Opinion
No. 37625.
November 6, 1950.
1. Mortgages — sales under deed of trust — statutes — waiver.
Any portion of the statute which prescribes the manner in which advertisements and sales under mortgages or deeds of trust shall be made may be waived by the parties or changed by their contract, except that part which requires advertisement for three consecutive weeks preceding the sale. Sec. 888 Code 1942, same, Sec. 2167 Code 1930.
2. Mortgages — sales under deed of trust — lands located in two counties.
Where a deed of trust covering lands located in two different counties specifically directed that the lands located in each county shall be sold at the court house of that county, the trustee was required to sell by two sales, one in each county, as directed in the contract, and was powerless to act otherwise. Sec. 888 Code 1942, same, Sec. 2167 Code 1930.
3. Mortgages — advertisement of sales under trust deed — lands located in two counties.
Where a deed of trust covering lands located in two different counties specifically directed that the lands located in each county should be sold in that county, thereby expressly providing for two separate sales, the advertisement of each separate sale in the county where the land was situated, without also advertising in that county the sale to be had in the other county, was a full compliance with the contract of the parties and did not violate the provisions of the statute as to advertisement. Sec. 888 Code 1942, same, Sec. 2167 Code 1930.
4. Mortgages — title of mortgagor — estoppel.
A mortgagor and all persons in privity with him are estopped from denying the title which he purports to convey or encumber; wherefore the mortgagor's heirs are estopped from asserting as a ground for invalidating the foreclosure sale that it was void because the mortgagor, although he assumed to encumber the entire title, had no title to a part of the mortgaged land and only an undivided interest in the other lands included in the mortgage.
5. Mortgages — error in description — want of entire title — sale not void — interest conveyed by sale.
Where there is an error in description of part of the mortgaged property and where the mortgagor purports to convey or encumber the full interest when he owns only an undivided interest, a sale of the property and interest mentioned in the deed of trust is not void but the purchaser takes only such property and interest as the mortgagor may own.
Headnotes as approved by Hall, J.
APPEAL from the chancery court of Pike County; R.W. CUTRER, Chancellor.
Cassidy, McLain Alford, and Henley, Jones Woodliff, for appellant.
Sec. 2167 Code 1930 authorizes only one sale and requires that it be advertised in each county where the land is located.
The exercise of a power of sale under a deed of trust is a substitute for a foreclosure proceeding in equity and has frequently been referred to as a "harsh remedy". In 59 C.J.S. p. 850, the rule is stated: "The effect of a regular foreclosure sale under the power of sale in a mortgage is equivalent to a strict foreclosure by a court of equity." It, therefore, follows that in exercising a power of sale under a mortgage or deed of trust that "due process of law" must be observed and that the trustee has no more authority to foreclose "by piecemeal" under a power of sale than could be done in a court of equity. In other words, a cause of action can not be "split" in court and the equivalent thereof is not permissible under a power of sale.
The case of Layden v. Layden, 228 N.C. 5, 44 S.E.2d 340, is one of the leading cases on this question. See also Rains v. Mann, 68 Ill. 264; Bank of America v. Dames, 239 N.Y.S. 558; National Bank of Montana v. Bingham, 269 P. 162, 83 Mont. 21; Kilmer v. Gallaher, et al., 107 Iowa 676, 78 N.W. 685; Escher v. Simmons, 54 Iowa 269, 6 N.W. 274; Poweshiek County v. Dennison, 36 Iowa 244, 14 Am. Rep. 521; Clayton v. Ellis, 50 Iowa 590; Wells v. Ordway, 108 Iowa 86, 78 N.W. 806, 75 Am. St. Rep. 209; Harms v. Palmer, 61 Iowa 483, 16 N.W. 574; Hardin v. White, 63 Iowa 633, 6 N.W. 580, 19 N.W. 822.
And compare the case of Connecticut General Life Insurance Co. v. Lombard, 185 So. 260 and Cook v. Taylor, 200 Miss. 381, 27 So.2d 404.
Mortgagor did not waive requirements of Sec. 2167 Code 1930 as to place of and manner of advertisement of sale.
Counsel for the appellee in filing the special demurrer apparently concede that the sale of the property involved in this suit was not made in compliance with the provisions of Sec. 2167 Code 1930, but took the position in said special demurrer that the mortgagor waived compliance therewith by virtue of having executed a mortgage containing a provision therein that the property in Pike County might be sold at Magnolia and that the property in Walthall County might be sold at Tylertown.
Counsel apparently relies upon the case of Baker v. Connecticut General Life Ins. Co., 18 So.2d 440; Brown v. British American Mortgage Co., 86 Miss. 388, 38 So. 312; Rawlings v. Anderson, 149 Miss. 632, 115 So. 714; Hamilton v. Federal Land Bank, 186 So. 832.
