Court Opinion

ID: 6582948
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:39:50.339854+00
Date Added: 2024-06-11T15:57:21.279639
License: Public Domain

The opinion of the court was delivered by
Ross, J.
The orator is trustee in a mortgage deed executed by Sheldon & Sons to it to secure the payment of their notes or bonds to the amount of $350,000. There is a provision m the deed by which the mortgagor has the right to sell and dispose of any portion of the mortgaged premises, and by which the orator is authorized to release and quit-claim the portion sold, “ provided the full value of the parcel or parcels so sold shall be used in purchasing or retiring bonds hereby authorized and heretofore issued, and provided that by such sale and payment the security for the remainder of such bonds shall not, in the judgment of said trustee, became impaired or reduced.” Sheldon & Sons made a sale of a portion of the mortgaged premises, and some of the bondholders objected to a conveyance by the orator. The orator being in doubt whether a proper occasion had arisen for the exercise of the power of conveyance given in the deed, brought this bill against Sheldon & Sons and the bondholders, praying to have the matter investi*379gated, and for advice “ as to whether or not the occasion is a proper one for the exercise of the power conferred by said provision of said mortgage deed, and if so, upon what terms and provisions, if any, to the end that said matter may be for ever set at rest, and all bondholders under said mortgage be concluded from hereafter calling the same in question, and fox-such other or different order or relief as may be just.” The master has found that the sale was for full value ; that the purchase money has been wholly applied to retiring the bonds secured; and that the security for the payment of the unre-tired bonds has not been lessened, or will not be by the conveyance. On these facts it is not contended by the bondholders but that a proper occasion for the exercise of the judgment of the trustee, in accordance with the provisions of the deed, has arisen; but they contend that the decree of the Court of Chancery went too far, in. that it decreed that the orator should make the conveyance, “ unless the said trasteé, by its board of directors or trustees shall decide that the security for the remainder of said bonds will become impaired or reduced thereby, and that the occasion has not arisen when it is necessary or expedient for the purpose of the business of said firm of Sheldon & Sons to make said sale.” "We think that this contention must be sustained.
This portion of the decree virtually decrees that the orator shall make the conveyance without any exercise of its judgment in the premises ; because it is- to convey if it does not exercise its judgment to the contrary. 'By the deed, all parties thereto contracted for the exercise of the trustee’s judgment when a proper occasion should arise, and agreed, impliedly at least, to be bound in the premises by the exercise of that judgment when made impartially and in good faith.
It is not the province of the court' of equity to make, or vary, the contracts of the parties, but to enforce them as made. It is no ground of objection that the orator is a corporation, and has no individual judgment, and only the aggregate or average judgment of its directors or trustees. It was for the *380honest, impartial exercise of such judgment as in law it had that the parties contracted. There is no .suggestion in the bill, or facts reported, that any of its directors or trustees are owners of the unretired bonds, and so have become disqualified to act, by reason of an adverse interest. Besides, this clause of the decreetal order goes beyond the prayer of the bill. It is contended that a decree, in the form rendered, is necessary to set the matter for ever at rest, and conclude the bondholders. Such a decree no more concludes the bondholders than the bona fide impartial judgment of the orator, by which the bondholders have impliedly agreed to be concluded. By coming to the court of equity for advice and direction, the orator has, in effect, expressed its willingness and readiness to follow the advice and obey the direction of that court in the premises, or to execute the trust imposed by the deed in accordance with such advice and direction. Hence, the case does not involve the consideration of what the right and power of the Court of Chancery might be if the orator had declined to execute the trust, or if it had been shown that a majority of its directors or trustees had become disqualified by having become interested in the bonds, and Sheldon & Sons, or the purchaser from them, had brought a bill to compel the orator to make conveyance.
The decree of the Court of Chancery is reversed, and cause remanded with a mandate in accordance with these views.