Opinion
No. 31741.
May 20, 1935.
COURTS.
Where association holding deed of trust was placed in receivership and chancery court which appointed receiver authorized trustee to foreclose, chancery court of another county could not entertain bill for injunction for moratorium hearing without complainants' obtaining consent of court which appointed receiver (Laws 1934, chapter 247).
APPEAL from the chancery court of Pearl River county.
HON. BEN STEVENS, Chancellor.
Suit by J.B. Calvin and wife against C.W. Sullivan, trustee. Judgment for plaintiffs, and defendant appeals. Reversed, and cause dismissed.
Sullivan Sullivan, of Hattiesburg, for appellant.
An answer was not filed for the reason that no process was had on the Building Loan Association or on the receiver, and for the further reason that if appellant is correct in his position, that the chancery court of Pearl River county does not have the authority to hear and determine this cause without permission to sue or enjoin having first been granted appellees, an answer by the appellant would have been a useless expense, a waste of time and vain. Therefore, appellant adopted the procedure as outlined in section 344, page 349 of the Mississippi Chancery Practice, by Griffith.
The question narrows itself down simply to whether or not the receiver is a necessary party to this litigation. If he is a necessary party to the litigation, then, the motion of appellant should have been sustained and the bill dismissed.
In the case of a deed of trust both the trustee and the beneficiary must be joined; and in general, all persons claiming an interest in the property must be made parties in order to bind them by the decree.
41 C.J., par. 1361; Byrd v. Hicks et al., 113 S.E. 660; Burroughs v. Jones et al., 28 So. 944; Smith v. Denny Co., 90 Miss. 434, 43 So. 479; Griffith's Equity, par. 150; Champlin et al. v. McLeod et al., 53 Miss. 484; Yates v. Council, 102 So. 176.
In the case at bar no one but the trustee was enjoined from proceeding with this foreclosure.
32 C.J. 301, par. 487.
J.M. Morse, of Poplarville, for appellees.
We admit that without chapter 247 of the Acts of 1934, W.O. Rea should be joined as a party defendant and that in ordinary cases the failure to join could be made in a motion, and unless he was so joined after time was granted, that the bill could and should be dismissed. However, our construction of chapter 247 of the Laws of 1934, is that it is optional with the complainants as to whether the legal holder of the note, to-wit, the receiver, be joined, for this act of the Legislature, as an emergency one, and the Legislature, after setting out the depressed condition of the country, the financial obligation of its citizens that they could not meet. Under its police power the state declared a state of emergency to exist and the act especially brings it within the police powers of the state, and the state of Mississippi, by this act, is acting as a policeman in extending its strong arm to its distressed citizens.
Paragraph 2 of the act contemplates judicial sales, and even if our friend's contention is correct that both he and Rea are mere officers of the court, then it amounts, in substance, to a judicial sale and even judicial sales are taken care of in this act.
Paragraph 7 especially gives to this court equitable jurisdiction, or shows that the situation which is now before the court was possibly contemplated by the legislators.
Section 11 took care of the very situation which is now before the court. The Legislature wanted the bill to be enforced as written, and the bill as written permits you to enjoin the trustee only if you so desire.
However, if we are mistaken in all our contentions then the bill should not be dismissed, the appeal is simply from an interlocutory order, and the bill should be remanded with the direction that W.O. Rea, receiver, be made a party to the suit, and the cause proceeded with.
J.B. Calvin and wife, appellees, filed a bill in the chancery court of Pearl River county, Mississippi, to en join C.W. Sullivan, trustee, from foreclosing a deed of trust in favor of the Building Loan Association of Jackson, given by appellees.
The bill did not allege that the Building Loan Association of Jackson was in receivership in the chancery court of Hinds county, and that W.O. Rea had been appointed receiver thereof. The bill drawn was for the purpose of securing an injunction for a moratorium hearing, and contained averments seeking to bring the cause within the provisions of chapter 247, Laws of 1934. The deed of trust was made an exhibit to the bill.
C.W. Sullivan, trustee, having been served with process, appeared and made a motion to dismiss the bill for want of jurisdiction in the chancery court of Pearl River county, alleging that said association, on the 24th day of August, 1935, was placed in receivership for liquidation by the chancery court of the first district of Hinds county, and that W.O. Rea of Hinds county was appointed as receiver, and that the title to all of the assets, including the note and deed of trust involved in the case at bar, were placed in the hands of said W.O. Rea, receiver, and that this fact was well known to the complainants when they filed their bill. A copy of the order appointing W.O. Rea as receiver was filed as an exhibit to the motion. It was further alleged that the defendants would show that the chancery court of the First judicial district of Hinds county, Mississippi, by V.J. Stricker, chancellor, entered an order on the minutes of said court authorizing W.O. Rea, as receiver, to proceed with the foreclosure of said deed of trust, and that said receiver is an officer or arm of the chancery court of Hinds county, and that the trustee named in said deed of trust is an agent of the receiver and of the chancery court of Hinds county, and, in attempting to foreclose said deed of trust, they were obeying the mandate of the chancery court of Hinds county and could not be enjoined or sued without complainants having first obtained the permission or consent of the chancery court of Hinds county, which was not done. A copy of the order directing the receiver to foreclose said deed of trust is filed as an exhibit to this motion. It was further alleged that the chancery court of Hinds county, Mississippi, has exclusive jurisdiction of the subject-matter, and that to permit this cause to be maintained in the chancery court of Pearl River county will put those parties maintaining same in constructive contempt of the chancery court of Hinds county, Mississippi, and the defendants moved that the cause be dismissed for want of jurisdiction of the Pearl River county chancery court.
The above statement is made merely to show the difference between the case at bar and the case of C.W. Sullivan, Trustee, v. J.B. Etta Hughes, No. 31706, recently decided by this court, 161 So. 316. The case at bar is governed by the same principles as the case of C.W. Sullivan, Trustee, v. J.B. Etta Hughes, supra, and the judgment of the court below will, therefore, be reversed, and the cause dismissed.
Reversed and dismissed.