Watson v. Perkins

40 So. 643, 88 Miss. 64

• Court: Mississippi Supreme Court
• Decided: April 15, 1906
• Status: Published

Opinion

Harper, Sp. J\,

delivered the opinion of the- court.

*

The deed of trust under which the sale now under consideration was made provided that the holder of the secured notes should' have the power to appoint a substituted trustee. This record shows that the holder of these notes, the Hnion Mortgage Company, did not undertake to appoint the substituted trustee who made this sale, but that he was appointed by one Ingraham, who purported to act as an attorney in fact for that company. But since such power of appointment has been held to be purely personal, and one that cannot be delegated, the attorney in fact of the holder of these notes had no right to name a substituted trustee, and, such appointment being void, the sale made by such trustee was void. Allen v. Alliance Trust Co., 84 Miss., 319 (36 South. Rep., 285) ; Carey v. Fulmer, 74 Miss., 729 (21 South. Rep., 752); Hartley v. O’Brien, 70 Miss., 825 (13 South. Rep., 241). This trust deed also provided that the appointment of a substituted trustee should be made by the holder of said notes “under his name and seal.” There was no seal, either of the holder of the notes or the attorney in fact, attached to the appointment of the substituted trustee herein, and for that reason, also, his appointment and the sale made by him was void. Sharpley v. Plant, 79 Miss., 175 (28 South. Rep., 799; 89 Am. St. Rep., 588).

The doctrine of election has no application to this case. As we understand that doctrine it applies only where a party, having elected to pursue one of two inconsistent remedies open for the assertion of a right arising from the same state of facts, is thereby estopped from afterwards pursuing the other. But here complainant is seeking but one remedy or relief, the recovery of the land in question, and it matters not upon how many independent grounds she may put her right so to do. She says, in effect, in her amended bill, “I am entitled to the land because the trust sale is void.” She further says, “I am entitled to the possession of the land by subrogation, if. the trust sale be not void.” And she might have proceeded with any number of other grounds or independent state of facts to show that she was entitled to such possession. It is true that the assertion of one right may sometimes be held to indicate an intention to abandon another. But this is purely a question ■of intention, and is not governed by the- doctrine of election of remedies, but by the doctrine of waiver of rights. Complainant’s original bill, to which we must look to determine whether there was a waiver of the right to set aside the void sale, sets out that defendant Watson, who bought from the Union Mortgage Company, the purchaser at the trustee’s sale, was the agent and bought for the use and benefit of complainant, and asks that she be subrogated to all of his rights under the contract. Then, in sec. 12, it proceeds as follows: “Although the amount claimed by said mortgage company, and for which said property was sold, was usurious and excessive to the .■amount of about $200, whereby all interest would be forfeited, and although said sale by the said O’Neill assuming to act as trustee was illegal and void for the reasons hereinbefore stated, yet, as said agreement of purchase was made by her said agent for her benefit and the same was to some extent the result of a ■compromise, she is willing to abide by it, and now offers to ■do so provided her rights are recognized, and the amount due by her under said contract is credited with the sums paid by her said agent, and she is reinstated in the possession and enjoyment- of her property.” Had such a provision been contained in a solemn contract between the parties, there would have been no ratification, of the void sale until the annexed conditions, valid in themselves, had been complied with. Under the broadest application, no higher rights could accrue to defendants by the doctrine of waiver than would have arisen from contract. The offer to waive was expressly conditional, and the right to make a conditional waiver is quite as clear as the right to make a conditional contract.

It may be true that the defendant, the New England Mortgage Company, purchased these notes with reference to the status fixed by complainant’s bill, but it had full notice of that bill and of its legal effect. Surely the two defendants, Watson and the New England Mortgage Company, ought not to be heard to complain; for they both not only refused to accept and act upon the offer made in the bill, but denied to the last the facts upon which subrogation was asked, and sought by every legal means to prevent .the conditional waiver from becoming effective. With such an explicit declaration in the bill of complaint of the conditions upon which a ratification and affirmance of the void sale would be given, it is difficult to understand how the New England Mortgage Company could have been misled, and if it relied in any measure upon this, bill as a ratification of the void sale, it is still more difficult to understand why it resisted in every legal way the consummation of the express conditions upon which complainant stated she would waive her right to set aside the sale. When the two defendants, AAtotson and the New England Mortgage Company,, had filed their answer, denying that complainant was entitled to be subrogated to the benefits of Watson’s contract, and thus, rejected the proffer made in the bill, complainant amended her bill and sought to' base her right to relief upon the additional ground that the trustee’s sale was void. Under the facts of this -case it is clear that equity and the ends of justice required that she be allowed so to do, and defendants cannot now be heard to complain.

The court below properly declared the trust sale void and ordered an accounting, and there is an appeal from this accounting’. The Union Mortgage Company became a mortgagee in- possession by operation of law, and from no fault of its own, but because of the default of complainant, and while so in possession, in perfect good faith entered into an agreement to sell the land in question to defendant Watson. The doctrine is well established in Mississippi that under such circumstances such mortgagee is only liable to account for the proceeds actually received from the land, and not for what ought to have been received, in the absence of willful wrong, neglect or fraud. Building Association v. Houston, 81 Miss., 386 (32 South. Rep., 911). The mortgagee here having sold to Watson in good faith, and having put him in possession of the land before this suit was filed, and, so far as this record shows, having used due diligence to collect all payments as they fell due, and having been fairly successful in such collection until after it became doubtful, from the filing of the amended bill, whether Watson wo-uld receive a good title if he made the payments, it seems clear that it should not be held responsible for his default. This attack upon its title put the Mortgage Company in a position where it could not repudiate its contract with Watson with safety, nor enforce it with effect.

The accounting proceeded upon a basis erroneous in law, in that it charged the- Mortgage Company with all rents collected by Watson, whether it had received them or not, and we think this error of law is sufficiently presented in the record for our consideration. We therefore reverse and remand this cause for a new accounting, and direct that the Mortgage Company be charged only with such sums as it actually received from Watson, that Watson be charged with all proceeds from the land received by him and not paid to the Mortgage Coinpany, and that Watson, and not the Mortgage Company, be credited with the value of all improvements made by Watson.

Reversed and remanded.

Whitfield, C. J., because oí relation to some of the parties, recused himself, and W. R, Harper, Esq., a member of the supreme court bar, was appointed and presided in his place