Allen v. Alliance Trust Company

• Decision Date: 07 December 1903
• Citation: 84 Miss. 319,36 So. 285
• Court: Mississippi Supreme Court
• Parties: BENTON R. ALLEN v. ALLIANCE TRUST COMPANY ET AL

36 So. 285

84 Miss. 319

BENTON R. ALLEN v. ALLIANCE TRUST COMPANY ET AL

Supreme Court of Mississippi

December 7, 1903

March 1904

FROM the chancery court of Washington county HON. CAREY C. MOODY Chancellor.

Allen appellant, was complainant in the court below; the Alliance Trust Company and others, appellees, were defendants there. From a decree sustaining defendants' demurrer to a part of the bill, the complainant appealed to the supreme court.

In 1891 Joseph Wilczinski owned a plantation in Washington county Miss. He borrowed some money from the Alliance Trust Company a corporation, and to secure the loan he and his wife executed a deed of trust in the usual form upon the plantation, in which one Currier was made the trustee. The deed of trust conferred upon the trustee the power to advertise and sell the plantation in case default was made in the payment of the borrowed money, and also conferred the power to substitute a trustee in the form which is fully set out in the opinion of the court. In August, 1897, Currier died, and at his death H. C. Williamson was appointed trustee in his place by one Caldwell, attorney in fact of the Alliance Trust Company. Williamson advertised and sold the plantation under the deed of trust, and it was purchased by James Hagget and William McMaster for the benefit of the Alliance Trust Company, and by mesne conveyances the title thus acquired by them became vested in appellant, Allen. Joseph Wilczinski, the grantor in the deed of trust, died before the sale, and left a last will and testament, whereby he devised the plantation to his three sons. This suit was by Allen against the devisees of Joseph Wilczinski to cancel their claims to the land as a cloud upon his title, alleging that the Wilczinski devisees were claiming that the sale under said deed of trust by the substituted trustee, at which complainant purchased the lands, was void. The prayer of the bill was, first, to cancel the titles of the Wilczinski devisees, and to confirm appellant's title, or, failing in that, second, to be subrogated to the rights of the Alliance Trust Company, and to charge said plantation with the amount due and unpaid upon the debt secured by the deed of trust. The defendants demurred to so much of the bill as sought to cancel their title and to confirm complainant's title, and by leave of the court answered the other parts of the bill. The grounds of the demurrer are that the appointment of the substituted trustee by Caldwell as attorney in fact of the Alliance Trust Company was void as being an unauthorized delegation of power conferred by the deed of trust, and consequently that the sale by the substituted trustee was void; that the power conferred by the deed of trust upon the Alliance Trust Company, to substitute a trustee in place of the one named, was revoked by the death of Wilczinski, the grantor in the deed, and that the sale was for that reason void.

Affirmed.

Jayne & Watson, for appellant.

While the maxim delegatus non potest delegare is a well-recognized principle of the law, it gives way to circumstances and conditions which render the delegation of the power necessary. The facts and conditions in the case at bar are such as to cause this maxim of the law to give place to necessity. The mortgagor lived in the state of Mississippi, where the property involved in this suit was situated; the trustee lived in the city of Memphis, in the state of Tennessee; and the mortgagee lived in Edinburgh, Scotland, being a corporation with its domicile in that city, and was engaged in lending money on properties situated in remote parts of the earth. From the power of attorney given by this corporation to Caldwell, it will be seen that the mortgage company was doing business in many states and territories of the United States. Being a corporation it could not, in the nature of things, go to and from the different states and territories in which it did business, and consequently must have acted through its agents and attorneys in fact. Our position ought to be maintained, notwithstanding the usual rule to the effect that a power cannot be delegated by the donee thereof. Sugden on Powers, 213; 4 Cruise's Digest, 225; Perry on Trusts, 294, 511.

It is well settled both in England and America that where the donor of the power authorizes the donee thereof in the instrument of appointment to re-delegate the power, such a re-delegation of the power is good. 2 Jones, Mortgage, sec. 1778; 4 Cruise's Digest, 226, 227; Clarke v. Wilson, 53 Miss. 119.

The power vested in the donee in the case at bar authorized the cestui que trust, "or any holder of said note or notes, or their legal representatives, " to appoint a trustee in the place and stead of the trustee named in the conveyance.

