49 W. Va. 150 | W. Va. | 1901
On the 6th. of January, 1898, Jas. B. Sandusky being heavily indebted to various persons, but not in more than the aggregate sum of twenty-three thousand dollars according to his contention, executed a deed of trust in which his wife joined, conveying all of his real and personal property in the counties of Bitchie and Harrison to Samuel Faris in trust to secure the payment of certain liens on said Sandusky’s lands therein speciñed in the order of their priority and the other judgments, debts and liabilities of said Sandusky; reserved to himself the right to collect and use the rents arising out of any of the houses on any part of the real esiate conveyed, the right to operate the mills therein mentioned and enjoy the profits arising therefrom, and the right to use and occupy free from rent one of the buildings on said real estate until such time as a sale thereof should be desired by the trustee; and authorized the trustee to take immediate possession of the property so conveyed subject to said reservations and proceed to
The property conveyed by this deed of trust consists of a tract of land of about four hundred acres situated near the town of Bridgeport in Harrison County, a portion of which is in said town on which there are eleven one and a half story houses, said to have cost about four hundred dollars, each renting for about three dollars per month, all of which tract is said to be worth sixteen thousand dollars; a house and lot in said town known as the John Payne property and alleged to be worth four hundred and fifty dollars; another two-story frame house and about an acre of land therewith known as the W. E. Hill property and alleged to he wotth one thousand two hundred dollars; a shop and lot in said town purchased of said Hill for three hundred and sixty-five dollars; a grist mill, and saw mill in said town and land upon which same are situated alleged to have cost seven thousand dollars; about five hundred and fifty-one acres in Ritchie County of which about four hundred acres are virgin forest, well timbered, all of which tract is charged to be worth eight thousand two hundred and sixty-five dollars; one-half of a tract of three hundred and seventy-two acres in Ritchie County, of which two hundred and seventy-five acres are improved and in grass, claimed
The only liens specified in the deed of trust of January 6, 1898, are a judgment for five hundred and ten dollars and seventy-seven cents in favor of Jas. McDermott dated September 17, 1896, on which it recites three hundred dollars had been paid, and a judgment for three hundred and thirty-nine dollars and thirty-six cents dated May 11, 1897, .and costs in favor of Otto D. Barnes; but the plaintiff admits in his bill that there are other liens and unsecured debts due and owing from him. The Jas. A. Coplin land was encumbered by a lien created by deed of trust executed by Coplin and wife and his mother dated August 16, 1888, to Kelso Bell, trustee, to secure to said Sandusky the payment of five thousand five hundred dollars in consideration of his agreeing to pay numerous debts due from Coplin to divers other persons. Said suin' of five thousand five hundred dollars was evidenced by a note executed by Coplin to Sandusky and he assigned it to the West Virginia Bank as collateral security for debts and obligations due to it from Sandusky, amounting now as he claims, to about five thousand dollars, and said bank still holds said note and the deed of trust has never been released.
After these transactions, Coplin, by deed dated November 27, 1895, conveyed the land to Sandusky for and in consideration of all the debts then owed by him to Sandusky amounting to about six thousand dollars. On the 12th of August, 1895, Sandusky and wife by deed of trust bearing that date, conveyed the various lots and parcels of land at and near Bridgeport containing about four hundred acres to J. V. Blair, trustee, to secure to Silas Langfitt the payment of a certain writing obligatory executed by Sandusky to Langfitt for the sum of six thousand seven hundred dollars for borrowed money bearing even date with the deed, and to become due in three years after date, since the execution of which Langfitt has died intestate and Jas. V. Langfitt has qualified as his administrator, and the debt remains unpaid: San-dusky being one of the sureites on the bond of W. E. Hill guardian for Cecil M., Sadie B., Wm. H. and Hattie Kester, who having instituted suits in the circuit court of Harrison County against said guardian and his sureties, an erroneous decree in
Hpon this appeal the decree of the lower court was corrected and affirmed, and at the January term, 1900, of the Harrison circuit court a decree was entered in the cause for sums aggregating two thousand eight hundred and eighteen dollars and ten cents with interest from May 11, 1897..- During the pendency of that suit the deed of trust of January 6, 1895, was executed and the trustee therein advertised the property of Sandusky for sale, and another suit was instituted by John I. Alexander, guardian of said Kester infants, to collect the amounts so decreed to them out of said estate, and to enjoin and restrain said trustee from
In a chancery suit brought in the circuit court of Harrison County by Moses W. Spencer to rescind a contract made between him and Sandusky for the sale of the Coplin land to him for six thousand eight hundred dollars there was a decree against Spencer entered which, upon appeal was reversed, and a decree entered therein against Sandusky for the costs amounting to three hundred and thirty-six dollars and twenty-two cents with interest from September 21, 1899. In addition to these sums San-dusky admits he is indebted to Kate Gawthrop in the sum of about seven hundred dollars; to Gideon Uuzum, about one thousand six hundred dollars; to Cyrus Thompson, administrator of John G. Thompson, about seven hundred dollars; to W. M. Late, on a judgment, about one thousand six hundred dollars and to different individuals in smaller sums.
