Valentine v. Dunagin-Whitaker Company

• Citation: 59 So. 844,102 Miss. 563
• Court: Mississippi Supreme Court
• Decision Date: 14 October 1912
• Parties: W. P. VALENTINE v. DUNAGIN-WHITAKER COMPANY

59 So. 844

102 Miss. 563

W. P. VALENTINE v. DUNAGIN-WHITAKER COMPANY

Supreme Court of Mississippi

October 14, 1912

March 1912

APPEAL from the circuit court of Jones county, HON. PAUL B. JOHNSON Judge.

Suit by the Dunagin-Whitaker Company against W. P. Valentine. From a judgment for plaintiff, defendant appeals.

The appellant was the owner of certain property in Jones county and executed a deed of trust to E. H. Whitaker, trustee, to secure an indebtedness due the appellee. Default having been made in the payment of said indebtedness, the trustee advertised same for sale and proceeded to sell it to satisfy the debt. At the sale one Whatley appeared and became the highest and best bidder, for the sum of three thousand, eight hundred and fifty dollars. After waiting until the next day and Whatley not being able or willing to pay the amount of his bid, the trustee executed and delivered a deed to appellee, the next highest bidder, for the sum of three thousand, eight hundred dollars. Appellee then instituted unlawful entry and detainer proceedings against appellant for the possession of the land in question, and recovered a judgment awarding him possession. From this judgment this appeal is prosecuted.

Reversed and cause dismissed.

Bullard & Gavin, for appellant.

Conceding for the sake of argument that the sale was made at the proper place it was void for another reason; it was not made to the highest bidder. The highest bidder was Whatley. The power of the trustee was here limited also, the limitation being that he should sell at public auction to the highest bidder, and from this limitation of his power he could no more depart than from any other. The trustee on the day of sale sold to Whatley as the highest bidder but he did not sell for cash. He credited Whatley for two days, and on his failure to pay his bid sold it at private sale to the Dunagin-Whitaker Company who, again bear in mind was the cestui que trust, and made a deed on that day as shown by the acknowledgment, and dated it back to the date of the sale.

When the trustee accepted Whatley's bid and credited him until the day afterward, his power to sell to any other person then was gone. If it were not so the cestui que trust or mortgage would always have it in his power to prevent a sale to any other person, and buy the property himself at a ruinous sacrifice. He could at the sale, bid a small sum, have some one else bid more than the property would bring, and on his failure to make good the bid, then call upon the trustee for a deed under his, the next highest bid, when every one else would be powerless to bid more. If the trustee could thus go back to the next highest bid after the sale, he could sell to a stranger at the same price; or he could go back to the next, and then the next on down to the lowest. Neither the parties to the trust deed nor the law, ever contemplated that the trustee should be clothed with such power as that.

The duty of the trustee in this situation is well stated in 27 Cyc. 1486, par. C, where it is said:

"Failure to comply with bid. The foreclosure purchaser cannot be compelled to complete his payment and accept a deed if he was deceived or misled as to the state of the title or as to the existence of other liens on the property, or if it is materially misdescribed in the notice of sale. But otherwise he is liable for the amount of his bid, which may be recovered in a proper suit against him; or if he is unable to comply with his bid the property may be put up for sale a second time. This may be done immediately, if the purchaser's refusal or inability is clearly manifested, and the necessity of advertising a second time or giving new notices may be avoided if the resale is made on the spot and before the bidders disperse, although otherwise there must be a new publication and evidence of the trustee's or mortgagee's continuing authority to make the sale." See, also, Davis v. Hess, 103 Mo. 31, 15 S.W. 324; Hogan v. Lepetre, 1 Port. (Ala.) 392; Benard v. Duncan, 38 Mo. 170, 90 Am. Dec. 416.

We think that no authority can be found which holds that the trustee may accept the highest bidder and then in the absence of an agreement to that effect, afterwards for any reason when the time for the sale has passed go back to the next highest bidder and deed him the property. Certainly not where the deed is made to the mortgagee without the consent of the mortgagor.

The case of Maloney v. Webb, 20 S.W. 683, relied on by the appellee in the court below, is not in point with this and does not support the contention of appellee. In that case the highest bid at the sale was by Maloney, the mortgagor. The mortgagee at the time warned him that it was a cash sale, and he, Maloney, said that if he had a little time he could get the money. The court then says: "It was agreed all round among the bidders and parties in interest that he should have one, two or...