Clinton v. First Nat. Bank of St. Louis, Mo.
| Citation | 176 So. 250,179 Miss. 492 |
| Decision Date | 04 October 1937 |
| Docket Number | 32794 |
| Court | United States State Supreme Court of Mississippi |
| Parties | CLINTON et al. v. FIRST NAT. BANK OF ST. LOUIS, Mo. et al |
1 MORTGAGES.
In proceedings to foreclose trust deed, consent decree containing stipulations relating to sale beneficial to various parties to suit and adjusting their rights, was a "final decree" so far as rights of parties were concerned, and, being concurred in by chancellor, would be adhered to in distribution of proceeds after sale had been directed thereunder.
2 MORTGAGES.
In proceedings to foreclose mortgage, provision of consent decree, concurred in by chancellor under which sale was directed to be had, that commissioner should hold 15 per cent, of bid to be paid in cash which he should ratably distribute to holders of bonds secured by trust deed, who had not theretofore delivered their bonds to the bondholders' committee, holding 85 per cent, of bonds as disclosed by evidence, was a material consideration of the decree and should be binding in distribution of proceeds.
3 MORTGAGES.
In proceedings to foreclose trust deed, mere disparity between actual value of property in the opinion of witnesses and price it brought at public sale was not enough to warrant setting aside chancellor's decree approving sale, even if property would bring more than it did under normal conditions.
HON. R. E. JACKSON, Chanceller.
APPEAL from the chancery court of Coahoma county HON. R. E. JACKSON, Chancellor.
Suit by the First National Bank of St. Louis, Missouri, as corporate trustee, and another, to foreclose a deed of trust securing bonds executed by R. N. McWilliams and another, wherein a sale was directed under consent decree containing stipulations beneficial to various parties to the suit and adjusting their rights, objections to sale of property were filed, and a decree, confirming the sale and directing certain payments to be made, was entered. From the decrees, J. R. Clinton and others appeal. Affirmed in part, and reversed and remanded in part.
Reversed and remanded.
J. M. Talbot, Brewer & Montgomery, Maynard, Fitzgerald & Venable, and Roberson, Cook & Luckett, all of Clarksdale, for appellants.
The First National Bank of Saint Louis was without right or power to invoke the jurisdiction of the court to foreclose the deed of trust for the reason that it was not the corporate trustee named in the deed of trust, but was purporting to act as corporate trustee because of the fact of the consolidation with it of the Liberty Central Trust Company, the corporate trustee named in the deed of trust, and, therefore, under the pleadings, the court was without power to grant any relief in view of the fact that the party asking the relief, to-wit: The First National Bank of Saint Louis, was not the corporate trustee.
It is our contention that the deed of trust is a contract, and that, unless, by its terms, there was a right to substitute another corporate trustee in the place of the Liberty Central Trust Company, then the effort of the First National Bank to act as such corporate trustee would be without force and effect, and we further contend that in no event could the First National Bank act as corporate trustee unless the power and right so to do is found in the terms of the contract, to-wit: the deed of trust.
Guion v. Pickett, 42 Miss. 77; Clark v. Wilson, 53 Miss. 119; Bonner v. Lessley, 61 Miss. 392; Sharpley v. Plant, 79 Miss. 175; McNeill v. Lee, 79 Miss. 455; Hartley v. O'Brien, 70 Miss. 825; Shipp v. Building & Loan Association, 81 Miss. 17; Allen v. Alliance Trust Co., 84 Miss. 319; Frank v. Mortgage Co., 86 Miss. 103; Cox v. Mortgage Co., 88 Miss. 88.
In the case of West v. Union Naval Stores Co., 117 Miss. 153, the court held that the power of appointing a substituted trustee is strictly construed and must be literally complied with.
Jones v. Salmon, 128 Miss. 508; Powers v. Interstate Trust & Banking Co., 163 Miss. 30.
In view of the principle of law announced in the foregoing cases, the conclusion would seem to be inescapable that the First National Bank of Saint Louis was without power or right to either attempt to foreclose the deed of trust in pais or bring a lawsuit for the foreclosure thereof on behalf of the bondholders secured thereby, for the reason that there is no language in the deed of trust which, by any reasonable construction thereof, vests any power whatsoever in the First National Bank.
It is not even contended that there was any attempt on the part of the Liberty Central Trust Company or the First National Bank in Saint Louis to in any wise comply with Section 2168.
That the consolidation of the Liberty Central Trust Company with the First National Bank in Saint Louis did not vest in said First National Bank the powers of trustee created in the deed of trust in question is very forcibly stated by the Supreme Court of the United States in the case of Ex Parte Worcester County National Bank, 279 U.S. 347, 73 L.Ed. 733.
The decree of December 18, 1936, was erroneous in that it attempted to change the provisions of the decree of April 24, 1936, fixing and determining the rights of holders of undeposited bonds.
The proposition that upon final adjournment of the term at which a final decree is rendered, the court loses control of such decree and cannot thereafter modify, change or alter it, is so fundamental that we content ourselves with citation of authorities sustaining it.
