Opinion
No. 36069.
February 25, 1946. Suggestion of Error Overruled March 25, 1946.
1. BILLS AND NOTES.
The word "holder" in law of bills and notes includes the payee or indorsee of a bill or note who is in possession of it (Code 1942, sec. 232).
2. MORTGAGES.
Under clause of deed of trust reciting that "holders" could appoint different trustees for any reason, a bank while it retained ownership and possession of notes secured by deed of trust was a "holder" and was authorized to appoint trustees.
3. MORTGAGES.
Under second clause of deed of trust reciting that "holders" could appoint different trustees for any reason, that in first clause authorizing appointment of other trustees, if nominated trustee was unwilling to act a bank was specifically mentioned and not in the second clause, did not indicate that word "holders" referred to holders of indebtedness other than the bank.
4. MORTGAGES.
Clause in a deed of trust authorizing a bank or any holder of indebtedness to appoint other trustees if the trustee or his successor should not be able and willing to execute the trust was not mutually destructive of succeeding clause authorizing appointment of another trustee for any reason and both would be permitted to stand.
5. MORTGAGES.
Appointment by holder of deed of trust of a substitute trustee was not affected by fact that appointee was holder's agent and attorney.
6. MORTGAGES.
Under deed of trust providing that upon condition broken, trustee should sell the property or a portion thereof to satisfy the indebtedness and requiring published notice of sale to set forth the time, place and "terms of sale," quoted phrase referred to amount, time and manner of payment for the property sold and hence fact that trustees published notice did not specify that land would be offered in 160-acre subdivisions and that a prospective purchaser might purchase any amount less than the entirety did not invalidate the sale.
APPEAL from the chancery court of Copiah county, HON. V.J. STRICKER, Chancellor.
Henley, Jones Woodliff, of Jackson, and R.E. Spivey, Jr., of New Orleans, La., for appellant.
The exact provision authorizing a substitution of trustee involved in the present case has on several occasions been construed and upheld by this Court.
McLendon v. McGee, 189 Miss. 712, 198 So. 725; Hamilton et al. v. Federal Land Bank of New Orleans, 184 Miss. 878, 186 So. 832; Hull et al. v. Federal Land Bank of New Orleans, 186 Miss. 593, 191 So. 118.
The case of Webb v. Biles, 192 Miss. 474, 6 So.2d 117, and of Biles v. Webb, 195 Miss. 369, 15 So.2d 362, deals with the right of a subsequent individual holder and is not applicable to the present case, but the reasoning contained therein is highly persuasive in the appellant's favor.
Webb v. Biles, supra; Biles v. Webb, supra.
A provision in a deed of trust authorizing the beneficiary or assignee to substitute a trustee at any time it might so desire is valid.
Thompson v. Wynne, 127 Miss. 773, 90 So. 482; Long v. State (Ga.), 1 S.E.2d 32.
There is no inconsistency between the clause authorizing an appointment of a substitute trustee in the event the original trustee was not present, able and willing to act and the clause authorizing the appointment of a trustee for any reason the holder of the indebtedness might desire.
Powers v. Interstate Trust Banking Co., 163 Miss. 30, 139 So. 318; Webb v. Biles, supra; Biles v. Webb, supra; McLendon v. McGee, supra; Hamilton v. Federal Land Bank of New Orleans, supra; Hull et al. v. Federal Land Bank of New Orleans, supra; Rea v. O'Bannon, 171 Miss. 824, 158 So. 916; Yazoo M.V.R. Co. v. First National Bank of Vicksburg, 119 Miss. 59, 80 So. 382; Miller v. Magnolia Building Loan Association, 160 Miss. 367, 134 So. 136; Williams v. Batson, 186 Miss. 248, 187 So. 236; Powers v. Canal Bank Trust Co. (Miss.), 139 So. 320; Jackson v. Watts et al., 113 S.W.2d 584; Florida Power Corporation v. City of Tallahassee, 18 So.2d 671; Hall et al. v. Hardaker, 61 Fla. 267, 55 So. 977; 65 C.J. 578, Sec. 350; 17 C.J.S. 726, Sec. 309; Black's Law Dictionary (3 Ed.), p. 1537, "Repugnancy."
