Muth v. Goddard

• Decision Date: 25 May 1903
• Citation: 28 Mont. 237
• Parties: MUTH et al. v. GODDARD et al.
• Court: Montana Supreme Court

28 Mont. 237

MUTH et al.

v.GODDARD et al.

Supreme Court of Montana.

May 25, 1903.

Commissioners' Opinion. Appeal from District Court, Lewis and Clarke County; J. M. Clements, Judge.

Suit by William Muth, as administrator of the estate of Albert G. Clarke, deceased, and others, against L. A. Goddard and others, to restrain defendants from selling lands described in a trust deed under the power of sale therein granted. From an order granting the injunction, defendants appeal. Reversed.

On the 10th day of October, 1890, Albert G. Clarke, Sr., was about to leave the state of Montana, to be absent during the winter, and on that day he executed to his son, Charles A. Clarke, the following power of attorney: “Know all men by these presents, that I, Albert G. Clarke, Sr., of Helena, Lewis and Clarke County, Montana, have made, constituted and appointed and by these presents do make, constitute and appoint Charles A. Clarke, of said City, County and State aforesaid, my true and lawful attorney for me and in my name, place and stead, and for my use and benefit to ask, demand, sue for, recover, collect and receive, all such sums of money, debts due, accounts, interest, dividends, annuities and demands whatsoever as are now or shall hereafter become due, owing, payable or belonging to me, and have, use and take all lawful ways and means in my name or otherwise for the recovery thereof, by attachment, arrest, distress or otherwise, and to compromise and agree for the same and acquittances or other sufficient discharges of the same for me and in my name to make, seal and deliver; to grant, contract, agree for, purchase, receive and take, lands, tenements and hereditaments, and to accept the seisin and possession of all lands and all debts and other assurances in the law therefor, and to lease, let, demise, bargain, sell remise, release, convey, mortgage and hypothecate lands, tenements and hereditaments upon such terms and conditions and under such covenants as he shall see fit also to bargain and agree for, buy, sell, mortgage, hypothecate and in any and every way and manner deal in and with goods, wares and merchandise, choses in action, and other property in possession or in action, and to make, do and transact all and every kind of business of what nature and kind soever, and also for me, and in my name and as my act and deed to sign, seal, execute and deliver and acknowledge such deeds, leases and assignments of leases, covenants, indentures, agreements, mortgages, hypothecations, bills of lading, bills, bonds, notes, receipts, evidences of debt, releases and satisfactionsof mortgage, judgments and other debts and such other instruments in writing of whatever kind and nature as may be necessary or proper in the premises; giving and granting unto my said attorney full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in or about the premises, as fully to all intents and purposes as I might or could do if personally present, hereby ratifying and confirming all that my said attorney shall lawfully do or cause to be done by virtue of these presents.” Albert G. Clarke, Sr., never revoked this power, and it ceased to be operative only at his death. In November, 1899, Mr. Clarke, Sr., lay in his last sickness. For quite a long time he had been a member of the firm of Raleigh & Clarke. This firm was then, November, 1899, owing about $35,000, about $23,000 of which sum was due the Union Bank & Trust Company, of which George L. Ramsey was cashier. The firm of Raleigh & Clarke was unable to pay the bank anything upon this indebtedness, and Ramsey notified W. B. Raleigh, who, with Albert G. Clarke, Sr., composed the firm, “that, unless the matter was fixed up at once, he would attach Mr. Clarke,” to which Raleigh replied that he (Raleigh) had made every effort, but was at the end of his resources. Raleigh then sent for Charles A. Clarke, and acquainted him with the situation. In the meantime the power of attorney was placed of record. Then followed a series of negotiations extending over a number of days. The result was that Raleigh turned over all his property to Albert G. Clarke, Sr. As he said, “I turned over everything that I had; the interest in Raleigh & Clarke and everything; made a clean sweep.” He also, in the name of Raleigh & Clarke, executed to the Union Bank & Trust Company seven notes for the sum of $5,000 each. These notes represented the money already due the bank, and cash in hand which the bank advanced to pay the other creditors of the firm. Charles A. Clarke then, assuming to act under his power of attorney, indorsed the notes as follows: “For value received, I hereby guarantee the payment of the within notes at maturity, or at any time thereafter, with interest as specified, until paid, waiving demand, notice of nonpayment, and protest. A. G. Clarke, by Charles A. Clarke, His Attorney in Fact.” And, likewise acting as his father's attorney in fact, Charles A. Clarke thereupon executed to John H. Tucker, as trustee, and party of the second part, and the Union Bank & Trust Company, party of the third part, a trust deed whereby he purported to convey certain of his father's real estate for the purpose of securing the payment of the seven promissory notes aforesaid. In this deed of trust it was stated that the grantor “has granted, bargained, sold, and conveyed, and does by these presents grant, bargain, sell, convey, and confirm, unto the said party of the second part, with full power of substitution to his successors in trust, and assigns, forever, the following described tracts or parcels of land,” etc. It was provided in the trust deed that in case of a default in the conditions thereof “the grantor herein does fully empower said trustee, original or substituted, his successors or assigns, and it is hereby made his special duty, at the request of the holders of the obligation secured hereby at any time made after default, as aforesaid, to take such steps as may be necessary for the collection of said debt, principal and interest, and to collect and sue for any rents due or to become due on said premises, and without process of law to enter upon and take possession of or let said premises, and either before or after said entry, when the trustee, his successors or assigns see fit, to sell the property herein conveyed, or any part thereof, together or in parcels, at public auction, for cash or on credit, at a place, time, and after the advertisement by him given, substantially conforming to and as required by law in the cases of sales on execution at the time of the sale, and to execute and deliver to the purchaser or purchasers thereof good and sufficient deed or deeds in fee simple for the same, which shall vest the complete and unincumbered title of the said property, and be a bar against the grantor herein, his heirs or assigns, and all persons claiming under them or any of them, of all right, interest, or claim in or to said property and all parts thereof. ***” In the trust deed it was provided that an attorney's fee of 5 per cent. on the amount of the principal recovered should be a lien upon the property, and be taxed and collected as are other costs, in case the conditions of the indenture be enforced by an action in court.

