Thompson v. Wynne

• Decision Date: 06 February 1922
• Docket Number: 22249
• Citation: 127 Miss. 773,90 So. 482
• Court: Mississippi Supreme Court
• Parties: THOMPSON v. WYNNE

90 So. 482

127 Miss. 773

THOMPSON v. WYNNE

No. 22249

Supreme Court of Mississippi

February 6, 1922

1 MORTGAGES. Payee of note extending time beyond date of trust deed without consideration is not bound thereby.

Where the payee in a note secured by a deed of trust on real estate, as a mere matter of grace, without any new or further consideration, at the request of a payor therein, extends the time of payment beyond the due date of said note, such agreement of extension is not binding on the payee therefore, notwithstanding same, the payee may proceed to foreclose such deed of trust before the expiration of such extended date of payment.

2 MORTGAGES. Held, that beneficiary under power in deed of trust could appoint a substituted trustee after discontinuing foreclosure proceedings.

Where the trustee in a deed of trust, at the request of the cestui que trust, is proceeding to foreclose the same in the manner provided in such deed of trust, and the cestui que trust whether for any wellfounded ground or not, become dissatisfied with the steps of foreclosure taken by said trustee, and has such trustee to discontinue the foreclosure proceedings, and appoints a substituted trustee in his place such appointment is valid under a power in the deed of trust authorizing the cestui que trust to appoint another trustee in the place of the one named in the deed of trust or any succeeding trustee at any time he may desire.

HON. G. EDW. WILLIAMS, Chancellor.

APPEAL from chancery court of Bolivar county, HON. G. EDW. WILLIAMS, Chancellor.

Bill by Edna Wynne against C. P. Thompson. Decree in favor of plaintiff, and defendant appeals. Reversed and remanded.

Reversed and remanded.

Shands, Elmore & Causey, for appellant.

In the case at bar appellee claims to know the amount that is due yet does not pay this into court. An itemized statement was furnished to the husband and agent of the appellee in advance of the day of sale of all accounts claimed by the defendant and an offer on the part of the defendant to accept a less amount than the amount that was actually owing. The chancellor, however, predicated his finding upon a supposed lack of power in the holder of this indebtedness to appoint a substituted trustee. Considering the language of the contract between the parties, this startling announcement is one that, if taken seriously, would cause considerable alarm.

The provision of the deed of trust, which was quoted in the statement of fact above, I now repeat, and is in the following language: "The owner or owners of the above indebtedness may, at any time he or they may desire, appoint another trustee in the place and stead of the trustee herein named, or any succeeding trustee."

It was conceded on the argument that this language is as broad as it is possible to be; but the chancellor conceived the idea that such a provision was contrary to public policy and would jeopardize the interest of the debtors.

There is no contention here that there was any fraud perpetrated by Thompson upon Mrs. Wynne; but, on the other hand, it appears affirmatively from the record that the deed of trust was entirely prepared by Frank Wynne, husband and agent of Mrs. Wynne, Frank Wynne being himself a practicing lawyer in Bolivar County, Mississippi, and after being prepared and executed by Mrs. Wynne, was delivered to Dr. Thompson, he not having seen the paper until after its execution and delivery to him.

Jones in his work on Mortgages, at page 452, in discussing the substitution of trustee, uses this language: "The trust deed often makes provision for the filling of any vacancy that may occur in the office of trustee; and if the person who is to execute the trust and the event upon which he may execute it are distinctly described he may act, and his acts will be valid."

This contract entered into between the parties gives to the owner of the indebtedness the power to appoint another person at any time he may see fit. The appointment is itself the strongest possible evidence of his desire or whim to appoint. 1 Devlin on Real Estate (3 Ed.), par. 387, says: "The deed may itself provide for the method of appointing a new trustee in which case application to a court becomes unnecessary." And cases cited thereunder hold that where a deed of trust does provide for such appointment the terms of the deed of trust are to be followed.

