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(274 Mo. 332) - SWABEY v. BOYERS. (No. 19105.)

(Supreme Court of Missouri, Division No. 2. April 9, 1918. *# Denied April 26,

1. CONTRACTS (3:167 – INCORPORATION OF W.

Laws in force at the time and place of making a contract which affect its validity, performance, discharge, or enforcement form a part of it as if expressly referred to or incorporated within its terms. 2. MORTGAGES @:97—DEED OF TRUST-HARMONIZING WITH STATUTES. The provisions of a deed of trust must be harmonized with the statutory provisions applicable to such deeds so as to give effect to all of them if possible. 3. MoRTGAGES & 334—DEED OF TRUST—NAKED POWER—LAPSING ON DEATH. A naked power in any deed of trust can be revoked at the pleasure of the grantor, and lapses upon his death. 4. MORTGAGES @:341 – DEED OF TRUST – SHERIFF AS SUCCESSOR OF TRUSTEE. Where the habendum of a deed of trust pr vided the property was held to the trustee “and" to his successor as hereinafter designated,” and provided that in the event of the trustee’s absence, death, refusal to act, or disability, the then acting sheriff of the county might proceed to Sell, that is, to execute the trust, and that, in Case of such sale, a deed to the purchaser should be made by the trustee or his successor, the sheriff of the county was empowered to execute the trust as the successor of the trustee as much as if the word “successor” had been used in connection with his authority to sell; it being evident from the instrument itself that it was the intention to vest the sheriff with the same interest and power to execute the trust that the trustee had. 5. MORTGAGES & 334—DEED OF TRUST-POWER TO EXECUTE—IRREVOCABLE CHARACTER. The sheriff of the county, designated as the successor of the trustee named in a deed of trust in case of the latter's absence, death, refusal to act, or disability, became vested with the power to execute the trust, and with an irrevocable interest retaining the power for him after the grantor’s death. 6. MORTGAGES @:342—DEED OF TRUST-APPOINTMENT OF TRUSTEE-STATUTE. Under Rev. St. 1909, §§ 11919, 11920, providing that if any trustee, in any deed of trust to secure payment of a debt, shall die, the court may appoint the sheriff or some other suitable person trustee to execute such deed of trust, etc., where the original trustee named in a deed of trust had died, and by the terms of the instrument the trust devolved upon another trustee, the court was not authorized to appoint a trustee; the evident purpose of the statute being to provide for an appointment of a trustee in case of the failure of some one to execute the trust.

Appeal from St. Louis Circuit Court; Thomas C. Hennings, Judge. Ejectment by Amelia Swabey against John

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to the land in controversy under a trustee's deed made in foreclosure of deed of trust executed by the defendant February 23, 1897, of which land the defendant at that date was owner in fee. The foreclosure took place in May, 1914. The deed of trust executed by the defendant conveyed the property to Henry Kotthoff, party of the second part, in trust to Secure a debt due William C. Eichlers. The plaintiff herein became the holder of the note secured, and was such at the time of the foreclosure. The granting ClauSe Of the deed Of trust is in the usual form, and after the description the habendum is as follows: “To have and to hold the same together with the appurtenances to the Said party of the Second part and to his successors hereinafter designated and to the assigns of him and his successor, forever.” The deed of trust then describes the debt, etc., and provides that:

“The said party of the second part, or in case of his absence, death, refusal to act or disability in any wise, the then acting sheriff of the city of St. Louis, Missouri, at the request of the legal holder of said notes may proceed to sell,” etc., and upon such sale “shall execute a deed in fee simple of the property sold to the purchaser or purchasers thereof, and any deed made by the trustee or his successor in pursuance of the powers herein granted, and all recitals therein contained, shall be everywhere received as prima facie evidence of such facts.”

We have italicized the words to which special attention is directed in the argument.

The trustee, Henry Kotthoff, died, and on May 5, 1914, upon the affidavit of the plaintiff (beneficiary in the deed Of trust) stating that fact, the circuit court of the city of St. LOuis appointed John J. Wanstrath trustee to execute said deed of trust. Wanstrath, as trustee, advertised the property for Sale in due form, and Sold the same On the 29th day Of May, 1914. The plaintiff became the purChaser and Conveyance was made to her.