Each of these cases, however, deals with the question that there may be a waiver of the provisions of law relating to the manner in which the sale is to be made, as to whether same is required to be made first in subdivisions and then as a whole or not.
Counsel for the appellees has not as far as we know cited any authority to the effect that the other provisions of Sec. 2167 Code 1930 may be waived. We respectfully submit that such provisions can not be waived even by contract.
On the contrary in the case of Polk v. S.S. Dale Son, 93 Miss. 664, 47 So. 386, 17 Ann. Cas. 754 the Court expressly held that the provision of the statute as to the place of sale would be read into and supersede the contractual provisions as to the place of sale.
The Court in the Lombard case and in the Cook case has expressly held that the provisions of Sec. 2167 Code 1930 as to the place of sale and advertisement were enacted in the public interest and such enactments, therefore, constitute an announcement of the public policy of the State of Mississippi. Under such circumstances, the parties may not contract away or waive the rights acquired by virtue of the provisions of such statute enacted in the public interest. The Supreme Court of the United States so held in the case of Brooklyn Savings Bank v. O'Neil, 89 L.Ed. 1296, 1307, 324 U.S. 697, 704.
In the case of Bank of America v. Dames, 239 N.Y.S. 558, it was held that the mortgagee and mortgagor can not by contract change the law affecting the manner in which real estate mortgages are to be foreclosed.
The Supreme Court of Mississippi has announced substantially the same rule in the case of Wilkinson v. Federal Land Bank of New Orleans, 158 Miss. 645, 150 So. 218.
Sale invalid on account of confusion and uncertainty resulting from manner of advertisement and sale. The deed of trust did not require that both sales to be advertised to take place on the same date. It is of the utmost importance that the owner of the lands be given an opportunity to attend the sale. Federal Land Bank v. Robinson, 134 So. 180.
Frequently property is of such nature that it is desirable as a farm unit and a person would not care to bid on part of the property unless he had an opportunity to also bid on the remainder of the property. The manner in which these sales were advertised made it impossible for Mr. Lee to protect his interest and rendered it unlikely that other prospective bidders would attend the sales on account of the uncertainty as to which sale would be held first and whether it would be necessary to go first to Magnolia or first to Tylertown.
The sale was also void because the advertisements stated and there was attempted to be sold the full interest in the property, whereas the mortgagor owned only a one-half undivided interest in the property. There was also forty acres of the property advertised for sale and attempted to be sold that Mr. Lee did not own at all. See Hancock v. Pyle, 191 Miss. 546, 3 So.2d 851.
Attention is also respectfully called to the cases cited in the above case, especially the case of Hesdorffer v. Welsh, 127 Miss. 261, 90 So. 3, and also to Federal Land Bank v. Collom, 201 Miss. 266, 28 So.2d 126.
Gordon Gordon, for appellee.
Appellant insists that under Section 2167 Code 1930 only one sale can be made of the land conveyed in the deed of trust as security for a loan, and he cites some cases decided in other states on this point, but no case which has been decided by the Supreme Court of this state, and it has been found that the statutes of the several states of the United States with regard to the sale of land, vary somewhat in what is required to be done in the sale of lands. Where the land is in two, or more, counties, it is provided in our statute that the parties may contract for a sale of the whole in any of the counties in which any part of the land lies. In this deed of trust the parties contracted for the sale of the land to be in each of the counties where it was located, and this is in accordance with the provisions of the statute, and the land was advertised in each of the counties.
Appellant further contends that the law required that all of the land conveyed in the deed of trust should have been advertised in each of the counties, where it was situated, which is to say that the land in Pike County should have been advertised in both Pike and Walthall Counties, and the Walthall County lands should have been advertised in both Walthall and Pike Counties, but cites no court decision passing upon a similar case. It will be seen here that Section 888 Code 1942 does not require that the land when situated in two or more counties shall be sold in one of the counties where it is located, as the statute uses the word "may", which is the same as "can" or that is to say, that the parties may elect to do so at their own election.
Mortgagor did waive requirements of Section 2167 Code 1930, as to the place of, and as to the sale of the land as a whole.
