Court Opinion

ID: 9729374
Source: CourtListenerOpinion
Date Created: 2023-08-26 14:33:21.062304+00
Date Added: 2024-06-11T18:25:57.354319
License: Public Domain

JOHN C. HOLSTEIN, Judge,
dissenting.
I respectfully dissent. The appropriate disposition here is to dismiss the appeal on jurisdictional grounds. The Farmer’s Bank (bank), as the mortgagee and beneficiary under a deed of trust, is an indispensable party to this litigation in its present posture. Failure to join an indispensable party deprives the trial court of jurisdiction to enter judgment and, therefore, deprives this Court of jurisdiction to decide the appeal.
This case began, and will end, as a quiet *157title suit pursuant to sec. 527.150, RSMo,1 between the Williamses and the Kimeses. The Williamses’ title derived from an estate that executed a note secured by a deed of trust in favor of the bank. As was determined by the first appeal, the Kimes-es’ title derived from a defective trustee’s sale made pursuant to that deed of trust. Williams v. Kimes, 949 S.W.2d 899 (Mo. banc 1997) (Williams I). In the second appeal, this Court ordered that the trial court place the parties in their respective “ex ante” positions, referring to the respective positions the parties held prior to the void foreclosure sale. Williams v. Kimes, 996 S.W.2d 43, 46 (Mo. banc 1999) (Williams II). The effect of this was to void the Kimeses’ claim to possession of the real estate and at the same time restore the Williamses’ right to possession of the property. Implicit in that determination was that the rights and duties óf the bank arising from the void foreclosure sale would be resolved. Of course, the bank was not a party at that point in time.
On remand after the appeals, new issues surfaced. First, the Kimeses claimed a right to an equitable lien in the Williams property based upon the amount they had paid at the bank’s foreclosure sale. In response, the Williamses sought to add the bank as a party to resolve the bank’s rights and obligations. The trial court refused to allow the bank to be added as a party or grant the lien.2 Although the issue is not preserved on appeal by the Williamses or the Kimeses, I believe failure to sustain the motion to join the bank as a party is a jurisdictional defect.
Under Rule 52.04(a), a party “shall be joined in the action if ... in the [party’s] absence, complete relief cannot be accorded among those already parties.... ” One having a direct and immediate interest in the subject matter’of litigation and who, if not joined, would have the right to reliti-gate the question involved in the case is a necessary party. Buford v. Lucy, 328 S.W.2d 14, 19 (Mo.1959). The bank is unquestionably interested in and entitled to relitigate issues presented regarding the validity of the sale, the bank’s now revitalized deed of trust, and whether the bank has a duty to disgorge the proceeds of an apparently invalid sale. It is a necessary party.
Rule 52.04(a) mandates that a necessary party be joined if feasible. Nothing indicates that it is not feasible to join the bank in this case. The difference between a necessary party and an indispensable party is subtle, but important. An indispensable party is a necessary party who cannot feasibly be joined but whose presence is so essential that in the exercise of equity and good conscience, the action should not be permitted to proceed without joining the absent party. Rule 52.01(b). The majority wholly ignores the analysis required by Rule 52.04. Applying that analysis requires that when this Court ordered that the parties be placed in their respective position ex ante the bank’s foreclosure sale, the bank became both a necessary and indispensable party in order to resolve its lien under the deed of trust and its obligation to refund the sale proceeds, as well as to quiet title to the premises.
This Court’s jurisdiction is derivative. If the trial court lacks jurisdiction, so does this Court lack jurisdiction on appeal. Whether the bank is characterized as either a necessary party or indispensable party, failure to join the bank in this litigation is so fundamental and jurisdictional as to require its consideration sua sponte whether raised by the parties on appeal or *158not. Steiner v. Vatterott, 973 S.W.2d 191, 194 (Mo.App.1998); Spellerberg v. Huhn, 672 S.W.2d 728, 729 (Mo.App.1984); Shepherd v. Department of Revenue, 377 S.W.2d 525, 528 (Mo.App.1964), overruled on other grounds, Jackson v. Director of Revenue, State of Mo., 893 S.W.2d 831, 834 (Mo. banc 1995). This is true even though such party is present during the trial and testifies adversely to its own interests or disclaims any interest in the subject matter of the suit. Polette v. Williams, 456 S.W.2d 328, 333 (Mo.1970); Spellerberg v. Huhn, 672 S.W.2d 728 (Mo.App.1984).