The statutes, sections 11919 and 11920 have the following provisions relating to deeds of trust upon which respondent relies for the legality of Wanstrath’s appointment:

“If any trustee in any deed of trust, to secure the payment of a debt * * shall die, * * * any person interested in the debt * * * if it be a deed of trust, to secure the payment of a debt * * * may present his or their affidavit, stating the facts of the case, specifically, to the circuit court of the county in which the property * * * is situated.”

Section 11920:

“If such court shall be satisfied that the facts stated in such affidavit are true, it shall, in case of a deed of trust given to secure the payment of a debt, or other liability, make an order appointing the sheriff, or some other suitable person of the county, trustee to execute such deed of trust, in place of the original trustees; and thereupon such sheriff, or other suitable person, appointed by said court, shall be possessed of all the rights, powers and authority possessed by the original trustee, under the deed of trust.”

[1] I. It is claimed by the appellant that on the death of the trustee, the deed of trust made the Sheriff Successor, vesting in him as Such the title and the power of Sale, and the court had no authority to appoint a trustee except upon the refusal or inability of the Sheriff to execute the trust. It is true, as respondent asserts, that laws in force at the time and place of making the contract which affect its validity, performance, discharge, or enforcement enter into and form a part Of it as if they were expressly referred to or incorporated within the terms of the contract. 6 R. C. L. Contracts, $ 243; Christian V. Insurance Co., 143 Mo. 460, loc. cit. 465, 45 S. W. 268; State ex rel. V. Smith, 173 Mo. 398, loc. cit. 420, 73 S. W. 211; Havens v. Fire Ins. Co., 123 Mo. 403, loc. cit. 416, 417, 27 S. W. 718, 26 L. R. A. 107, 45 Am. St. Rep. 570; Kleeman Co. v. Casualty Co., 177 Mo, App. 397, 164 S. W. 167; Northern Pacific Ry. Co. v. Wall, 241 U. S. 87, loc. cit. 91, 36 Sup. Ct. 493, 60 L. Ed. 905; Walker v. Whitehead, 16 Wall, loc. cit. 317, 21 L. Ed. 357. [2] This rule is made to apply, every kind of contract which is of statutory enactment. Taking it as applicable to this case, and reading these Statutes into the deed of trust as a part of its provisions, and construing them in connection with the other provisions quoted above, it becomes necessary to ascertain on what contingency the court could appoint a trustee with authority to discharge the trust. These provisions of the deed of trust must be harmonized with the statute so as to give effect to all of them, if possible. Respondent contends that the sheriff is not made alternative trustee by the terms Of the deed of trust, but is merely given the power to sell; that it is a grant of a naked power, without the estate such as is vested in a trustee, and therefore on the death of Kotthoff there is no trustee to execute the trust in its entirety, and the court may appoint. This court has held that the proviSion in a deed of trust, to the effect that On the death of the trustee the then Sheriff may sell, means the sheriff who is such at the time the foreclosure sale is desired. And it Was held also that the Sheriff is not, by the deed of trust, vested with the title on the failure of the trustee, but merely is given the power and right to Sell. Miller V. Bank, 235 Mo. 522, loc. cit. 530, 139 S.W. 192. That Case mentions the case of McNutt V. Life Ins. Co., 181 Mo. 94, 98, 79 S. W. 703, 704, and states that it has been overruled. In the latter case the deed of trust provided that upon death or refusal of the trustee to act, another trustee Who Was named should execute the trust, and in case of the latter's death, inability or refusal to act, “then the (then) sheriff of said County of Jackson and State of Missouri (who shall thereupon become their successor to the title to said property, and the same become vested in him in trust for the purposes and objects of these presents, and with all the powers, duties and obligations thereof), may at the request of the holder of said note proceed to sell,”

it Seems, to the subject

etc. The court says (181 Mo. 99, 79 S. W. 704):

“That the title which the sheriff takes in such circumstances, he takes as an individual. and not officially, and it remains in him until divested by his death, or other disqualification, or by the payment of the debt”

