Davis v. Bessehl

• Citation: 88 Mo. 439
• Parties: DAVIS, Trustee, Appellant, v. BESSEHL.
• Decision Date: 31 October 1885
• Court: United States State Supreme Court of Missouri

88 Mo. 439

DAVIS, Trustee, Appellant,

v.BESSEHL.

Supreme Court of Missouri.

October Term, 1885.

Appeal from St. Louis Court of Appeals.

AFFIRMED.

James O. Broadhead and Isaacc H. Lionberger for appellant.

(1) The deed of trust executed by E. B. Hudson, to secure the payment of the certificates of the Butchers' & Drovers' Bank, is a mortgage. Hoffman v. Mackall, 5 Ohio St. 130; Woodruff v. Robb, 19 Ohio St. 215; Newman v. Samuels, 17 Iowa, 534; Judge Dillon, 2 Am. Law Reg. 648; Casey v. Gibony, 36 Mo. 320; Johnston v. Houston, 47 Mo. 227; Masterson v. Ry., 72 Mo. 347; Jones on Mort., secs. 62, 1769; Perry on Trusts, sec. 602, d and f; 1 Wash. on Real Prop., 475, 483; 12 Mo. App. 497; 97 U. S. 68; 13 N. Y. 200; 15 Ill. 505; 21 Ill. 450. (2) After default in the payment of the certificates secured, the trustee was entitled to enter for breach of condition. ( a) A mortgagee may enter after forfeiture. Walcop v. McKinney, 10 Mo. 230; Meyer v. Campbell, 12 Mo. 603; Kennett v. Plummer, 28 Mo. 142; Sutton v. Mason, 38 Mo. 120; Hubble v. Vaughn, 42 Mo. 138; 43 Mo. 98; 47 Mo. 227; 49 Mo. 126, 389; 51 Mo. 55; 53 Mo. 147. ( b) A trustee may enter. Johnston v. Houston, 47 Mo. 227; Masterson v. Ry., 72 Mo. 347; Sherwood v. Saxton, 63 Mo. 82; Goode v. Comfort, 39 Mo. 313; Jones on Mort., secs. 62, 1769; Shaw v. Ry., 5 Gray, 162, 180; 1 Wash. Real Prop. *502; Perry's Trusts, sec. 602, d, i, k, aa, gg; Brown v. Due, 10 Sm. & M. 268; Jones on Ry. Securities, secs. 357, 360; Sturges v. Knapp, 31 Vt. 1; Hall v. Ry., 21 Law Rep. 138. (3) The restrictions upon the trustee's power to sell do not attach to his right of entry after forfeiture. Power of sale concurrent, not exclusive. Thornton v. Pigg, 24 Mo. 249; Sav. Ass'n v. Mastin, 61 Mo. 435; Johnston v. Houston, 47 Mo. 227; 1 Broom & H. Coms., 617; 1 Wash. on Real Prop. *501; Jones on Morts., sec. 1773; 2 Am. Law. Reg. 653, 717; 7 Ala. 823; 2 Chand. 105; 5 Gray, 162, 180; 36 Pa. St. 150; 21 Ala. 573; 2 Cowen C. C. 195; 5 Hump. 612; 10 Iowa, 408; 2 John. Ch. 25; 48 Miss. 444; 12 Mich. 180; 4 Mich. 447; 76 N. C. 378; 52 Texas, 326; 1 Wis. 420; 12 Conn. 449; 21 Wend. 273; 49 Me. 375; 39 Ark. 544. A restriction upon a power of sale will not attach to the concurrent rights or remedies. Johnston v. Houston, 47 Mo. 227; Butler v. Ladue, 12 Mich. 180; Bradley v. Ry., 36 Pa. St. 150, note; Shaw v. Ry., 5 Gray, 162, 180. (4) A tenant is in no better position than a mortgagor. 2 Coke *36, Butler's note 2; 2 Wash. on Real Prop. *226; 4 Kent, *164, *165; Moss v. Gillmore, 1 T. R. 384; 2 Ves. & B. 252.

Madill & Ralston for respondent.

