Id.452: Forrest Vi KullJ1';'Id. 522; Barney v. L,at1wJm, Supreme·QounJ1. S., Apri118,1881, not yet reported., (Ilee 102l!. &.:)Bl9kti v, preme Court U, S., May 2, 1881, not yet reported, dllcided since the. fore:going opinion was delivered. ." .
ao. Id. 498:
ad. v. McComb, 17 nlatChf.
Oooks T.
CUEW and othe,l'1il v. HYMAW, and others. ,
Oourt,z:.., P. nZinois. April' ;,
1881.)
DEBD-FoRECLOSURE-PARTIES.
Devisees, h,olding the fell jnan equity ofredf:llllption, are necessary parties to a suit to foreclose a trust deed by a jUdicial sale of the land under,the decree of a court of equity. ' ' 2. DONEE 'OF POWER-FEE. A power to in his own dIRcretlon,ant'l' re-inveRt, iluring the minority of devisees, d.oes not vest anexecuwr With the fee of the land. 8. TRUIn' DEED-JUDICIAL SALE.
A sale under a d,!cree of court is. judicial, when such sale is not made exclusively under the p.owers of a trust deed.
4.
SAME-FORECLOSURE SALE-RATIFICATION.
An executor, empowered to sell for the purpoRe of re-investmeitt, cannot bind devisees holding the fee in an equity of redemption, .by the ratificl,ltion of a foreclosure sale to Which. they were not parties. -[ED.
In Equity. Bill to Redeem. BLODGETT, D. J. By this bill the complainants seek to redeem the lands in question froni a trust deed given as security for the payment'of money. The material facts,'BS they appear in the record, are that, on and before the sixteenth of February, 1859, one William F. Johnston was seized in fee of the un(livided half of section 21, town 39 north, range 13 east, situate in Cook county, in this state, and on that day made a deed of the premises in fee to John V. Lemoyne, in trust, to secure the payment· of the bond of Johnston to Susan C. Williams, for $4,500, with power to the trustee, in case of default in the payment of the ness, 'to sell said premises at public vendue, after giving
8
FEDElUL". nEPQB1EB· · ' 't 'I i
notice of the, time and place of Buch Bale, in the provided in .said· deed, and out of the pftl,ce'e'd'sto pay said indebtedness ahd the cost of· sale. On :'Hrl, ",-, r",,: _ tne twentieth of June, 1859, Mter the making and recording of said trust deed, Johnston sold and conveyed the premises to John A. Washington, subject to the trust deed, and by the terms of the conveyance WashIngton assumed and agreed to pay the indebtedness secured by said trust deed. On the thirteenth day of September, 1861, John A. Wash· ington died intestate, leaving, as surviving heirs, pis Louisa F., Jaue E., Eliza S., Anna M., Lawrence, Eleanor, and George, who, with the husbands of the married daughters,are the complainants in this case; By his last will and testament, bearing date on the fifteenth of August, 1861, John A. Washingtou, after bequeathing to his son Lawrence certain family mementos, books, and manuscripts, disposed of the residue of his property in the following terms: "(3)' I give all of the property of which I may die possessed, other than that just mentioned, to be equally divided am(Yng my children as , they' respectively become2t years old, and until then to be maintained and educated out of the )?roceeds arising from it. (4) I constitute and appoint my brother Richard B. Washington,and my friends William Fontaine Alexander and Edward C. Turner, executors of this my last will and testament, and I hereby empower them, or the survivors or' survivor of them, to sell any property of which I may die possessed, and which is beyond the limits of Virginia, in such rilanner and on such terms and for such price as to them. or him shall seem best for the interest of my.children, and to re-invest the proceeds arising from such sale in such other property as they may think best for my children." will was duly probated in Farquier county, Virginia, in November, 1861, and letters testamentary issued to Richard B. Washington as sole executor; Alexander having died and Turner having renounced all rights as executor under the will. In December, 1861, Richard B. Washington, as executor of John A. Washington, gave to George H. Hughes two contracts in writing, by the terms of one of which Hughes was to con· f; .',
CHEW V. HYMAN.