—and held, as a necessary consequence, that “the then sheriff,” means the person who was sheriff at the time of the death, removal or inability of the trustee. The case of Feller v. Lee, 225 Mo. 319, 124 S. W. 1129, is referred to as overruling the McNutt Case. There the COn Veyance WaS made to the sheriff of Webster county, party of the second part, no name mentioned, with habendum, “to have and to hold the same with the appurtenances to the party of the second part, and to his successor or successors in trust, and to his or their grantees and assigns forever.” 225 Mo. 328, 124 S. W. 1132. It then provides that in case of the absence, death, refusal to act, or disability in any Wise Of the party Of the Second part, the then acting sheriff of Webster county, Mo., might sell. 225 Mo. 329, 124 S. W. 1129. The court says (225 Mo. 332, 124 S. W. 1133):

“Not only so, but a succession of trustees is carefully provided. In certain named contingencies the original trustee becomes functus officio and his named successor is to execute the power. Now in this trust deed there is no hint that Lemphere and Hayes (grantor and beneficiary) were contracting that Goss, then sheriff, alone held a donation of power to execute the trust. To the contrary, the parties industriously and of set purpose provided for a line of succession to make the security effectual and easily accomplished by avoiding complications or accidents in the way of foreclosure.”

The original sheriff named as trustee was out of the county, and the sheriff in office at the time Of the default executed the trust and made the sale, and it was held the Sale was good. This case closes by reference to the McNutt Case, and was sent to the court en banc because of a difference from that case, and the Opinion was there adopted. Since that time this COurt in Several CaSeS has held that the “then Sheriff” mentioned in deeds of trust Of that form is the Sheriff Who happens to be such when the foreclosure is desired. Betzler V. James, 227 MO. 375, 26 S. W. 1007; West v. Spencer, 238 Mo. loc. cit. 69, 141 S. W. 586; Miller v. Bank, 235 MO. loc. cit. 529, 530, 139 S. W. 192. Each of these cases distinguishes the McNutt Case, and calls attention to the peculiar language USed in it. In none. Of these cases Was it Stated or intimated that the sheriff, on the failure of the trustee, acquired only a naked power without an interest. In none of them were the words “successor or successors,” tlSed, nor any WOrdS indicating an intention to Vest title in the Sheriff On failure Of the trustee named. The difference between the McNutt Case and the Feller Case Seems to be in this Only: The “then Sheriff” referred to in the McNutt Case meant the One Who WaS Sheriff at the time Of the failure Of the Original trustee, While in the Feller Case it was held to be the one who was Sheriff at the time Of the desired foreclosure. In the McNutt Case it was held that the Sheriff Was invested With the title as an individual, and not as an official, so that on the failure of the other trustee he was plainly designated as such individual. In the Feller Case it Was held that it Was the Official Who WaS designated, and that it was the Sheriff who happened to be in office at the time of the foreclosure. The two cases are in agreement to the effect the Sheriff Was the Successor in trust of the trustee with power to eacecute the trust. In the Feller Case the habendum WaS to the party Of the Second part, and to his successor or successors in trust, just as in the case at bar. The opinion explains that the title Was not Wested in the Original trustee “Out and Out for all purpoS88, but merely for the purpose of eaecuting the trust,” and indicates that the sheriff, on the contingency named, Would Succeed to exactly the Same estate and power . It holds that the instrument provided for “succession of trustees,” aS ShOWn in the paSSage quoted above, and the sheriff in office at the time of the foreclosure “executed the trust.” 225 Mo. 331, 124 S. W. 1129. From an early day this court has held that the Sheriff in Such case acquires an interest in addition to the mere power of Sale. In Beatie V. Butler, 21 Mo. 313, loc. cit. 319 (64 Am. Dec. 234), the Court Said:

“The distinction between the mere grant of a power and of an estate is obvious to every member of the profession, and is recognized on all occasions. Where there is a mere grant of power, the death of the grantor of the power extinguishes it.”

In White v. Stephens, 77 Mo. 452, the court referS to that case and indorses the doctrine stated. The deed of trust provided that in the event of the death of the trustee the then acting Sheriff of Marion county Should proceed to Sell the property, etc., and execute a deed; it Was held that the power granted the Sheriff Was not revoked by the death of the grantor for the reaSOn that the grant included an interest.

