Court Opinion

ID: 7989584
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:29:27.044331+00
Date Added: 2024-06-11T16:35:18.959000
License: Public Domain

Caliioon, I.,
delivered the opinion of the court.
This is an appeal from a decree overruling the demurrer of ■appellants to the hill of appellees. It appears from the hill that A. E. & R. A. Armitage executed a mortgage on the land in controversy to the estate of J. B. Guthrie to secure the payment of six certain several promissory notes falling due annually, covering a period of six years and aggregating $1,600, exclusive of *232interest. This, the oldest incumbrance shown in this record, provided that in case of default in payment of either of the notes the legal holder of any of them might appoint a trustee to take possession and sell in the manner and upon the notice required by statute for sales under execution at law. Pending this mortgage, and junior to it, A. F. & R. A. Armitage, on. March 20, 1903, conveyed the land to E. S. Drake, trustee, to secure appellees in the payment of three promissory notes of $140 each. Pending both these incumbrances, and junior to both, A. F. & R. A. Armitage, on February 8, 1904, conveyed the land to T. M. Searles, one of the appellants, as trustee, to secure the payment of promissory notes aggregating $1,000, payable to A. F. & R. A. Armitage, and by them indorsed in blank, and they then came to be owned and held by “T. M. Searles, or Ann M. Searles, or both.” With matters in this condition, and on December 31, 1904, the Armitages conveyed the land in fee, by a conveyance with special warranty, to appellant, Ann M. Searles, and she thus became on the face of the record the owner, subject to thethree incumbrances. This conveyance was not put on record until twenty-one days after its execution — January 20, 1905. On that day, January 20, 1905, T. M. Searles, as trustee in the youngest of the trust conveyances, after proper publication, sold the land, and Mrs. Ann M. Searles, his wife, bought through her attorney, J. B. Dabney, and this trustee conveyed it to her and she went into possession of it. In February, 1905, Mrs. Searles had negotiations for the purchase of the notes secured by the middle incumbrance — that to E. S. Drake, trustee, to secure appellees; but these negotiations failed because she would not pay the amount demanded. At some time early in the year 1905 the appellant, Thomas M. Searles, bought the notes secured by the oldest incumbrance — the Guthrie mortgage — with the purpose of protecting his wife’s title by this claim superior to the middle incumbrance — the one to Drake, trustee, to secure appellees. Then, as the holder of the Guthrie estate notes, pur*233suant to the authority of the mortgage, he appointed in writing the said J. B. Dabney as trustee to sell under this mortgage, which he did, after due advertisement in the proper newspaper in Port Gibson, and the sale was made at the door of the courthouse there, and Mrs. Ann M. Searles was the purchaser, and Mr. Dabney, the appointed trustee, conveyed to her. At the date of this sale the Armitages were insolvent, llis appointment as trustee was not filed for record until the day of the sale, and after the sale, when he filed it with his deed to Mrs. Searles. A point is made on this. It was actually filed just ten minutes before the deed. The bill avers that appellees, Kelly, Simmons & Co., had no notice of the purchase of the Guthrie notes by Thomas M. Searles, nor of the appointment of J. B. Dabney as trustee, and that the purchase by Mrs. Searles of the Guthrie notes and the sale were solely in the interest of Mrs. Searles, and with the design to defeat the interest of appellees, and therefore fraudulent. No fact of fraud is set out. It is conceded that on the face of them all the proceedings were in exact compliance with the terms of the instruments. The foregoing is a very accurate and full presentation of the case made by the bill.
One objection is made that the appointment of J. B. Dabney as trustee under the oldest incumbrance, that of the Guthrie estate, was not filed for record until after the actual sale and therefore the sale was vitiated under the statute of 1896. Laws 1896, ch. 96, p. 105. We cannot concur in this. That statute had reference expressly to “substituted trustees.” Mr. Dabney was not a substituted trustee. He was an original trustee, appointed by the holder of the unpaid notes in strict accord with the terms of the mortgage contract.
The only other objection is based on the situation at the time Mrs. Searles bought at the trustee’s sale under the Guthrie estate mortgage. It is stated that under the averments of the bill she had bought at the trustee’s sale under the youngest incumbrance, and had bought from the Armitages themselves all their interest, *234and was in possession at the time she bought at the sale under the oldest mortgage; and it is urged that she was in such privity with the Armitages that she could not do what they could not do, and as they could not buy at that sale so as to affect the middle incumbrance, she could not. NWe cannot subscribe to this extension of the doctrine of privity of estate. There was such privity of estate as exists between vendor and purchaser, but no privity whatever in the relation of the Armitages to the three secured debts. Mrs. Searles did not owe the debts. She was not a mortgageor in possession. No duty of a mortgageor devolved on her. She was at arm’s length with the Armitages and the claimants under the junior incumbrance. 9 Ency. PI. & Pr., 193. Being in by purchase under the youngest incumbrance and from the Armitages, she had a perfect right to perfect her title by buying the notes of the senior mortgage, causing sale under it, and purchasing at that. She was under no obligation to give actual personal notice to the claimants under the middle incumbrance. It was their business to watch that. It was a duty to see that proper advertisement was made in the proper newspaper and a fair sale had according to the terms of the contract; and this duty being performed, it was not her fault that appellees were not subscribers to the newspapers and did not see the advertisement.-
We know of no authority holding that the beneficiary in a trust cleed cannot buy at the trustee’s sale. The demurrer to the bill should have been and now is sustained.

Reversed and remanded.