Court Opinion

ID: 7275698
Source: CourtListenerOpinion
Date Created: 2022-07-25 19:59:09.56647+00
Date Added: 2024-06-11T16:18:49.414308
License: Public Domain

Mr. Justice Shepard
delivered the opinion of the Court:
1. The first error assigned is the want of authority on the part of the trustees to make the sale at any time before the maturity of the principal note and the last of the series of interest notes thereon. The contention is, that the power to sell, “upon default or failure being made in the payment of the said, notes,” refers to all of the notes recited in the trust deed, including those given for the instalments of interest as well as that given for the principal of the loan, and that the words following, “or of any instalment of interest thereon when and as the same shall become due and payable,” must be taken to refer to the interest payable on each interest instalment after maturity, and as not due until the maturity of the principal note.
We agree with the learned justice who tried the case, that “ the language of the instrument is too clear for dispute.” The use of the plural form “notes,” instead of the singular, in the first part of the paragraph, which was, no doubt, a mere clerical error, cannot change the plain intent of the instrument. Default in the payment of instalments of interest unquestionably refers to the series of small notes, each of which represents a semi-annual payment of interest.
This was a contract the parties had the right to make, and upon the failure to pay the first note, as it matured, the holder had the right to demand a sale in accordance with the stipulation. Richards v. Holmes, 18 How. 143. The trustees were vested with no discretion in the premises. The authorities relied on by the appellant have application to the duties and obligations of an entirely different class of trustees. We have had occasion heretofore to point out the clear distinction between the powers, duty and discretion of *382that class of trustees, and those of trustees for sale in the ordinary deed of trust like this, and nothing need be added to what was then said. Anderson v. White, 2 App. D. C. 408, 419.
Although the trust deed did not in express terms declare that a failure to pay an instalment of interest should mature the principal note, yet, for all the purposes of the trust, this is plainly implied in the directions for the distribution of the proceeds of sale. This direction is, after payment of all expenses and charges, “to pay whatever may then remain unpaid of the said notes, and of the interest thereon, whether the same shall be due or not.” Richards v. Holmes, 18 How. 143; Pope v. Durant, 26 Iowa, 233; 2 Jones Mortgages, Secs. 1177, 1178. The question of the maturity of the principal, for • any and all purposes, is not involved, and would only be of importance in the event that the proceeds of sale would not extinguish the debt, and suit might be brought at law to recover the balance remaining unpaid. Of course, the distribution of the proceeds of sale would extend no further than the payment of the principal note and interest actually accrued thereon, and we do not understand the trustees’ report as following a different scheme. No exception has been taken to it, and if any error may be found in it, its correction can be made in the final decree.
2. The second error assigns as an objection to the validity of the sale, “ that the property was advertised in solido, and so inartificially worded is the notice of sale, set forth in these proceedings, as to calculate to mislead and mystify anyone intending to bid on the same.” This objection is now raised for the first time. It is true that the advertisement of the sale is made an exhibit to the original bill filed before the day set for the sale, but it appears only as a part of the formal history of the case. No allegation of the bill is founded thereon. This sale was restrained, and the second advertisement was made in the same form. Had any objection to this form been made in the original bill, no doubt *383the second notice would have responded thereto. The notice is also made an exhibit to the last amended bill, but without an allegation of objection to the sale on account of its form. The question of the sufficiency of the notice of sale is therefore not before us, and will not bo considered.
3. The next ground of objection to the sale is the inadequacy of the price which the property brought. The sale took place January 3, 1880. The lots sold for $3,725 each. The first time that the inadequacy of the price was made a ground of complaint was in the amended supplemental bill, filed June 9, 1890, more than ten years after the sale had taken place. It is omitted altogether in the last amended bill, filed March 20,1893. On account of the frequently rapid advances in the value of city property especially, this is a ground of objection that ought to be made without unreasonable delay. No excuse is given for complainant’s laches in this regard, and she would have no cause to complain if the objection were overruled on that ground alone. An examination of the evidence, however, has been made, and fails to sustain the charge of inadequacy. The property, though it has since increased greatly in value, was, at the time of the sale, worth but little more, if any, than the aggregate of principal, interest, taxes, and charges. It brought $57.83 less. There is nothing to show that the sale was not fairly and properly conducted. The charge of combination to stifle competition is without a particle of support in the proof. The only conduct at the sale likely to prevent full competition among bidders was that of complainant’s husband and agent, who gave written notice of the invalidity of the sale and of the pending litigation. If this protest, which is probable, caused the property to bring less than it might otherwise have done, the complainant has herself to blame for it. She cannot visit the consequences of her own act upon the lien creditor, who did all that he could to counteract them by promising complete indemnity from all loss and damage to whomsoever might make the successful bid. Under the promise of this *384indemnity the successful bidder, Devine, purchased each lot for $3,725. . He acted in good faith in the purchase, and in like good faith sold one of the lots, after expending $200 in repairs on the house, to his co-defendant Johannes, some time afterwards, for $4,000.
4. The objection that the trustees acted solely in the interest of the beneficiary of the trust is without foundation. As before said, we cannot agree with the appellant in the view taken of the discretion vested in trustees of this character. “Their duty is to sell after default, upon the demand of the security holder, in the manner and upon the notice prescribed in the trust. They cannot sell upon holidays, or at unusual or unreasonable hours; but they have no right, on the other hand, to refuse to sell until some time in the future that may be more satisfactory or advantageous to the mortgagor. Appeals for delay to a more favorable or convenient season must be made to thecreditor. The terms of the instrument measure the powers and prescribe the duties of the trustees.” Anderson v. White, 2 App. D. C. 419.
No misconduct is shown on the part of the trustees. The first interest note on each of the principal notes was overdue. Payment had been demanded and refused. The evidence shows that indulgence had been asked and extended for sixty days. Before the first advertisement of sale, notice was given complainant. In a note dated June 2, 1879, McBlair, the active trustee, inclosed a copy of the notice of sale to Wood-bury Wheeler, and said: “I regret to be obliged to advertise, but you know I have given'you sixty days to pay the interest in. Since you have failed, I must conclude you are unable to pay it; hence I am obliged to advertise.” During all this time complainant was in possession, collecting the rents, and not even paying the taxes accruing due.
It is unnecessary to discuss the case further. There is no error in the record of the trial below, and the decree must be affirmed, with costs to the appellee. And it is so ordered.