Cox v. American Freehold & Land Mortgage Co. , 88 Miss. 88 ( 1906 )

Whiteield, C. J.,

delivered tbe opinion of tbe court.

Tbis is a bill filed to redeem certain land sold under a trust deed. The trust instrument, after reciting at great length tbe very large powers conferred upon the original trustee, provides as follows: “For any sale hereunder, the acting trustee is authorized to appoint in writing an agent and auctioneer to malee such sale for him in his absence as fully and validly as if the trustee were present himself and conducting the sale.” It is alleged in the amended bill, and admitted by the demurrer, that the appointment of Roscoe Stinson, who made this sale, was not made in writing or acknowledged and recorded. According to the allegations of the amended bill, property worth $50,000 was sold for $8,000; the sale was made to a party interested in the debt by a by-bidder selected to bid for him; the selection of this by-bidder was made by Mr. Stinson, the party who made the sale; all of the bidders, except this by-bidder for Graham, were required to put Up ten per centum of their bid before the bid was accepted; this by-bidder was not required to make this deposit in making this bid; the bid for Graham was not paid in cash; at the time of the sale $1,200 upon the original debt of $8,000 had been paid; and, in short, everything was done at the sale for the advancement of the interest of the owners of the debt and against the appellants. Such are the allegations of the bill demurred to. An answer was filed by the Freehold Company, Currier and Graham, which denies all the material allegations of the bill and proceeds to set up matters of fact which, it is insisted in the answer, constitutes an estoppel. But there accompanied this answer a demurrer by the defendants, A. F. Jacobs and Ilyman Jacobs. That demurrer sets up four grounds, as follows: “First, because the complainants, and each of them, are estopped by their laches from asking relief from this court of equity; second, because the amended bill of complaint, and the exhibits thereto, and the deeds, etc., referred to therein, show that the purchaser, Benjamin Graham, acquired an absolutely legal and valid title to the lands mentioned and described in the bill of complaint; third, because the defendants A. F. ■Jacobs and Hyman Jacobs axe innocent purchasers for value without notice of any nature or kind whatsoever of any defect in the title of said property, either shown by the records of ■deeds of Jefferson county or otherwise; fourth, because there is no equity on the face of the bill. 'A. H. Geisenberger, solicitor for A. F. and Hyman Jacobs.”

It will be especially noted that the answer of the defendants, the American Freehold Company, Charles C. Currier and Benjamin Graham, and the demurrer of A. F. and Hyman Jacobs, both plead estoppel growing out of laches of complainants. Biit this distinction is to be taken between the answer and the demurrer: that the answer sets out particularly certain alleged facts, in addition to the single fact that the original bill was not filed until ten years from the date of sale, lacking just one day; the answer, therefore, pleading an estoppel based not simply on the failure to file a bill fox so long a time, but upon the affirmative fact set up in the answer. The demurrer, on the other hand, pleads, and could plead alone, as ground of laches on the part of complainants the mere failure to file the bill for nearly ten years from the date of sale. The demurrer of part of the defendants cannot, of course, avail itself of the facts set up in an answer by other defendants. Indeed, the answer is not before us at all, since this appeal is taken alone from the decree of the chancellor sustaining the demurrer and dismissing the bill to settle the principles of the cause. We therefore, at this time, on this record, can only review this decree sustaining the demurrer. As stated, the original bill was filed ten years after the sale, lacking just one day;, and the whole insistence of the first ground of the demurrer is that the bill cannot be maintained merely because of the delay in filing it. It is far too late in this state to insist upon any •such defense. It surely ought to be known that that defense has been thoroughly disposed of by the. cases of Hill v. Nash, 73 Miss., 862 (19 South. Rep., 707), and Houston v. Building Association, 80 Miss., 31 (31 South. Rep., 540; 92 Am. St. Rep., 565). It was the right under the law of .the complainants, so far as merely delay is concerned, to file their bill on the last day before the expiration 'of ten years, just as fully as if they had filed it on the first day after the sale. We trusü this court will never have to reiterate this proposition further.