The provision of the deed of trust "any holder of said deed of trust" is broad and comprehensive and includes the bank as a holder of said indebtedness.
Hull et al. v. Federal Land Band of New Orleans, supra; Commercial State Bank v. Palmerton-Moore Grain Co., 152 Wn. 89, 277 P. 389, 391; State v. Logsdon, 215 Iowa 1297, 248 N.W. 4, 6; Citizens Bank of Louisiana v. Parker 24 S.Ct. 181, 184, 192 U.S. 73, 81, 40 L.Ed. 346; Wheeler et al. v. Pullins, etc., (Fla.), 11 So.2d 303; State v. Chesapeake Beach Ry. Co., 98 Md. 35, 56 A. 385; Code of 1942, Sec. 232; 3 C.J.S. 1418.
Except where fraud is charged, the court will not inquire into motives of the parties.
Weir v. Jones, 84 Miss. 602, 36 So. 533.
The law presumes that the trustee's sale was regular and that all matters incidental thereto were properly performed.
McCaughn v. Young, 85 Miss. 277, 37 So. 839; McLendon v. McGee, supra.
The notice of sale was legal and valid in every respect, but regardless of its legality and validity, no issue thereof was raised by the pleadings, and the sufficiency of the notice of sale is not a proper question for the court to decide in this case.
Jones et al. v. Frank et al., 123 Miss. 280, 85 So. 310; Graham v. Fitts, 53 Miss. 307; Enochs v. Miller, 60 Miss. 19; McCaughn v. Young, supra; Rawlings v. Anderson et al., 149 Miss. 632, 115 So. 714; Cox v. American Freehold Land Mortgage Co., 88 Miss. 88, 40 So. 739; Smith et al. v. Allbright et al., 279 S.W. 852; Perdue et al. v. Davis et al., 10 S.W.2d 558; Loveland v. Clark, 11 Colo. 265, 18 P. 544; 41 C.J. 950; Sec. 1387.
The court should follow its previous decisions in the Hamilton, McLendon and Hull cases upholding the validity of the provision in the Federal Land Bank deed of trust authorizing the substitution of a trustee.
Guion v. Pickett, 42 Miss. 77; Webb v. Biles, supra; Thompson v. Wynne, supra; Hull et al. v. Federal Land Bank of New Orleans, supra; McLendon v. McGee, supra; Biles v. Webb, supra.
The foreclosure was not void because the substituted trustee was an attorney for the bank.
Webb v. Biles, supra; Powers v. Interstate Trust Banking Co. et al., supra; Hamilton et al. v. Federal Land Bank, supra; Jackson et ux. v. Watts et al., supra.
J.H. Garth, of Hazlehurst, and L.F. Easterling and J.E. Skinner, both of Jackson, for appellees.
The clause authorizing the substitution of trustee is wholly ambiguous and contains phrases so repugnant, one to the other, as to render the entire clause meaningless and of no effect.
Guion v. Pickett, 42 Miss. 77; Webb v. Biles, 192 Miss. 474, 6 So.2d 117; Harlow v. Mister, 64 Miss. 25, 8 So. 164; McNeill v. Lee, 79 Miss. 455, 30 So. 821; Clark v. Wilson, 53 Miss. 119; Fuller v. Davis, 63 Miss. 78; Hartley v. O'Brien, 70 Miss. 825, 13 So. 241; Allen v. Alliance Trust Co., 84 Miss. 319, 36 So. 285; Watson v. Perkins, 88 Miss. 64, 40 So. 643; Scottish American Mortgage Co. v. Butler, 99 Miss. 56, 54 So. 666; Polle v. Rouse, 73 Miss. 713, 19 So. 481; Hill on Trustees, p. 251; 3 C.J.S. 1036; 28 C.J.S. 1049.
The action of the Federal Land Bank in appointing its agent and attorney as substituted trustee rendered the foreclosure proceedings a nullity.
Webb v. Biles, supra; 19 R.C.L. 586.