The case of McKnight v. Wimer, 38 Mo. 132, is Where a deed of trust provided that, in the absence, SickneSS Or death, Or disability of the trustee, the acting sheriff of the city of St. Louis might proceed to Sell. The court held that it Was not merely a naked power, Such as an attorney in fact possesses, which could be destroyed by revocation. “The Sheriff Was ClOthed With a trust for his (beneficiary’s) benefit, and the grantors did not possess the powers of revocation.” The Opinion in that case discusses the principle at Some length.

The holding mentioned above in Miller V. Bank, 235 Mo. 522, 139 S. W. 192, that the sheriff is not “successor” of the trustee, possibly was on the theory that when the trustee dies his SucceSSOr provided in the contract must eo instanti be Vested With the

Successor must be such that he can be ascertained at that time. According to the Feller Case it is not necessary that the trust should devolve at once upon the successor. It is necessary only that the trust shall not fail for, want of a trustee, and his succession may occur immediately, or after an interval, and not alone upon the contingency of the failure of the original trustee, but upon the further contingency of a demand of forecloSure after default. That conclusion realizes the evident intention of the parties to an instrument such as we have under consideration, and is in harmony With the CaseS cited. [3] Therefore it Was not necessary to the conclusion reached in the case of Miller v. Bank that the Court Should hold, as it did, that the Sheriff acquired no interest, but Only a naked power; and to that extent the announcement is obiter If it were merely a naked power, it could be revoked at the pleasure of the grantor in any deed Of trust, and would lapse upon the grantor's death. [4] II. The intention, Which may be gathered from the instrument, compels the same COnclusion. It was said in the case of Kelsay V Farmers' & Traders' Bank, 166 MO. loc. cit. 171. 65 S. W. 1007, 1011: “The power to sell under a deed of trust is a matter of convention and contract between the parties, and they are authorized to select their own trustee, and presumably they do it because of their faith in his fairness, and another cannot be substituted in his stead unless it is done in the manner, and on the conditions, to Which the parties have agreed.” The habendum here provides that the property is held to the trustee “and to his 8wCcessor as hereinafter designated.” The provision for the sale of the property in case Of the trustee’s absence, death, refusal to act or disability in any wise is that the then acting sheriff of the city of St. Louis may proceed to sell; that is, to eaceCute, the trust. Then follows the proVision that in Case Of such sale, a deed to the purchaser shall be made “by the trustee or his successor.” There can be n0 doubt Of the intention that the trustee’s “successor hereinafter designated” should be no other than the sheriff. There is no Other designation Of a SucceSSOr, and the fact that a sheriff is empowered to execute the trust is just as Complete and Specific a designation of him as successor to the trustee as if the Word “Successor” had been used in connection With his authority to Sell. So it is evident from the terms of the instrument that it was the intention to vest the sheriff with the same interest and pOWer to execute the trust that the trustee had. [5] In view of the uniform ruling that the Sheriff in the contingency under consideration becomes Wested With the power to eXecute the trust, and With an irrevocable interest Which retains for him the power after the death Of the grantOr, the Obiter State

tablish a contrary rule. Particularly it cannot control in this case, where the terms of the deed of trust clearly indicate intention to make the sheriff Successor in trust.

[6] III. Respondent makes the further point that in any event under the language of the statute the court might appoint a trustee on the death of Kotthoff because, the statute says, “if any trustee in such deed of trust die,” the court may appoint SOme One to execute the trust. The argument is that, the original trustee having died, the contingency arose, although there might be a Successor, that under the statute the Court is authorized to appoint a trustee if the original trustee dies, although by the terms of the instrument the trust deVOlWeS upon an9ther trustee. If there were Several trustees Vested With the estate, Who should act together, the statute would apply in case of the death of any one, and it is argued that it applies if there were several trustees where the authority of each depends Successively upon the failure of his predeceSSOr. It does not appear to us that the Legislature had any such restricted interpretation of the statute in mind in enacting it. The evident purpose was to provide for the appointment of a trustee in case of the failure of some one to eaecute the trust, the complete absence, under the terms of the instrument, of some one who might carry out its provisions; to arrange the matter so that the trust Would not fail for want of a trustee. We think the contingency did not arise which authorized the circuit court to appoint a trustee, and therefore the sale was void.