As shown above, the demurrer admitted that the appointment of Stinson, who made the sale, was not in writing, signed by the acting trustee, and recorded with the clerk of the chancery court of Jefferson county. So far that part of complainant’s contention, in respect to this point, that such appointment must have been acknowledged and recorded, is concerned, we pretermit any expression of opinion as to whether the said contention is sound or not for the present, it not being necessary to the decision of this cause on this record. But beyond all controversy the appointment of Stinson under the terms of this trust instrument, must have been in writing, signed by the acting trustee. It is perfectly idle to argue against this proposition in view of the very clear and emphatic enunciation of the rule, that powers vested by a trust instrument in trustees are to be construed slriclissimi juris, as laid down in Sharpley v. Plant, 79 Miss., 175 (28 South. Rep., 799; 89 Am. St. Rep., 588), which we trust will certainly be understood henceforth as the settled law of this state on that subject. The same doctrine is laid down in Bonner v. Lessley, 61 Miss., 397, and in many other cases in our state reports. See, specially, Clark v. Wilson, 53 Miss., 119; Hartley v. O’Brien, 70 Miss., 825 (13 South. Rep., 241). There is nothing to the contrary of this in Johns v. Sargeant, 45 Miss., 332; Tyler v. Herring, 67 Miss., 169 (6 South. Rep., 840; 19 Am. St. Rep., 268), or Dunton v. Sharpe, 70 Miss., 850 (12 South. Rep., 800). On the contrary, they fully accord with this view.

The question here is not whether a mere auctioneer may perform the purely ministerial act of conducting the sale. That is not the question at all. The question is this: Where the contract set out in the trust instrument requires the appointment of one who may conduct the sale to be “in writing, signed by the acting trustee,” is not an appointment, not in writing, signed by the acting trustee, void ? It most undoubtedly is. The case of Dunton v. Sharpe so much relied on, contained no provision that the one conducting the sale should be appointed in writing, and that is the vital distinction between that case and this. It was said in that case that the terms of the trust deed must be complied with, and they were complied with, as the court held in that case, since no such provision was in that trust instrument. The provision of the trust deed, “that in case of the absence from the state of the original trustee the beneficiary might appoint a substituted trustee,” is wholly distinct from the power-given, not to the beneficiary, but to the acting trustee, to appoint some one in writing to make the sale, and the difference in the provision very strongly bears out our view.

The third ground of the demurrer cannot be maintained, because it is not a voidable, but an absolutely void, sale. The principles of law applicable as between a voidable and a void sale are too well settled for discussion. Besides this, the acknowledgment to the deed from Currier, the original trustee, to Graham, is so irregular that it ought to have attracted the attention of one making diligent inquiry and put him on his guard. We do not deem it necessary on this point to now hold that the acknowledgment was so absolutely void as to disentitle the deed to be recorded; but it certainly was so irregular as to have required investigation on the part of any person exercising due diligence.

We come now to a proposition urged most elaborately and ably by one of the learned counsel for appellees, to wit, that the relief prayed for was barred by the statute of limitations of ten years. On this point it is insisted with great earnestness that the ground that Stinson was not appointed by writing signed by tbe acting trustee to make tbe sale was not set up or insisted on in the original bill, but that it was introduced for the first time in the amended bill, filed more than eleven years after the day of sale, and, so say the appellants, it was barred by the ■statute of limitations of ten years, since the statute continued to run as against this ground until the filing of the amended bill, and the learned counsel referred to many authorities, which we now examine :

Union Pacific Railway Co. v. Wyler, 158 U. S., 285 (15 Sup. Ct., 877; 39 L. Ed., 983), in which case it was held that “in an action by an employe of a railroad company, based upon the general law of master and servant, brought to recover damages for an injury which had happened to the plaintiff in Kansas while on duty there, an amended petition which changes the nature of the claim, and bases it upon a statute of Kansas giving the employe, in such a case, a right of action against the company in derogation of the general law, is a departure in pleadings and sets up a new cause of action; and the statute of limitations, as applied to such new cause of action, treats the action as commenced when the amendment was incorporated into the pleadings, and not as begun when the action itself was commenced.”

