90 Va. 370 | Va. | 1893
Lead Opinion
delivered the opinion of the court.
The controversy between the parties to this appeal has arisen over the execution of a trust deed executed by the appellants to a certain trustee, conveying a tract of land in Ilenrico county, near the city of Richmond, containing 856 acres, to secure a debt due the Virginia State Insurance Company of $12,229 37. There were several abortive attempts at a sale, one on the premises, and another in the city of Richmond, when a sale was made at $12,000, when, it appearing by affidavits that the price of $12,000 was grossly inadequate, and in the opinion of numerous persons — real estate dealers and others — that the property was worth $25,000, by consent of all parties the sale was set aside by the court, and a resale ordered. The trustee advertised the sale to take place at the door of the city hall iu the city of Richmond, when the appellants procured an injunction, upon the ground that the property could hot safely be sold in the city of Richmond with a reasonable expectation that it would bring a reasonable price, and that such a sale would result only in a sacrifice of the property; that it was a large farm near the city, situated iu the county, and capable of subdivision into several valuable truck farms; that the trustee should not be allowed to sell the whole tract unless necessary to pay the debt due on it; that, if sold in bulk, it would not bring its value, whereas the record showed that it was worth $25,000, and that land just across the road had recently sold for $100 per acre, and this, by proper adver
In the first place, it appears that the advertisement was as long as the terms of the deed required — “ten days at the least.”
The next question is as to the place of sale, and upon this question we will remark that the deed contained no stipulation as to the place where the sale should be made; and according to the rule established by the law, and to be found in the decisions, of this court, this matter was left to the sound discretion of the trustee. Shurtz v. Johnson, 28 Gratt., 657, and cases cited; Walker v. Beauchler, 27 Gratt., 511, and cases cited. Mr. Barton says on this subject (2 Bart. Ch. Pr., 446): “When the deed does not fix the place for the sale, the trustee may make it in any place which, in discretion, he may select; but he should exercise that discretion fairly and prudently,” (citing Shurtz v. Johnson, supra); and he cannot sell more of the trust subject than is necessary to satisfy the debt, unless the interest of the owners demand it, or they request it, or unless it would be injurious not to sell the whole. This rule, of course, relates to a divisible subject, the trustee’s duty in every case being to act for the best interest of all the parties. It is a settled principle in this court that trustees ought not to
As we have said, the deed is without directions as to the place where the sale shall be made, and the trustee must, in the exercise of a sound discretion, such as we have above referred to, select the place; and, if he shall be in doubt, he may apply to a court of equity for a determination of that question. If he determines for himself, and either party is not satisfied with his decision, he may apply to the court of equity to have it determined before the sale by the court, according to the circumstances of the case. That this question is determinable in the light of the circumstances of the particular case is clear under the decisions. In Walker v. Beauchler, supra, Judge Staples, speaking for the unanimous court, said: “It is very true the deed does not prescribe the place of sale, and much was therefore left to the discretion of the trustee: In the exercise of that discretion, it would seem clear that the salé ought certainly to have been made at least in the county where the property was situated.” And the subsequent case of Shurtz v. Johnson, supra., Judge Burks says, speaking of a sale of land situated in York county, Va.: “ It thus appears that neither Baltimore nor any other place is specially designated in the deed as the place where the sale is to be made, but by
¥e are further of opinion that the land should be subdivided and sold in parcels; that no more may be sold than is necessary to pay the debt; and, when enough has been realized to pay the debt, no more ought to be sold. It is true that the deed simply directs the trustee to sell the property conveyed, but this must be taken in connection with the statute, chapter 113, § 6, Code 1873, which applies to this case, which provides, in such case, that when, default shall have been made in the payment of the debt, or any part thereof, by the grantor, the trustee shall sell the property conveyed by the deed or so much thereof as may be necessary. And Judge Moncure, speaking of this subject, and construing a similar law to this, says, in Michie v. Jeffries, 21 Gratt., 347: “It is the duty of the trustee not to sell more of the trust subject than the purposes of the trust require, even though the deed direct him, in case of default, to sell the trust subject, without saying, ‘ or so much thereof as may be necessary to satisfy the purposes of the trust,’ ” the last part of the sentence, “ to satisfy the purposes of the trust,” being the phraseology of the law applicable to that case. Code 1860, c. 117, § 6. He adds: “ That is always implied, unless a contrary intention plainly appears”; and
As to the length of time that the land should be advertised before selling, the terms of the deed are not restrictive, except only so far as to prohibit a shorter notice than “ten days at the least,” and in this case the court, in justice to the debtor, should prescribe a reasonable notice of at least thirty days, and not only in the newspaper as directed by the deed, but by handbills posted and so distributed as to bring the best price attainable for the property, if these expenses are incurred at the instance and request of the debtor, as they do not diminish the amount to be received by the creditor, and in no way impair his rights. It is right to add that in this case the creditor has been liberal and not unduly aggressive in enforcing his claim. It appears that he has been as anxious as the debtor to make the property bring the best price possible, and there is no proper criticism that can be, or ought to be, made upon him, nor upon the trustee throughout these transactions. Much has been done in a mutual spirit of friendliness; but the parties have reached the point where divergence of interest has finally culminated in disagreement, and, the debtor seeking the aid of a court of equity, as he had a right to do, we have considered the rights of the parties as they now appear, and will reverse the decree for the stated reasons, and remand the cause to the chancery court, with directions to continue the injunction, and direct the proceedings of the trustee in order to a sale of the property and the payment of the creditor’s debt as soon as it can be done, having regard to the just rights of all concerned.