The notice of sale as set out in the exhibit to the bill of complaint shows on its face that the terms of the foreclosure sale were not properly advertised. The deed of trust in this case provides that upon condition broken the property described in the deed of trust, or a sufficiency thereof, should be sold to satisfy the outstanding indebtedness. The notice of sale by the substituted trustee stated only that the entire land would be sold and did not specify that the land would be offered for sale in 160 acre subdivisions and did not specify that a prospective purchaser might bid for and purchase any amount of the property less than the entirety.
Rawlings v. Anderson et al., 149 Miss. 632, 115 So. 714; Code of 1942, Sec. 888; Constitution of 1890, Sec. 111; 19 R.C.L. 587.
Robert L. Genin, of Bay St. Louis, amicus curiae.
The Federal Land Bank had the power and authority for any reason to appoint a substituted trustee, when it so desired. There is no ambiguity in the clause in question in itself or when considered with other provisions of the deed of trust. The provisions are clear and definite and valid and have been so held by the Supreme Court of Mississippi.
Thompson v. Wynne, 127 Miss. 773, 90 So. 482; Hamilton v. Federal Land Bank of New Orleans, 184 Miss. 878, 186 So. 832; Hull et al. v. Federal Land Bank of New Orleans, 186 Miss. 593, 191 So. 118; McLendon v. McGee, 189 Miss. 712, 198 So. 725; Webb v. Biles, 192 Miss. 474, 6 So.2d 117; Biles v. Webb, 195 Miss. 369, 15 So.2d 362.
The parties to the deed of trust here had the right to contract with reference to the appointment of the trustee, and that part of their contract is valid and should be upheld.
American Bankers Ins. Co. v. White, 171 Miss. 677, 158 So. 346; Home Mutual Fire Ins. Co. v. Pittman, 111 Miss. 420, 71 So. 739; Messina et al. v. New York Life Ins. Co., 173 Miss. 378, 161 So. 462; Harris v. Townsend, 101 Miss. 590, 58 So. 529; Dundas v. Hitchcock, 12 How. (U.S.) 256, 13 L.Ed. 978; 12 Am. Jur. 791, Sec. 250, p. 794.
To affirm the finding of the court below this Court would be overruling the holding of the Supreme Court of Mississippi in several cases, particularly, Webb v. Biles, supra; Biles v. Webb, supra; Hamilton et al. v. Federal Land Bank of New Orleans, supra; McLendon v. McGee, supra; Hull et al. v. Federal Land Bank of New Orleans, supra. The rule announced in those cases is now a rule of property.
Webb v. Mobile O.R. Co., 105 Miss. 175, 62 So. 168; Forest Product Mfg. Co. v. Buckley, 107 Miss. 897, 66 So. 279; Robertson v. Puffer Mfg. Co., 112 Miss. 890, 73 So. 804; Edwards v. Davenport, 20 F. 756, 763; O'Connor v. Townsend, 87 F.2d 882, 884; Dugan v. Beckett, 129 F. 56, 63, C.C.A. 498; McConnell v. Cook National Bank of McCook, 142 Neb. 451, 6 N.W.2d 599, 602.
Argued orally by W.S. Henley, for appellant, and by J.H. Garth and J.E. Skinner, for appellees.
This is an appeal from a decree overruling a demurrer to a bill of complaint. It appears in substance from the bill that the appellees, who were the complainants in the court below, executed a deed of trust in January 1923 on the land therein described to the appellant, Federal Land Bank of New Orleans, to secure an indebtedness therein set forth, the trustee therein named being Barrett Jones.
One of the clauses of the deed of trust provides that "The said Bank, or any holder of said indebtedness, if a person, acting personally; or a corporation, acting by and through either its president, vice-president, or secretary, or other managing authority, is hereby fully authorized and empowered to appoint another and succeeding trustees in the place of the said above named Trustee, or his successors, if for any cause the Trustee in this instrument, or his successors, shall not be present, able and willing to execute this trust; or if for any reason said holders acting through the above described officers, or any one of them, should so desire, and such appointees shall have full power as Trustee herein." Default having been made in the payment of the indebtedness secured by the deed of trust and the bank being still the holder thereof, it appointed W.S. Henley as trustee in the deed of trust in the place of Jones by a written instrument, reciting that it, the bank, "does hereby constitute and appoint one W.S. Henley as trustee in said deed of trust in the place and stead of the original trustee therein named," without stating whether or not the original trustee was present, able, and willing to execute the trust. Henley then published a notice that he would, on the 5th day of April, 1935, "offer for sale and sell to the highest bidder for cash, at the courthouse in Hazelhurst, Miss., within legal hours of sale," the land described in the deed of trust. The sale was made at the time and place advertised and the land was purchased by the appellant.
