The first appeal in this case was from a final decree in a foreclosure proceeding before sale was had thereunder. With the exception of a direction for modification of the decree as to the amount of interest due, and a reversal of that part of the decree allowing attorney's *Page 608 fees, with directions that the Chancellor take and consider additional testimony in regard to that matter, and enter such decree with reference thereto as the evidence might warrant, the final decree appealed from was by this Court in all other respects affirmed. See Sammons, et al., v. Trust Company of Florida, 102 Fla. 711, 136 So. 742, decided August 4th, 1931. On this first appeal it appeared that the mortgage executed by Sammons and wife to the Trust Company of Florida, as Trustee, was given in April, 1925, on the Meridian Hotel property in Miami Beach to secure an issue of 139 bonds aggregating $60,000.00, that nine bonds had been paid, twenty-two were outstanding in the hands of investors scattered throughout the country, the possession of which the Trustee had not been able to procure, and that complainant Trustee was only able to file in evidence 108 of the bonds, aggregating $46,800.00. One of the exceptions to the Master's report was that the bonds introduced in evidence were not sufficient to support the finding of the Master that the amount due on principal was $55,937.50, and it was contended that the mortgage could not be foreclosed as to the bonds not offered in evidence. On this point this Court held that the bonds need not be introduced in evidence in the foreclosure suit by a Trustee named in a mortgage securing bonds where the evidence is sufficient to prove that the bonds were valid and outstanding obligations.
The mortgage thus ordered to be foreclosed provided, among other things that the Trustee should hold and dispose of the property for the equal pro rata benefit and security of all persons who were lawful holders of the bonds, without preference of one bond over another; that the Trustee, on default for thirty days in any of the payments of interest or principal when due, might accelerate all the *Page 609 bonds to maturity, and take possession of the property and sell the same, after four weeks advertisement. And a later paragraph gave the Trustee the power to foreclose in due form of law. The 2d 5th and 6th paragraphs of the trust deed in this case are the same as those bearing the same numbers which are quoted from the trust deed involved in the recent case of Smith as Liquidator of the Trust Company of Florida, v. Mass. Mutual Life Ins. Co., 156 So. 498, at page 501. It will be noted that the fifth paragraph gave the Trustee, or any of the bondholders, or any person or persons acting in their behalf, authority to purchase, either under the power of sale therein provided for, or at any sale held pursuant to judicial decree. The bonds expressly made the provisions of the trust deed a part of the bonds.
Said final decree, thus affirmed, provided in general terms that in case of default in payment of the sum ascertained therein to be due, together with the attorney's fees and court costs, the mortgaged property should, after prescribed notice, be sold by the Master at public outcry "for cash to the highest and best bidder," and, after confirmation, out of the proceeds of sale, to pay the said costs and fees, and the remainder to the complainant Trustee up to the amount found to be due on the mortgage, and then to bring any surplus, if any, into court to abide its further orders. Then followed this paragraph of the decree:
"That the complainant, or any of the parties to this suit, severally or jointly, may be bidders for or purchasers of the said premises at the sale thereof. In the event that the complainant or any purchaser acting for the protection of the bondholders shall become the purchaser of said property at the said sale for an amount not greater than the amount herein adjudged to be paid to the said complainant, *Page 610 the said complainant or said purchaser for the protection of the bondholders shall be required to pay in cash only the amount of costs, charges and expenses hereinabove adjudged to be paid, including the costs thereby incurred in advertising and selling the said property, and the remainder of the bid shall be taken to be a credit on the bonds of the bondholders secured by the mortgage or trust deed foreclosed in this case and on the amounts adjudged to be due under this final decree."
In the opinion on this appeal, which was written by Mr. Justice BUFORD, and concurred in by all the members of the Court, it was said:
"There is some contention that the terms of the final decree are such as to require a bondholder bidding to pay his bid in cash, thus depriving such bondholder of the privilege of using the bonds held by him in part payment of his bid. As we construe the decree it does not preclude a bondholder who is successful bidder for the property to use his bonds to pay their proportionate value of the bid. It appears to be held in the majority of jurisdictions that a bondholder being the successful bidder for property at a foreclosure sale in a suit to enforce the payment of bonds may use his bonds in payment of his bid to the extent of the proportionate value of such bonds as ascertained by the amount realized at the foreclosure sale. That is, if the property sells for enough to pay only 50% of the face of the bonds outstanding then the bonds in the hands of the bidder can be used as part payment at 50% of their face value and this is true whether the decree specifically so provides or not."