Our court in the case of Guion v. Pickett, 42 Miss. 77; Clark v. Wilson, 53 Miss. 128; McNeill v. Lee, 79 Miss, 459, and in numerous other cases, unnecessary to mention, lay down the rule that where the deed of trust itself undertakes to provide the method or the circumstances under which a trustee may be appointed, that the provisions of the contract must be followed unless in conflict with some expressed provision of law.

The only statutory requirement in Mississippi for the appointment of a trustee, or the only act of the legislature which, in any wise, impairs the right of contract as to the appointment of a trustee, is the statute which requires such appointment to be in writing, duly acknowledged and filed for record before the publication of the first notice of sale.

Even this statute would not be effective against a contract between adult parties, were it not for the provision in the statute that a sale by a trustee should not pass title unless the substitution was therein made. The chancellor was of opinion that there was some kind of public policy that controlled in the matter of the execution and foreclosure of deeds of trust.

In this holding he is in conflict with this honorable court. The parties might have provided that only a one-eyed man might be appointed trustee, and if they had so contracted nobody except a one-eyed man could have foreclosed. They might have provided for the appointment of a substituted trustee upon the happening of any contingency that they saw fit to provide for.

The grantor in this deed of trust, by her own husband and agent in preparing the deed of trust, provided that the grantee therein might appoint a substituted trustee at any time that he saw fit. The grantee acted upon this power given to him and did so appoint, we respectfully submit that there is no authority holding that such right of contract is in contravention of any public policy of the State of Mississippi.

As this record shows that all of the facts are disclosed by this record; and that all parties who know anything about the matter were called and sworn as witnesses to tell the truth the whole truth and nothing but the truth, it is apparent that all of the facts connected with this case are now disclosed by this record. We, therefore, contend that this court ought, in order to save delay and additional expense, reverse the decree of the chancellor in overruling the motion to dissolve, and should enter a decree in this court dissolving the injunction and awarding to appellant C. P. Thompson, statutory damages of five percent, because of the wrongful suing out of this injunction.

Roberts & Hallam, for appellee.

1. The complainant in the lower court contended, and the chancellor upheld her contention, that the substitution of Causey as trustee in the deed of trust in question in the place of Jones was illegal and unauthorized, notwithstanding the provision in the deed of trust that the owners or owner of the above indebtedness may at any time he or they may desire appoint another trustee in the place or stead of the trustee herein named, or any succeeding trustee. The iniquity of such a provision and its availability as a weapon of abuse are readily seen, and are amply demonstrated in the case at bar. It violates every rule laid down by this court heretofore on the right of a cestui que trust to substitute a trustee. It places the borrower at the mercy of the money lender, and opens wide the doors to dishonesty and fraud. It tends to injustice and oppresssion. If this is true, the stipulation is against the public policy of the State of Mississippi and is, therefore, void.

In Tarbell v. Rutland R. R. Co., 73 Vt. 347, it is said: "The general rule of law is stated to be that whatever tends to injustice or oppression, restraint of liberty and natural and legal right, or to the obstruction of justice, or to the violation of a statute, and whatever is against good morals, when made the subject of a contract, is against public policy and void. It is said that they are not contracts, but unlawful agreements, which are void in their inception."

In Peoples Bank v. Dalton, 2 Okla. 476, it is said, that public policy is the principle under which freedom of contract or public policy is the principle under which freedom of contract or private dealing is restricted by law for the good of the community. In Lampton's Will, 53 N.Y.S. 531, the court said: "Perhaps the most concise and satisfactory definition of the term is that public policy, is a policy which must be established either by law, by courts, or by general consent."

We submit that it has always been the policy of this state to protect the weak and needy, to extend the all powerful arm of the law as a barrier to oppression and injustice; and in line with that policy this court has on numerous occasions expressed itself with reference to the substitution of a trustee in place of the trustee named in the instrument creating the trust, following the general rule of law on the subject.

In 39 Cyc., p. 273, speaking of the occasion for the appointment of a substitute trustee, the rule is thus stated: "Since a power of appointment can only be exercised upon the happening of the contingency expressed in the grant, the instrument granting the power should express plainly the cases in which a new trustee may be appointed, and should embrace every event...