Dissenting Opinion
dissenting, said :
The case, in my judgment, is so plain for affirmance that I shall be brief in the statement of my views in regard to it. In view of the evidence in the record and the settled law on the subject, it is matter of surprise that the decree appealed from should be reversed. Fortunately, however, two of the judges being absent, the decision cannot be authority for any other ease. Whiting v. Town of West Point, 88 Va., 905, 912.
Much that is said in the opinion just announced is not rela-vant to any question before the court. The case is a simple one. The principal grounds upon which the injunction was prayed for to prohibit the advertised sale were (1) that the sale ought to be made on the premises; (2) that the property ought to be sold in parcels; and (3) that the notice of sale was not sufficient, the latter point being now abandoned.
The property is situate just outside the city limits. The place of sale is not prescribed in the deed of trust, but the provision is that in the event of a sale, “ the same shall be made after first advertising the time, place, and terms thereof for at least ten days in some newspaper published in the city of Richmond,” and the statute provides that the trustee in a deed of trust, which does not otherwise provide, shall, when called upon to sell, make sale after having first given “reasonable notice of the time and place of sale,” which, of course, implies that in such a case the sale need not be upon the premises, but that it may be at any other suitable place the trustee, in his discretion, may select. Code, sec. 2442; 1 Bart. Ch. Pr.,446.
The principle is that the trustee must exercise his discretion, so far as he has any, in an intelligent and reasonable manner. He must use every effort to sell the estate under every possible advantage of time, place, and publicity. 2 Perry, Trusts, sec. 602o.
This elementary principle was recognized by the Supreme Court of the United States in Richards v. Holmes, 18 How.,
The case of Johnson v. Dorsey, 7 Gill, 269, is another authority in point. In that case, under a decree of foreclosure of a mortgage, a farm, situate just outside the city of Baltimore, was ordered to be sold, and the sale which was made, not on the premises, but in the city, was upheld.
Indeed, in Shurtz v. Johnson, 28 Gratt., 657, a sale by a trustee in Baltimore of a farm situate in York county, in this State, was sustained; and Judge Burks, in the course of his opinion, said: “I know of no law of this State forbidding such a sale, and no decision of any court has been cited in support of the general proposition, that a trustee who is invested with power to make sale of real estate for the payment of debts, without express limitation as to the place of sale, cannot lawfully make such sale at a place outside the territory and beyond the jurisdiction of the State in which such real estate may be. The powers of the trustee must be determined from an examination of the deed under which he acted. * * It appears that neither Baltimore nor any other place is specially designated in the deed as the place where the sale is
The learned judge also referred to Walker v. Beauchler, 27 Gratt., 511, and pointed outthe difference in the circumstances of the two cases, and that there was no conflict between the cases. Indeed, Judge Staples, speaking for the court in the Walker Case, expressly stated that where the place of sale is not prescribed by the deed of trust, much is left to the discretion of the trustee. He lays down no such proposition as that, in such a case, the sale must, as matter of law, be on the premises, or even in the county; neither does he impugn the general principle stated by Judge Burks in the Shurtz Case; but merely says that under the circumstances of the case with which he was dealing — the war being flagrant — the sale ought to have been at least in Alexandria county, where the property was situate, and not in Georgetown, outside the State. The case' is, in fact, an authority for the principle that whether a trustee has fairly exercised his discretion depends upon the circumstances of the case — a principle universally recognized, not only in regard to selecting the place of sale, but also as to selling the estate in whole or in parcels.
Now, remarkable to say, the conclusive and uncontradicted evidence on this point in the present case is utterly ignored in the opinion just announced.
It is proven, as the opinion of competent judges, that the property will sell to better advantage in Richmond than on the premises. This is sot out at large in the answers of the defendants, which were sworn to, and which were treated as affidavits on the motion to dissolve the injunction, there being no countervailing testimony. 1 Bart. Ch. Pr., 414; Muller v. Stone, 84 Va., 834. The answers aver that the premises are greatly out of repair, and by no means attractive in appearance. It is also stated that at a previous sale on the premises, under the deed of trust, the only bidders present were from the city; that
The answer of the trustee states that he would have indulged the appellants as to the place of sale had they expressed a preference (as they were given the opportunity to do) for the sale again to be on the premises. He also says that in view of the fact that at the previous sale on the premises not more than a half dozen persons from the country attended, he considered the ehauee of an advantageous sale better if the property were offered in Richmond, and accordingly advertised the sale to take place in front of the city hall.
"Why, then, should the advertised sale be enjoined instead of leaving the trustee to try the experiment of a sale in the city? Surely no one could have been injured by such experiment; for had the sale proceeded in the city without a just or satisfactory result, the chancellor could have refused to confirm it. The appellants thus had an ample remedy for the protection of their interests, without applying, as they did, to the judge of another court for an injunction to stop the sale. It is to the interest of all parties that the property shall bring the best possible price; and as it has once been offered on the premises without an adequate price being obtained, why should it. not be offered in the city, where, according to the evidence, the chance of obtaining a fair price is better? It is extraordinary, as it seems to me, that the decree dissolving the injunction should be reversed, with arbitrary directions to sell on the premises and in parcels, in view of the result of the effort that has already been made to sell in that way and all the other evidence in the case.
I am for affirming the decree.
Decree reversed.