This construction follows quite closely the provisions of paragraph 18 of the trust deed. The opinion continues:
*Page 611"In 14 A. C. J., page 713, it is said:
" 'The foreclosure decree need not require the sale of the corporate property to be for cash. The bonds of the mortgagor corporation may be taken in lieu of cash, as cash, if taken, would be given back again to the bondholders in any event to redeem the bonds. Nor does a provision in the decree that the property be sold, "to the highest and best bidder for cash" affect the rule. "The highest bidder for cash" is construed as meaning "for cash or its equivalent" and bonds in such cases are the equivalent of cash.' "
When the cause was remanded to the Circuit Court, the Chancellor took additional testimony in regard to the matter of solicitor's fees, as directed, and on November 14th, 1931, amended the final decree of January 21, 1929, by correcting the amount of interest and adjudicating the question of complainant's solicitor's fees, in compliance with the opinion and mandate of this Court above referred to. From this amendment to the final decree one of the defendants, Flagler Finance Corporation, the holder of the legal title to the mortgaged property, took an appeal in its name and on behalf of its co-defendants, with supersedeas. On this appeal, the action taken by the Circuit Court was, on May 21, 1932, affirmed by this Court. See 105 Fla. 547, 141 So. 743. This left the original decree as thus amended affirmed by this Court and in full force and effect, and these judgments of affirmance became the law of this case insofar as the validity of the final decree as amended was concerned. Palm Beach Estates v. Croker,106 Fla. 617; 143 So. 792, and cases cited.
When the cause was for the second time remanded to the lower court, the Master, after publication of notice of sale, reported that he had sold the property pursuant to said final decree, on September 5, 1932, to J. H. Therrell as Liquidator of the Trust Company of Florida, who was *Page 612 by order of Court substituted in the place of the original complainant, the Trustee named in the mortgage, "for the sum of $12,000.00, the same being the highest bid therefor. That upon the confirmation of this report of sale, if the same shall be confirmed, I will execute to said purchaser a Master's deed conveying said property. That out of the amount so bid for said property, if and when this report shall be confirmed, I will disburse and pay the sums specified in said decree and will make a report of the payment of the same to this court and will file receipts therefor."
Flagler Finance Corporation, one of the original defendants, and North American Realty Company, which was not a party to the cause, but the owner of $3,700.00 of the bonds, filed objections to the report of sale. The first objection was that the Master reported that he had sold all the furniture and equipment in the building, whereas he should have reported that he had sold only such property located in the building as belonged to A. L. Sammons and wife, the mortgagors, and which was placed therein by them. The report was later amended to meet this objection, some announcement to this effect having been made at the sale. So this objection was met and requires no further consideration here.
The second ground of objection was that "The Master did not report that he received cash for the sale or in what manner the plaintiff purchaser intends to pay for said property."
We might observe here that the decree above quoted from, did not require the complainant Trustee, on bidding in the property, to pay the amount of its bid in cash, only insofar as the costs, charges and expenses provided for in the decree were concerned, the remainder of the amount bid to be credited on the bonds secured by the trust deed; *Page 613 and the Master reported that if the sale was confirmed he would disburse and pay the sums specified in the decree and make report of same to the court. This implies that he either had the cash to pay these costs and charges, or what he deemed adequate assurance of it, and if he had failed to make good on this report, the sale could then have been set aside.
The third alleged objection, which was more in the nature of a demand than of an objection, was that the North American Realty Co., as the owner of seven of the bonds secured by the trust deed, aggregating $3,700.00 face value, "demands the right to have its pro rata share of the proceeds arising from said sale distributed to it in cash before said sale is confirmed."
The fourth objection was that said North American Realty Co., had bid the sum of $11,000.00, in cash, for the said property, which bid was the highest and best cash offer made for said property unless the plaintiff-purchaser intended to pay for its bid for said property in cash. We will return to a discussion of these objections further on in this opinion.
