant has the right to sue upon his mortgage note if he desires to do so. The execution of a mortgage to secure a note does not prevent the holder of that note from suing on it and obtaining a personal judgment, unless there is some stipulation to that effect in the mortgage itself. No such stipulation appears in the mortgage involved in this case. The defendant will pay the costs of this court and of the court below. All the judges concur.