In our own state it has been so held in Cooper v. Allen, 57 Miss., 696. In that case a bill was filed to foreclose a married woman’s mortgage for plantation and family supplies, which mortgage was held to be void. After that an amended bill was filed, proceeding on the wholly distinct ground that the married woman was liable, not by virtue of the mortgage, but because of the dealings had between her and the creditor; that is to say, because of purchases of plantation supplies made by the husband as statutory agent. The statute of limitations was set up against the claim under the amended bill, and it was sustained on the ground that it was a new cause of action, the statute having become a complete bar in the interim between the filing of the original and amended bill.

In Dinkins v. Bowers, 49 Miss., 219, the same doctrine is expressly approved. In that case an action was brought by a mechanic to enforce his claim, a purely personal action, more than six months after the bringing of the original action; the suit was amended so as to insist on the mechanic’s lien provided by the statute. The statute provided that this lien could not be. enforced unless the suit was brought within six months after the money was due. It was held that, more than six months having elapsed between the filing of the original declaration and the amended declaration, the bar of the statute had become complete so far as the enforcement of the mechanic’s lien, a new cause of action, was concerned.

In the case of City of Kansas v. Hart et al., 60 Kan., 684 (57 Pac. Rep., 938), the court held: “Whether the cause of action sued on originally is the same as that set out in an amended petition is to be determined by the averment of the pleadings, and not by testimony of what the pleader intended the pleadings should contain. The plaintiff, whose daughter "was killed through the alleged negligence of the defendant, brought an action in which he stated a common-law liability for loss of services of his daughter; but the averments were wholly insufficient, to constitute a statutory liability for her death. More than two years after the negligent injury he asked and obtained leave to amend his petition, so as to state a cause of action for the recovery of damages for death under sec. 422 of the Civil Code (Gen. St. 1889, p. 4518; Gen. St. 1897, ch. 95, sec. 418). Held, that the amendment was a departure; that it constituted a new cause of action, and that the cause of action set up in the amendment was barred by the statute of limitations.”

In the case of Wood v. Wood, 59 Ark., 444 (27 S. W. Rep., 641; 28 L. R. A., 157; 43 Am. St. Rep., 42), the court, through the learned Justice Battle, held that where a new ground for a divorce, not contained in the original bill, was introduced for the first time in an amended bill, it was held that the filing of the amendment setting up an entirely, new and distinct cause for divorce was equivalent to, and not distinguishable from, a beginning of a new suit; that a totally new cause of action was introduced by the amendment; and that, the bar of the statute having become complete between the filing of the original and amended bill as against the new cause of action introduced by the amended bill, the action was barred.