All these negotiations were completed on December 16, 1899. On December 23d following Albert G. Clarke, Sr., died. In due time the seven notes were presented in the form of a claim against the estate of Albert G. Clarke, deceased, and allowed. Thereafter the said notes and trust deed were assigned to one L. A. Goddard. Some time after the maturity of the notes, Goddard, through his attorneys, Cullen, Day & Cullen, commenced to execute the power of sale contained in the trust deed. Thereupon William Muth, as administrator of the estate of Albert G. Clarke, deceased, William H. Clarke, and Albert G. Clarke, Jr. (the two Clarkes claiming to be entitled to the whole of the residue of the said estate to the exclusion of their brother Charles A. Clarke), as plaintiffs, commenced this action against the said L. A. Goddard, Cullen, Day & Cullen, and Charles A. Clarke, as defendants, to enjoin the defendants from selling the lands described in the trust deed under the power of sale, etc. Upon the filing of the complaint a temporary restraining order was issued, together with an order to show cause why the injunction should not be granted. Upon the hearing of the order to show cause the court entered its order granting the injunction as prayed for. From this order the defendants appeal.

Cullen, Day & Cullen, for appellants. Walsh & Newman and Toole & Bach, for respondents.

CALLAWAY, C. (after stating the facts).

The following questions have been presented and argued by counsel: (1) Was Charles A. Clarke authorized by the power of attorney to execute the trust deed conveying his principal's individual property to secure the notes of the firm? And herein did he have the authority to include in the trust deed a power of sale, and a provision for an attorney's fee in case of foreclosure? (2) Can the power of sale be executed now that Albert G. Clarke, Sr., is dead? We will treat these questions seriatim.

1. Authorities in great number have been cited by counsel in discussing the right of Charles A. Clarke to execute the trust deed under the power of attorney above set forth. We have examined them all, and also have made much independent research, in order to arrive at a correct solution of the propositions involved; but no case has been cited to or discovered by us, which, construing a power of attorney like the one in question, decides any similar point. The instrument in question may be denominated an unrestricted general power of attorney. It will be noticed that the donor of the power placed his agent in a position to perform almost every act that may ordinarily arise in the transaction of business....