9:
duct a suit then pending in the supreme court of the Umted States, in which said John A. Washington was appellant, and Mahlon D. Ogden was appellee, to a determination thereof, and to pay all costs and charges necessary to conduct said suit; and said executor agreed to pay Hughes, as compensation for his services rendered and to be rendered by hi}ll in the said suit, one-third of the proceeds of the sale of tMreal estate of John A. Washington lying in Cook county, IllinoIs', after payment of the encumbrance then on said laiid, or to give Hughes, in'lieu of said proportion of proceeds, one-third part of said teal estate which might remain after payment'df the encumbrances,-Hughes to pay all the expenses 9f etriploying counsel and conducting said suit; and in case of arretet'o mination thereof in favor of Ogden, he was to receive'nocompensation for. his services rendered or to be rendered.' 'By the terms of the other of these contracts', Hughes was to take charge of the half section now in controversy, and one'other tract, and to sell so much thereof as was necessary to pay the encumbrances thereon, and advance the money required to pay the encumbrances and taxes, and was to receive for his services one-fourth of the proceeds after paying the encumbrances and expenses. The proof also shows that in the spring of 1862 the executor gave to Hughes a power of attorney to bring and defend any suits concerning the estate of John A. Washington in Cook county; also to negotiate and make sales of said property, or any part thereof, and apply the proceeds to the payment of any encumbrances or any other debts in illinois, and to such other objects and ends as Hughes might deem best. On the twelfth day of March, 1864, Susan C. Williams, the payee and holder of the bond secured by the deed of trust from Johnson to Lemoyne, filed upon the chancery side of' this zourt her bill, setting out in substance that said' bondl1itd', byits terms, become due and payable on the sixteenth of Febrtl·... ary, 1864, and that the same remained wholly unpaid; that, said John A. Washington had assumed the paymeh't of said indebtedness, and had died, and that Richard B. Wtshington was his executor; that Mr. Lemoyne, as' trUstee, was.
10
REP.QRTER.
unwilling to execute the trust without an order of court, and prllyed that an accoun,tingmightbe had of the amount due on the bond; and. that Lemoyne, as trttstee, be directed by the court to sell said premises in pursuance of the powers contained in the trust deed, and, out ,9f the proceeds of the premises, to pay thecomplainallt Mrs. the amount found due her, and to bring the residue into court for the beJ;lefit of the parties entitled t1}ereto. The only defendants to 8ltid bill were Richard B. Washington, the executor, and Mr. Lemoyne, the trustee. On the same day that the bill was iiled, Mr. Lemoyne, the trustee, entered his appearance filed his answer; and ont4e same day the appearance of Richard B. Washington was entered in said cause by Hughes as his attorney in· fact, service -qf processwaived, and his n.n.swer.filed admitting the substantial allegations of the bill; Lnd a decree was. on the same day finding that there was due Mrs. Williams the sum of $4,500 principal and $262 for interest o.n the bond secured by the. trust deed, declaring the same a lien on said premises, and directing said premises to be sold to pay said indebtedness, and that Lemoyne should proceed to execute the power vested in him as such trustee, and make sale of said premises without benefit. of redemption. The decree also found that it was necessary to sell the whole of said premises, the interest an undivided one; that he should sell the same at puqlic vendue, after first giving then pub30 days' notice in the Chicago l(Qst, a lished in the city .of Chicago, and. make and deliver to the purchaser or purchasers a good and sufficient deed or deeds of conveyance in fee simple, and thatpe should pay to Mrs. Williams the Bum of $4,762, with at 6· per cent. from the date of the decree, and pay the balance of the pro· ceE1ds into court, to pe drawn out by Richard B. Washington, of John .A.. Washingt.on, and to make report to the court ()fhis doings in thatbehaJf. for the approval of the In pursuance of this on the otfereifthepiemises,at pub. twenty-sixth day of A;pril, lie vendu.e,and the same was struck. off and ·sold to the de.. c . ; ' " ' , " . ' .' ,
, CKEWV. JrrMAN.