We refer finally and specially to the case of Box v. Chicago, R. I. &. P. Ry. Co., 107 Iowa, 660 (78 N. W. Rep., 694). The court said: “It is true that in the first cited case the recovery was sought because of negligence, and in the later case recovery was sought because of unlawful intercourse; but a 'cause of action,’ as the term is used in pleading, is not the same under which a state of facts may be classed, but it consists of the facts giving rise to the action. An action is the proceeding in court. Code, § 3424. The cause of action is the fact or facts that 'justify it or show the right to maintain it.’ Hence, when a material fact necessary to a recovery is omitted from a petition, we say it does not state a cause of action. In 5 Am. & Eng. Ency. Law, 776, it is said: 'The cause of action is the entire state of .facts that give rise to an enforceable claim; the phrase comprising every fact which, if traversed, the plaintiff must prove in order to obtain judgment.’ This definition is taken, substantially, from the case of Reed v. Brown, 22 Q. B. Div., 128. In that case it is said that a cause of action is 'every fact which it would be necessary for plaintiff to prove, if traversed, in order to support his right to the judgment of the court.’ It is then said: 'It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved.’ In Hutchinson v. Ainsworth, 73 Calif., 452 (15 Pac. Rep., 82; 2 Am. St. Rep., 823), speaking'of a cause of action with reference to the statute of limitations, it is said: 'The facts upon which the plaintiff’s right to sue is based, and upon which the defendant’s duty has arisen, coupled with the facts which constitute the latter’s wrong, made up the cause of action.’ See Bruil v. Association, 72 Wis., 430 (39 N. W. Rep., 529), and Rapalje & Lawrence, Law Dict., 180. Care should be taken not to confuse the term 'cause of action’ as used abstractly and as used in pleadings. In a general sense the term means 'a claim which may be enforced.’ Bucklin v. Ford, 5 Barb. (N. Y.), 393. 'It is a right which a party has to institute and carry through an action.’ Meyer v. Van Collem, 28 Barb. (N. Y), 230. The right to prosecute an action with -effect. Douglass v. Forrest, 4 Bing., 704. Looking to these cases, it will be seen that the term 'cause of action’ is used with no purpose to indicate a rule by which one cause of action may be distinguished from another, but merely with reference to the existence of a cause of action. "VVe use expressions like these: 'A cause of action for negligence;’ 'a cause of action for malicious prosecution;’ 'a cause of action for desertion.’ They indicate the subject or subject-matter of the action, but are meaningless as showing a particular cause of action. In Rodgers v. Association, 17 S. C., 406, are the following query and .answer: 'What is a cause of action ? We must keep in view the difference between the subject of the action and the .cause of the action. The subject of the action was what was formerly understood as the subject-matter of the action. . . . The cause of .action is the right claimed or wrong suffered by the plaintiff on the one hand, and the duty or delict of the defendant on the other; and these appear by the facts of each separate case/ We have emphasized the closing words to call especial attention to the rule when applied to a particular case. The application of the rule to this case leaves no doubt what the conclusion should be. The original petition stated a complete cause of •action, and the amendment stated another. The two causes of .action are so distinct and separate that either could be established without reference to the fact of negligence alleged in the-other. Appellant says the cause of action is The injury wrongfully inflicted by the defendant through the negligence of the-defendant.’ That means a cause of action based on defendant’s-negligence, and if that is the meaning of the term for the purposes of pleading,' then no amendment would be vulnerable to-the objection that is stated except a cause of action, so long as-the facts pleaded constituted negligence. No authority that we-have seen sustains such a rule.”

We quote at length what the court held a cause of action, is, to-give it our hearty approval. The cause of action is the reason why the action is sought to be maintained, the ground or reason for the action. We have carefully examined these authorities,, and we are clearly of the opinion that the law is, as in them laid down, that wherever there is a cause of action set up in an amended bill, wholly distinct from the cause of action set up in the original bill, and the bar of the statute has become complete-in the interim between the filing of the two, no relief can be had on the new cause of action set up in the amended bill. On this-point it is earnestly insisted by counsel for appellant that he did substantially set up in the original bill that the sale was void because the appointment of Stinson was not in writing signed by the acting trustee, and that all that his amended bill did was to amplify that allegation. The allegation of the original bill on this point is this: “That said sale was not made by said trustee, but was made by one Noscoe Stinson, who was either interested in the debt or was an agent of the party or parties who owned and held said debt, who had no proper legal authority to make said sale.” This we think is a mere averment of a legal-conclusion, not an averment of facts showing want of legal authority. In addition to this, the original bill then proceeds to set out several distinct facts as grounds why Stinson was without authority to make the sale without suggestion at all that one of these grounds was the failure to appoint Stinson in writing signed by tbe acting trustee. We think it is clear that the original bill did not aver in any proper legal sense, as a. ground for the invalidity of the sale, the failure of the acting trustee to appoint Stinson in writing signed by himself. •

