Dunton v. Sharpe

• Decision Date: 17 April 1893
• Citation: 12 So. 800,70 Miss. 850
• Court: Mississippi Supreme Court
• Parties: G. W. DUNTON ET AL. v. ELLA M. SHARPE ET AL

12 So. 800

70 Miss. 850

G. W. DUNTON ET AL. v. ELLA M. SHARPE ET AL

Supreme Court of Mississippi

April 17, 1893

FROM the chancery court of Coahoma county, HON. W. R. TRIGG Chancellor.

On January 31, 1883, appellee, Mrs. Sharpe, then Ella M Riddick, executed a trust-deed on her plantation, containing 672 acres of land, in Coahoma county, Miss. to one Sherwood as trustee, to secure a debt to the American Mortgage Company, of Scotland, amounting to $ 2,000, payable December 1, 1887, with five interest coupon notes, payable respectively, on December 1, 1883, and annually thereafter. The rate of interest was ten per cent. per annum, and the deed provided that if the coupon notes were not paid as they matured, they should bear interest thereafter at the rate of ten per cent. per annum. It also provided that if accruing taxes were not paid by the grantor, the beneficiary might declare the debt due, or might elect to pay the taxes and add the same to the secured debt. The trust-deed further provided that, should the grantor fail to pay the interest as it matured, or to comply with any of the conditions of the deed the beneficiary, without notice to the said grantor, might elect to declare the whole indebtedness due, and proceed to have the property sold by the trustee under the power of sale therein contained. Default having been made, the property was sold under the trust-deed June 2, 1884, to appellee, G. W. Dunton, for $ 2,440, the amount then claimed to be due under the trust-deed, including interest and all charges. The sale was made in the name of Sherwood, the trustee. He, being a citizen of New York, was not personally present at the sale, but was represented by D. A. Scott, who was requested to advertise and make the sale. Mr. Scott was also authorized to bid, for Dunton, at the sale, the sum named. The land was sold at auction, as required, and was bid off by Mr. Scott, in the name of Dunton. There is some uncertainty in the record as to whether the sale was actually cried off by Mr. Scott, or his brother-in-law, Mr. Yerger. A deed, in due form, was executed by Sherwood, the trustee, to Dunton, the purchaser. It recites a compliance with the requirements of the trust-deed, that default had been made, that the debt had been declared due, that notice of the sale was duly given and that the land was properly sold by the trustee. The trust-deed authorized the said Sherwood, or other person appointed to act for him as trustee, to advertise and sell, in case of default.

In March, 1884, prior to the sale under the trust-deed, the lands were sold for the non-payment of taxes, and were bought in by Dunton.

At the time of the trustee's sale, the grantor, through her agent or tenant, was in possession of the property. Subsequently, on January 2, 1886, Dunton sold and conveyed the land to appellee, J. H. Field, who resided in the state of Alabama, for the sum of $ 4,000, of which $ 500 was paid in cash, and the balance was secured to be paid in annual installments of $ 500 each, with interest at the rate of ten per cent. per annum from date. Dunton, it appears, after some litigation with Mrs. Sharpe, collected the rents for the years 1884 and 1885. At the time of his purchase, Field, without objection, took possession of the property, and has since held the same.

On December 13, 1889, appellee, a citizen of Memphis, Tenn., filed the bill in this case against the appellants, F. W. Dunton, J. H. Field, and Sherwood, the trustee, seeking to set aside the sale by said trustee, and to cancel the conveyance of Dunton to Field. The bill alleges that all the recitals in the deed executed by the trustee as to the exercise of the power of sale under the trust-deed are false; that the alleged advertisement and sale were without the request of the mortgage company; that Sherwood, the trustee, did not make the sale, but that it was made through and by the direction of Dunton, who was the agent of the Corbin Banking Company, by whom the loan was negotiated for complainant; that the sale was managed and conducted throughout by D. A. Scott, the agent of Dunton, the purchaser; that Scott bid in the property for Dunton, and that it was sold for only one-fifth of its real value; that Field had full notice of the defects in the exercise of the power of sale. The bill further alleges that, while complainant executed her notes for the loan of $ 2,000, she actually received in cash only about $ 1,600. It also alleges that the pretended advertisement and sale were made immediately after a most disastrous overflow; that the entire Delta country, including the land of complainant, was submerged, causing the destruction of houses, fences and other improvements, and, particularly, that this was the case with complainant's land; that gloom and general demoralization followed, and that farming operations were practically suspended; that, owing to this, the lands were not cultivated during the year 1882, but that complainant leased the plantation for the years 1883, 1884, 1885, and would have been able to pay the debt, if an extension of time had been granted as requested. Complainant further alleges that she was very poor, and had a family of children dependent on her for support, and, therefore, was not able to contest the sale, which she alleged to be illegal, but that she gave notice to Dunton, and others in interest, that she would contest the sale as soon as she was able to do so; that she had spoken to a number of attorneys with reference to contesting the sale, but was unable to raise funds sufficient for this purpose.

