McPherson v. Davis

Decision Date08 March 1909
Docket Number13,584
CourtMississippi Supreme Court
PartiesOLIVER S. MCPHERSON v. JOHN A. DAVIS ET AL

FROM the chancery court of Attala County, HON. JAMES F. MCCOOL Chancellor.

McPherson appellant, was complainant in the court below; Davis and others, appellees, were defendants there. From a decree in defendant's favor complainant appealed to the supreme court. The facts are fully stated in the opinion of the court.

Reversed and remanded.

S. L Dodd and May, Flowers & Whitfield, for appellant.

In the first place, we say that the court below erred in sustaining the demurrer to the amended bill.

The facts as set out in the bill appear to be so complicated, and present grounds for so many different possible views to be adopted by the court that it was plainly impossible for the complainant to plant himself upon any particular set of facts and ask the court for that relief only which in his judgment should be given him. It was his duty to state all the facts in order that the court might, for itself, determine to which relief he was entitled. If, under the facts charged, he was entitled to any relief whatsoever then the demurrer should have been overruled.

Keeping in mind that no fraud was intended by any party to the transaction we find the facts to be as set out in the bill that Davis, trustee, did cry off this land under his first lien and this appellant, O. S. McPherson, bid therefor the sum of $ 1510. The bidder offered to pay then and there whatever was necessary to satisfy the senior lien and to pay all the costs of the foreclosure. It was understood and well known by all the parties interested that McPherson held the second lien and that the excess of his bid over the amount necessary to satisfy the debt secured by the first lien and the costs of the foreclosure would go to him, and be credited on the indebtedness of Johnson to him. There was no necessity for the actual handling in cash of this excess; there was no necessity for McPherson to pay this money into the hands of the trustee in order that it might at once be handed back to him. This excess would have been credited upon the claim of the holder of the junior lien. The trustee should have accepted the amount necessary to pay the debt due the Kelly Banking Company and the costs of the foreclosure and should have made McPherson a deed. The said purchaser would then have been compelled to credit his claim by amount of the excess. To hold that this was the duty of the trustee under the circumstances it is not necessary to believe that the trustee desired to practice any fraud upon anybody. In fact we are considering the allegations of the bill with the charges of fraud eliminated. The trustee was evidently mistaken in his duties at this juncture; he doubtless thought as trustee he would be best protected by collecting the cash and then redelivering it. This does not alter the case however. There is no reason, as far as the allegations of this bill show, why he should not have collected the purchase price in this way. It may be that there are reasons which he had before him at that time, but if there are such reasons they should be furnished in an answer Certainly these facts cannot be admitted and the complainant at the same time denied any relief. It is usual for the payment of the purchase price to be made in this manner when the successful bidder is the holder of the next lien. It is the business way to do it. The trustee represents the owners of the property as well as the beneficiary. To credit the indebtedness of the owner of land by the amount of the excess in cash to them. Especially in the case at bar was this the proper way to adjust it. There had been an agreement between the parties to sell at the same time under both instruments. There was nothing wrong in such an agreement, but it was made in the hope that thereby the property could be made to bring its full value. The best bidder at a foreclosure sale is nearly always the holder of the second lien. He is trying to protect his rights and make the property bring enough to pay his debts, too. All the complainant is asking here is that he be permitted to purchase for $ 1,510 and that he have the deed to the land. It is difficult to see why this should be objected to by any of the defendants except Lowenberg. He bought for $ 1,000 and got a deed. As far as Mrs. Johnson and her daughter are concerned no reason shall be conjectured why they should not prefer this course. They would have something over $ 750 of their indebtedness to McPherson paid thereby and at the same time would have their indebtedness to the Kelly Banking Company paid and all costs of the foreclosure. The court will observe that the deed of trust to McPherson and McNeill embraces certain personal property consisting of horses, about seventeen in number. These are liable for the balance due on the McPherson indebtedness. Mrs. Johnson and her daughter were therefore interested in having the indebtedness to McPherson & McNeill reduced as much as possible.

If the Kelly Banking Company had been the purchaser it would not have been necessary to put the cash into the hands of the trustee.

Crediting the note of the mortgagor would have been the same as the payment of the cash. Jacobs v. Turpin, 83 Ill. 424; Beal v. Blairi, 33 Iowa 318; Mead v. McLaughlin, 42 Mo. 198.