The objections were duly sworn to by the president of Flagler Finance Corporation. The said Liquidator of the Trust Company of Florida, who was substituted as party complainant in the place of the said original trustee, moved to strike the objections, on the ground that they were irrelevant and immaterial; that the objector was not a party to the cause, and if it is a beneficiary, it was represented by complainant. This motion to strike the objections was filed on September 10th, 1932. On September 12, 1932, motion for confirmation of sale was filed by complainant, and on September 15, 1932, the North American Realty Company filed an objection to the confirmation of the Master's sale, *Page 614 asking that said sale be set aside, and another sale be had, "at which the mortgaged property be sold to the highest and best bidder for cash, with permission to any of the bondholders secured by said mortgage to bid thereat, and to credit on their said bonds the pro rata value of the bonds held by them, paying the balance of their said bids in cash."
If the above prayer that the sale be set aside and that another sale be had, at which the property should be sold to the highest and best bidder for cash, had been granted, and such a sale ordered, thus limiting the bidding to cash bids, it would have been in plain violation of the terms of the final decree which had been affirmed by this Court, and which the lower court had no power to change; which final decree specifically provided that in the event the complainant Trustee, or anyone purchasing for the protection of the bondholders (meaning, of course, the bondholders in general), should become the purchaser at the sale, and if the bid did not exceed the ascertained mortgage debt due to the complainant Trustee, such complainant, or purchaser for the protection of the bondholders, should be required to pay in cash only the costs, charges and expenses therein adjudged to be paid, the remainder of the bid to be a credit on the bonds of the bondholders secured by the trust deed. So this prayer could not have been granted.
The further prayer, that at the requested resale, any of the bondholders be permitted to bid thereat, and if any bondholder became the successful bidder, "to credit on their said bonds (bids) the pro rata value of the bonds held by them, paying the balance of their said bids in cash," was a right already granted to any of the bondholders, including the North American Realty Company, by the original final decree as construed in the opinion of Mr. Justice BUFORD hereinabove quoted from. So there was no need to set *Page 615 aside the sale already had and order a new sale on that ground. Indeed, the objecting bondholder had exercised its power to bid, and if its bid had been accepted, the presumption is that the Master would have allowed a credit on such bid for the pro rata value of the bonds held by it, in accordance with such final decree as thus construed. But the Master accepted the higher bid made by the complainant, the statutory Liquidator of the Trustee named in the trust deed, $12,000.00, as against the objecting bondholder's cash bid of $11,000.00. This, we think, presents the controlling legal question involved on this appeal; that is, whether the Liquidator-Trustee was authorized to bid as he did, and the Master was authorized to accept said Trustee's bid, as the highest and best bid under the terms of the final decree, in spite of the bondholder's cash bid of $11,000.00, and whether the Chancellor abused his discretion in confirming the sale so made.
The objecting bondholder attached to and made a part of its said objection to confirmation of sale, filed September 15th as aforesaid, an affidavit by its president, J. W. Bullock, to the effect that one J. W. Smith, a duly authorized agent of J. H. Therrell as Liquidator of said Trust Company of Florida, told him that he, the said Liquidator, and said Trust Company, did not have any money with which to pay the costs of expenses of the suit, "or to pay any of the bondholders their pro rata share of any bids made for said property at said sale by said Liquidator, and that if it became necessary to raise any money for said purpose the said Liquidator would have to ask the court to offer said property for sale to other parties for cash"; that the property was badly in need of repair; that the insurance thereon would be cancelled upon confirmation of sale, and the Liquidator had no money with which to pay for such insurance; *Page 616 that if the sale was confirmed the owner would remove the furnishings of the hotel, which were not covered by the mortgage, so that the hotel could not be operated, as the Liquidator had no money with which to purchase furniture, nor any authority to do so under the mortgage; that the taxes for 1931 had not been paid and the Liquidator had no money to pay them, and that if the sale should be confirmed and the objector was not paid the pro rata value of its bonds in cash, but should be required to take a pro rata interest in said property as a joint tenant with other bondholders, it would be deprived of its property by sale of same for taxes, and that this objector had no way of compelling other bondholders to contribute to the upkeep and maintenance of said property or the payment of taxes.