Samuel S. Faris, trustee in the deed of trust of January 6, 1898, gave notice in January, 1900, by publication that on the 19th day of February, 1900, he would offer for sale at the front door of the court house of Harrison County, the Coplin land; and, on the 20th of February, 1900, on the premises, the four hundred acre tract at and near Bridgeport (part of which would be sold in lots ranging from one-half acre to twenty-five acres, all accessible by streets and aliajes); the lot known as the Hill property of about one and one-eighth acres; such part as he might desire to sell of a two and one-half acre lot adjoining said Hill lot; the one-half acre lot on Philadelphia avenue; and a lot in Bridgeport containing about one-sixteenth of an acre; in which notice the terms of sale were fixed at one-third cash and the residue in two equal instalments, to become due in nine and eighteen months respectively from the day of sale.
On February 15, 1900, Sandusky presented his bill of complaint against Faris, trustee, and others to Hon. G. W. Farr, judge of the Fourth circuit, in vacation, who granted an injunction restraining said trustee from further proceeding with the sale of said property and from making any disposition of the same or of the proceeds of such of it as he had already sold until the further order of the circuit court of Harrison County.
Such is the substance of the bill covering twenty-seven printed pages, except a rather lengthy statement concerning the timber on the Ritchie County lands and the probability that these lands will become productive, and valuable oil and gas territory.
The prayer is for an injunction preventing the sale advertised by Faris, his making any disposition of the proceeds of any of the property until the future order of the court except to pay taxes on the property, and the cost of the suit brought by the Hester children; for a reference to a commissioner; for a decree fixing the amounts and priorities of his debts; for a strict account on the part of Faris as trustee; for the appointment of a special receiver in the case; for the sale first of the lands other than the homestead in case a sale shall become necessary; for permission to redeem the homestead in case the other land shall not bring enough to pay all the debts; for the renting of the lands for oil and gas purposes and the application of the rents to the payment of the debts; and for general relief.
To this bill the defendants Faris, trustee, W. M. Late, John Duncan, Jas. H. Hurry and John C. Johnson tendered their separate answers, to which the plaintiff filed exceptions, which were overruled and the answers filed, and general replication was made thereto. Separate answers were filed by Thompson, administrator, J. Y. Blair, trustee, G. S. Nuzum, O. D. Barnes, Catharine Gawthrop, the West Virginia Bank, and James Duncan, and were replied to, generally. There were depositions taken and filed for the plaintiff of himself, P. M. Long, W. F. Stout, M. G. Sperry, J. R. Adams and Jas. M. Lyons in addition to which plaintiff filed his affidavit. For the defendants the affidavits of S. C. Den-ham, W. F. Williams, and Nathan Davis, J. D. Long, B. W. Hav-nar, Y. L. Highland, Ed. Martin, T. H. Dunn, Oliver Rinehart, Frank Peck, W. C. Morrison, John Duncan and J. W. Bailey were filed.
The cause has come to this Court upon an appeal from, and supersedeas to this order, and the appellant insists that the circuit court erred, first, in passing upon and overruling, in vacation, his exceptions to the answers of several of the defendants; and secondly, in dissolving the injunction.