And again after Davis, the trustee, refused to make appellant a deed, McPherson then offered to pay the amount to the Kelly Banking Company together with the costs of the foreclosure in extinguishment of the lien held by the said Kelly Banking Company. He ascertained the amount and tendered it in gold and yet the trustee would not accept it, but afterwards proceeded to make another sale. It is charged that Lowenberg, the purchaser who did get a deed knew about this offer to pay the debt and the tender of the money. This would have disposed of the first lien and strengthened McPherson's security, raising his to the rank of senior. But Davis refused to accept his money. Assuming that he had no fraudulent intent the fact remains that he failed to do what the law required him to do. The failure to do this avoids the sale afterwards made to Lowenberg and if the court should hold that McPherson is not entitled to a deed, certainly this sale should be set aside and the land sold under the decree of this court.

"No valid sale can be made under a mortgage or trust deed after the debt secured has been paid, or after a sufficient tender of the whole amount due." 13 Cyc. 1452.

And again, in order to strengthen his right to a deed to the said land, the said McPherson bid it in at the sale under the junior trust deed for the sum of $ 10. He understood this to be a purchase subject to a prior lien if he did not have a deed under the foreclosure of such prior deed. He therefore has a deed to the land made by the substituted trustee in the second instrument and the right to a deed from the trustee under the first mortgage. This too, without any regard to whether the transaction was fraudulent. If the first sale was a valid one then he is entitled to a deed from the trustee under that sale. If he got no title under that sale then the sale to Lowenberg is void, because the trust deed had been, in the eyes of a court of equity, satisfied by the tender of the amount due under it intervening the first sale and the sale to Lowenberg. If he is not entitled to a deed from Davis and the sale to Lowenberg is void, then McPherson has a title to the property under the sale by Dodd, trustee in the second mortgage.

"If the purchaser under a power of sale, fearing that the sale was irregular, causes the land to be resold, and again buys it in, such second sale does not estop him from asserting the validity of the first sale." Jones on Mortgages (6th ed.), § 1902.

But if McPherson was entitled to no relief based upon the facts set out in the preceding paragraphs, it certainly cannot be denied that he is at least entitled to the excess of Lowenberg's bid over the amount necessary to satisfy the first mortgage. Under no view of the case can he be denied this much. He held the second lien.

Mayes & Longstreet, for appellees.

1. It is not shown that any consideration whatever moved to the Kelly Banking Company, for the so-called agreement to sell under both trust deeds at the same time--an agreement (or rather, an undertaking, apparently) which McPherson himself failed to carry out, in failing to have his trustee present at the time for the sale.

2. Neither the debtor, Johnson (who was in fact then dead), nor Davis, the trustee, was a party to this agreement or understanding. Davis was notified of it after it was made; and he did advertise for sale at the time he was instructed. This far, the Kelly Banking Company clearly had a right to call on him (as to the time of sale). But what he should do as salesman and trustee when the sale was made was another thing entirely; and as to that he was to be guided by the provisions of the trust deed, exclusively.

3. When it appeared that Dodd, the substituted trustee for McPherson could not attend because of his personal engagment in court, he could have asked any other person as well as Davis to represent him, or McPherson could...

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5 cases
  • Gray v. Sullivan
    • United States
    • Mississippi Supreme Court
    • March 7, 1932
    ...of sale. 19 R. C. L., p. 621, sec. 438; Barnard v. Duncan, 38 Mo. 170, 90 Am. Dec. 416; Love v. Harris, 72 S.E. 150, 152; McPherson v. Davis, 95 Miss. 215, 48 So. 625; Valentine v. Dunagin Whitaker Co., 102 Miss. A conditional notice of resale was not sufficient. Yellowly v. Beardsley, 76 M......
  • Longmire v. Mars
    • United States
    • Mississippi Supreme Court
    • January 17, 1921
    ... ... the Longmire deed, we call the court's attention to ... another Mississippi case, namely McPherson v. Davis et ... al., 48 So. 625, 95 Miss. 215, the court will observe ... that where the bill of complaint is for general relief, as is ... the ... ...
  • Great Southern Land Co. v. Valley Securities Co.
    • United States
    • Mississippi Supreme Court
    • November 9, 1931
    ... ... immediately transferred from the land itself to the surplus ... in the hands of the trustee or senior mortgagee ... Frank ... v. Davis, 17 L. R. A. 306; McPherson v. Davis, 48 ... So. 625; Markey v. Langley, 23 L.Ed. 701. [162 Miss. 131] ... A ... purchase by a junior ... ...
  • C.C. Kelly Banking Co. v. McPherson
    • United States
    • Mississippi Supreme Court
    • December 10, 1910
    ...Co. et al. From a judgment for plaintiff, defendant appeals. A full statement of facts will be found in the opinion in McPherson v. Davis, 95 Miss. 215, 48 So. 625. instant case is an appeal from a decree entered after the former case was remanded. Upon the remanding of the former case, it ......
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