Lucas v. American Freehold Land Mortg. Co.

• Decision Date: 19 November 1894
• Court: Mississippi Supreme Court
• Parties: E. P. LUCAS ET AL. v. AMERICAN FREEHOLD LAND MORTGAGE COMPANY

16 So. 358

72 Miss. 366

E. P. LUCAS ET AL. v. AMERICAN FREEHOLD LAND MORTGAGE COMPANY

Supreme Court of Mississippi

November 19, 1894

FROM the chancery court of Noxubee county. HON. T. B. GRAHAM Chancellor.

This is a bill by appellee against appellants to remove clouds from title, The facts alleged in the bill, so far as it is necessary to state them, are as follows: In 1883 W. B. Lucas Sr., E. P. Lucas, his wife, and W. B. Lucas, Jr., his son borrowed from appellee, the American Freehold Land Mortgage Company, of London, $ 1,250, securing the same by a trust-deed on the lands in controversy, which were owned by W. B. Lucas, Sr. The debt secured was not payable until 1887 but the deed of trust provided that if the grantors failed to pay the interest as it fell due annually, or to pay the taxes, the entire indebtedness, at the option of the mortgage company, should be declared due, and the trust-deed foreclosed. One Sherwood was named as trustee, with power of sale. The grantors failed to pay the taxes and interest due in 1884; and thereupon the mortgage company declared the whole debt due, and, Sherwood having refused to act as trustee, appointed Dinsmore trustee in his stead, who advertised and sold the lands in May, 1885, to F. W. Dunton agent of appellee, he bidding the amount of the debt, and taking the deed directly to himself, but for the mortgage company. Dunton entered and continued in possession until 1889, when, W. B. Lucas, Sr., having in the meantime died, by an arrangement with the heirs, Dunton sold to P. G. Lucas, who, as part of the trade, executed a trust-deed to G. W. Wheeler, trustee, to secure the purchase price, which was all on credit. After this sale to P. G. Lucas, the mortgage company was advised that there was some doubt as to Dinsmore's authority, as substituted trustee, to make the sale, inasmuch as the trust-deed provided that the new trustee might be appointed by the mortgage company by writing duly acknowledged and recorded, whereas Dinsmore was appointed by Austin Corbin, attorney in fact of the mortgage company, and the instrument of writing was acknowledged in London, England, not before a proper officer, but before a notary public. In view of this doubt, the mortgage company, in September, 1889, appointed one Kirksey trustee in the original trust-deed, and he advertised and sold the land, which was bought in by G. W. Wheeler for the benefit of the company. P. G. Lucas made default in the payment of the first note of the purchase money, and Wheeler advertised and sold the land, in 1892, to one Edgel, who also purchased for the benefit of the company. In the meantime, P. G. Lucas had procured quitclaim deeds from all the other adult heirs of W. B. Lucas, Sr., without the knowledge of the mortgage company, and, at the sale by Kirksey, attorneys for P. G. Lucas and the minor heirs of W. B. Lucas, Sr., gave notice that they would claim the land. Edgel, after his purchase, was denied possession of the land, and P. G. Lucas, whose tenants were on the land, took rent notes from them, payable to Brame & Dent, attorneys for the heirs of W. B. Lucas, Sr. Edgel thereupon brought unlawful detainer, and secured possession. In February, 1894, the heirs of W. B. Lucas, Sr., brought ejectment against the tenants of the mortgage company, without giving any notice, by publication or otherwise, to the nonresident mortgage company. The tenants suffered judgment by default, and the appellants, the heirs of W. B. Lucas, Sr., obtained possession by means of a writ of possession.

After setting out all the foregoing facts, the bill alleged that the claim of appellants is a cloud on complainant's title, and the prayer is for cancellation of the claim as a cloud. To this bill defendants demurred, on the grounds, among others, that the sale by Dinsmore, as substituted trustee, was void because his appointment was not made by the beneficiary in accordance with the terms of the trust-deed, and because the subsequent sale by Kirksey, as substituted trustee, was void, the debt secured by the trust-deed being then barred by the statute of limitations of six years, and because the sale was not made in conformity to law. The demurrer was overruled, and defendants appeal.

Affirmed.

T. W. Brame, for appellants.

The appointment of Corbin, attorney in fact, and his appointment of Dinsmore as substituted trustee, was in violation of the deed of trust, and void. Hartley v. O'Brien, 70 Miss. 825; 1 Perry on Trusts, § 294.

Dunton acquired no title by his purchase, and his quit claim to P G. Lucas was worthless, and the trust-deed by Lucas to him conveyed only his interest as heir. For the same reason, Edgel got no title from Wheeler's trust-deed. To cure the defect in the sale, the company attempted to appoint Kirksey trustee. The appointment of Kirksey was void, because it was...