While it is true our statute provides that the exceptions to an answer “shall at once fie set down for argument,” (Code, chapter 125, section 54), it is not so provided, nor has it ever been held in this State that the complainant in a fiill upon which an injunction has been awarded, may, by filing exceptions to the answer, deprive the defendant of its benefit, if it be sufficient, upon the hearing, in vacation, of a motion to dissolve. Nor can he thereby delay the hearing of such motion until the next term of court to the end that such exceptions may then be argued and disposed of prior to the hearing of such motion. With us, judges of circuit courts have unqualified jurisdiction by express statutory provision, to dissolve injunctions in vacation upon.reasonable notice in writing having been given the opposite party of the time and place at which the motion will be made. Code, chapter 133, section 12. Clothed with this authority, it would indeed be strange and inconsistent, if they did not have jurisdiction to settle all questions, necessarily preliminary and incidental to its exercise.
As Stated in Richardson v. Donahoo, 16 W. Va. 685: “The court should pass upon the exceptions filed to the answer before proceeding to finally hear the causebut this language does not even carry an intimation that such action must be deferred until the final hearing in all cases or that the court or judge cannot resort to the exceptions for any purpose until the cause comes on to be finally hoard. That such exceptions may be considered upon a motion to dissolve an injunction, is supported by abundant authorities.
“On a motion to dissolve an injunction, objections of every kind to the answer may be made, and are then in order.” Gibson v. Tilton, 1 Md. 352.
“A motion to dissolve the injunction and exceptions to the
“According to the chancery practice of this state, the motion to dissolve an injunction and the exceptions to the answer are heard and decided at the same time." Keigler v. Savage Mfg. Co., 12 Md. 383.
The Maryland rule as laid down in these cases is subject to the qualification stated by the learned chancellor in Salmon v. Claggett, supra, as follows: “But, however, it may be in the English courts in this particular, it has long been the practice of this court to hear and decide upon the motion to dissolve and the exceptions to the answer at the same time; and I shall hereafter consider it as finally settled here that the motion to dissolve and all exceptions to the answer which may then be filed, shall be taken up and decided upon at the same time; not however, denying to the plaintiff the right, for the purpose of obtaining a sufficient answer to the full extent required by the bill, to except to the answer within the proper time, after the motion for a dissolution of the injunction has been disposed of. * * * * In this court the question presented on a motion to dissolve, on the coming in of the answer is not one which always or necessarily involves the merits of the whole case, as set forth in the bill; it may be, and not unfrequently is, much narrower; because this court recognizes the distinctions between the case on which the injunction rests, the material head of equity which entitles the plaintiff to an injunction, and that which forms the whole foundation of his prayer for relief; which although often, are not necessarily one and the same case; and therefore this question on a motion to dissolve properly extends only to the equitable grounds of the injunction, and no further."
Beach on Mod. Eq. Pr. s. 784 says: “The court will hear an argument upon the exceptions to the answer and upon the motion to dissolve the injunction at the same time." High on Inj. s. 1602 lays down the American rule as follows: “Hence it follows that exceptions to the answer will not per se prevent the dissolution of an injunction but the court will look into the exceptions upon the argument of the motion to dissolve, and will give them the weight to which they are entitled;” and in this connection, the author says a different rule prevailed under the English practice which has never been received with favor in this country.
In O’Connor v. Starke, 59 Miss. 481, the court says in discuss
If in the application of this rule, upon the hearing of a motion to dissolve in vacation, the order dissolving the injunction shows also that the exceptions to the answer were overruled, as it does in this case, it is not necessary upon an appeal from that order to determine whether it is error to include that ruling in the order as likely to prejudice the plaintiff’s rights at the final hearing; for it cannot have that effect until a final decree is made carrying the error with it. If it shall be found that the injunction was properly dissolved the decree will be affirmed. It is not intended here, however, to intimate that such action was erroneous. The dissolution of the injunction necessarily overruled the exceptions to so much of the answer as. related to the equities of the bill upon which the injunction was based, and certainly no harm could result from recording what was properly decided, although it may have been unnecessary, nor need it be said that because the language of' the order carries on its face an appa-rentty broader meaning, it really signifies more than that the .exceptions were considered only so far as it was proper to do so in deciding upon the motion to dissolve the injunction.
The plaintiff filed four exceptions to the answer of Late, Johnson, Hurry and Duncan, and seven to that of Faris, but none of them are sufficiently specific to conform to the requirements of the rules of equity practice respecting such exceptions. They are mere criticisms upon the answers without setting forth any of the allegations of the bill as not being sufficiently answered.
