Morriss v. Va. State Ins. Co.1

• Decision Date: 07 December 1893
• Citation: 18 S.E. 843,90 Va. 370
• Parties: MORRISS. v. VIRGINIA STATE INS. CO.1
• Court: Virginia Supreme Court

18 S.E. 843

90 Va. 370

MORRISS.

v.VIRGINIA STATE INS. CO.¹

Supreme Court of Appeals of Virginia.

Dec. 7, 1893.

Trust Deeds—Notice of Sale —Place of Sale —exercise of power by agent—equity.

1. "While it is a compliance with a deed of trust requiring a notice of "ten days at the least" to insert the advertisement on Sunday, the 4th, for a sale on the 15th, when the circumstances warrant equity in taking charge of the sale, the court should prescribe a notice of at least 30 days, not only in the newspaper, as directed by the deed, but by handbills.

2. Where a deed of trust contains no provision as to the place of the sale, this matter is in the discretion of the trustee, and, if either party is not satisfied with his decision, he may apply to equity for instructions prior to sale.

'3. Where a deed of trust covering property on the outskirts of Richmond contained no provision as to the place of sale, and the trustee selected the city hall in Richmond, on the debtor's objection that, if the sale were made on the property, it would command a higher price, the debtor's wishes should be respected.

4. A deed of trust directing a sale, but not requiring, in terms, a subdivision, should be construed in reference to Code 1873, c. 113, § 6, requiring the trustee, in case of default, "to sell the property conveyed by the deed, or so much thereof as may be necessary;" and if the laud will bring a better price by a sale in lots, and the owner so requests it. and the trustee refuses, the owner may control the trustee, in the exercise of his discretion, in equity.

5. Trustees in deeds of trust must act in person, and not by agent.

Lewis, P., dissenting.

Appeal from chancery court of Richmond.

The Virginia State Insurance Company, being the beneficiary under a deed of trust executed by one Morriss, requested the trustee to proceed with the sale, which the trustee did, but in such a maimer as to be objectionable to the debtor in the matter of notice of sale and method of conducting the same. The debtor secured an injunction, which was dissolved, and an appeal is taken from said order of dissolution. Reversed.

Stiles & Holladay and Edmund Waddill, for appellant.

Christian & Christian, for appellee.

LACY, J. This is an appeal from certain decrees herein, the last of which was rendered on the 31st day of October, 1893. The controversy between the parties to this appeal has arisen over the execution of a trust deed executed by the appellants to a certain trustee, conveying a tract of land in Henrico county, near the city of Richmond, containing 850 acres, to secure a debt due to the Virginia State Insurance Company of $12,229.37. There were several abortive attempts at a sale, one on the premises, and another in the city of Richmond, when a sale was made at. $12,000, when, it appearing by affidavits that the price of $12,000 was grossly Inadequate, and in the opinion of numerous persons, real-estate dealers and others, that the property was worth $25,000, by consent of all parties the sale was set aside by the court, and a resale ordered. The trustee advertised the sale to take place at the door of the city hall in the city of Richmond, when the appellants procured an injunction, upon the ground that the property could not safely be sold in the city of Richmond with a reasonable expectation that it would bring a reasonable price, and that such a sale would result only in a sacrifice of the property; that it was a large farm near the city, situated in the county, and capable of subdivision into several valuable truck farms; that the trustee should not be allowed to sell the whole tract unless necessary to pay the debt due on it; that, if sold in bulk, it would not bring its value, whereas the record showed that it was worth $25,000, and that land just across the road had recently sold for $100 per acre, and this, by proper advertisement and judicious offering, might be sold as well; that the 10-days notice required by the deed had not been given; that the advertisement was inserted on Sunday, the 4th, to take place on the 15th instant; that this was not a compliance with the terms of the deed in letter or in "spirit;'' and that the advertisement contains no notice of the terms of sale as to the residue after the cash payment has been paid and the debt discharged. This bill was answered, and a motion made to dissolve the injunction. Up on the hearing the court dissolved the injunction by decree in the cause on the 18th of October, 1892, but reserved all other questions, and, on motion of the plaintiffs, suspended the decree upon the usual terms for 10 days, to allow the plaintiffs to present their petition to this court for an appeal, which being done, the appeal was allowed.

In the first place, it appears that the advertisement was as long as the terms of the deed required, —"ten days at the least."