An order sustaining complainant's motion to strike the objections filed by the North American Realty Company to the confirmation of the sale was made and entered on September 16, 1932.
On September 20, 1932, the Chancellor rendered a decree, finding that the Master's report showed that he had in all respects carried out the orders of the former decree, and in strict conformity to law, and that the sale had been fairly made to said J. H. Therrell, as Liquidator of Trust Company of Florida, as Trustee, and concluded with a decree confirming the sale and directing the Master to execute a deed to said purchaser.
On October 14, 1932, said North American Realty Company filed a petition stating that on September 27, 1932, Roscoe Martin had been, by order of the court, appointed a substitute Trustee in the place and stead of J. H. Therrell as Liquidator, etc., insofar as the trust involved in this cause was concerned, and praying that the court enter an order making such substitute Trustee a party plaintiff in the *Page 617 cause, which petition was granted by an order dated October 13th, and duly entered and filed on October 14, 1932.
From the order of September 16, 1932, hereinabove referred to, and the decree of September 20th, confirming the sale, this, the third appeal in this cause, was promptly taken by Flagler Finance Corporation and North American Realty Company, in their own names and those of their co-defendants, the notice of entry of appeal having been filed October 13, 1932.
It was called to our attention on petition for rehearing, that the affidavit of Mr. Bullock, President of the North American Realty Co., as to what the Liquidator's agent, J. W. Smith, told him in regard to the financial ability of the Liquidator, or of the trust estate, to comply with his bid and pay such costs and charges, was based on hearsay, and as the objections, of which the affidavit was made a part, were stricken by the court, the Liquidator of the Trust Company was not required or called upon to offer any evidence to the contrary. While the affidavit referred to states that the agent who made these statements to affiant was the "duly authorized agent" of the Liquidator, the nature and scope of his authority was not set forth, nor does the affidavit expressly allege that said agent was authorized by the Liquidator to make such statements to affiant. Doubtless said J. W. Smith told the affiant exactly what affiant stated in his affidavit, and Smith may have stated the facts as they existed at the time of this statement to affiant, but the court can hardly be said to have abused its discretion in striking the affidavit and in confirming the sale when we consider that in addition to the hearsay nature of the affidavit, the court had before it the report of the Master appointed by the court, expressly stating that if the sale was confirmed, he would make the disbursements *Page 618 and pay the sums specified in the decree, which of course he could not have so reported unless he had felt assured that the purchaser would make good on his bid.
And if we may consider the affidavits submitted in behalf of appellee in connection with this petition for rehearing, as well as the counter-affidavits submitted by the appellants, and the Master's final report, belatedly filed after this appeal was taken, the purchaser at the foreclosure sale, said J. H. Therrell as Liquidator of the said Trust Company, did in fact pay the amount in cash which was required by the decree, namely, $2,524.13, and the Master disbursed this sum on the day after the sale was confirmed, September 21, 1932, the remainder, $9,475.87, being reported by him as credited on the amount of said final decree.
It appears from the counter-affidavits on behalf of appellants that when J. H. Therrell as Liquidator of the Trust Company of Florida, was removed as Trustee, and Roscoe Martin made substitute Trustee, on a bill filed by the North American Realty Co., on September 5th, 1932, and going to final decree September 27, 1932, it was determined by the court that the trust was indebted to said Therrell as Liquidator in the sum of $3,300.00, for advances made, including the said costs of foreclosure, for which he was given a prior lien on the trust property, and the substitute Trustee was authorized to and did borrow that amount on a Trustee's certificate, and used the proceeds to reimburse the Liquidator Trustee so removed, which substitute Trustee's certificate was by the court decreed to be in subrogation to Therrell's claim, and a lien on the said trust property, so foreclosed upon, superior in dignity to all other liens except those for taxes and tax certificates. The decree rendered September 27, 1932, also authorized said substitute Trustee to borrow an additional $2,000.00, for *Page 619 necessary repairs and insurance, and to issue to the lender his Trustee's certificate.