Section 2167 Code 1930 provided that all lands comprising a single tract and wholly described by the division of the governmental surveys sold under mortgages and deeds of trust hereafter executed, shall be sold in the manner provided for by Section 111 of the Constitution for the sale of land in pursuance of a decree of court or under execution. Section 111 of the Constitution providing that lands comprising a single tract sold in pursuance of a decree of court, or execution shall be first offered in subdivisions, of not exceeding 160 acres or one-quarter section, and then offered as an entirety. The Supreme Court of this state has held in the cases of Baker v. Connecticut General Life Ins. Co., 196 Miss. 701, 18 So.2d 440; Brown v. British American Mortgage Co., 86 Miss. 388, 38 So. 312; Rawlings v. Anderson, 149 Miss. 632, 115 So. 714; Hamilton v. Federal Land Bank, 184 Miss. 878, 186 So. 832, that these provisions being for the benefit of the mortgagors, they could waive them and they upheld sales made under a deed of trust brought in question in those suits, where these benefits were waived by the mortgagor.
It is clear from the reading of Section 2167 Code 1930 that any of the provisions of the said statutes can be waived except that the land shall be advertised as provided for in the statute and that no contract would be valid where it would be contrary to the provisions of the statutes. It being clear from the statute that the mortgagor and the mortgagee could provide where the land would be sold, whether in the county where located, or in the county of the residence of the mortgagor, or one of the mortgagors or whether it might be sold in one county where a part of the land was located in two or more counties.
The appellants, in their brief cite the case of Polk v. Dale Son, 93 Miss. 664, 47 So. 386, which is a case where the deed of trust provided for the sale of the land at "Dale's Store". The land being located in a different county from where "Dale's Store" was located. In that case the land had first been advertised and sold as provided in the deed of trust at "Dale's Store", and this being in the county where the land was not located, and being of the opinion that the sale was void, and it being void, the substituted trustee then proceeded to advertise and sell the land according to the provisions of the Constitution and the statutes of the state at the court house of the county where the land was located.
Anyone reading the statute would know that under the facts of the case stated that the sale was void and that is equally true in the case of the sale of the Lombard case, and the Cook case, but it is not true as to the facts in this case as the land in this case was sold in each of the counties where it was located.
All of the cases cited by the appellants in support of their contention, that the sale was void are not in point, as the facts are not the same or even similar or in line with those of this case.
Appellants contend that the sale was void since the trustee advertised the land for sale as if the mortgagor owned the whole of it instead of an undivided one-half interest. There was nothing stated by the mortgagor in his deed of trust as to the interest that he owned in the land except that he owned it all and that it was so advertised and so sold, when he was responsible for the statement that he owned the whole of the land as it was set forth in the mortgage, and in the notices of sale and he having represented that he owned it all, he was then, and his heirs are now, estopped to allege that the sale was void because of his error or the wrong that he committed, when he represented that he owned all of the land or had full title when he borrowed from the appellee. The case of Hancock v. Pyle, 191 Miss. 546, 3 So.2d 851, and the case cited under it by the appellant are not in point. For in those cases the mortgagors correctly described the land that they owned, and the trustee in advertising the land for sale erroneously described the land, and the land as mortgaged was not sold and conveyed by the trustee's deed. The mortgagor there was not responsible — for the error, as is the case here, and since the trustee made the error and the wrong land was sold the sale was void because the land mortgaged was not sold. The deed of trust executed by H.M. Lee describes the land as if he had full title.
Bill of complaint was filed by the heirs at law of H.M. Lee, deceased, seeking the invalidation of trustee's deeds executed pursuant to foreclosure sales on November 26, 1936, under a deed of trust from H.M. Lee to Magnolia Bank dated February 11, 1931. This deed of trust covered approximately 240 acres of land in Pike County and 160 acres in Walthall County, all contiguous except one forty-acre tract therein described which was separated from the remainder, and it was therein specifically provided that in the event of foreclosure the Pike County land should be sold at the north door of the courthouse of that county, and the Walthall County land should be sold at the main front door of the courthouse of that county. Default having been made in the payment of the indebtedness secured by this deed of trust, the bank requested the trustee to foreclose the same and he prepared a notice of sale of the Pike County land to be held in Pike County and a separate notice of sale of the Walthall County land to be held in that county. These notices were duly posted and published as required by the statute. The Pike County notice made no reference to the Walthall County land, and the Walthall County notice made no reference to the Pike County land, but both notices fixed the same day of sale. At the sale the bank became the highest bidder for the Pike County land and a deed therefor was executed by the trustee to the bank. The bank also became the highest bidder for the Walthall County land at the sale conducted in that county and a separate deed therefor was executed by the trustee to the bank. Both deeds of course bear the same date, and the total consideration for the two deeds was insufficient to fully satisfy the indebtedness. Copies of the deed of trust, notices of sale, and trustee's deeds are all filed as exhibits to the bill of complaint. The chancellor sustained a demurrer to the bill, the complainants did not request leave to amend, and the bill was dismissed. This appeal is prosecuted by only one of the complainants.
