19 W. Va. 179 | W. Va. | 1881
announced the opinion of the Court:
The record in this cause raises a number of questions. It is plain, that several necessary parties have not been brought before the court, and that the decree of the court below would have to be reversed on that account if for no other reason; but in assigning the grounds, upon which some of these parties are material to a proper and final determination of the controversy, it will be necessary to consider in a great measure, if not entirely, the whole controversy in the cause. The original bill in this cause was filed for the purpose of setting aside the sale to Miller under the trust-deed, and to procure a proper assignment of dower in the property. Naturally the first question, which arises is: Should that sale be set aside on account of the misconduct of the trustee, in which Miller participated to the extent of losing the benefit of the legal title, which ordinarily in such a sale inures to the benefit of a bona fide purchaser from a trustee without notice? No general principles are better settled than, that a trustee is the agent of both parties and must consult impartially the interests of each. He is bound to bring the property to sale in the way, which will secure the best price, and to accomplish this he is required to exercise reasonable diligence and to ob
These authorities not only establish the above general principles but farther show, that if the trustee in neglect of his duty as trustee fails to apply to a court of equity to remove the impediments to a fair sale, by injunction any one having a substantial interest may prevent a sale, until that can be accomplished, or if a sale be made, may apply to a court of equity, when not in default himself, to have the sale set aside.
Applying these principles to the facts of this cause, it will be seen, that a case can rarely arise, in which more reasons existed for the interposition of a court of equity to remove difficulties in the way of a fair sale of the property. Both the grantor and cestui que trust had been dead about five years; two bona fide purchasers had received conveyances for different parcels of the lands and had thus acquired rights in the trust-property, which they were entitled to have protected against sacrifice; the trustee had become as executor of the original beneficiary a cestui que trust; the widow had instituted proceedings to have her dower assigned to her, and dower had in fact been laid ofl: and assigned to her by commissioners
In the case of Gibson v. Jones, 5 Leigh, Judge Tucker says: “Indeed an opinion has been entertained by able men, that a trustee ought not to proceed to sell, where the debtor dies, since by his death the duty of redeeming and the benefit of redemption, which were before blended in the same person, are now separated; the duty devolving on the executor, to whom it belongs to discharge debts, and the benefit accruing to the heir, who has a right to demand of the executor, if he has assets, to relieve the trust-subject from the encumbrance. Moreover the heir not being cognizant of the debts is unprepared to defend the estate from an unjust sacrifice. On these grounds Judge Coalter allowed an appeal, when I was at the bar, though I am unable to' say what became of it.” This opinion of Judge Tucker is quoted without dissent in 1 Lorn. Dig. 426. In 2d vol. Min. Inst. 290, this doctrine is announced to be the law by Prof. Minor almost in the very language of Judge Tucker.
It seems to me, that this position is sound and comports with the true view of the respective rights and duties of the
These cases all proceed upon the principle, that where there are several persons having separate and distinct rights in a common subject, they should all be convened, before that subject is disposed of, in order that the mutual rights and liabilities may be ascertained and determined. In Bierne v. Brown supra notwithstanding the complainant had a specific lien on the land, the death of the vendee raised new rights and duties between the personal representative and the heir, which, it was held, must be adjusted, before the vendor would be permitted to sell the land. While there was the lien, which must be satisfied, it was the duty of the personal representative, if he had assets, to discharge that lien in relief of the realty and in protection of the heir. The personal estate is the primary fund for the payment of debts, and the heir was entitled therefore to have that fund exhausted, before the secondary fund to his injury should be resorted to. The vendee’s personal representative and heir were before the court in that case; and the complaint was, that a commissioner of the court was directed to settle the administration account, to ascertain whether the personal assets were available to any extent in the discharging of the debt.
I imagine that in any case, where there may be a primary
I am of opinion therefore, that upon the death of the grantor in a deed of trust conveying land to secure a debt the trustee must resort to a court of equity before selling the land.
