Cloud v. Kansas Loan & Trust Co. , 52 Mo. App. 318 ( 1893 )

Gill, J.

— This is an injunction suit brought by plaintiff Cloud, whereby it is sought to enjoin the defendants, particularly defendant Flower, from selling certain real estate covered by a deed of trust executed by Cloud May 1, 1886. From the record before us it appears that Cloud borrowed of the defendant trust company the sum of $700, giving his note due in five years with interest coupons attached. To secure the loan, Cloud executed his deed of trust in the ordinary form, and' provided therein that if default was made on any interest obligation then the entire debt should become due at the option of the beneficiary. Sweet was named as trustee with a provision that if he failed or refused then one Noble was authorized to act.

Following this the deed of trust further declared: “And in case of the death, absence, inability or refusal to act of the said party of the second part or any of his successors in trust, then any attorney of record, residing in the state of Missouri, whom the said party of the third part or the legal holders of said note may in writing appoint, shall be and he is hereby made successor in trust to the trustee hereinbefore named with like powers and authority.”

The plaintiff Cloud failed to pay the interest as he had agreed for the years 1889 and 1890; and, thereupon, in April, 1891, Sweet and Noble, the -trustees named in the deed of trust, declining to act, defendant Flower, an attorney of Missouri, was in writing appointed by the legal holder of the note to act as trustee. Flower proceeded at once to perform the trust and advertised the property for sale. Plaintiff thereupon began this suit to enjoin the sale. The cause was heard in the court below, where plaintiff succeeded, and. defendants have appealed.

There is no rule of law or equity upon which this judgment can be sustained. The court below seems to have rested its decision on the mere fact that the trustee and defendant Flower had at times, antecedent and contemporaneous with his attempt to foreclose this deed of trust, acted as an attorney for the beneficiary in the trust deed, and that he, therefore, was not, as declared by the court, “a suitable person to act as trustee in the deed of trust.” This is not a proceeding under sections 8683 and 8684 of the Revised Statutes for the appointment of a trustee on a failure of those designated by the deed, as was the case in In re Mayfield, 17 Mo. App. 684, but this trustee Flower was in terms practically named by the parties themselves. The holders of the debt secured have done that, and nothing more than they were authorized to do under the terms of the deed of trust executed by plaintiff Cloud. They were empowered by the plaintiff (in case of the failure of Sweet and Noble to act as trustees) to appoint some attorney of the state of Missouri to act instead of such trustees. And as such beneficiaries saw proper to select one who had been, or was at the time, their attorney, we discover no reason why they should not be allowed to do so. It would not have been improper even to have designated one of the mortgagees or beneficiaries to act as trustee in such an emergency. Such a party would then be a mortgagee with power of sale. Cassady v. Wallace, 102 Mo. 575, 580.

The judgment here was clearly for the wrong party. It will, therefore, be reversed and the cause remanded with directions to assess damages and enter a judgment for defendants.

All concur.