In Richardson v. Donahoo, supra, this Court held that, “Exceptions are allegations in writing stating the particular points or matters with respect to which the complainant considers the
Under this rule it is necessary in order to make an exception available, that it clearly designate the allegation in the bill in relation to which the answer is excepted to for insufficiency, and the better practice is to set it out in haec verba. 1 Barb. Ch. Pr. 176; 3 Barb. Ch. Pr. 422; Beach. Mod. Eq. Pr. s. 406; Dan. Ch. Pr. 6 Am. Ed. p. 2110.
As to all material allegations not expressly admitted in the answer of Faris, trustee, that answer is sufficiently responsive to the bill. After taking up and dealing directly with the allegations by way of denial and explanation, to the .extent of over thirty-two pages of the printed record in which, as is also true of the bill, there is a great deal of matter which does not properly belong to pleading, the respondent says, “he has aimed to answer fully each and every allegation in the bill and either admitted or denied the same as the fact is, which he believes he has done, but byway of general answer to all such allegations as have not been either admitted or denied, says that all such allegations not heretofore replied to are untrue, and respondent demands and calls for proof of the same.” As to an answer containing a similar clause this Court held in Burlew v. Quarrier, 16 W. Va. 108 that, “While this denial is general and not sufficient to constitute good pleading in chancery proceedings, if excepted to properly in the court below, still in absence of such exceptions in the court below, the appellate court will generally consider said part of the answer as controverting said material allegations of the bill.” Taking this in connection with the apparent effort in good faith of Earis to answer all the allegations of the bill in detail and the failure of the plaintiff to designate by way of exceptions any particular allegations to which he desired
The principal grounds upon wbicb it is contended that the injunction should not have been dissolved are, that the notice of sale was insufficient for want of certificate showing that the trustee had given bond, and was not published and posted for the time required by law; that the trustee is unfriendly to complainant, and intimate with, and under the control and influence of some of his creditors; that the sale as proposed and advertised by him will be detrimental to the interests of complainant and his creditors; that complainant should be permitted to retain the homestead if the residue of the lands will sell for enough to pay off his indebtedness; that the amount of said indebtedness is unknown, uncertain and unascertainable except by a convention of his creditors in a suit in equity for that purpose; that no sale by the trustee should be permitted until the priorities of the liens are fixed by a decree of court, and that the legal title to the lands is outsanding in trustees Pell, Blair and Duncan.
That part of the statute requiring bond to be given by the trustee upon the demand of the grantor or any oestui que tmst, is mandatory, but whether that part which says every notice of sale in such case shall have appended to it the certificate that the bond has been given is mandatory need not be determined here, as the question is not properly raised, for unless the bond was given upon the demand of the grantor or a cestui que trust, no such certificate need be appended. Faris admits that he gave the bond, but denies that it was required, and there is no evidence that any was required. Sandusky in his affidavit says the Hester children complained that no bond had been given, and Faris afterwards gave it, as he believes, in order to meet this complaint. This is clearly insufficient to overcome the positive denial of Faris and his averment that he voluntarily entered into the bond without any notice from any of the creditors, or their knowledge, except such of them as signed it as his sureties.
To the objection that the notice was not published and posted for four successive weeks, it would be sufficient to reply that the deed of trust authorizes the trustee to advertise the sale for such time as he may deem best. But there were four successive publications in four separate weeks, and at the date of 'the first publication, the notice was posted, as appears by the affidavits of Frank Peck, who posted it, and W. C. Morrison who saw it on
The allegations of unfriendliness, ill-temper and indifference on the part of Faris toward complainant and intimate relations with Johnson, Late, Hurry and Duncan or any of them respecting the subject matter of the trust are all denied, and are not supported by proof. It is claimed that the charge that on one occasion Faris approached .plaintiff and “talked to him in a very harsh and disrespectful manner about what actions plaintiff sought in the premises;” and “used threats against the plaintiff and told him that he himself would never cease in his resistance and objection to a suit for the purpose of preventing such sale but would use all means in his power to defeat such suit, etc., * * * * and that such interference and any litigation growing out of the same would result in plaintiff’s having to pay costs on both sides,” etc., is not denied. The answer seems broad enough to cover this, and if plaintiff desired a more direct reply to it, he should have made the allegation the subject of a proper exception. But is the allegation itself sufficient ?
