Court Opinion

ID: 9776688
Source: CourtListenerOpinion
Date Created: 2023-08-29 19:42:13.051521+00
Date Added: 2024-06-11T09:09:17.055037
License: Public Domain

BLACKMAR, Judge,
concurring in result.
In concur in the result because I am persuaded that the plaintiffs, makers of the note in issue, acquiesced in a trial before the court on an issue of damages based on the difference between the contract price of $43,550 and the value of the house as actually delivered, resulting in a judgment in their favor in the amount of $2,985 plus interest. This form of submission takes credit for payment of the note in full, even though it had not been fully paid. Under these circumstances the makers should not be entitled to bar foreclosure for the balance due. It is not necessary to decide whether an action on the note itself would be barred.
The plaintiff-makers initially filed suit in several counts claiming relief which, if granted, would wipe out all indebtedness of the defendant-holder to them and would leave a substantial balance in their favor. They were only partially successful, obtaining a jury verdict for $5,000 which was set aside because of improper instruction on damages, after which they voluntarily assented to a trial by the court of a narrow damage issue. They did not persist in asserting any claim which would have resulted in a determination of the actual amount owing on the note.
I am concerned lest the principal opinion be interpreted as saying that the holder of a note who is an original obligee may simply ignore litigation designed to resolve a dispute about the true balance. This note was given in exchange for an executory contract calling for the transfer of title to real estate and construction of a house on the property. The makers would have a defense of partial failure of consideration if the construction contract were not properly performed. The compulsory counterclaim rule, Rule 55.32(a), was designed to wrap up all issues arising out of the same factual nexus in a single litigation. The makers, plaintiffs, could probably have accomplished this by including in their petition a prayer for declaratory judgment fixing the balance due on the note. Had the parties framed appropriate issues, the aforesaid judgment for the plaintiffs in the amount of $2,985 plus interest could have been set off against the balance owing on the note, represented to be $2,749 plus interest (probably in a greater amount than on the makers’ claim). A net figure could then be determined, the balance paid, and this whole proceeding, which has troubled three courts and could involve at most a few hundred dollars, avoided. I would make it clear that persons in the position of these makers could force the holder or holders of the note to litigate the issue of the outstanding balance, and that they could use Rule 55.32(a) for this purpose. We have generally construed that rule strictly and in favor of requiring the compulsory counter*32claim. State ex rel. J.E. Dunn, Jr. & Associates, Inc. v. Schoenlaub, 668 S.W.2d 72 (Mo. banc 1984), and cases there cited.
It has been suggested that the application of the compulsory counterclaim rule would interfere with our established procedure of sale foreclosure. The holder of a note secured by deed of trust would be entitled to foreclose through publication and sale any time prior to final judgment determining the amount due, unless enjoined. If there were disagreement as to the amount owing the makers of the note or their successors could obtain temporary injunctive relief while litigating the issue, but would be required to tender the amount they admit to be due and post a bond to insure payment of the balance finally determined. See Rule 92.02(c). The mere filing of a suit would not automatically stay foreclosure.
Both sides were at fault in protracting these proceedings and it would be inequitable to deny the noteholders the opportunity to foreclose on a note on which the makers have already claimed credit for payment. But they could have protected their interest in the initial suit. I would hope that future litigants would avoid the problems this case has demonstrated.