Without going over in detail the various reasons before enumerated, which should have induced a trustee acting with a view to make the trust-fund bring when sold the best price-practicable, and should have caused a discreet, prudent busi-, ness-man to delay a sale, until those difficulties and circumstances, which were calculated to injure a sale, could be removed, it may be remarked, that there was in this case a seeming disregard of the rights of others, which resulted in great injustice to some of the parties. The purchaser in addition to being aware of many of them was specially informed of a fact with regard to the assignment of dower, which gave him an advantage over other bidders and indicated to him, that there was a doubt at least as to the quantity of land the widow would receive, although the general public supposed it would be as assigned. He is now before the court claiming, that she is entitled to no dower at all in the land, although the land was sold subject to dower, which as assigned was according to the testimony more than half the l»nd in value. Land, which if free from dower was worth from $1,300.00 to $2,000.00, he purchased for $625.00, because of the supposed dower-incumbrance, which he now claims does not exist.
The next question is: Was Sarah D. Lee entitled to dower in this land ? She did not unite in the deed of trust nor in the deed to Rollins, the certificate of her acknowledgment of the Rollins deed being fatally defective in omitting the words “declared she had willingly executed the same.” Leftwich, v.
I am of opinion to reverse the decree of the circuit court with costs to the appellants and against the appellees, John D. Ankrum and L. M. Miller, and to remand the cause to that court with leave to the complainant, Spencer, in the original bill and the complainant, Miller, in the cross-bill to amend their bills and make the personal representatives, James N. Ankrum and A. P. Ankrum, and the husband of Sarah D. Lee, if living, parties defendant with instructions, that when the circuit court has set aside and annulled the sale and deed made by John Ankrum, trustee, to Lewis M. Mil-
■ On .one question discussed by brother Patton I propose to express my views, as they differ from his to a certain extent. That question is, whether in a deed of trust conveying land to secure a debt the death of the grantor disables the trustee from executing the trust, and whether such trust must in every such case be enforced in a court of equity. There are cases, where the trustee is utterly incapacitated to execute the trust, as where the trustee and the creditor secured by the deed is the same person, for such a deed is but a mortgage, and it can only be foreclosed in a court of equity. So when the trustee dies, the legal title descends to his heir, who holds it as trustee, but he is utterly incapacitated from selling the land, because the power conferred by the deed and the duty thereby imposed was a 'personal confidence and can only be ex-eputed by the trustee named in the deed in person. In all
But the cases, in which a trustee is thus utterly incapacitated to act, and in which a court of equity will on this ground without any enquiry enjoin in him from acting, are but few. There are however many cases, in which a court of equity would enjoin the trustee in such a deed from selling the land in the manner prescribed in the deed, not because he was incapacitated to sell but for a very different reason. It is the duty of such trustee to act in executing such trust in an impartial and disinterested manner and with regard to the interests and rights of both the grantor and the creditor secured disregarding any suggestions by either of them inconsistent with the character he holds. See Quarles v. Lacey, 4 Munf. 251; Lane v. Tidball, Gilm. 132. It is therefore the duty of the trustee to decline to sell the land, if there be obstacles in the way of his obtaining a fair price for it, which he cannot remove, but which could be removed by the interposition of a court of equity. If he is proceeding to sell under such circumstances, a court of equity, if applied to, would enjoin him not because he was incapacitated to sell, but because in making the sale under such circumstances he was violating his duty as the impartial trustee of both parties. If there be a cloud on the title arising from an adverse claim, the trustee would for this reason be enjoined from selling. Gay v. Hancock, 1 Rand. 72 ; Bryan v. Stump, 8 Gratt. 247. And for like reason such injunction would be awarded, if there were prior in-cumbrances. Miller v. Trevilian, 2 Rob. 1. When the sum
It is obvious, that in this class of cases the injunction is not t.o be awarded and perpetuated as a matter of course, but only where the circumstances are shown to be such, as would prevent a fair price being obtained for the land, if the sale was made by the trustee; for then only would it be his duty to desist from selling. In this these csaes differ from the first class, where in the view of equity the trustee himself is incapacitated from selling, and therefore he would as a matter of course be enjoined from proceeding to sell. .
