Shipp v. New South Building and Loan Association

• Decision Date: 20 October 1902
• Citation: 81 Miss. 17,32 So. 904
• Court: Mississippi Supreme Court
• Parties: SARAH V. SHIPP v. NEW SOUTH BUILDING AND LOAN ASSOCIATION

32 So. 904

81 Miss. 17

SARAH V. SHIPP v. NEW SOUTH BUILDING AND LOAN ASSOCIATION

Supreme Court of Mississippi

October 20, 1902

October 1902

FROM the circuit court of Lauderdale county HON. GUION Q. HALL Judge.

The Building and Loan Association, appellee, was the plaintiff and Mrs. Shipp, appellant, was defendant in the court below. The action was ejectment for a lot in the city of Meridian. From a judgment in plaintiff's favor the defendant appealed to the supreme court.

On the trial in the court below plaintiff introduced a deed from one Ginder, as the trustee in a deed of trust in its favor, and a deed of trust to one Blanc, as trustee, to secure to it a certain indebtedness. The deed of trust recited that Blanc was the treasurer of the appellee, and that the title to the land therein conveyed should be vested in him only so long as he might remain treasurer of the association, and that whenever any other person should be elected treasurer to succeed Blanc, such person should, ipso facto, become the trustee, with the title, right to sell, etc.

The defendant objected to the introduction of this deed. Plaintiff then proved that said Ginder had been duly elected treasurer of the New South Building and Loan Association, and the court below then overruled the objection. The opinion contains a further statement of the facts.

The statute of March 3, 1896 (Laws 1896, p. 105), provides that sales of land made under deeds of trust by substituted trustees shall not convey the interest of the grantor until the substitution appear of record in the office of the chancery clerk.

Reversed and remanded.

S. A Witherspoon, for appellant.

The act of March 3, 1896, Laws 1896, p. 105, provides that sales of land made under deeds of trust by substituted trustees shall not convey the interests of the grantor until the substitution appear of record in the office of the chancery clerk. The act then provides that such substitution may appear of record in two ways: either by separate instrument recorded as other recordable instruments, or it may be attached to or copied on the deed book by the clerk. Now, the question is whether a foreign corporation can evade and violate this provision of the statute by providing in the deed of trust that the election of a treasurer of a corporation in a foreign state, ipso facto, operates as a substitution, the statute to the contrary notwithstanding.

The object of the statute was to facilitate the examination and tracing of land titles. In this case the examiner of the title would find by the record that Page had conveyed the title to Jules A. Blanc. Then he would look for a deed from Jules A. Blanc, and finding none, he would have the right to suppose that the title was still in Jules A. Blanc. He would then look for a substitution of some other person as trustee, but finding none on record, how would he ever find that Ginder had acquired the title. It is impossible, and this is the very evil which the statute intended to remedy. The substitution relied on by the appellee is therefore in violation, not only of the letter and plain language of the statute, but also in hostility to its spirit and object, and presents the very evil which the law intended to prevent. But it is argued that the trust deed shows on its face that the election of a treasurer to succeed Blanc would be the appointment of another trustee. How does this help the case? Must the examiner of the title go to New Orleans, and there present a petition to this foreign corporation, praying the privilege of examining its records to find out who is its treasurer? What assurance would he have that the corporation would permit him to examine the books? But the statute intended to fix it so that the title could be traced in the office of the clerk and not in the office of the corporation.

Again, it was argued in the court below that Ginder is not a substituted trustee, but that the title was conveyed to him by the very terms of the trust deed. In other words, the contention is that the conveyance is made not to Jules A. Blanc, but to the treasurer. My answer to this is that, even if it were so, the evil which it would produce would be the same as if the conveyance were made to Jules A. Blanc, and that there would be the same necessity for some record of a change in the person who held the office, as there is for a record of a change in the trustee of the ordinary trust deed, and hence the statute would be equally applicable. But it is not true that the trust deed conveys the title to the treasurer of the corporation.

From the provisions it is clear that the title was conveyed to Jules A. Blanc as an individual, and not as the office of the corporation, for it is nowhere stated in the trust deed that Blanc is an officer until long after the title has been conveyed to him and after he has been vested with all his powers, rights, and duties, including the power to sell, and not until we come to the close of the trust deed, where it provides for the substitution of his successor, do we learn that he is a treasurer. The conveyance is made not only to him, but to "his successor as trustee, " and not to his successor as treasurer. The words, "to his successor as trustee, " do not, of course, add anything to the legal effect of the instrument, for if those words were omitted from the granting clause it would still convey the title to his successor as trustee. This is the case in all trust deeds, for how else could the successor of the original trustee get title if the instrument did not convey it to him? But the words, "to his successor as trustee, " do show that the instrument was not seeking to vest the title in the officer of the corporation, but in the individual who might hold that office. The whole deed of trust shows that its scheme was to substitute a trustee by the mere election of a treasurer, and I insist that the corporation could not in this way set aside the statute. If a corporation can do this, then a natural person can also set aside the statute. The election of a treasurer of a corporation is nothing but the appointment of an agent, and if a corporation can provide, as this one seeks to do, that whenever it appoints a certain agent, then such agent shall, ipso facto, become trustee instead of the one shown by the record, and without making his appointment a matter of record, as the statute provides, then a natural person may also have trust deed in his favor providing that whenever he appoints and selects an attorney or a real estate agent or broker, or any other sort of agent, such agent shall, ipso facto, become trustee instead of the one shown by the record and without any sort of compliance with the...