Appellant first contends that Section 2167, Code of 1930, which is the same as Section 888, Code of 1942, authorizes only one sale under a deed of trust and requires that it be advertised in each county where the land is located. In this connection it is argued first that the law does not authorize a sale by piecemeal, that the lien is entire and indivisible, and should be foreclosed in one proceeding. As a general proposition of law, in the absence of statute, this argument might merit serious consideration, but we are at once confronted with the express provisions of the aforesaid statute which provides, in part: "All lands sold at public outcry under deeds of trust hereafter executed, or other contracts hereafter made, shall be sold in the county in which the land is located, or in the county of the residence of the grantor, or one of the grantors in the trust deed, provided that where the land is situated in two or more counties, the parties may contract for a sale of the whole in any of the counties in which any part of the land lies." (Emphasis supplied.)
This Court has held that (Hn 1) any portion of the statute, except that part which requires advertisement for three consecutive weeks preceding the sale, may be waived by the parties or may be changed by contract of the parties. Brown v. British American Mortgage Co., 86 Miss. 388, 38 So. 312; Rawlings v. Anderson, 149 Miss. 632, 115 So. 714; Hamilton v. Federal Land Bank, 184 Miss. 878, 186 So. 832; Baker v. Connecticut General Life Insurance Company, 196 Miss. 701, 18 So.2d 438.
(Hn 2) In the absence of a contract to the contrary the quoted portion of the Code section absolutely requires that all lands sold under a deed of trust shall be sold in the county in which the land is located or in the county of the residence of the grantor or one of the grantors in the trust deed. In the instant case the parties specifically contracted that the Pike County land shall be sold in Pike County and the Walthall County land shall be sold in Walthall County. This is in accordance with the statute and only writes out of the statute that portion thereof which permits the sale to be made in the county of the residence of the grantor. They did not contract that all of the land could be sold in one of these counties, and, in the absence of such a provision, the trustee was powerless to sell the land in any manner other than that in which he did sell it. The effect of this is that the statute as well as the contract does authorize a sale by piecemeal to the extent of selling it in the two counties, and to that extent the lien is not entire and indivisible and could not be foreclosed in one proceeding in one county alone.
It is further argued in this connection that the whole property should have been advertised in both counties, in support of which appellant cites Connecticut General Life Insurance Company v. Lombard, Miss., 185 So. 260 and Cook v. Taylor, 200 Miss. 381, 27 So.2d 404. Those cases, however, involved an entirely different situation from that here presented. There the lands were situated in two counties and the parties had contracted, as the statute permits, that they could all be sold in one county, and the Court held that where a foreclosure was so conducted it was void unless the lands were advertised in both counties. There could be no confusion in such an advertisement, because any prospective purchaser would be advised by the notice of sale that all of the lands would be sold at one place, and the Court held that the mortgagor was entitled to have prospective purchasers in both counties notified of the sale by due advertisement published in both counties. In those cases the parties to the deed of trust had made it entire and indivisible and had contracted that there should be only one sale and had specifically excluded a sale by piecemeal. (Hn 3) Here the parties had expressly provided for two separate sales, and an advertisement of each separate sale in the county where the lands were situated, without also advertising the sale to be held in the other county, fully complied with the contract of the parties and did not violate any provision of the Code relating to advertisement.
(Hn 4) It is further contended by appellant that the foreclosure sales were void because it appears that the mortgagor, H.M. Lee, did not have any title whatever to one of the forty-acre subdivisions included in the deed of trust and sale, and that as to the remainder of the land he owned only an undivided one-half interest, while the deed of trust and trustee's deeds purported to convey the entire title to all of the lands therein described. This contention is wholly without merit. The deed of trust in this case warranted the full title to the land. A mortgagor and all persons in privity with him are estopped from denying the title which he purports to convey or encumber. 31 C.J.S., Estoppel, Section 14; Meyers v. American Oil Company, 192 Miss. 180, 186, 5 So.2d 218. (Hn 5) Where there is an error in the description of part of the property, and where the grantor purports to convey or encumber the full interest when he owns only an undivided interest, a sale of the property and interest mentioned in the deed of trust is not void but the purchaser takes only such property and interest as the mortgagor may own. Gaston v. Mitchell, 192 Miss. 452, 4 So.2d 892, 6 So.2d 318; Gulf Refining Company v. Harrison, 201 Miss. 294, 333-334, 28 So.2d 221, 30 So.2d 44.
The decree of the lower court is accordingly affirmed but without prejudice as to such interest, if any, as may have been owned by Mrs. H.M. Lee who did not join as a mortgagor in the deed of trust, which interest is not sought to be established in the bill of complaint now before us.
Affirmed.