It is general in its terms; the alleged harsh and disrespectful language does not appear .either in the bill or the affidavit of San-dusky. The court has nothing from which it can inform itself as to the character of the language and conduct of Faris, except the plaintiff’s opinion, and that is clearly insufficient. Nor can it be regarded as misconduct on the part of the trustee to tell the grantor he would resist an effort to have the trust executed under the direction of the court, if there was no ground for equitable interference. He owes a duty to the creditors as well as to the grantor, and must execute the trust in the most economical, advantageous, and expeditious manner possible under its terms, and he would not be warranted in leaving the manner of. its execution to the determination of the grantor, nor can the action of the trustee in advising or notifying him that an unsuccessful! at
The allegation that the sale as proposed by the trustee will be injurious to the plaintiff and his creditors presents nothing more than a difference of opinion between the plaintiff and Faris, and. this difference dates only from about the time the trustee gave the last notice. For nearly or quite two years before that time, Sandusky agreed with Faris and urged him to_sell, and resisted the opposition to the sale offered by the Hester children. And he gives no reason for his change of opinion except that he has become convinced from the actions and conduct of Faris, Johnson, Late, Hurry and Duncan that such salé will not be beneficial to him and his creditors.
The deed of trust by its terms vests in the trustee plenary powers as to what part or parts of the land shall he sold, and as to its division into lots with streets and alleys, and the bill does not allege that such division and sale will he injurious. The only objection is that the division should be made in a manner different from that in which the trustee has made it, unsupported by anything except the opinion of the plaintiff, against which stands the covenant in the deed of trust by which that matter is left to the discretion of the trustee, and also the opinion of the trustee and principal creditors expressed in their answers.
The charge that it is the purpose of the trustee to unnecessarily subject the homestead to sale is denied, and is unsupported by proof.
The remaining grounds upon which it is urged that the injunction should not have been dissolved have been virtually passed upon in Kester v. Alexander, 47 W. Va. 329, (34 S. E. 819), in which Sandusky supported the action of Faris in obtaining the dissolution Of an injunction, restraining him from selling these lands; but the ease comes back here at the instance of a party who stands in a different relation to the subject matter of the trust.
Where, from any cause, the amount due and to be raised by a sale is uncertain, such uncertainty is an impediment to the proper execution of the trust, and application may be made by the trus
But to sustain an injunction upon the ground of such uncertainty the complainant must sufficiently allege it, and if it be denied in the answer, he must prove it. The bill in the case at bar sets forth no facts from which such uncertainty appears. It only alleges that he does not know the amount of his debts, that the trustee is not informed as to them, that they are uncertain, and that they cannot be ascertained except by a reference to a commissioner for that purpose. It is clearly not enough to allege such uncertainty in terms. It ought to appear that, as in Curry v. Hill, and Hogan v. Duke, supra, certain credits are claimed on one side and denied on the other; or the collection of certain improper claims is sought to be effected by the execution of the deed of trust. Such allegations until denied constitute a prima facie case. Here the chargeof uncertainty,if if couldbe held to be sufficiently alleged, is denied, Faris having sat out in his answer, by items, what he is informed and believes to be the bulk' of Sandusky’s indebtedness, amounting with interest in the principal items to twenty-seven thousand seven hundred and thirty-two dollars and seventy-three cents. The plaintiff files his affidavit, denying that he owes some of the smaller sums named, but the validity of none of these claims is questioned by him in his bill. As to the amount so stated as due Mrs. Potter, three hundred and twenty-five dollars on note; J. H. Hurry two hundred dollars on note, and W. Scott, three hundred dollars for services as attorney, he simply says he does not owe them. He does not deny having executed the notes or that Scott rendered him such service, nor does he claim to have paid them in whole or in part. In this affidavit he says he made payments to S. C. Denham, deputy sheriff, who claims five hundred and thirty-four dollars and twenty-six cents to be still due him on account of taxes about seven hundred and sixty dollars, and that the amount of the taxes was only about eight hundred and fifty dollars. While affiant does not say he makes the statement in reference to these payments upon information and belief, it appears that none of them were paid by him personally, but were, except two items of one hundred and eighty-four dollars and seventy-five dollars,
This affidavit and the bill fail to show any effort on Sandusky’s part to find out what his debts were, or as to what items or matters there will be conflict between him and any of his creditors. As to the discrepancies to which he refers in his affidavit, he neither alleges nor swears to any effort to ascertain whether there
There is no allegation here that Faris will pay any improper claim or refuse to compel the allowance by the creditors of any credit to which Sandusky is entitled.