(1) The action being ejectment the burden of proof was on plaintiff to show both legal title to the premises, and the right of possession as against defendant. Malone on Real Prop. Trials, 98; Kimbrough v. Benton, 3 Humph. 129; Ford v. French, 72 Mo. 250; Norfleet v. Russell, 64 Mo. 176. (2) Plaintiff does not own or hold the legal estate conveyed by Mrs. Hudson's deed of trust to James G. Barry. There was no provision in the deed for the appointment of a new trustee in case of the death of Barry, and the power of the latter was extinguished by his death. Hill on Trustees (2 Am. Ed.) 301, 211; 2 Perry on Trusts (3 Ed.) 355; Whittelsey v. Hughes, 39 Mo. 13; Graham v. King, 50 Mo. 22. A new trustee does not take the legal title until the conveyance of the same to him by the former trustee, or by some person appointed by the court. O'Keefe v. Calthrop, 1 Atk. 18; Young v. Young, 4 Cranch, C. C. 499; Hill on Trustees (2 Am. Ed.) 274-5, et seq. (3) There has been no default which entitles the plaintiff to enter. Martin v. Paxon, 66 Mo. 260; Tracy v. Gravois Ry., 13 Mo. App. 295; St. Louis, etc., v. Ry., 69 Mo. 65. (4) The agreed statement of facts shows that all the amounts due from the stockholders of the Butchers' & Drovers' Bank of St. Louis have not yet been either collected or applied to the payment of the certificates of indebtedness of said bank, as provided in the deed of trust, which, by its express terms, makes the collection and application of these amounts to the payment of the said certificates a condition precedent to any sale of this property by the trustee. This condition precedent not having yet been fulfilled, it is clear that the trustee could not now make any valid or legal sale and conveyance of this property under the power of sale contained in the deed of trust. Roarty v. Mitchell, 7 Gray (Mass.) 243; 1 Hilliard on Mortgages, p. 132, sec. 4. Such sales if now made by the trustee, would be simply void, both at law and in equity, and would pass no title to the vendee, which would enable him to maintain an action of ejectment for this property. Eitelgeorge v. Building Association, 69 Mo. 52; Long v. Long, 79 Mo. 644, 51, 52; Koehring v. Muemminghoff, 61 Mo. 403; Hill on Trustees [2 Ed.] *478, p. 698 and note; Sugden on Powers [6 Ed.] 497. The debt secured by the deed cannot be ascertained in amount until the amounts due from the stockholders of the bank are collected or found to be uncollectible; and any attempted sale by the trustee would be enjoined until the amount of the debt should be ascertained by an accounting in equity; or some other proper manner. Wilkins v. Gordon and wife, 11 Leigh, 547. (5) And for the same reasons above set forth, neither the trustee nor the scrip holders of the Butchers' & Drovers' Bank, can now maintain a bill for the foreclosure of the deed of trust, and the appointment of a receiver on the ground that there had been default in the payment of the scrip, and that the property is inadequate to secure its payment. Butchers' & Drovers' Bk. v. The Bank et al., 14 Mo. App. 597; Building Ass'n v. Platt, 5 Duer, 675; Masterson v. Ry., 72 Mo. 347; Meyer v. Estell, 48 Miss. 401. (6) Mrs. Hudson was a voluntary surety for the bank, and as such entitled to stand on the strict construction and letter of her contract. Brandt on Suretyship, sec. 21; 1 Jones on Mortgages, secs. 113-4; Wilcox v. Todd, 64 Mo. 388; John v. Reardon, 11 Md. 465.

BLACK, J.

On the first of August, 1877, Eliza B. Hudson made a deed of trust conveying the improved real estate here in question to Barry to secure certain debts. On the death of Barry, the plaintiff was appointed successor in the trust and brings this suit of ejectment to the end that he may apply the rents in discharge of the debts. The defendant is the tenant of Mrs. Hudson. The deed recites that the Butchers' & Drovers' Bank, which was then unable to meet its obligations, had made a proposition to its creditors to pay five per cent. in cash and to issue certificates of indebtedness for the balance due to them, the contents and form of which certificates are given showing that they were to be due and payable on or before the first of August, 1880, and had as security the assets of the bank amounting to seven hundred and fifty thousand dollars, and would be secured by deeds of trust on property of E. B. Hudson, M. F. Smith and M. C. Chambers, valued at two hundred and fifty thousand dollars. The proposition also states that the certificates would be received for debts due to the bank. Further provisions of the proposition will be hereafter noticed.

The deed then recites that a “sufficient number” of the creditors had accepted the proposition “so that the said Eliza B. Hudson deems it safe to execute the said instrument which is therein proposed to be executed by her,” and that the bank had executed its certificates to the amount of six hundred and fifty thousand dollars. The property is then conveyed to Barry “upon the following trusts, and no others, to-wit: First, if said certificates of indebtedness above mentioned, issued or to be issued, shall well and truly be paid and satisfied by said Butchers' and Drovers' Bank of St. Louis, on or before the first day of August, eighteen hundred and eighty, then this deed shall be void, and the same shall be released by said trustee, at the costs of said party of the first part; but if

Secondly: the said Butchers' & Drovers' Bank of St. Louis shall not, on or before the said first day of August, eighteen hundred and eighty, have paid, satisfied, taken up or extinguished the said certificates, and each and every one of them, then said trustee may, at the request of the holders of said certificates, or any of them remaining unpaid, proceed to sell the said real estate above herein described, or any part or parcel thereof, at the east door,” etc., “ provided, however, that before the said trustee shall be authorized, under the power herein given to proceed to advertise and sell the whole, or any of the above described property, all the assets of said bank which can fairly and reasonably be considered as collectable, shall first have been collected and applied to the payment of said certificates, or sold for, or received in payment of such assets, and all the amounts that are owing by, or collectible from, the stockholders of said bank, and that can, by reasonable diligence, be collected, shall have been first collected and applied to said certificates.”

The certificates were not paid on the first of August, 1880, nor were they paid in 1882, when this suit was commenced.

1. The admitted facts are that at the commencement of this suit there remained a considerable portion of the assets of the bank, due from stockholders and others, which were fairly and reasonably considered collectible, and which had not been collected or applied in payment of the certificates. It must, therefore, be, and is agreed on all hands that the trustee could not sell under the terms of the deed; for it will be seen he can only sell when all the assets which are fairly and reasonably considered collectible shall have been collected and applied, etc. The claim on the part of the appellant, however, is that these restrictions relate only to the power of sale; that they are to be regarded in the execution of that power, but...