The prayer of the bill is that complainant be allowed to redeem, and that the purchasers be treated as mortgagees in possession, the complainant offering to pay whatever is found due on the mortgage debt, as well as for any improvements made in good faith.

The answer of Dunton denies the material allegations of the bill as to the advertisement and sale; admits that Sherwood was not personally present, but avers that the sale was made by him under the trust-deed; avers that the property was duly advertised and sold, and that the trustee ratified the sale and executed a deed to the purchaser, who had conveyed the property to Field. The answer further avers that before the sale Mrs. Sharpe made application to the mortgage company to have the sale postponed, and for an extension of time, which was refused; that she suffered the sale to proceed and yielded possession of the property, and is estopped by laches and by her conduct to complain of the sale. Sherwood, the trustee, in his answer also denies the material allegations of the bill as above, and avers that the sale was duly advertised and made, and that he ratified the same and executed a deed to the purchaser. He avers, also, that on default of the grantor the whole indebtedness was declared to be due, and that the mortgage company, through its agents and attorneys, directed the sale to be made.

The defendant, J. H. Field, in his answer also denies the material allegations of the bill as to the regularity of the advertisement and sale, and sets up that he purchased in good faith without notice of defects or irregularities, if any, and that no objection was made to his taking possession.

Testimony was taken at length. Among other things, that of complainant tends to show that at the time of and immediately after the sale, she was in ignorance of any irregularity in respect to the same, except the failure of the trustee to be personally present, and this her attorney deemed insufficient to set aside the sale; that she then endeavored to repurchase by offering to pay the debt with interest, taxes and all charges, which was refused; that thereupon notice was given Mr. Scott, who was acting for Dunton, that she intended to contest the sale; that it was not until 1889 that she learned, through her attorney, of the alleged illegality growing out of the fact that Mr. Scott, while acting for the trustee, also represented the purchaser at the sale; that shortly after the invalidity of the sale was discovered, and she had been advised of her rights, the bill was filed. The testimony also shows that only four or five persons were present at the sale, and that only the one bid was made.

The facts in regard to the appointment of the trustee are, that the mortgage company, on being informed of the default in payment of the interest, sent the notes and trust-deed from Edinburgh, Scotland, to the Corbin Banking Company, of New York, where the debt was payable, for foreclosure and collection in the usual course. The papers were, by the Corbin Banking Company, turned over to J. P. Dosh, the attorney of the mortgage company in New York, for collection. Dosh informed Sherwood, the trustee, who was an agent of the mortgage company, that the debt had been declared due, and requested him to sell as trustee. Sherwood instructed him to have some responsible person make the sale in his name, as it was impossible for him to be present. Dosh then forwarded the notes and trust-deed to D. A. Scott, at Friar's Point Miss. Scott wrote, advising Dosh that he had posted notices of the sale, and stating that he thought it likely that the company would have to buy the lands in. Dunton informed Dosh that he would bid the $ 2,440 for the property, and, by his request, Dosh authorized Scott to make the bid. Sherwood, the trustee, being informed of the facts of the sale, executed the deed. He was connected with the Corbin Banking Company, and there was some testimony tending to show that, as agent of the mortgage company, he had authority to declare the debt due. There was no evidence introduced in regard to the posting of notices. The sale was made at the court-house door of the county, as required by the trust-deed. It...