Barroll v. Benton

Urner J., delivered the opinion of the Court. This appeal is from an order vacating a sale of real estate reported to the Circuit Court for Kent County as having been made under a power of sale in a mortgage. The power ¹⁷⁶ was conferred upon the mortgagee, “The Second National Bank of Chestertown, Maryland, or Hope H. Barroll, its attorney or agent.” The mortgage was transferred to the Third National Bank of Chestertown, and having become overdue and being in part unpaid, it was assigned for collection to Mr. Barroll, who proceeded to execute the power of sale. In his advertisement and report the power contained in the mortgage is recited as the source of his authority to make the sale, but this right is treated as being vested in him by virtue of the assignment.

The advertisement was signed by him as “Assignee of Mortgage,” and the report of sale as “Assignee and Trustee.” The bond which he filed preliminary to the sale refers to the assignment, but it was executed by him in his individual capacity, and its condition is that he shall well and faithfully perform “the trust reposed in him by said mortgage and any decree or order in the premises.” The Court below set aside the sale on the ground that no valid authority to sell had been vested in the mortgagee or its assigns. This action was taken upon the theory that the power of sale which the mortgage attempted to give the mortgagee corporation was void and not susceptible of being transferred by assignment, and that as the assigns of the bank were not expressly authorized to execute the power, a sale reported as being made by an assignee of the mortgage could not be sustained. The provision in sec. 6 of Art. 66 of the Code (1912), that: “In all mortgages there may be inserted a clause authorizing the mortgagee or any other person to be named therein to sell the mortgaged premises” has been held, in the light of other sections of the same article, to contemplate a personal trust and obligation which a corporation is incapable of performing. Frostburg Mutual Building Association v. Lowdermilk, 50 Md. 179 ; Queen City Perpetual Building Association v. Price, 53 Md. 399.

It was accordingly decided in the cases just referred to that a power of sale thus sought to be given to a corporation, or its unnamed attorney or agent, ¹⁷⁷ is, by reason of tbe corporate disability, inoperative and void. ■ In Chilton v. Brooks, 71 Md. 445 , tbe authority to sell was conferred by the mortgage upon the mortgagee corporation, “its successors and assigns,” or a designated person as attorney or agent, and it was held that an assignee may execute the power if the mortgage so provides. Where, however, the mortgagee who is given the power in the first instance is a natural person, and, therefore, capable of executing the trust, it is regarded as an incident of the mortgage security and as such it passes to successive assigns even in the