The cases and authorities uniformly identify the mortgagee as a necessary party to a suit to set aside a sale under a deed of trust. Todd, Missouri Foreclosures of Deeds of Trust 8 (3d ed.1996) states, “While the trustee is a proper party in a suit involving the deed of trust, she is not a necessary party. The mortgagee is a necessary party, however.” A better statement of the rule is that while ordinarily all parties to a transaction or instrument sought to be invalidated should be made parties, this is not true if, “it is obvious that the one not joined has no interest whatever in the subject matter of the suit.” Casper v. Lee, 362 Mo. 927, 245 S.W.2d 132, 138 (1952) (holding that the trustee under- a deed of trust was not a necessary party). The significance of the failure to join the mortgagee in an action to set aside a foreclosure sale was confirmed by Huge v. Golden, 657 S.W.2d 689 (Mo.App.1983). That case concluded that failure to join the holder of a note secured by a deed of trust in an action to set aside a trustee’s foreclosure under that deed of trust deprived the trial court of jurisdiction. Id. at 692.
The majority evades the question of whether the bank is a necessary party. The closest it comes to addressing the question is when it states “The Williams suffer no injustice by the bank’s absence [because the] bank as a party would merely be required to repay the Kimeses’ purchase money and be restored as the lienholder against the 72 acres.” That is simply not true. By the bank’s absence, the Williamses have been denied the right to litigate claims and defenses they may have against the bank on its note and deed of trust. Furthermore, the bank may have claims or defenses against the Kimeses’ recoupment claims which remain unlitigated. . The Kimes claim to a lien is dependant upon the validity of their re-coupment claim against the bank. In addition, the Williams quiet title action remains unresolved insofar as the bank is concerned. These claims involving the bank’s rights and duties were not and could not be decided by the trial court without the bank being a party.3 The Williamses are prejudiced not only by being denied a determination of those issues by the trial court, but also by being denied any right to appellate review.
The majority asserts that the bank has no interest in the real estate that affects the parties. But the interests of the bank, that is, its rights and duties, create the bridge that the Kimeses must cross to establish any lien on the property. One cannot utter any of the several issues in this case without speaking of rights or duties of the bank toward the parties relating to its note and deed of trust on the subject property and the bank’s conduct in the foreclosure process. Those issues demonstrate ample interests by the bank that affect both the real estate and the parties. Because those issues cannot be finally resolved unless the mortgagee is bound by the judgment, the precedent uniformly requires the mortgagee to be made a party to an action to set aside a foreclosure sale.
*159This Court has ordered that the parties be put in their ex ante position regarding foreclosure. That means the bank must be made a party, that its right to a lien on the Williams land be determined and that, absent some now undisclosed defense, the bank should be obliged to return the proceeds of the defective sale to the Kimeses. To bypass the bank and treat the Kimeses as mortgagees of the Williamses’ property without eliminating the lien of the bank or insuring a complete refund of the proceeds of the foreclosure sale, will deny the Williamses and Kimeses “complete relief’ and leave them subject to “substantial risk of incurring double, multiple or otherwise inconsistent obligations.” Rule 52.04-(a). The bank is a necessary and indispensable party.
The majority fails to follow the cases cited above or the mandatory joinder language of Rule 52.04. The bedrock of our legal system is its reliance upon reasoned precedent and reasoned analogy from precedent. To ignore numerous well-reasoned cases or the plain language of a rule should send a shudder through our courthouses.
This case has gone on too long. I appreciate the majority’s effort to end it. But expediency must give way to our firm commitment to well-reasoned precedent and consistently applied rules of procedure. Equally important, the parties are entitled to a full and final determination of their rights and title. Without the joinder of the bank, that is impossible. For failure to join a necessary or indispensable party, where it is clearly feasible to do so, I believe the trial court and this Court lack jurisdiction to proceed. The appeal should be dismissed and final judgment held in abeyance until such time as the bank is made a party and its rights and duties under the deed of trust are fully litigated.

. All references to statutes are to RSMo 1994, unless otherwise noted.

. Assuming the trial court had jurisdiction to proceed without the bank's presence, the Williamses cannot be faulted for failure to appeal the lack of joinder. Because the trial court's judgment was favorable to the Williamses on the claim for the lien and other issues, the Williamses could not appeal. They were not aggrieved by the judgment. Sec. 512.020. The Williamses are only aggrieved by this Court’s imposition of a lien based on the Kimeses claim against the bank.

. Two obvious defenses the bank may have to an equitable recoupment claim brought by the Kimeses are the running of the statute of limitations and the doctrine of laches. Similarly, should the bank bring an action to revitalize its note and lien on the real estate, these same two defenses might be raised by the Williamses.