The American courts, among them our own supreme court, at a very early date placed a liberal construction on the meaning to be given to the term "legal representatives." Say the court in the case of Cushing v. Gibson:

"The word legal representatives may be considered a generic description, of which we may have many species, such as heirs, aliens, executors, and administrators, administrators de bonus and administrators with the will annexed." Cushing v. Gibson, Walker, 89.

In the case of Grand Gulf, Etc., Co. v. Bryan, the court held in defining the meaning of the term "legal representatives:"

"In legal parlance the executor or administrator is most commonly called the legal representative. Still, in regard to things real, the heir is also the legal representative, and so is a devisee who takes by purchase. Heirs may be legal representatives or they may not. Suppose by will a testator should give his land to one who is not an heir; the devisee would be the legal representative, in regard to the thing devised." Grand Gulf R. R. & Banking Company et al. v. Bryan, 8 Smed. & M., 275.

In Duncan v. Walker, 2 Dallas, 205, "legal representatives" were held to mean heirs or alienees. It is well settled that the primary and original meaning of the terms "legal representatives, " "legal and personal representatives, " and "personal representatives" and like expressions, is administrators and executors; "but the terms 'legal representatives, ' 'personal representatives, ' etc., are often used in statutes and instruments of writing in a broader sense, so as to include all persons who stand in place of and represent the interest of another, either by his act or by operation of law." 18 Am. & Eng. Ency. Law [2d ed.], 814; Mutual Life Insurance Co. v. Armstrong, 117 U.S. 591; N.Y.Life Insurance Co. v. Flack, 3 Md., 341; Plummer v. Brown, 64 Cal. 429; In re Conrad Estate, 89 Iowa, 396; Walter v. Odd Fellows Mutual Benefit Society, 42 Minn., 204; Ewing v. Shanahan, 113 Mo., 194 (20 Southwestern Rep., 1065); Woodruff v. Woodruff, 44 N. J. Eq., 349 (16 Atl., 44); Bradley v. Dells Lumber Co., 105 Wis., 246 (81 N.W. 395); Carpenter v. Rannels, 19 Wall., 138; Chapman v. Nelson, 31 La., 343; Beall v. Elder, 34 La., 1099; May v. Greenwick Co., 15 Q. B. D., 59; Hogan v. Page, 2 Wall. (U.S.), 605; Hammond v. Mason & Hamlin Organ Co, 92 U.S. 724; Henderson National Bank v. Alvez, 91 Ky. 142 (15 S.W. 132); Osborne v. First National Bank of Athens, 175 Pa., 494 (34 Atlantic, 858); Railway Co. v. Fitler, 60 Pa., 124; Boston Marine Insurance Co. v. Scales, 101 Tenn., 629 (89 S.W. 743); Metzger v. Manchester Ins Co., 102 Mich., 334 (63 N.W. 650).

There is a necessity for trusting persons who cannot be personally known, in order to effectuate men's intentions in the exercise of that dominion which the law gives them over their properties. 1 Sugden on Powers, 148; Walter v. Maund, 19 Ves. Jun., 323; 1 Sugden on Powers, 151.

Harris & Powell, and Edward Mayes, on same side.

We recognize as a general rule the doctrine of delegatus non potest delegate, and we are familiar of course with the decision by this court of Hartley v. O'Brien, 70 Miss. 825, and the cases there cited. Still, we insist that under the facts of this case and the wording of the trust deed in question that the substituted trustee was legally appointed and his acts binding on all parties.

The controlling idea running through all the cases seemingly adverse to our view seems to be that the power to appoint a substituted trustee is a personal trust, and cannot for that reason be delegated. We submit that while this may be true where the donee of the power is a natural person, it has no application where the donee of the power is a corporation. One may repose confidence in the skill or honesty or capacity of a natural person, but how can such trust and confidence be reposed in a corporation, which is simply a name and which can act alone through agents, who are constantly changing by death, resignation, or election? If you should say that personal trust and confidence was reposed in the president or directors of the corporation, then in which president or which directors? Holy writ tells us "that man that is born of woman is of few days, " and in the seven years that the contract had to run, a part or all of them may or probably would die, be superseded or resign; in fact, Wilczinski did die during that time.

Again, under the provisions of the trust deed in question, the beneficiary or the holder of the notes or their legal representative has power to appoint a substituted trustee. If we understand the law, all the words of an instrument must be upheld and given a meaning, if possible. Under our decisions the legal representative is primarily the executor or administrator, but that sense cannot be applied to the words "legal representative" in this case, for a corporation cannot have an executor or administrator.

This court in the case of Cushing v. Gibson, Walker's Report, 89, says:...