In regard to another fact in the above case upon which an attempt to uphold the injunction was predicated, the opinion says: “It is outside of the pleadings in the cause,” and such is true of the matters set up in the affidavit, and herein referred to. But this doctrine of the uncertainty in the amount of the indebtedness is not ordinarily applicable to the case under consideration to the extent contended for as will be shown later on.
At the time said deed of trust was executed to Faris for the benefit of Sandusky’s creditors, there were a number of liens .on the real estate thereby conveyed, but it does not appear that there is any contention among the lienors as to priority, or any question raised as to their validity. It is error to decree a sale of the lands without first ascertaining the amount of the liens and their priorities for the reason that a sale under such a decree has a tendency to sacrifice the property by discouraging creditors from bidding as they probably would, if their right to satisfaction of their debts and the order in which they were to be paid out of the property had been previously ascertained. Coles Adm'r v. McRea, 6 Rand. 644; Cralle v. Mee, 8 Grat. 530; Buchanan v. Clarke et al., 10 Grat. 165; Moran v. Brent, 25 Grat. 104; Simmson v. Lyles, 27 Grat. 922; Kendrick et al. v. Whitney, 28 Grat. 646; W. A. & G. R. R. Co. v. A. & W. R. Co., 19 Grat. 592; Livesay’s Ex. v. Jarrett, 3 W. Va. 283; Murdock's Admr. v. Wells, 9 W. Va. 552; Wiley v. Mahood et al., 10 W. Va. 206; Marling v. Robrecht et al., 13 W. Va. 440; Scott et al. v. Ludington et al., 14 W. Va. 387; Payne & Green v. Webb et al., 23 W. Va. 558; McCleary v. Grantham, 29 W. Va. 301.
The sale sought to be enjoined in this cause is analogous to a sale under such a decree. Sandusky, the debtor, is bound by the authority given in Ms deed of trust for immediate sale of his property, and the consent of the creditors to such sale will be presumed until the contrary is made to appear; and if the assignment be free from fraud and legally sufficient they too are inextricably bound by it except in relation to their vested rights in the property as lienors, or some matter of detail or procedure on the part of the trustee to which they have not expressly consented. In this instance none of the creditors are here disputing the trustee’s authority to sell, or showing any reason why sale should not be made; on the contrary they are insisting that it be made. Under such conditions, how can Sandusky who has given his consent by the solemn covenant of- his deed, be heard to object? If it he true that the legal title is outstanding, and Faris can only sell the equity of redemption, and the purchaser from him will take the lands subject to the liens existing at the time of the general assignment, has not Sandusky assented to that also? Upon what authority can he be permitted to
It was his duty to know it and he cannot now be heard to deny such knowledge as the basis of forcing his creditors to accept a new and different arrangement for their benefit unless 3 be under peculiar circumstances which do not appear here. By this it is not intended to say that under special and peculiar circumstances overcoming the presumption of the debtor’s knowledge of the condition of his estate and presenting a strong ease,, he may not invoke the powers of a court of equity in his behalf, but that ordinarily, and in the absence of such circumstances, he cannot do so as to matters clearly involved in and covered by his consent.
To what extent and in what respects a deed of trust made for the benefit of a debtor’s general creditors differs from an ordinary deed of trust, it is not necessary, upon the state of the pleadings in this case and the questions brought here on appeal, to.decide; but that there is a marked difference, which warrants the position taken in this opinion respecting the power of the plaintiff in resisting the sale he has authorized, cannot be doubted.
“There is a manifest and well settled distinction between an unconditional deed of trust and a mortgage or deed of trust in the nature of a mortgage. The former is an absolute and indefeasible conveyance of the subject matter thereof for the purpose expressed; whereas the latter is conditional and defeasible. A mortgage is the conveyance of an estate, or pledge of property, as security for the payment of money, or the performance of some other act, and conditioned to become void upon such payment or performance. A deed of trust in the nature of a mortgage, is a conveyance in trust by way of security, subject to a condition of defeasance, or redeemable at any time before the sale of the property. A deed conveying land to a trustee as mere collateral security for the payment of a debt when due, and with power to the trustee to sell the land and pay the debt, in case of default on the part of the debtor, is a deed of trust in the nature of a mortgage. By an absolute deed of trust, the grantor parts absolutely with the title, which vests in the grantee unconditionally, for the purpose of the trust. The latter is a conveyance to a trustee for the purpose of raising a fund to pay debts; while the former is a conveyance in trust for the purpose of securing a debt, subject to a condition of defeasance.” Bartley, Judge, in Hoffman v. Mackall, 5 Ohio St. 124.
