Opinion
No. 33801.
October 2, 1939. Suggestion of Error Overruled October 16, 1939.
1. MORTGAGES.
Under deed of trust empowering holder of indebtedness to appoint another and succeeding trustee in the place of named trustee or his successors, holder of indebtedness had the same right to appoint a new substituted trustee as successor to substitute trustee first appointed, as it had to appoint the first substituted trustee in place of the original trustee.
2. MORTGAGES.
Under deed of trust empowering holder of indebtedness to appoint another and succeeding trustee in the place of named trustee or his successors, where holder of indebtedness appointed a substitute trustee and subsequently, by instrument in the same language which did not mention the first substitution, appointed another substitute trustee, the second appointment constituted the second substituted trustee successor of the first, with full power and authority to sell the land.
APPEAL from the chancery court of Winston county; HON. J.D. GUYTON, Special Chancellor.
R.W. Boydstun, of Louisville, for appellants.
From the allegations of the bill and the admissions of the answer in this cause all the rights, title and duties that ever rested in and upon R.W. Boydstun as trustee remain in her. The Federal Land Bank has never made an effort to remove the trusteeship from R.W. Boydstun and place same in another.
The neat point here, attempted by appellant, to be placed before this court is this: "At the time of the attempted sale by Neal Prisock, substitute trustee, who held the legal title to the property." We have studied the case a great deal and find, in our opinion, this point as here presented, has never been passed upon by any court in the United States and the question here is one of "First impression" and should be fully settled by this court.
Par. 2, Page 128, Code of 1930, is in this language: "The mortgagor, or grantor shall be deemed the owner of the legal title of the property conveyed in such mortgage or deed of trust, except as against the mortgagee and his assigns, or the trustee after breach of the condition of such mortgage or deed of trust."
This statute certainly places the title of the property in the trustee, after the condition of the trust was broken, and now the one question is, "Who is the trustee?"
It is a well known principal of our law that when title to real estate is once vested in any person it there remains until there is some active divestment of the title to the property from the owner and placed in another. There was never an effort made to divest R.W. Boydstun of the title as trustee in this instance.
Brown v. Bartee, 10 S. M. 268; Freeman et al. v. Cunningham, 57 Miss. 67; Stadeker v. Jones, 52 Miss. 729; Wolfe v. Dowell, 13 S. M. 103; Smith v. Otley, 26 Miss. 291.
The title to the property being in the trustee is fully recognized in the case of Heard v. Baird et al., 40 Miss. 793.
Some time about 1860 the State Legislature passed an act providing that payment of a debt secured by a trust deed extinguished the trust deed and revested the title in the mortgagor. This provision has been brought forward, Code 1930, Page 152, Par. 2, but this only provides another way of divesting the title from the trustee and does not deprive the trustee of any rights or powers. We have searched the authorities on the question of sales by unauthorized trustees very carefully and find only one case in point.
McNeill v. Lee, 79 Miss. 455, 30 So. 821.
For the purpose of this brief so far we have not denied the right of the Federal Land Bank to substitute as many trustees as it may desire, though we do not admit generally that the trust deed gave such right without a reason therefor, but our contention is that said bank never attempted to exercise the right to appoint a trustee in the stead of R.W. Boydstun, and hence R.W. Boydstun is still trustee and has the title to the property as trustee and that the attempted sale by Neal Prisock, substitute trustee, is void.
E.M. Livingston, of Louisville, for appellee.
The deed of trust provides that if for any reason the Bank or said holders, acting through their officers, or any one of them, should so desire they may appoint successor trustees. There is nothing mentioned in the deed of trust as to whether it shall be a legal reason or not and it is unimportant here as to whether the Bank should have had a legal reason, but if the language of the deed of trust should be construed that there should be a legal reason, then the Bank certainly had a legal reason to appoint someone other than Mr. Boydstun. It is unnecessary in the appointment to state that the substituted trustee is being appointed in the place of any given trustee or substituted trustee. It is simply necessary to state that he is being substituted as trustee or at least that is true under the contract between Mr. Hull and the Bank.
The appointment of Neal Prisock as substituted trustee divested the title out of Boydstun in the same manner that the appointment of Boydstun divested the title out of Barrett Jones and if one appointment failed of its purpose the other likewise failed for the same reason. Appellants make no contention here that the title was divested out of Barrett Jones and vested in Boydstun, but admit and argue to the court that this is a valid appointment. We are unable to reconcile appellant's theory in this case when they take the position that one appointment is a valid appointment and binds all the parties and further take the position that a subsequent appointment containing the exact same provisions is a void appointment.
Thompson v. Wynne, 90 So. 482.
The power granted the Bank or the holder of the indebtedness was that it or they should have full authority to appoint a trustee or succeeding trustees when they so desired. It was desirable that the Bank appoint a substituted trustee at the time Mr. Prisock was appointed, and it is immaterial whether they had a reason for so doing or not. All that was necessary under the powers granted was that the Bank desired to appoint a trustee in the place of Mr. Boydstun. This power was exercised and the instrument appointing Mr. Prisock gave to him all of the powers vested in the original trustee and likewise gave him all of the powers that were vested in R.W. Boydstun as substituted trustee.
The sole question presented for decision on this appeal is whether a sale of land is valid when made by a second substituted trustee where the appointment of the first substituted trustee is of record and outstanding at the time of the second appointment, and where the language of the second appointment is silent as to whether the succeeding trustee named therein is appointed in the place of the original trustee or in place of the substituted trustee first appointed.
Default was made in the payment of an indebtedness owing by appellant, H.H. Hull, unto the appellee, The Federal Land Bank of New Orleans, which was secured by a deed of trust on certain lands, and which instrument provided that the Bank or any holder of the indebtedness was authorized and empowered to appoint another and and succeeding trustee in the place of the trustee therein named, or his successors, if for any reason such trustee named in the instrument, or his successors, shall not be present, able and willing to execute the trust, or if for any reason said holders, etc., should so desire; and further provided that such appointee, shall have as full power as the trustee therein named.
The original trustee named was Barrett Jones. On May 5, 1932, the bank substituted R.W. Boydstun as trustee by a proper instrument of writing duly recorded, and which quoted the provisions of the deed of trust providing for such substitution, and also recited the desire of the Bank in that behalf. On February 8, 1933, the Bank executed and caused to be duly recorded another instrument in the same language as the first substitution, with the exception that it named Neal Prisock as substituted trustee.
The latter instrument, as heretofore suggested, did not expressly stipulate whether Prisock was substituted in the place of Jones or in the place of Boydstun, but we are of the opinion that the language employed in the deed of trust conferred upon the Bank or other holder of the indebtedness the same right to appoint Prisock as a succeeding trustee to Boydstun as it did to appoint Boydstun as substituted trustee in the place of Jones; and that the second appointment had the effect of constituting Prisock the successor to Boydstun as trustee with full power and authority to make the sale in question. The chancellor so held.
Affirmed.