Sullivan v. Hughes

• Decision Date: 06 May 1935
• Docket Number: 31706
• Citation: 172 Miss. 744,161 So. 316
• Court: Mississippi Supreme Court
• Parties: SULLIVAN v. HUGHES et al

161 So. 316

172 Miss. 744

SULLIVAN v. HUGHES et al

No. 31706

Supreme Court of Mississippi

May 6, 1935

Division B

Suggestion Of Error Overruled June 3, 1935.

APPEAL from the chancery court of Sunflower county, HON. J. L WILLIAMS, Chancellor.

Bill by J. B. Hughes and Etta Hughes against C. W. Sullivan substituted trustee, to enjoin foreclosure sale under deed of trust. From a judgment for plaintiffs, defendant appeals. Reversed and remanded.

Reversed and remanded.

Sullivan & Sullivan, of Hattiesburg, for appellant.

Receiver appointed by judicial authority, in the absence of a statute to the contrary, cannot be sued without leave of court which appointed him.

Rea v. O'Bannon, 158 So. 916.

Appellee evidently well knew that he was without authority to sue the receiver, without having first sought and obtained permission of the chancery court of the first judicial district of Hinds county, Mississippi, and by this suit, he is attempting to do indirectly, the very thing that he is prohibited from doing directly.

W. O. Rea, receiver, is the owner and holder not only of the notes and deeds of trust involved in this litigation, but of all of the assets of the Building & Loan Association in liquidation, and as such owner and holder of the notes and deeds of trust executed by appellees, he was, and is, a necessary party to this litigation.

Byrd v. Hicks et al., 113 S.E. 660; Burroughs v. Jones et al., 28 So. 944; Smith v. Denny & Co., 90 Miss. 434, 43 So. 479; Champlin et al. v. McLeod et al., 53 Miss. 484; Yates et al. v. Council, 102 So. 176.

The receiver is making the foreclosure, or causing it to be made. If any wrong which ought to be enjoined, is being done, the receiver is the man doing that wrong, by and through, of course, the substituted trustee, and he is the man who certainly ought to be enjoined, if any one is to be, because then, all of the equities of the matter can be inquired into after the necessary parties are before the court, and a proper and final decree can be rendered, but with no one but the substituted trustee in court, that court is powerless to do any thing, except to say to the substituted trustee that, "you can't foreclose this property." It certainly cannot say any more than that to him, because he has no beneficial interest in the indebtedness secured by the deeds of trust, sought to be foreclosed.

32 C. J. 301, par. 487.

A careful reading of chapter 247, of the Laws of 1934, will convince anyone that it was never expected, nor intended, by this law, to authorize injunction proceedings against the trustee alone.

Cooper & Thomas, of Indianola, for appellees.

A grantor in a deed of trust may properly maintain in equity a bill for injunction to restrain the trustee from foreclosing without joining the beneficiary, if the suit is solely for this injunction and no other relief is sought and the bill does not seek to bind the beneficiary nor to restrain him in any way and no relief is sought against the beneficiary and the validity of the debt and of the deeds of trust is not in issue.

47 C. J. 67, secs. 140, 72 and 73; Griffith's Chancery Practice, secs. 108 and 109; 65 C. J. 861, secs. 743, 744 and 747; 32 C. J. 83, secs. 69 and 477, and page 295, sec. 475, and page 301, sec. 486; Carpenter v. Knollwood Cemetery, 198 F. 297; 41 C. J., par. 1361.

Chapter 247 of the Laws of 1934 (the Moratorium Law) authorizes an injunction suit against a trustee.

A. M. O'Neil, of Drew, for appellees.

Appellees seek no relief against the receiver, they do not ask for an accounting, they seek only the relief granted to them specifically by the moratorium law. They ask that the trustee in the deed of trust be enjoined from doing that thing which the trust deed authorizes him to do, by virtue of the "state of emergency" which the act declares to be in existence. They ask merely a postponement of the sale so that what equities they may have in the properties sought to be sold may be protected.

19 R. C. L. 604, sec. 420.

If the trustee himself may postpone the sale, surely under a specific statute the trustee may be enjoined from making the sale.

14 R. C. L. 328, sec. 28; 20 R. C. L. 669, sec. 8; Richter v. Jerome, 123 U.S. 233; Carpenter v. Knollwood Cemetery, 198 F. 297; Alabama & V. Ry. v. Thomas et al., 38 So. 770; Cottrell v. Smith, 112 So. 465.

It is also a further settled principal of law that if the improper party is made defendant to a bill that he must make the defense, and that he must raise the misjoinder of question by demurrer; thus it would appear that here appellant attempts to use as grounds of dismissal of the bill the failure to join a party against whom no relief is sought and equity says that to so join a party defendant is improper.

Argued orally by C. W. Sullivan, for appellant, and by Forest C. Cooper, and A. M. O'Neil, for appellees.

OPINION

Ethridge, P. J.

J. B. Hughes and Etta Hughes, appellees, executed a deed of trust in favor of the Building & Loan Association of Jackson, Mississippi, upon property situated in Sunflower and Tallahatchie counties, to secure the indebtedness therein described. Subsequently, the Building & Loan Association of Jackson was, by the chancery court of Hinds county, placed in receivership and W. O. Rea was appointed receiver. Thereafter, said W. O. Rea, with the approval of said chancery court, substituted said C. W. Sullivan as trustee in the deed of trust and directed him to foreclose said deed of trust and sell the property to satisfy said debt.

Appellees filed, in the chancery court of Sunflower county Mississippi, a bill to enjoin said sale, alleging therein that said C. W. Sullivan, substituted trustee, proceeded to advertise all of the property described in said deed of trust, giving notice that it would be sold on January 10, 1935, and made the advertisements exhibits to the bill. It was then alleged that after the execution of said deed of trust the territory in which the property was located, and in which the appellees reside, was in the throes of what is commonly recognized as a world-wide depression, and the ability of debtors to repay promptly their obligations, through no fault of their own, was rendered uncertain; that appellees have endeavored, to the best of their ability, to pay as much as possible on the obligations secured by said deed of trust; and that appellees, notwithstanding said troubles which were beyond their control, have paid various and sundry amounts on said indebtedness to the Building & Loan Association, through its duly authorized agents during its life, and to W. O. Rea, receiver, after his appointment, but that appellees are informed and so believe and state on said information that neither the loan association, nor the...