LEE v. MAGNOLIA BANK

Cassidy, McLain Alford, and Henley, Jones Woodliff, for appellant.

Sec. 2167 Code 1930 authorizes only one sale and requires that it be advertised in each county where the land is located.

The exercise of a power of sale under a deed of trust is a substitute for a foreclosure proceeding in equity and has frequently been referred to as a "harsh remedy". In 59 C.J.S. p. 850, the rule is stated: "The effect of a regular foreclosure sale under the power of sale in a mortgage is equivalent to a strict foreclosure by a court of equity." It, therefore, follows that in exercising a power of sale under a mortgage or deed of trust that "due process of law" must be observed and that the trustee has no more authority to foreclose "by piecemeal" under a power of sale than could be done in a court of equity. In other words, a cause of action can not be "split" in court and the equivalent thereof is not permissible under a power of sale.

The case of Layden v. Layden, 228 N.C. 5, 44 S.E.2d 340, is one of the leading cases on this question. See also Rains v. Mann, 68 Ill. 264; Bank of America v. Dames, 239 N.Y.S. 558; National Bank of Montana v. Bingham, 269 P. 162, 83 Mont. 21; Kilmer v. Gallaher, et al., 107 Iowa 676, 78 N.W. 685; Escher v. Simmons, 54 Iowa 269, 6 N.W. 274; Poweshiek County v. Dennison, 36 Iowa 244, 14 Am. Rep. 521; Clayton v. Ellis, 50 Iowa 590; Wells v. Ordway, 108 Iowa 86, 78 N.W. 806, 75 Am. St. Rep. 209; Harms v. Palmer, 61 Iowa 483, 16 N.W. 574; Hardin v. White, 63 Iowa 633, 6 N.W. 580, 19 N.W. 822.

And compare the case of Connecticut General Life Insurance Co. v. Lombard, 185 So. 260 and Cook v. Taylor, 200 Miss. 381, 27 So.2d 404.

Mortgagor did not waive requirements of Sec. 2167 Code 1930 as to place of and manner of advertisement of sale.

Counsel for the appellee in filing the special demurrer apparently concede that the sale of the property involved in this suit was not made in compliance with the provisions of Sec. 2167 Code 1930, but took the position in said special demurrer that the mortgagor waived compliance therewith by virtue of having executed a mortgage containing a provision therein that the property in Pike County might be sold at Magnolia and that the property in Walthall County might be sold at Tylertown.

Counsel apparently relies upon the case of Baker v. Connecticut General Life Ins. Co., 18 So.2d 440; Brown v. British American Mortgage Co., 86 Miss. 388, 38 So. 312; Rawlings v. Anderson, 149 Miss. 632, 115 So. 714; Hamilton v. Federal Land Bank, 186 So. 832.

Each of these cases, however, deals with the question that there may be a waiver of the provisions of law relating to the manner in which the sale is to be made, as to whether same is required to be made first in subdivisions and then as a whole or not.

Counsel for the appellees has not as far as we know cited any authority to the effect that the other provisions of Sec. 2167 Code 1930 may be waived. We respectfully submit that such provisions can not be waived even by contract.

On the contrary in the case of Polk v. S.S. Dale Son, 93 Miss. 664, 47 So. 386, 17 Ann. Cas. 754 the Court expressly held that the provision of the statute as to the place of sale would be read into and supersede the contractual provisions as to the place of sale.

The Court in the Lombard case and in the Cook case has expressly held that the provisions of Sec. 2167 Code 1930 as to the place of sale and advertisement were enacted in the public interest and such enactments, therefore, constitute an announcement of the public policy of the State of Mississippi. Under such circumstances, the parties may not contract away or waive the rights acquired by virtue of the provisions of such statute enacted in the public interest. The Supreme Court of the United States so held in the case of Brooklyn Savings Bank v. O'Neil, 89 L.Ed. 1296, 1307, 324 U.S. 697, 704.

In the case of Bank of America v. Dames, 239 N.Y.S. 558, it was held that the mortgagee and mortgagor can not by contract change the law affecting the manner in which real estate mortgages are to be foreclosed.

The Supreme Court of Mississippi has announced substantially the same rule in the case of Wilkinson v. Federal Land Bank of New Orleans, 158 Miss. 645, 150 So. 218.

Sale invalid on account of confusion and uncertainty resulting from manner of advertisement and sale. The deed of trust did not require that both sales to be advertised to take place on the same date. It is of the utmost importance that the owner of the lands be given an opportunity to attend the sale. Federal Land Bank v. Robinson, 134 So. 180.

Frequently property is of such nature that it is desirable as a farm unit and a person would not care to bid on part of the property unless he had an opportunity to also bid on the remainder of the property. The manner in which these sales were advertised made it impossible for Mr. Lee to protect his interest and rendered it unlikely that other prospective bidders would attend the sales on account of the uncertainty as to which sale would be held first and whether it would be necessary to go first to Magnolia or first to Tylertown.

The sale was also void because the advertisements stated and there was attempted to be sold the full interest in the property, whereas the mortgagor owned only a one-half undivided interest in the property. There was also forty acres of the property advertised for sale and attempted to be sold that Mr. Lee did not own at all. See Hancock v. Pyle, 191 Miss. 546, 3 So.2d 851.