And this brings us to the last point in the case, the one above referred to, as to whether the relief prayed on this ground in the amended bill is barred by the ten-year statute of limitations, and here one of the most astonishing things which the court is called on to consider discloses itself. It is perfectly obvious that the learned counsel for appellees who made the argument that the statute bars the release, supported by the authorities which we have reviewed, was misled in saying, as he does in his brief, that the statute of limitations was set up by the demurrer. He adverts to the fact that it has been held in this state, citing the authorities (Hines v. Potts, 56 Miss., 347), that the statute must be specially pleaded at law, and then states that it is equally well settled that it may be interposed by demurrer, in chancery, citing McNair v. Stanton, 57 Miss., 298, and adds that in the case at bar the demurrer to the amended bill raises the question of the statute of limitations. Counsel misconceives the record entirely on this point. We have set out the demurrer hereinbefore, and it will be perfectly obvious upon a mere inspection of it that it in no way sets up the statute of limitations, nor is there the slightest allusion to the satute of limitations in the brief of counsel for A. IT. and Hyman Jacobs, who filed the demurrer. He very correctly under the first ground of his demurrer argues alone the proposition, set up by said grounds, that the complainants were barred by reason simply of their laches in failing to file their bill until the last day in which it could be filed within the ten years. Most manifestly the statute of limitations is not set up by the demurrer at all. When the amended bill was offered and was about to be filed, counsel made an agreement, which appears in the record (page 33) to this effect: “It is hereby mutually agreed, in order to advance the trial of this cause, that the complainants may file and make their amendment to their amended bill this day, before the hearing of the demurrer now on file herein, and without the complainants being held to confess any of the causes of the said demurrer, and that said demurrer be considered as applied to the amended bill as this day amended. Signed and agreed to this the 21st day of December, 1905. . Theo. McKmight, for complainant. A. Ii. Geisenberger, for defendants, A. F. and Hyman Jacobs. American Freehold Land & Mortg. Co., by Chas. T. Coleman, attorney.” So that it appears clearly from this agreement that the demurrer originally filed was not changed at all, but simply referred to the amended bill. Nothing can be clearer, therefore, than that the statute of limitations was not set up in this cause in any way, either by plea or demurrer. This court is bound, of course, by the record. If the parties defendant below chose to rely on simple laches, and to waive the separate and distinct defense, to be specifically made by plea or demurrer, of the statute of limitations on the trial in the court below, they cannot set the statute up here for the first time. This court cannot set it up for the parties. So it is too obvious for discussion that all that is so strongly argued by learned counsel with respect to the statute of limitations barring the relief sought by the amended bill is wholly out. of place in this cause, on the record as it now stands.

We make just one concluding observation. Learned counsel for appellant, in discussing the clause in the trust instrument which we have quoted above, providing that “for any sale under the trust deed the acting trustee was authorized to appoint in writing,” etc., indulging in argument of some length to show that the word “may” was used in this clause in its ordinary sense’; that it was permissive, and not mandatory. But a careful reading of the clause itself shows that the word “may” is not used in the clause at all. This seems to have been an inadvertence on the part of the learned counsel. The language of the clause is not “may appoint,” but is “authorized to appoint in writing,” which includes necessarily the idea that the acting trustee was authorized to appoint in no other than the specified mode. Learned counsel for appellant also argues that the power in a trust instrument to appoint a mere auctioneer to perform no other than the mere ministerial act of conducting the sale is not by the general law required to be in writing, but may be verbal. Grant this to be true, it in no wise affects this trust instrument, which expressly requires the appointment of “an agent and auctioneer” to be in writing, signed by the acting trustee. Here, if the general law was as stated, the parties to the contract have waived that general law, and substituted for it the specific and exclusive mode named in the instrument, to wit, that the appointment should be in writing signed by the acting-trustee.

We have given this case the most painstaking and careful consideration. The result is that on the record as it now stands, since the appellees failed in any way to set up the statute of limitations on the trial in the court below, and since the sale was for the reasons indicated manifestly void, and not simply voidable] the decree must be, and it is hereby,

Reversed, and the cause remanded for proceedings in accordance with this opinion.