The next question is as to the place of sale, and upon this question we will remark that the deed contained no stipulation as to the place where the sale should be made; and according to the rule established by the law, and to be found in the decisions of this court, this matter was left to the sound discretion of the trustee. Shurtz v. Johnson, 28 Grat. 657, and cases cited; Walker v. Beauchler, 27 Grat. 511, and cases cited. Mr. Barton says on this subject, (2 Barf. Ch. Pr. 446:) "When the deed does not fix the place for the sale, the trustee may make it in any place which, in his discretion, he may select; but he should exercise that discretion fairly and prudently, " (citing Shurtz v. Johnson, supra;) and he cannot sell more of the trust subject than is necessary to satisfy the debt, unless the interest of the owners demand it, or they request it, or unless it would be injurious not to sell the whole. This rule, of course, relates to a divisible subject, the trustee's duty in every case being to act forthe host interest of all the parties. It is a settled principle in this court that trustees ought not to allow any urgency of the creditor to have an influence on their conduct, but that, whether they act under deeds of trust or under decrees of a court of chancery, they ought to consider themselves as impartial agents of both parties, and should act for the interest of the debtor as well as of the creditor, (Quarles v. Lacy, 4 Munf. 251;) and it is now incontrovertibly settled that a trustee is to be considered as the agent of both parties, bound to act impartially, and to disregard the suggestions of either inconsistent with that obligation, and that he has, in general, no greater powers touching his trust than a commissioner of a court of equity for a sale of lauds under its decree, (Lane v. Tidball, Gilmer, 130; 4 Minor, Inst. 05; Chowning v. Cos, 1 Rand. (Va.) 311; 2 Minor, Inst. 2S5; 1 Lomax, Dig. 424.) Mr. Minor says, (2 Minor, Inst. 286:) "The general principle of his duty is to act justly, impartially, and discreetly, without permitting himself to be swayed to the one side or the other by the suggestions or persuasions of either party. He has been likened in this respect to the commissioner of the court of equity. He must conform to the terms of the deed in. respect to the time and manner of giving notice, and the time and manner of sale, as well as in all other particulars, and in all points when the deed is silent he must govern himself by the general rule to sell to the best advantage, and with an impartial regard to the rights and interests of both parties." It is a principle also of such transactions that the trustee is charged with a personal confidence, and must therefore act in person and not by agent. 1 Lomax, Dig. 427; 1 Tuck. Comm. 108; Harvey v. Steptoe. 17 Graf. 289. It is the trustee's duty to forbear to sell, and to ask the aid and instructions of a court of equity, in all cases where the amount of the debt is unliquidated or in good faith disputed, when any cloud rests upon the title, when a reasonable price cannot be obtained, or when, for any reason, a, sale is likely to be accompanied by a sacrifice of the property, which, at the cost of some delay, may be obviated. 2 Minor, lust. 2S7; 1 Tuck. Comm. 100; Lane v. Tidball, supra; Wilkins v. Gordon, 11 Leigh, 547; Miller v. Argyle, 5 Leigh, 400; Miller v. Trevilian, 2 Rob. (Va.) 25; Bryan v. Stump, 8 Grat. 247. Judge Lomax, in his Digest, (volume 1, p. 425,) says: "These trustees may, of their own motion, apply to a court of equity to remove impediments in the way of a fair execution of their trust;" and, if the trustee fails to do so, the debtor may enjoin the sale, and ask the execution of the trust under and by the aid of a court of equity, and thus, to adopt the language of Lord Bacon, substitute for the private conscience of the trustee "the general conscience of the realm, which is chancery, " which Justice Story says implies nothing more than that a trustee who does not know his duty shall be at the pains to learn it.

As we have said, the deed is without directions as to the place where the sale shall be made, and the trustee must, in the exercise of a sound discretion, such as we have above referred to, select the place; and, if he shall be in doubt, he may apply to a court of equity for a determination of that question. If he determines for himself, and either party is not satisfied with his decision, he may apply to the court of equity to have it determined before the sale by the court, according to the circumstances of the case. That this question is determinable in the light of the circumstances of the particular case is clear under the decisions. In Walker v. Beauchler, supra, Judge Staples, speaking for the unanimous court, said: "It is very true the deed does not prescribe the place of sale, and much was therefore left to the discretion of the trustee. In the exercise of that discretion, it would seem clear that the sale ought certainly to have been made at least in the county where the property was situated." And in the subsequent case of Shurtz...