Gray v. Shaw

• Decision Date: 31 March 1851
• Citation: 14 Mo. 341
• Parties: THOMAS GRAY & RICHARD HOWARD v. HENRY SHAW.
• Court: Missouri Supreme Court

14 Mo. 341

THOMAS GRAY & RICHARD HOWARD

v.HENRY SHAW.

Supreme Court of Missouri.

March Term, 1851.

APPEAL FROM ST. LOUIS CIRCUIT COURT.

CROCKETT & WHITTLESEY, for Appellant.

I. It is the duty of a trustee under a power, to follow strictly the terms of that power, and unless they do this their acts are void. The directions contained in a power must be strictly followed, and the directions contained in a mortgage preclude all departure from them. 1 Kent's Com. 148; Hawkins v. Kemp, 3 East, 410. Directions of a power must be strictly complied with: 4 Kent's Com. 330, note. Special power of attorney must be strictly construed: Hogg v. Smith, 1 Taunt. 356; Fenn v. Harrison, 3 Taunt. 457; 1 Hare & Wal. 382-398; Wyhham v. Wyhham, 3 Taunt. 316; Morgan v. Suman, 1 Taunt. 284. Trustees under a power must pursue their power strictly: Baldrige v. Walton, 1 Mo. R. 520; Stine v. Wilkson, 10 Mo. R. 75. Persons claiming under a power must show that it has been strictly pursued: 1 Crim. Dig. 145, n. 84; Cockerill v. Chelmley, 10 Barn. & Cres. 564; Chelmley v. Paxton, 3 Bing. R. 207; 3 Russell, 565; 10 Moore, 286; 11 Moore, 17. In all summary proceedings, the complainant must show that all requisites are complied with: Rule's Lessee v. Parker, 9 Cranch, 365; Williams v. Peyton's Lessee, 4 Wheaton, 77; Neal v. Hughes, 10 Gill & Johns. 7; 2 Har. & Gill, 346. In Anderson v. Foulke, 2 Har. & Gill, if trustee ordered to sell entire, at public sale, under decree of court, the sale will be irregular and void, but the court may nullify the sale for good reasons. Under a power to sell for installment due, a sale for one due and one not due is void. Ormsby v. Yancey, 3 Littell, 411. Where advertisement under power states a false assertion, as, that land sold on three mortgages instead of two; the sale will be irregular and void: Burnett v. Denniston, 5 Johns. Ch. R. 37. In the case of Buller v. Dunc, 1 P. Williams, 445, 455, the Lord Chancellor said, that “a declaration of trust was like the prescribing at law to the trustee, which was to be observed by him, and contained in it a prohibition to act to the contrary; it was such an affirmative as raised a negative,” &c. The case of Ivy v. Gilbert, 2 P. Williams, 13, was decided on the same principle, and affirmed by the House of Lords, although thought to be a hard case. 2 Bro. C. C. 468; and that too when a mortgagee lost the money he had advanced.

