The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918. Page: 996
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250 FEDERAL REPORTER
MASTERSON v. MISSISSIPPI VALLEY TRUST CO. et al.
(Circuit Court of Appeals, Fifth Circuit. April 15, 1918.)
MORTGAGES "6817--RIGT OF REDEMPTION FROM FORECLOSURE-FRAUD.
Evidence held insufficient to sustain a decree permitting a junior mort-
gagee to redeem from a foreclosure sale under a prior lien, on the ground
that the existence of the prior lien was concealed from him, and that
the sale was simulated and fraudulent.
Appeal from the District Court of the United States for the South-
ern District of Texas; Waller T. Burns, Judge.
Suit in equity by the Mississippi Valley Trust Company and T. M.
Pierce against Harris Masterson. Decree for complainants, and de-
fendant appeals. Reversed.
P. A. Williams, of Galveston, Tex., and H. Masterson, of Houston,
Tex., for appellant.
Sam Streetman, of Houston, Tex. (Andrews, Streetman, Burns &
Logue, of Houston, Tex., on the brief), for appellees.
Before WALKER and BATTS, Circuit Judges, and GRUBB, Dis-
WALKER, Circuit Judge. This is an appeal from a decree which
permitted the holder of bonds secured by a deed of trust on land in
Texas to redeem that land, which had been sold under a foreclosure
of a prior lien, by paying the amount of the debt, including interest,
secured by the prior lien, and the expenses of foreclosure. The bill
under which this relief was decreed contained averments to the effect
that the holder of the prior lien participated in a fraudulent conceal-
ment of it from the creditor secured by the junior one, and that the
title acquired by the prior lienholder, who was the purchaser at the
foreclosure sale under his lien, did not really vest in him for his own
benefit, but was acquired in trust for the then owner of the land, sub-
ject to the two liens mentioned. There was no right of redemption
from the sale under the prior lien, unless that sale was void or voidable
at the instance of the party allowed to redeem, or unless the plaintiff
proved one or both of the charges of fraud or simulation made by the
bill. The evidence adduced did not prove the existence of such a
state of facts. On the contrary, it showed that the foreclosure of the
prior lien was regular, being made in a way which was effective under
the law of Texas, and it failed to prove that the prior lienholder par-
ticipated in a fraudulent concealment of his duly recorded lien from
the creditor secured by the junior lien, or acquired the incumbered
property for any one other than himself.
Much was attempted to be made of the circumstance that the credi-
tor secured by the junior lien, which was a deed of trust made, not
to the creditor, but to another party, was kept in ignorance of the
:For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes
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The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918., legislative document, 1918; Saint Paul, Minnesota. (digital.library.unt.edu/ark:/67531/metadc38821/m1/1011/: accessed March 28, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.