The judgment is reversed, and the cause remanded. <

ROY, C., concurs.

PER CURIAM. The foregoing opinion by WHITE, C., is adopted as the opinion of the court. All the JudgeS COnCur.

(274 Mo. 272) STROTHER v. ATCHISON, T. & S. F. R.Y. CO. (No. 18830.)

(Supreme Court of Missouri, Division No. 2.
April 9, 1918. Rehearing Denied
April 26, 1918.)

1. CouRTs 6-231(23)—SUPREME COURT-JURISDICTION – CONSTITUTIONAL QUESTION RAISING OPPORTUNELY. - - - - - - To give the Supreme Court jurisdiction of a case on the ground that a constitutional question arises, the question should be lodged in the case at the earliest moment that good pleading and orderly procedure will admit under the circumstances, a moment that may occur at almost any stage from filing of answer to filing of motion for new trial. 2. CourTs @->231(23)—SUPREME CouRT—JURISDICTION–CONSTITUTIONAL QUESTION. In an action against a railroad for loss of a stallion in transit, where the cause of action was based squarely on the statutes of Kansas, which were pleaded by plaintiff, the railroad

should have set up in the answer that such statutes of Kansas were violative of Const; U: S. Amend. 14, and, having waited until the trial was in progress and the statute offered in evidence before it raised the question, it cannot claim that a constitutional question was involved and raised at the first proper opportunity to give the Supreme Court jurisdiction of its appeal. 3. CourTs @:231(23) – SUPREME CourT – JURISDICTION – CoNSTITUTIONAL QUESTION OBJECTION TO PETITION. It is not true that objection may be made at any time to the sufficiency of a petition, where it does not state a cause of action to give the Supreme Court jurisdiction on the ground that a constitutional question is involved.

Appeal from Circuit Court, Jackson County; Frank G. Johnson, Judge.

Action by John Strother against the Atchison, Topeka & Santa Fé Railway Company. From a judgment for plaintiff, defendant appeals. Case ordered transferred to the Kansas City Court of Appeals.

Thomas R. Morrow, George J. Mersereau, John H. Lathrop, and J. D. M. Hamilton, all of Kansas City, for appellant. Beardsley & Beardsley, of Kansas City, for respondent.