It further appears from the bill of complaint that when Henley was appointed as trustee in this deed of trust and also when he made the sale thereunder, he was "the attorney and agent of the Federal Land Bank," and that Jones was present, willing, and able to execute this trust when Henley was appointed in his stead and when he sold the land as trustee, to the appellant. The bill sought the cancellation of the deed executed by Henley to the appellant pursuant to his sale of the land to it under the deed of trust.
In support of the decree of the court below the appellees say:
1. That the appointment of Henley in place of the original trustee in the deed of trust was void for three reasons: (a) the words "said holders" in the second provision of the clause of the deed of trust conferring the power to appoint a trustee in place of the trustee named therein does not include the appellant, it being included only in the first provision thereof. (b) The trustee named in the deed of trust, Barrett Jones, was present, able, and willing to execute the deed of trust, and (c) the right given to the bank to appoint a trustee in the place of Jones did not include the right to appoint as such its own agent and attorney.
2. The trustee's published notice of his intention to sell the land was fatally defective.
The words "said holders" in the second provision of the clause of the deed of trust under consideration, refer to the holders of the indebtedness set forth at the beginning of the first provision of the clause as the "said bank or any holder." The word "holder" in the law of Bills and Notes, by Section 232, Code 1942, and independently thereof, 2 Bouvier's Law Dictionary, Rawles 3d Ed., p. 1444, includes "the payee or indorsee of a bill or note who is in possession of it." The appellant bank, therefore, while it retained the ownership and possession of the notes secured by this deed of trust was the holder thereof.
But counsel for the appellees say that these words refer to holders of the indebtedness other than the bank, because in the first provision of this clause of the deed of trust the bank is specifically mentioned, and is not in the second. We are unable to follow this reasoning or to find any warrant in the deed of trust for excluding the bank from the holders referred to in either provision of the deed of trust. The grantor in a deed of trust, of course, cannot foresee, who, if any one, will succeed to the ownership of his indebtedness secured thereby; and it would be rather unusual for him to give these unknown subsequent holders of his indebtedness a wider latitude in appointing a trustee in the place of the one named in the deed of trust, than he was willing to give to the grantee therein.
Again, it is said by counsel for the appellee that there is an irreconcilable conflict between the two provisions of this clause of the deed of trust, and, therefore, the first must prevail over the second. The second of these provisions overlaps the first, but it does not prevent that from being done which the first provision specifically permits. Neither does the first provision limit the scope of the second. While it would seem that the second of these provisions rendered the first unnecessary, nevertheless the parties thereto had the right to put both of them in the deed of trust and may have had a purpose in so doing that seemed good to them. But with that we are not concerned, it being our duty to permit both provisions to stand unless they are mutually destructive, in which event one would prevail over the other. This clause of this deed of trust has been several times before us, but none of the opinions rendered thereon discussed the particular objection thereto here made. As will appear from Hamilton v. Federal Land Bank, 184 Miss. 878, 186 So. 832, Henley's appointment as substituted trustee is in no way affected by the fact that he was the appellant's agent and attorney.
The deed of trust provides that upon condition broken the trustee "shall sell said property, or a sufficiency thereof, to satisfy the indebtedness aforesaid then unpaid." The appellees' objection to the trustee's published notice of his intention to sell the land is that it "did not specify that the land would be offered for sale in 160-acres subdivisions and did not specify that a prospective purchaser might bid for and purchase any amount of the property less than the entirety." The deed of trust does not require that this information be set forth in the published notice of the trustee's intention to sell it, but only "the time, place, and terms of sale." The phrase "terms of sale" in the law of sales refers to the amount, time, and manner of payment for the property sold.
The demurrer should have been sustained.
Reversed and remanded.