There is still a third class of cases, in which a court of equity would decline to enjoin such a trustee from selling pursuant to the provisions of the deed, though in so doing he was proceeding in violation of established rules in the selling of real estate under the supervision of courts of equity. Thus it is an invariable rule of a court of equity, that it will not permit the sale of land to satisfy a debt whether secured by a mortgage or a judgment-lien, and though the party may have been for years in default in its non-payment, without first giving the debtor a reasonable time to pay the sum and thus avoid the sale. So as a general rule a court of equity will, not sell land for cash; and the circumstances would indeed have to be very peculiar, which would justify a court of equity in ordering the sale of land for cash. And yet it is an everyday practice for trustees in such deeds of trust to sell for cash and immediately on default of (he debtor without any reasonable time being given him to avoid the sale by the payment of the debt. And this conduct of the trustee would not be enjoined by a court of equity, because the grantor in his deed has expressly stipulated, that his land may be sold for cash and immediately on his default in the payment of the debt.
Having taken this general view of this subject I am now prepared to consider the question, whether when a grantor in such a deed of trust dies, a court of equity ought or ought not to enjoin the sale of the land by the trustee. This case certainly doos not belong to the first class, of which we have spoken. The death of the grantor in the deed certainly does
This long acquiescence, so far as the actions of our courts are concerned, in the practice of trustees selling lands after the death of the grantors in the deeds of trust taken in connection with the provisions in the Code of Virginia of 1849, referred to by brother Patton, which certainly must be regarded as recognizing this as an existing practice and as not prohibiting its continuance is a strong reason for holding, that such practice ought not to be now interfered with by courts of equity. The least weight certainly, which can be given to this argument, is, that where such sale has been
Our statute-law referred to by brother Patton, and which is in this respect the same, as that contained in the "Virginia Code of 1849, it is true, as I understand it, authorizes a trustee after the death of the grantor to sell for cash and after paying expenses and satisfying the trust to pay over the balance to the grantor’s representatives. While I must regard this statute as recognizing the right and duty of the trustee in such a deed of trust in some cases to sell the land after the death of the grantor, I do not interpret it as forbidding a court of equity to enjoin him from selling the land after the death of the grantor, when the circumstances are such, that he would in so doing violate his duty as the impartial trustee of both the grantor’s heirs and the creditor secured, any more than this statute forbids this interference by a court of equity} when the trustee proposes to sell in the lifetime of the grantor in disregard of such duty on his part. I can see therefore no reason, why we may not even at this late day enquire into the circumstances brought about in a particular case by the death of the grantor in such deed of trust, and if these circumstances in the particular case would make it a breach of duty in a trustee, who is required to be impartial between the grantor’s heirs and the creditor, to proceed to sell the land, why he ought not to be enjoined by a court of equity from the breach of his duty.
But it may be said, that courts of equity have not gone bó-
So too’it would not permit, the heir’s-larid to be sold, if the personal estate was primarily responsible for the debt, until the personal representative had settled his accounts, though it might- be apparent, that in this particular case there was but little personal estate, which could be applied to the debt to the relief of the heir’s land. A trustee on the other hand should not be governed by any such inflexible rules. He must use a wise discretion in not selling the land of the heir, when by so doing he would do him a substantial injustice not a mere technical wrong. If there be in the hands of the personal representative personal estate, which would relieve the heir’s land from the payment of a substantial part of the debt, the trustee would be doing"thc heir substantial injustice by selling this land before the application of this personal estate to the discharge in whole, or in part of the debt, or until at least time was afforded the heir to compel the personal representative to perform this duty of paying this debt to the extent of the funds in his hands applicable thereto, when there were funds so applicable of considerable amount. If on the other hand the personal representative had in his hands little or no funds applicable to the debt, or if it was obvious, that the sale of all the land in the deed of trust would be required after the application to it of all the personal estate, which could be so applied, or so long a time had elapsed since the death of the grantor in the deed of trust, that ample time had been afforded the heir to compel the personal representative to apply the assets in his hands to the payment of the debt, then no injustice would be done the heir by the trustee selling his land ; and a conrt of equity ought not, under these circumstances to enjoin the sale. My' conclusion is, that whether a court of equity ought or
Decree Reversed. Cause RemaNded.