Webb v. Biles

• Decision Date: 09 February 1942
• Docket Number: 34782.
• Citation: 192 Miss. 474,6 So.2d 117
• Court: Mississippi Supreme Court
• Parties: WEBB v. BILES et al.

6 So.2d 117

192 Miss. 474

WEBB v. BILES et al.

No. 34782.

Supreme Court of Mississippi

February 9, 1942

W W. Venable and Dan C. Brewer, both of Clarksdale, for appellant.

Bell & McBee, of Greenwood, for appellees.

ROBERDS Justice.

The bill in this case seeks to set aside two sales of lands under trust deeds executed by appellant, complainant below, to the Federal Land Bank of New Orleans, and some seven years after such execution transferred and assigned by said bank to appellee, Biles, who was the purchaser at the sales. The sales were by a trustee substituted by Biles for no stated reason other than his desire, and in the exercise of his option, so to do. Complainant makes the contention, among others, that Biles had no such right or power; that the appointment was invalid; the sales illegal, and conveyed to Biles no title to the land. She offers to pay any indebtedness found to be owing by her and to do equity, and seeks an accounting of rents and profits. A general demurrer was sustained and the bill was dismissed by the chancery court.

The provision reads: "The said bank, or any holder of said indebtedness, if a person, acting personally, if a corporation, acting by and through its president vice-president or secretary, or other managing authority, is hereby fully authorized and empowered to appoint another and succeeding trustee in place of the said above named trustee or his successors, if for any cause the trustee in this instrument, or his successors, shall not be present, able or willing to execute this trust, or if for any reason, said holders acting by and through the above described officers or any one of them, should so desire, and such appointee shall have full power as trustee herein."

The specific question is whether the phrase "or if for any reason, said holders acting by and through the above described officers, or any one of them, should so desire," confers upon an individual the power to substitute a trustee at his option, or whether that phrase limits that right to corporate holders.

A review of the rules announced by this Court will be helpful in deciding this question. In Guion v. Pickett, 42 Miss. 77, the deed of trust provided that if the trustee should neglect or refuse to act, the beneficiary might appoint another. The named trustee died. The beneficiary appointed one Clarke. The Court held that the beneficiary had no power to substitute a trustee in this case, that it could not be said that the original trustee, who had died, had neglected or refused to execute the trust. The Court said "In the construction of powers, the intention of the parties, if compatible with law, governs the court. But that intention is to be collected from the instrument creating the power. And with regard to the appointment of a new trustee, the power authorizing it should express plainly the cases in which a new trustee may be appointed, and it should embrace every event that can render such appointment necessary,-such as the neglect or refusal of the trustee to act, his death, absence from the country, wish to retire from the office, or incapacity to discharge its duties. Hill on Trustees, 251. The appointment of a new trustee under a power cannot properly be made, unless the terms of the power clearly and distinctly authorize the appointment in the particular event which may have occurred."

In the case of Clark v. Wilson, 53 Miss. 119, the deed of trust provided that if the trustee should "fail from any cause to act," the beneficiary might appoint another. The beneficiary went into bankruptcy, and the trustee in bankruptcy undertook to make an appointment. The Court held that the trustee in bankruptcy had no power to make an appointment. The Court said: "The law does not supply the cestui que trust with such power. He does not have it, unless he stipulates for it with the grantor. Nor can those who take by succession from him, as the executor or administrator, make an appointment, unless they are expressly authorized by the grantor to do so. Hill on Trustees, 183; 1 Sugden on Powers, 145; Bradford v. Belfield, 2 Sim. 264. When the power is granted, it should designate the person by whom, as well as the event or circumstances upon which, it may be exerted. If a person not named, or distinctly described by his office or character, makes the appointment, or if the circumstances do not warrant the new appointment, or there be serious irregularity in executing the power, in all these cases the acts done by the appointee will be invalid; and the original trustee will not be exonerated or discharged. Hill on Trustees, 189; Guion v. Pickett, 42 Miss 77."

In Sharpley v. Plant, 79 Miss. 175, 28 So. 799, 89 Am.St.Rep. 588, where the deed of trust provided that the appointment of the trustee should be under the hand and seal of the beneficiary, the Court held this must be done even though private seals had been abolished in this State.

In McNeill v. Lee, 79 Miss. 455, 30 So. 821, 822, the deed of trust provided a trustee might be substituted if the original trustee should not be present, able and willing to execute the trust. The named trustee was present, able and willing to act. The beneficiary appointed another. The attempted appointment was void. The Court said the power to appoint a trustee "is a strict power, and such an appointment cannot be made, except upon the happening of the precise event specified in such deed."

In Allen v. Alliance Trust Company, 84 Miss. 319, 36 So. 285, the Court held that the attorney in fact of the beneficiary could not appoint a trustee where the provision was for the appointment "by the beneficiary or any holder of the notes secured or their legal representatives." This provision authorized the appointment at the option of the holder or legal representative. The Court held that the sale was void and no title passed.

To the same effect was the holding in the case of Watson v. Perkins, 88 Miss. 64, 40 So. 643; the Court saying the power was personal and could not be delegated to another, citing Allen v. Alliance Trust Co., 84 Miss. 319, 36 So. 285; Carey v. Fulmer, 74 Miss. 729, 21 So. 752; Hartley v. O'Brien, 70 Miss. 825, 13 So. 241.

In Jones v. Salmon, 128 Miss. 508, 91 So. 199, 200, the deed of trust provided that if "from any cause [the named trustee] should fail or refuse to act as such when thereto requested * * *" the beneficiary or holder of the notes could appoint another. The named trustee died. The instrument appointing another trustee recited that the original trustee was not able and willing to execute the trust. The Court held this substitution was good, and distinguished this case from the Guion case, supra, where the right existed if the named trustee "shall neglect or refuse" to act, saying that "'fail or refuse' is more comprehensive than 'neglect or refuse"'; that one who is dead cannot refuse and neglect to act. The Court reannounced the rule of strict construction of the power to substitute a trustee, but said the doctrine...