So it appears from the affidavits submitted by both sides on this rehearing that in some way, the Liquidator-Trustee, J. H. Therrell, after the objections to his financial ability were filed, raised or advanced the necessary money, and actually complied with the cash-payment requirements of his bid at the foreclosure sale, as provided for in the final decree. Thus, neither in the transcript of the record as filed, nor on the affidavits filed in this Court, in connection with the application for rehearing, including the certified copy of the Master's final report, is it made to appear that the court below committed any harmful or reversible error in overruling the objections to the report of sale, or to the confirmation thereof, going to the inability of the Liquidator-Trustee to comply with the cash requirements of his bid under the terms of the final decree ordering such sale. Indeed, in their able brief on this rehearing, counsel for appellants appear to have abandoned this point. The brief begins as follows:
"The question presented by the petition for rehearing in this cause is whether this Court should reverse its previous opinion holding that a trustee under a mortgage given to secure the payment of bonds of the mortgagor has no authority on a foreclosure sale to purchase the mortgaged land for the benefit of all the bondholders over the objection of one bondholder.
"The opinion was rendered after full opportunity to file briefs and after oral argument. It is predicated on the assertion that the mortgage under which the trustee was acting was the only source of his authority and that the power so to bind objecting bondholders was wanting in the instrument." *Page 620
After carefully considering the questions raised on this rehearing, and the able opinion of Mr. Justice ELLIS above referred to, the writer's view is that construed as a whole, the mortgage under which the Trustee was acting, some of the provisions of which are hereinabove quoted, made the Trustee the representative of all the bondholders in matters affecting the enforcement of the security, and gave the Trustee the power to foreclose the same, and to buy in the property at the foreclosure sale for the benefit of all the bondholders, as authorized by the final decree herein, provided, of course, no bondholder, or other person, appeared at the sale and presented a higher and better bid. The mortgage, or trust deed, expressly gave the Trustee, or any of the bondholders, or any person or persons acting in their behalf, authority to purchase at the foreclosure sale. And when the trust deed gave the Trustee this power, it must have meant that the Trustee should exercise it for the equal benefit of all the cestuis que trustent — the bondholders as a whole — and not for its own private gain, or for the benefit of any particular bondholder. The second paragraph of the trust deed provided that the said property, subject to the conditions and agreements therein contained, "shall be held and disposed of by the Trustee for the equal and pro rata benefit and securing of all the persons who shall be the lawful owners of said bonds without preference of one bond over another."
Would it not constitute a preference of one bond over another to allow the objection of one bondholder, or the demand that he be paid his pro rata share of the bid in cash, to destroy the right of the Trustee to purchase the trust property at foreclosure sale for the benefit of all the bondholders, at which sale the Trustee was the highest bidder? Certainly it would, if the trust deed, and, as here, *Page 621 the decree of sale also, gave the Trustee the right to purchase at the foreclosure sale for the benefit of the bondholders, and to pay in cash only the foreclosure costs, and credit the balance on the bonds. As each of the bonds thereby secured made the provisions of the trust deed a part of the bond, and as the provisions of the trust deed showed the power of the Trustee to act as the representative of all the bondholders in the enforcement of the security (including the non-enforceable power to take possession without foreclosure and administer the property for their benefit), the objecting bondholder took his bond subject to these powers of the Trustee so far as they were legally enforceable and has no right to object to his proper exercise of such powers.
But this question had already been settled, as I see it, by the two previous decisions of this Court, affirming the final decree, which dealt with this very question, as shown by the quotation thereform hereinabove made. This became the law of the case. The foreclosure sale was made under this very decree. There is, and could be, no appeal in this case from the final decree. It still stands affirmed. So that decree, as construed and affirmed by this Court, became the law of the case. And, as so construed, it protected both the Trustee, acting for all the bondholders, and any individual bondholder who might desire to bid at the sale, giving the former the power above mentioned and the latter the right to use his bonds to pay their proportionate value of his bid.