WHITE, C. The plaintiff recovered judgment in the sum of $1,600 for the loss Of his Stallion which died while being shipped over the defendant's railroad, and the defendant appealed. The respondent challenges the jurisdiction of this court, and jurisdiction can be retained Only if a constitutional question was properly and timely raised by the defendant in the trial court. Plaintiff alleges that on the 1st day of March, 1912, he delivered to the defendant a stallion of which he was the OWner, to be carried by the defendant from Abilene, Kan. to KiOWa, Kan. The cause of action is based On Sections 7116 and 7117 of the General Statutes of KanSaS for 1909, and those Sections are set out verbatim in the petition. Section 7116 provides that all common carriers shall transport live Stock received for transportation without delay at a rate of Speed not less than an average of 15 miles an hour, unless prevented by unavoidable accident. Section 7117 provides that if the carrier refuses Or fails to transport live stock at a rate of not less than 15 miles an hour it shall be liable for all damages Sustained by any perSon on that account, and all other damages Which are the approximate result of such failure, together With the cost of a suit if one is brought, and a reasonable attorney fee fixed by the COurt. The petition then alleges that the defendant, in the Shipment of said stallion, failed to comply with the provisions Of Said Sections 7116 and 7117 of the General Statutes Of Kansas, and Such failure Was not due to unavoidable accident; that because of the unreasonable length of time lost in removing the said stallion from Abilene, Kan. to Kiowa, Kan., the said stallion contracted pneumonia and died soon after reaching Kiowa, Kan.; that Said death WaS due to the Carelessness and negligence of the defendant, its employés and agents, in failing to move the said car from Abilene, Kan., to Kiowa, Kan., “within the time prescribed by the statute hereinbefore pleaded.” The petition does not allege any damage accrued to plaintiff by any failure to receive the horse promptly for shipment. Although the allegation is that it was first shipped from Beloit, Kan., to Abilene, Where there Was unreasonable delay, it is alleged that the stallion was in perfect health at the time of its delivery to defendant at Abilene. The only act of negligence alleged was the failure of the defendant to transport the shipment after receiving it within the time prescribed by the Statute. The answer of the defendant sets up that at the time of the alleged offer of the said stallion for transportation from Abilene, Kan., to Kiowa, Kan., the defendant Could not accept it for shipment, for the reason that from the 2d day of March until the 4th day of March, 1912, it was impossible to move its freight trains on account of an unusual and unprecedented Snow blockade existing upon its line between Abilene, Kan. and Kiowa, Kan., and that as soon as its said line was open for traffic it did accept and transport the Said Stallion from Abilene to Kiowa. The answer then alleges that under the laws of the State of Kansas, the order or ordinance of the Kansas Board of Railroad Commissioners, the published tariff rates of the defendant and the shipping contract, the value of the horse was limited to One hundred dollarS. The answer further says if there was any delay in the transportation, said delay was due entirely to unprecedented conditions, and “that this defendant is not liable for Such delay by reason of the provision as contained in section 7116 of the statute of Kansas aS quoted on page 2 of defendant's amended petition.” - The answer is of great length, and not only recognizes the Statute upon Which the Suit is brought, but pleads facts which would avoid the effect of the statute. It is a confession and an avoidance. The plaintiff in reply set up other statutes of Kansas and decisions of that State construing the various statutes. The case proceeded to trial, and plaintiff testified to the facts relating to the shipment and death of the horse as alleged in the petition, and defendant in cross-examination offered the shipping contract and produced a Witness to show the rules Of the Kansas Public Utilities Commission. The plaintiff produced several witnesses relating to the negligence of the defendant. The plaintiff then Offered the statute of Kansas, Sections 71.16 and 7117. At that point the defendant Ob

&=For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Iudexes

the Kansas Statutes on the ground that they are in Violation of the Fourteenth Amendment to the Constitution of the United States. At the close of the evidence instructions also Were offered to the effect that these Sections Of the Statute were unconstitutional. [1] I. In Order to give this court jurisdiction of a case on the ground that a constitutional question arises in the case, “the constitutional question should be lodged in the case at the earliest moment that good pleading and Orderly procedure Will admit under the circumstances of the given case.” This rule has been repeated time and again until it should be considered no longer a matter of debate. The cases have been fairly consistent with slight differences in the application of the rule to the records presented. The earliest moment that good pleading and orderly procedure will admit may occur at almost any stage of the proceeding, from the filing Of the answer to the filing of the motion for new trial. Without construing this rule so strictly as to apply it to every moment of time in the progress of the case, it is obvious that there are three general stages in a proceeding, separated from each other in the Very nature of the case by the regular steps of an orderly proceeding, during which questions of that character may be raised: First, Opportunity might be presented to raise it in the pleadings when the trial court could have time and deliberation to consider, so important a question before the hurry and stress Of the actual trial begins; second, it might arise for the first time in the progress of a trial When a ruling of the court is demanded upon the introduction or exclusion of evidence, or the giving of -instructions to the jury; or, third, it might occur after trial, When a motion for new trial is filed and presents the first opportunity. The question here iS, Could the constitutional question have been raised by the pleadings, and, if so, was it too late to wait until the trial Was in progress and then raise it for the first time on objection to the evidence? The expressions of Some of the numerous cases upon this point ought to settle it. The case of Lohmeyer v. Cordage Co., 214 Mo. 685, 688, 113 S. W. 1109, treated the Subject at Some length, and that case has been quoted in many Subsequent cases. The court there characterizes the practice of waiting until late to raise a constitutional question in these WOrdS: “Whatever the use of an ambush in war, or

games of chance, its use does not commend itself to jurisprudence.”

And on page 689 of 214 Mo., on page 1110 Of 113 S. W.:

“A constitutional question might possibly obtrude itself at the trial regardless of the pleadings through some unanticipated ruling on the introduction of testimony.”

And on page 690 of 214 Mo., on page 1110

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