Attention is also respectfully called to the cases cited in the above case, especially the case of Hesdorffer v. Welsh, 127 Miss. 261, 90 So. 3, and also to Federal Land Bank v. Collom, 201 Miss. 266, 28 So.2d 126.

Gordon Gordon, for appellee.

Appellant insists that under Section 2167 Code 1930 only one sale can be made of the land conveyed in the deed of trust as security for a loan, and he cites some cases decided in other states on this point, but no case which has been decided by the Supreme Court of this state, and it has been found that the statutes of the several states of the United States with regard to the sale of land, vary somewhat in what is required to be done in the sale of lands. Where the land is in two, or more, counties, it is provided in our statute that the parties may contract for a sale of the whole in any of the counties in which any part of the land lies. In this deed of trust the parties contracted for the sale of the land to be in each of the counties where it was located, and this is in accordance with the provisions of the statute, and the land was advertised in each of the counties.

Appellant further contends that the law required that all of the land conveyed in the deed of trust should have been advertised in each of the counties, where it was situated, which is to say that the land in Pike County should have been advertised in both Pike and Walthall Counties, and the Walthall County lands should have been advertised in both Walthall and Pike Counties, but cites no court decision passing upon a similar case. It will be seen here that Section 888 Code 1942 does not require that the land when situated in two or more counties shall be sold in one of the counties where it is located, as the statute uses the word "may", which is the same as "can" or that is to say, that the parties may elect to do so at their own election.

Mortgagor did waive requirements of Section 2167 Code 1930, as to the place of, and as to the sale of the land as a whole.

Section 2167 Code 1930 provided that all lands comprising a single tract and wholly described by the division of the governmental surveys sold under mortgages and deeds of trust hereafter executed, shall be sold in the manner provided for by Section 111 of the Constitution for the sale of land in pursuance of a decree of court or under execution. Section 111 of the Constitution providing that lands comprising a single tract sold in pursuance of a decree of court, or execution shall be first offered in subdivisions, of not exceeding 160 acres or one-quarter section, and then offered as an entirety. The Supreme Court of this state has held in the cases of Baker v. Connecticut General Life Ins. Co., 196 Miss. 701, 18 So.2d 440; Brown v. British American Mortgage Co., 86 Miss. 388, 38 So. 312; Rawlings v. Anderson, 149 Miss. 632, 115 So. 714; Hamilton v. Federal Land Bank, 184 Miss. 878, 186 So. 832, that these provisions being for the benefit of the mortgagors, they could waive them and they upheld sales made under a deed of trust brought in question in those suits, where these benefits were waived by the mortgagor.

It is clear from the reading of Section 2167 Code 1930 that any of the provisions of the said statutes can be waived except that the land shall be advertised as provided for in the statute and that no contract would be valid where it would be contrary to the provisions of the statutes. It being clear from the statute that the mortgagor and the mortgagee could provide where the land would be sold, whether in the county where located, or in the county of the residence of the mortgagor, or one of the mortgagors or whether it might be sold in one county where a part of the land was located in two or more counties.

The appellants, in their brief cite the case of Polk v. Dale Son, 93 Miss. 664, 47 So. 386, which is a case where the deed of trust provided for the sale of the land at "Dale's Store". The land being located in a different county from where "Dale's Store" was located. In that case the land had first been advertised and sold as provided in the deed of trust at "Dale's Store", and this being in the county where the land was not located, and being of the opinion that the sale was void, and it being void, the substituted trustee then proceeded to advertise and sell the land according to the provisions of the Constitution and the statutes of the state at the court house of the county where the land was located.

Anyone reading the statute would know that under the facts of the case stated that the sale was void and that is equally true in the case of the sale of the Lombard case, and the Cook case, but it is not true as to the facts in this case as the land in this case was sold in each of the counties where it was located.

All of the cases cited by the appellants in support of their contention, that the sale was void are not in point, as the facts are not the same or even similar or in line with those of this case.

Appellants contend that the sale was void since the trustee advertised the land for sale as if the mortgagor owned the whole of it instead of an undivided one-half interest. There was nothing stated by the mortgagor in his deed of trust as to the interest that he owned in the land except that he owned it all and that it was so advertised and so sold, when he was responsible for the statement that he owned the whole of the land as it was set forth in the mortgage, and in the notices of sale and he having represented that he owned it all, he was then, and his heirs are now, estopped to allege that the sale was void because of his error or the wrong that he committed, when he represented that he owned all of the land or had full title when he borrowed from the appellee. The case of Hancock v. Pyle, 191 Miss. 546, 3 So.2d 851, and the case cited under it by the appellant are not in point. For in those cases the mortgagors correctly described the land that they owned, and the trustee in advertising the land for sale erroneously described the land, and the land as mortgaged was not sold and conveyed by the trustee's deed. The mortgagor there was not responsible — for the error, as is the case here, and since the trustee made the error and the wrong land was sold the sale was void because the land mortgaged was not sold. The deed of trust executed by H.M. Lee describes the land as if he had full title.