But the objecting bondholder in this case insists that by thus giving the Trustee the power to use all the bonds, including the objector's bonds, in complying with his, the Trustee's bid, the Trustee only having to pay in cash the foreclosure costs, while the objecting bondholder would *Page 622 have to pay all of his bid in cash excepting the pro rata value of his bonds, put him at a disadvantage in bidding against the Trustee. If so, he agreed to this in advance by purchasing and accepting a bond which expressly made all the provisions of the trust deed a part of the bond. And if the Trustee, as was the case here, outbids the individual bondholder and becomes the purchaser, and acquires possession of the mortgaged property, he does so for the equal pro rata benefit of the objecting bondholder, along with all the others; whereas if the objecting bondholder had outbid the Trustee, he would have become the sole owner of the property, and entitled to the entire profit that might arise from the income-producing power of the hotel, if any, and also entitled to the entire possible profit that might arise from a resale of the property when values again increased or returned to normal. No other bondholder would share therein. Not so with the Trustee. All such profits as the Trustee might make, either by the use or resale of the property, after deducting any advances for necessary expenses, and his compensation for services under the terms of the trust deed, would go to the bondholders as a whole, and the objecting bondholder would get his pro rata share. This power of the Trustee to use the bonds of all the bondholders in complying with his bid, by crediting the amount of his bid on the bonded, or mortgage debt, is a necessary result of his relation as Trustee under the trust deed securing all the bonds, and it becomes especially valuable to the bondholders that he should have this power to prevent a sacrifice of the mortgaged property when foreclosure takes place at a time when values are abnormally depressed. It is a matter of common knowledge that property rarely sells for its full value at foreclosure sales, even in normal times, and it is also a matter of common knowledge that when *Page 623 this particular sale took place, in September, 1932, real property, in Florida, had not recovered from the collapse of the boom, and at foreclosure and other forced sales especially, was not selling for anything like its real value.
In the recent case of Smith as Liquidator v. Mass. Mutual Life Ins. Co., above cited, this Court, at page 506, of 156 So., in construing the powers of a Trustee under a trust deed practically identical in its provisions with the one here involved, said: "This provision contemplates that the Trustee, if it purchased at all, should purchase for the bondholders at such judicial sale. The provisions of the trust deed were made a part of each bond. If, as was expressly provided, the Trustee was authorized to purchase the property at judicial sale, circumstances might become such that it would be absolute duty to do so, and we think the record in this case, in connection with the judicial notice which we have of the extreme deflation in real estate values which took place after the collapse of the boom of 1925 and the almost total lack of market for real estate which existed in Dade County at the time this sale took place, were such as to make it the duty of the Trustee to bid in and purchase the encumbered property at the foreclosure sale for the bondholders."
In the case of Shaw v. Little Rock Ft. Smith R. Co.,100 U.S. 605, 25 L.Ed. 757, it was observed in the opinion that: "The Trustee represents the mortgage, and in executing his trust may exercise his own discretion within the scope of his powers."
In Com. v. Susquehanna Del. R. Co., 122 Pa. 306,15 A. 448, 1 L.R.A. 225, it was said: "When a default occurs, the duties of the Trustee (in a corporation mortgage) become active and important. He represents all the bondholders, and is under obligation to protect them so far *Page 624 as the property in his hands in trust for them will enable him to do so."
The question of the implied power of a Trustee in a trust deed (which of course under our statute is in legal effect a mortgage) to purchase at the foreclosure sale, where the trust deed contains no express authority to that effect, was discussed and a number of authorities bearing on the general subject cited in Smith v. Mass. Mutual Life Ins. Co., supra. See pages 508-509, 156 So. See also First National Bank v. Neil, 137 Kan. 436, 20 P.2d 528, 88 A. C. L. 1252, with note beginning at page 1260, where both in the opinion and the note the authorities are reviewed. It appears that the leading case upholding the existence of such implied power in the Trustee is that of Nay Aug Lumber Co. v. Scranton Trust Co.,240 Pa. 500, 87 A. 843, Am. Ann. Cases 1915-A, 235, while the leading case to the contrary is one cited and relied on by the appellants here, viz., Harris Buck v. Equitable Trust Co.,35 F.2d 513, in which it was held that where there was no provision in the trust deed authorizing the Trustee to bid for and on behalf of the bondholders, the court cannot confer such authority on the Trustee. In the note on this subject in 88 A.L.R., 1260, the annotator says: "The few cases which have considered the matter under annotation differ widely in their views, there being good authority on both sides of the question, and no one view being clearly entitled to be regarded as established by the weight of authority, although the doctrine that the Trustee may be authorized to bid in a proper case is followed in more of the jurisdictions which have considered the point. The paucity of decisions may be largely accounted for by reason of the fact that generally express provisions with respect to the Trustee's right to bid are contained in the mortgage." *Page 625
While we do not consider this question involved in this case, as we hold that the trust deed in this case must be construed as granting the power referred to, we think certain portions of the opinion in the annotated case of First National Bank v. Neil, supra, might well be quoted here, in answer to some of the arguments which have been advanced on the strength of the opinion in the case of Werner, Harris Buck v. Equitable Trust Co., supra. After reviewing the authorities at length, the Supreme Court of Kansas in First National Bank v. Neil, supra, closed its opinion as follows:
"Under the deed of trust, it was the duty of the Trustee not to protect one bondholder at the expense of another, but to so conduct its administration of the trust that, so far as possible to accomplish the result, all of the bondholders would be protected to the best possible advantage, and ratably among themselves.