fendant Robert W. Hyman for the sum ot' $9;700: and the trustee made and delivered to the defendant Hyman a 'Q.eed of all the right, title, ahd interest, 'both atlawand in equity, which said trustee had acquired in the said premises oy said trust deed, and thereupon duly reported his proceedings under said decree to the cotirt, and paid intb court the sum of $4,300, being the balance left after' paying the amounfdue Mrs. Williams and the cost of said proceedings. It further appears that after the consummation of said sale the money sO'paid into court was withdrawn by Hughes, as agent and attorney of Richard B. Washington, and all, except enough to Dutke, with the amount paid Mrs. Williams and the costs, $6,000, was refunded to the defendant Hyman by Hughes, and thereupon defendant Hyman made two notes of $4,500 each, payable to Richard B. Washington, executor, with interest at 6 per eent.,--one on the twentysixth of April, 1865, and the other on the twenty-sixth of October, 1865,-and secured payment ofthffsame by a deed on said premises. '. In May, 1865, Hughes and Richard B.Washington me\in Baltimore, Maryland, and'Hughes rendered an account of the proceeds of said land, and turned over to the executor the last note 'of Hyman for $4,500,' and the wassu.bsequently fully paid to the executor.: of the present complainantfl-.;;ehildren' of ;1ohn' A. Washirtgiion-were made parties to this Buit by Mrs. Williams, and the testimony shows that none of these children were 'aware of this suit, or that the land in question had been sold under the decree of this court, until a shorttiriie before the suit, was brought. There is good ground, I think, for concluding from theevi. dence jn the record that this Williams suit, and'the proceed. ings under the decree of the court made therein, was a mere expedient resorted to by Hughes to vest the #tIe to the land in the defendant 'Hyman. It appears tha.tH'ughes, in February, 1864, wrote to Richard B. Washington, executor, that he had sold this land for forwa:r'dedhim a deed to execute in pursu'ance of such' sale. But the executor did not execute and return the deed, arid this circuinstttnce"takenin
.REPOBTER.
oonnection'with', the dispatch al1d facility with which the decree was obtained in the court, and the fact that Hughes then had in his control ample means with which to payoff the Williams debt, certainly tends cogently to prove that the proceedings in court were purely friendly, and preconcerted for the purpose of effecting under their color the sale made by Hughes to Hyman, which the executor had refused to ratify by executing and returning the, deed; but as I do not rest my .,cqnclusions to the merits of the case on feature .of the I will not enlarge, upon it. There is ,nqproof)n ,the recorq to that.,tp.esumof.$15, 000 by :ijyw.an for. the ,was not, at the ,that,th(3. property was "l9rt b;.! ( . i ,:., " ! U 91lthn .the ;.to, 9PffJiiA g1;9!1Jtl,d, \:Wa{; : ,9f , : I phe C&'fle, of j
tM;;s. and that they ,were not parties to i 1 .,o.r ,fPf3f
..If.Qt pur-
",as)p up.4er..\¥I-id ·«fllJlllfl,,; solely rC-9p t ract cppfex:re4,pp; by '1w;L : .pa,rt of tha ap,tl;l,\Vere not tb,e bill; tb,at their interElsta: were, repre{lented. executor; and further, that the . clothed with "slliQh powers of :will as to draw to hiIQ,the ;Of .tl:le land upon which his power was to first question to be considered is, who·4ad the fee in: the. equity of of this land at the titUe of question? The thirl! clause of the will Qf J obn A. deyises this land, with his other real estate, his children, and I think there is no room for doubt, and hardly for these complainants held' the fee in the equity of' redemption. The Williams bill was filed for the purpose of having an accoun,t taken as to the amount due Mrs. Williams Bnd
C:HE.W; V. HYIfAN.
.13
secu:red by the trust deed, and to. require the trustee to execute the trusts rand the amQunt thus to be found due. r.J;1he frame and scope <of the bill were such that the court could appropriately have appointed a new trustee, or directed a sale by one of, its :own officers, a master in chan. eery' Or commissioner, in the usual form of chancery sales. The court was not necessarily bound to execute the trusts through the trustee named in the deed, if for any reason it should be held more agreeable to equity, and conducive to the rights of all the parties, .that they should be executed otherwise. It is nottwhait the court did· do. nm: the: decree which was actually entJered;·but what. the cQurtmight have done un<ler this, biU".whichdetermines the question as to who were the propeT pamiesithereto." .: , The decree wliichwiltsiEiniliered the sale ina pal'lticulaa-, \taYi directing;,the; whitlh' he should publish biis;nbtmea.nd th6:number<of daiys ."'\thieh ·such,j noilice' shaili! publishe<4 ,and: finally! hilh .to'repmit the'sMe to'the courtJ'&nd to :pay; outof,the<p1iO-eeeds;of,tho'saIe;iihe a.IMunt, due ,<Mrs-., est per ,cellt/lifteriltlke dMe of the pay/the baUtncefof'the'1lroceeds inoo;coort, tobedrawnout 'i81Td 'B, Here, :>it ,willi be. seen, a.re several' duties imposed; on ,the ·. -did notam:ise under thefirllt:deed;,IFifoBt.· tise ina partioula'1'newspaper,< whem ,the trt!lstdeeddesigna,ted no special hewsp8lperfor,thepurpose.:<·8elJond,' He was'! to pay. Mrs. Williams, thecomplainamt;'not. the principal sum .aue on bond and interest at 10, pef cent., as' the deed required, but" the amountfouud due hy' the decree .and 6 per -cent. from the entry of the decree, thus compounding the interest for such time as' should intervene between the decree and sale. Third. He was to bring the surplus .proceeds of the sale into court, instead of paying it over himself directly to Johnson, the grantor in the trust deed, or his assigns. He was to pay it into court, to be drawn out by Richard B, Washington, executor, etc., thus judicially ,determining 'who was to this surplus. Fourth. The decree- directed the I
1IIBDEBALBZ1>OBTEB.