II. These cases, cited to show the strictness with which trustees must pursue their powers, the question rises, have the trustees in this case properly pursued their power? By the terms of the deed they were to sell the whole, or any part of the land; first giving twenty days' notice of the time, terms, and place of the sale, &c. Now, in this case the trustees have not complied with the terms of the power, in this: 1st. They did not sell on the day advertised. The advertisement was first inserted on the 7th of December, and in it they advertised to sell on the 28th of December, next. The adverb, next, here qualified the word December, and not the word day, and there is an ellipsis of the verb ensuing, or following. By the grammatical construction of the sentence, the property was to be sold on the 28th of December, of the following year, and as the trustees did not sell on that day, but upon another day, they so failed to comply with the power, and the sale was void. That this construction of the advertisement is correct, see the case of Port of Mobile v. State, Minor's Ala. R. 290, where the court decided, that a notice dated March 6th, and returnable in March next, is returnable in March of the following year. But admitting, for the sake of argument, merely, this construction to be incorrect, still, it tends to throw a shadow over the title, and to diminish the value of the title sold, and would prevent the purchaser from bidding for fear that the title would not pass. As courts of equity always consider any conveyance by mortgagee, to be subject to redemption if vendors had not relied on the power. 1 Pow. on Mortgages, 124. 2nd. The trustees failed to pursue their power in this, that they advertised the land for sale as an entirety--as a whole, but on the day of sale cut it up into lots and sold it in parcels. It is useless to answer, that the land sold for its value, as stated by witness. It is a sufficient reply, non in hæc fædera venit; Clark made no such contract, gave no such authority to the trustees, to sell, how and as they pleased, and when they pleased. The deed under which the trustees assumed to act, and from which they derived all their authority, expressed the terms upon which the land should be sold; and the manner therein prescribed negatived any other method of sale. They were to sell the land or so much thereof, &c.--they advertised the whole, and then sold in lots. Now, the advertisement gave no notice that they would sell it in lots, and non constat, that if they had so done, the land would have brought more than it did, for where there is one man worth $50,000, ready to buy land in large pieces, there are dozens worth $2,000, ready to buy small pieces for their own use. Persons of small means, seeing the land advertised as a whole, would not attend the sale, whereas, persons of large means, who bought for speculation, would not bid upon small lots, on account of the uncertainty of making a re-sale to advantage, and the trouble of attending to the management of property in small lots. To show the strictness with which courts regard such matters, see the following cases: If a trustee under the decree be ordered to sell entire at public sale, sell at private sale in parcels, the sale will be irregular and void, although the court may for good reason affirm his acts. Anderson v. Foulke, 2 Har. & Gill, 346. In Quarles v. Lacey, 4 Munford, 251, a sale by trustees was held invalid, on the ground that the sale was not in pursuance of the decree, by which as much was ordered to be sold as should pay the debt; which excluded the selling in small quantities which might have diminished the price obtained therefor. 4 Munford's R. 251. Where advertisement under a power, states a false assertion, as, that land is to be sold under three mortgages instead of two, the sale will be irregular and void. Burnett v. Denniston, 5 Johns. Ch. R. 37. Under power to sell for installments due, a sale for one due and one not due, is void. Ormsby v. Yancey, 3 Littell, 411. The general rule of law is, that in all summary proceedings, it must be shown that all the requisites of the law have been complied with, as in cases of sales by tax collectors, public officers, &c. 9 Cranch, 365; 4 Wheat. 77; Neal v. Hughes, 10 Gill & Johns. 7. Although the defendant, purchasing from the trustees, has acquired the legal title, yet the requisites of the deed not being complied with, he has not acquired a complete title in equity. Taylor v. King, 6 Munf. R. 358, 367. The strictness required, in this summary method of foreclosing for debt, is also seen in the case of Baldridge v. Walton, 1 Mo. R. 520; Stine v. Wilkson, 10 Mo. R. 75. That the land was worth more than it sold for, is seen from the price the equity of redemption sold for at sheriff's sale, with this legal title in the defendant, under the deed of the trustees, and but for the expenses and trouble of a suit to redeem it, would have brought still more. Upon the principles laid down and established in the books, the trustees have not complied with the terms of the power, for they have sold without advertisement, for the sale on a day not advertised is a sale without advertisement, and that is void. Gibson v. Jones, 5 Leigh's Va. R. 370. The sale is void at equity, for they did not sell in accordance with the terms of their power, in not advertising the manner and terms of sale. They did not state that they would sell in lots, but that they would sell the whole. In all these respects they have failed to comply with the terms of the power, and the sale is consequently void; and the plaintiffs, being the purchasers of the equity of redemption, are entitled to redeem.

SPALDING, for Respondents.

I. The sale to the cestui que trust, the creditor secured by the deed of trust, was legal, and is customary, in fact, it is necessary that he should be able to bid, otherwise, there would be a sacrifice. Coote on Mortgages, 124 (67 Law Lib.); 18 Vesey, 344, 346; Powell on Mortgages, 13, notes; 7 Johns. Ch. R. 50; 10 Ohio R. 204. Even trustee would get legal title, 14 Johns. 407; 8 Wend. 426.

II. The deed of the trustees to Shaw passed the title whether they advertised rightly or complied with the conditions in the deed of trust or not. A power in a mortgage to sell is good, and a sale has the equity; 6 Mo. R. 273; 67 Law Lib. 177. 1. The trustees were not mere agents or attorneys in fact, but the holders of the title, and their deed operated to pass out the title. 6 Munf. 358. This reference is directly in point. 2. Lewin on Trusts, 242 (22 Law Lib). The legal estate in the trustee has precisely the same properties and incidents as if the trustee were the usufructuary owner; see also pp. 244, 247; 14 Johns. 407.

III. The notice was sufficient. There is no prescribed form of notice for sale under a deed of trust to secure payment of debts; all that is necessary is to give such notice for the required time, as, that people shall be informed to a reasonable certainty, what is to be sold, and when, and where, &c. 12 Wheat. 570--no legal form of notice required, &c. 7 Ohio R. 16--trustee sold land in several parcels, not stating in the advertisements that he would do so-- held good. 4 Port. R. 321--the advertisement need not state the amount of the debt. 13 Mo. R. 359, Hewes v. Musick, held, that the advertisement, which was confused and bungling, and did not designate how much was due, nor to whom it was due, was sufficient; it was not shown that the notice misled any person, or was misunderstood; but the evidence showed...