This is held also in Briggs v. Davis, 21 N. Y. 574, in which the syllabus reads: “Where there is a' valid trust for the sale of land, the party creating the trust and those holding the derivative titles under him, have no rights, legal or equitable, until the purposes of the trust are satisfied. Their interests are subject to the execution of the trust absolutely; so that a subsequent grantee, from the creator of a trust to sell for the payment of debts, acquires no right to redeem the land.” This distinction is recognized and declared in Woodruff v. Robb, 19 Ohio Rep. 216; Cower v. Constantine, 86 Ala. 492; State v. Benoist, 37 Mo. 500; Crow v. Beardsley, 68 Mo. 435; Hargdime v. Henderson, 97 Mo. 375; Mills v. Williams, 31 Mo. 447; In re Zwang, 39 Mo. Ap. 356; State v. Hemingway, 69 Miss. 491; Fromme v. Jones, 13 Iowa 480; Bartlett v. Teah, 1 McCrery (U. S.) 176; Martin v. Hausman, 14 Fed. Rep. 160; Weber v. Mick, 131 Ill. 521; Hershiser v. Higman, 31 Neb. 533; Johnson v. Roberson, 68 Tex. 399.
Upon these authorities as well as upon reason, it is asserted in Burrill on Assignments, 12: “An assignment is more than a security for the payment of debts; it is an absolute appropriation of property for their payment. It does not create a lien in favor of creditors upon property which in equity is still regarded as the assignors, but it passes both the legal and equitable title to the property absolutely beyond the control of the assignor, and the trust which results to the assignor in the unemployed balance does not indicate such an equity.” Again: “An assignment for the benefit of creditors implies the actual transfer of the property to an assignee or trustee, so that the assignor is devested of all control over it.” Beach on Trust & Trustees, s. 596.
“A distinction should be noted in this connection between unconditional deeds of trust to raise funds for the payment of debts, and deeds of trust in the nature of mortgages, the former
Giving an assignment or deed of trust for the benefit of creditors this character does not preclude the assignor from the incidental right to discharge the trusts thereby created in favor of his creditors by paying off the debts before sale and thereby placing himself in a position to demand a re-conveyance of the property, or the right to claim a reconveyance of the residue, remaining unsold after the debts are paid, or in such case, payment of the residue of the proceeds. But there is no estate or interest in the assigned property remaining in him that he can convey or incumber as against the creditors, and he cannot prevent an immediate .execution of the power of sale with which he has clothed the trustee, for the deed of trust creates at once the relation of trustee and cestui que trust between the assignee and the creditors, and the latter have the right to demand the enforcement of it according to its terms.
From this view of an assignment for the benefit of creditors, it is clear that it virtually amounts to a conversion or an appropriation of the property assigned, so far as may be necessary to effectuate the purposes of the trust. The debtor having appropriated his property to the payment of his debts, authorized, and directed its immediate sale, his further interest in it amounts to little, if anything, more than a right to have an accounting on the part of the trustee. This he may have, and if by the negligence or misconduct of the trustee, part of the property should be lost or sacrificed or illegal claims be paid out of the estate, he must respond in the settlement of the account. The law permits the debtor to select his own trustee if the person selected be not disqualified in some way. By consenting to an immediate sale and conversion of his property into money, he may place it in the hands of some one in whose capacity and integrity he has confidence, besides requiring a bond from him, and thus put it beyond the reach of his creditors in any effort they may make to subject it by ordinary legal proceedings. Ho is permitted to thus delay his creditors in consideration of the surrender of his property for their benefit. Therefore, any interference on the part of the court at his instance to prevent the execution of the power of sale must be based upon much stronger grounds than ordinarily appear in cases relating to sales of property under
This case presents no such grounds, and for this and other reasons herein given, the decree of the circuit court must be affirmed.
Affirmed.