"Default was made by the mortgagor and in performance of its duty, the Trustee brought foreclosure proceedings, and a sale was had at which no bidders appeared at any price, adequate or otherwise. The question of its further duty then confronted the Trustee, which had doubt of the extent of its powers and it filed its motion with the court for instructions and authority, not only as it had a right to do, but as was its duty. Old Colony Trust Co. v. City of Wichita (C. C.) 123 F. 762, 767; 21 C. J. 129; 39 Cyc. 317; 26 R. C. L., 1372, et seq.; Pomperoy's Eq. Jur. (4th Ed.) Sec. 1064. The motion informed the court as to the lack of specific authority for it to bid for the benefit of all the bondholders; that in the judgment of the Trustee another sale should be ordered; and that at such sale 'in the event there are no other satisfactory bidders therefor,' it should be permitted to bid an amount not greater than its *Page 626 judgment and interest, plus costs and unpaid taxes. It also presented the matter of the period of redemption and the effect thereof on the bidding, and that in the opinion of the Trustee it would be 'next to impossible to secure an adequate bid'; and that it was uncertain as to whether or not it had authority to bid for the benefit of the bondholders. These were proper matters for consideration by the court, and its order shows it did consider them.
"What were the rights of the minority bondholders as opposed to the remaining bondholders? While his rights are not in any sense to be ignored, overlooked, or frittered away, can he determine the course of action the remainder must pursue? When he purchased he did so with notice of the recitals of the deed of trust, and knew that he was to share ratably with the other bondholders in payment either by act of the makers of the bonds, or as a result of sale in foreclosure proceedings, or otherwise.
"We are not convinced by the reasoning of Equitable Trust Co. v. United States Oil Refining Co., and Werner, Harris Buck v. Equitable Trust Co., supra, that, at least under the deed of trust under consideration, the holder of the $100 bond or of eleven $100 bonds can say that he may gamble as he will with his bonds and be the sole judge of whether the Trustee can bid for him or not, and that the court cannot say under all the equities of the case that the Trustee shall bid on behalf of all the bondholders.
"We are persuaded the holding of the Pennsylvania Court in Nay Aug Lbr. Co. v. Scranton Trust Co., supra, that there is no good reason why a Trustee should not be permitted to bid at a foreclosure sale, if it be necessary to protect the interest of bondholders, is more reasonable and equitable, and should be followed.
"A positive and definite rule cannot be laid down as to *Page 627 when the court should make an order permitting the Trustee, under a deed of trust where specific authority is lacking, to bid on behalf of bondholders under terms and conditions the court may fix, as such an order must necessarily depend on the existing facts and circumstances; but on the showing here, and in view of the fact that the property was once offered for sale and there were no bidders, it cannot be said that the court exceeded its jurisdiction or abused its discretion."
In consideration of the foregoing matters on this rehearing and indulging the presumption in favor of correctness which attaches to the lower court's orders and decrees, our conclusion is that it has not been made to appear that the court below erred in overruling the objections filed by the appellants to confirmation of sale, nor in finding in effect that the Trustee's bid was the highest and best bid within the meaning of the final decree, nor in decreeing the confirmation of the foreclosure sale. It follows that our judgment of reversal heretofore rendered should be vacated and the orders appealed from should be affirmed.
WHITFIELD, C. J., and TERRELL, BUFORD and DAVIS, J. J., concur.
ELLIS, J., dissents.