trustee to sell the whole premises, because ,the interest was an' undIvided one. '; This is only material so far" as it shows that in this decree, which, we must presume, was prepared by the consent of 'all the parties before the court, the sale was treated as a judicial sale ,by the court and parties, and not as ,a sale made exclusively under the powers of the trust deed, further than the cotirtsaw fit to adopt those powers and terms. In thisrespact the case comes clearly within the case of Swift v. Smith, decided by the supreme court of the United States lit the present term, which expressly holds that the sale was a. judicial sale, although conducted and made b) the master in chancery of the' court, whowa,s appointed a trustee by the decree; yet, at the same time, it was to be made according to the, terms conta.ined in the trust deed. If this was a judicial sale, I hardly need cite authorities to show that the owners ·of the fee, burdened with the indebtednes8 , which the complainant sought to make out of this real estate, were necessary parties to the Buit. But it is urged that equity rule 49 dispenses with the' necessity of making these devisees parties to the record. Thill rule reads as follows: ,"In all suitsconceming real estate, which is vested in trustees by devise,'and such -trustees are competent to sell and give discharges for the proceeds of the sale, and for the rents and profits of the 'estate, sucb trustees shall represent the persons beneficially interested in the estate, or the proceeds or the rents and profits, in thesa.me manner and to the same extent as the executor.'or administrators in suits concerning personal estate represent the persons beneficially interested in such personal estate;' and in such cases, it shall not be necessary to the persons in such real estate, or rents and profits, parties to the suit, but the court may, upon consideration of the matter upon the hearing, if it shall sothinkfit,orde±' such persons to be made parties." The questiontthen,in this case is,wasthe fee ()f this land vested in the 'executor; so as to make this rule applicable? will certainly does not vest it in the executor 'by its
terms,and therefol'ejt seew.stome rI,l1e400,9; apply. 'rhe p<;>werwith which. the executor. ijlclothed by the willis. purely ·discretionary. The. executor could not he compelled to act. He was clothed simply with tb,e discretionary to ,sell the real estate outsida o,f ,the state of Virginia and: re..Wvest the proceeds. Until the exeeutor exercised this diat; cretion to sell for t4e purpose of re-investUlent, the fee, of thi$ land remains in .the childr:en, the devisees under the will, and there is no cllJ,use or word in the will intimatingthaLthe testator intended that the executor should thll fee. When the executor saw fit to sell for the purpose of re-investment under the powers with which he was clothed, that passed the fee out of the children, as in the case of a power given any agent to sell real eatate under a letter of from his principal. "Mere pOwers are purely discretionary with the donee: he mayor may not exercise or execute them . at his sole will and pleasure, and nocoutt· can compel or control' his discretion, or exercise it his stead or place,' if ' for any reason he leaves the power unexecuted. It ds different with powers coupled with a trust, or which imply a trust." Perry on Trusts, § 248. So in Taylor v. Benham, 5 How.'. 269, the supreme court of· the United States says: "One.of the tests on ,this subject is;that a naked power to :sell1Day, be exercised or not by executors, ahd is discretionary, while' an imperative direction I to sell and dispose of the proceeds, as in this case, is a power coupled with a trust." So in Story's Eq. Jur. § 1070, the rule is stated in these terms: "In the nature of things there is a wide distinction between a power and a trust. In,the fortner., the patty' may or may not aQt in his discretion j' in the latter, 'a trust ,will be elecuted: notwithstanding his omissionw act." But it is urged further thakthissale has been ratified by. the executor, by the receipt from Hughes of the proceeds ,of, the sale made to Hyman.' . The answer, to this sooms .to mel to be-First,the execJitorreceived this money· from Hughes, under the faJse ·property had been sold at'! afi>rced sale uilder foreclosure ]>foceedings;'w,hen{ !jn, Ifact 'it; was, a mere colorable sale.. consentedto.:and1U.JIittged"by,