10 R. C. L. 563; 21 C. J. 706; Corinth State Bank v. Nixon, 144 Miss. 674, 110 So. 430; Carter v. Kimbrough, 122 Miss. 543, 84 So. 251; Ex Parte Stanfield, 98 Miss. 214, 53 So. 538; LeBlanc v. I. C. R. Co., 73 Miss. 463, 19 So. 211; Lane & Standley v. Wheeless & Co., 46 Miss. 666; Wiggle v. Owen, 45 Miss. 691; Shirley v. Conway, 44 Miss. 434; Commercial Bank v. Lewis, 13 S. & M. 226; Sagory v. Bayless, 13 S. & M. 153; Griffith's Chancery Practice, par. 610; Humphreys v. Stafford, 71 Miss. 135, 13 So. 865; Blum v. Planters Bank & Trust Co., 154 Miss. 800, 122 So. 784; Ledyard v. Henderson, Terry & Co., 46 Miss. 260; Cromwell v. Craft, 47 Miss. 44.
The decree of April 24, 1936, was a final decree, the provisions of which could not be altered or changed by the lower court after the adjournment of the term at which it was rendered.
There was another reason why the court was without authority to change the provisions of its former decree, namely: the provisions thereof had been agreed to by the complainants, through their counsel. Such an agreement possesses the attributes of a contract and, when duly authenticated and especially after being filed, is binding on the consenting parties, if competent to contract, and cannot be set aside or reviewed, except on a clear showing that it was obtained by fraud, or the substantial equivalent thereof, or was based on mutual mistake.
Griffith's Chancery Practice, sec. 618; Middlesex Banking Co. v. Field, 84 Miss. 646, 37 So. 139; Pipkin v. Haun, Morris, Jenkins and Steele, Freeman's Chancery Reports 254.
Shands, Elmore, Hallam & Causey, of Cleveland, for appellees.
When consolidation of state bank having trust powers is consummated with national bank, under Title 12, Section 34a, U. S. Code, the trust powers continue to exist in the national bank and state bank does not lose its identity.
First National Bank of Chattanooga v. Harry E. Chapman Co., et al., 22 S.W.2d 245; Casey v. Gilli, 94 U.S. 673, 23 L.Ed. 168; Colyar v. Taylor, 1 Cold. (Tenn.) 372; Miller v. Lancaster, 5 Cold. (Tenn.), 514; Memphis Water Co. v. Magens, 15 Lea (Tenn.), 37; Commonwealth v. First National Bank, 154 A. 379; Michigan Ins. Bank v. Eldred, 143 U.S. 293, 36 L.Ed. 162; Metropolitan Natl. Bank v. Claggett, 147 U.S. 520, 35 L.Ed. 841; Adams v. Atlantic National Bank, 155 So. 648; Ex parte Worcester County National Bank, 279 U.S. 347, 73 L.Ed. 733; Boyer v. Barnett, 15 P.2d 801.
Mississippi has no statute which prevents consolidation of state and national banks, and trust companies may exercise trust powers under Code, Section 3838.
The suit was properly brought by complainants as trustees and appellants cannot complain.
The trustees or either of them may foreclose deed of trust in pais. The trustees or either of them may file suit for foreclosure.
The suit was filed at request of holders of more than fifty per cent. in amount of bonds.
Section 2168 of Code 1930 only applies to sales in pais by substituted trustees and does not apply to sales under Chancery Court decrees.
The Chancery Court may disregard terms of deed of trust in ordering sale.
Smith v. Cleveland Steam Laundry, Inc., 131 Miss. 254, 95 So. 433; McDonald v. Vinson, 56 Miss. 497; Thompson v. Houze, 48 Miss. 444; Carey v. Fulmer, 74 Miss. 729, 21 So. 752; Pearson v. Kendrick, 21 So. 37.
The Chancery Court may name corporate trustee and having permitted First National Bank in St. Louis to sue as trustee, and expressly adjudicating that said bank is lawful trustee is recognition of said bank as corporate trustee, and equivalent to appointment.
Bull v. Degenhard, 55 Miss. 602; 26 R. C. L. 1341, sec. 205; O'Neill v. Henderson, 60 Am. Dec. 568.
The appointment of new trustee without notice is valid.
26 R. C. L. 1278, sec. 128; Dyer v. Leach, 27 P. 598; Dodge v. Dodge, 130 A. S. R. 523.
The decree of April 24, 1936, operated as an adjudication of the rights of appellants.
The exclusive right to bring suit vested in trustees, for equal benefit of all bondholders.
The bondholder cannot sue, unless trustees refuse to sure, or are guilty of fraud or negligence.
19 R. C. L. 521, sec. 321; Seibert v. Ry. Co., 53 N.W. 1134; Runsey v. Ry. Co., 55 S.W. 615; Ry. Co. v. Fosdick, 106 U.S. 77, 1 S.Ct. 10.
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