The Prudence Co., Inc. v. Garvin

After repeated conference in regard to final disposition of the above entitled cause in this Court, it has been determined by the Court to order a reargument, the reargument to be confined and addressed to the question as to whether or not the title to the property involved in this suit after being conveyed by the Master in Chancery pursuant to sale under foreclosure to J.J. Kiser and Sol Meyer as Trustees, thereafter passed from J.J. Kiser and Sol Meyer as Trustees so as to become vested in the Puritan Company in such manner that the Puritan Company could execute a valid trust deed to secure its bonds whereby the purchasers of such bonds should be construed to be holders thereof without notice of the claim of The Prudence Company the cestui que trust in whose behalf J.J. Kiser and Sol Meyer as trustees foreclosed the trust deed resulting in the sale of the property and the conveyance by the Master to J.J. Kiser and Sol Meyer as Trustees as first herein stated. And upon the further question as to whether or not after the foreclosure of the trust deed executed by Alter Kotte and wife to Sol Meyer and J.J. Kiser as Trustees to enforce the payment of the bonds held by the Prudence Company and the conveyance of the property involved in this suit by the Master in Chancery in that foreclosure suit to J.J. Kiser and Sol Meyer as Trustees, Prudence Company waived its right to rely upon its security and elected to look for the payment of its bonds to J.J. Kiser and Sol Meyer as guarantors.

The Court will hear argument on these questions on the 9th day of February, 1937, at 9:30 o'clock A.M.

So ordered.

ELLIS, C.J., and WHITFIELD, BROWN, BUFORD and DAVIS, J.J., concur.

ON REARGUMENT Division A. A reargument of this case was heard February 9, 1937, by order of the Court limited to the following questions:

"1. Whether or not the title to the property involved in this suit after being conveyed by the Master in Chancery pursuant to sale under foreclosure to J.J. Kiser and Sol Meyer as Trustees thereafter passed from J.J. Kiser and Sol Meyer as Trustees so as to become vested in the Puritan Company in such manner that the Puritan Company could execute a vaild trust deed to secure its bonds whereby the purchasers of such bonds should be construed to be holders thereof without notice of the claim of the Prudence Company, the cestui que trust in whose behalf J.J. Kiser and Sol Meyer as Trustees foreclosed the trust deed resulting in the sale of property and the conveyance by the Master to J.J. Kiser and Sol Meyer as Trustees as first herein stated.

"2. Whether or not after the foreclosure of the trust deed executed by Albert Kotte and wife to Sol Meyer and J.J. Kiser as Trustees to enforce the payment of the bonds held by the Prudence Company and the conveyance of the property involved in this suit by the Master in Chancery in that foreclosure suit to J.J. Kiser and Sol Meyer as Trustees, Prudence Company waived its right to rely upon its security and elected to look for the payment of its bonds to J.J. Kiser and Sol Meyer as guarantors."

In an opinion filed April 11, 1936, a full statement of the essential facts will be found. These facts will be drawn from as a basis for the present opinion rather than attempting a restatement of them.

The questions as stated are verbose but after argument and a thorough consideration of them in the light of the record, we find no reason to reverse or modify our opinion filed April 11, 1936. Both questions should be answered in the affirmative for the following reasons:

1. The Trustees of the Mortgage securing the Kotte bonds were empowered to purchase at the foreclosure sale the lands securing said bonds in their individual or official capacity. When so purchased, they could sell the said lands and convey a good and indefeasible title in them. Nay Aug Lumber Co. v. Scranton Trust Co., 240 Pa. 500, 87 A. 843; Watson v. Scranton Trust Co.240 Pa. 507, 87 A. 845; Smith v. Mass. Mutual Life Ins. Co.,116 Fla. 390, 156 So. 498; 95 A.L.R. 508.

2. The record discloses and it was in effect held by the Chancellor that the Prudence Company waived its right to rely on the Kotte bond security and elected to rely on Meyer-Kiser Corporation of Indiana for security.

3. It was admitted at the oral argument by counsel for appellant that Smith, as liquidator, was a holder for value and in due course of his Puritan Company bonds to the same extent as if they had been purchased and held by the Atlantic National Bank of Jacksonville.

4. Even if Appellants and Appellee Smith could both be classed as innocent parties, Appellants would in equity by reason of their conduct be required to suffer because of their silence when conscience required them to speak.

We do not deem it essential to discuss and cite authorities supporting these reasons. They in part arrive from an interpretation of the evidence and facts as disclosed from the record. We have given the whole case a thorough consideration on reargument and find no reason to recede from our former opinion.

It is accordingly reaffirmed.

ELLIS, C.J., and WHITFIELD, TERRELL and CHAPMAN, J.J., concur.

BROWN, J., concurs in the conclusion.

BUFORD, J., dissents.