The postulate upon which the conclusion of the majority opinion rests is the statement that "under paragraph 5 of the trust deed" the Trustee, G. L. Miller Bond Mortgage Company (subsequently named Marion Mortgage Company), had express authority to "purchase the encumbered property at the foreclosure sale and that its receipt should be sufficient to discharge any purchaser for his purchase money. This provision contemplates that the trustee, if it purchased at all, should purchase for the bondholders at such judicial sale." "If, as was expressly provided, the trustee was authorized to purchase the property at judicial sale, circumstances might become such that it would be its 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 in 1926 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 *Page 422 bid in and purchase the incumbered property at the foreclosure sale for the bondholders."
It is apparent from a careful reading of paragraph 5 of the trust deed that a distinction is made between the "Trustee" and "any person or persons acting in their behalf" at any sale of the property. If the meaning of the paragraph is as the opinion holds, that the Trustee as such, that is to say acting for the bondholders, had express authority to purchase the property at the foreclosure sale, would his own receipt as Trustee to himself as Trustee be required to discharge him for the purchase money in order to complete the judicial record of the sale? In which case what would become of the costs: and attorneys' fees allowed by the decree of foreclosure to be paid from the proceeds of the sale?
In those circumstances would it become necessary for the Court, assuming it had the power, to create another trust as the opinion holds in which the Trustee for the bondholders under the original trust deed should place a mortgage upon the property in order to raise money to pay court costs and attorneys' fees in the foreclosure proceedings, needed repairs of the property and taxes past due and accruing in the years to come, and thus by such a legal metamorphosis convert the status for the original bondholders from that of creditor to that of debtor?
If the Trustee as such was expressly authorized to purchase the property and it became necessary in the circumstances to execute the mortgage as the confirmation order of the sale provided, then the act of the Trustee became the act of the original bondholders, now the cestui que trustent of the trust property, and the new obligation became the personal obligation of each of the cestuis que trustent of the new trust, so that if another emergency arose, such as the collapse of another boom, or the presence of a malicious fly, of a south sea tornado, or failure of more banks, the *Page 423 Court might find it necessary in the circumstances to create another trust or enter a deficiency decree for the amount of the latest debt against so many of the original bondholders as the process of the Court should reach.
The opinion would in this State be regarded as authority for a judicial pyramiding of trusts in which by a kind of legal legerdemain an original creditor becomes, on account of his ownership of a bond, a debtor on a personal liability unless the Chancellor in the exercise of a sort of realistic conception of law exerts his paternalistic power and preserves the helpless owner of a bond from such a hardship which the Chancellor did not provide for in the instant case.
The law is not an empirical science. It is what the courts administer, not what the courts do in given cases. If it were not so it would be impossible for lawyers to advise their clients. Men could not know their rights and their correlative duties until some court in a given case, viewing the so-called emergencies which may have arisen, prescribes for the parties a rule of conduct which the exigencies seem to require.
I am not a member of such a school of exaggerated free law. Even Mr. Justice Holmes, the brilliant exponent of so-called realistic law, admits that courts do not "inquire what the legislator meant, but only what the statute means." The same formula is applicable to contracts. In construing a contract, where construction is necessary, it is, not what the parties might have intended in view of the existence of some so-called emergency, like a shrinkage in value of the subject matter of the contract, but what the words deliberately used in the document indicate the purpose of the contracting parties to have been.
There is no provision in the original trust deed from the Cortez Hotel Company to the Miller Bond Mortgage Company (later named Marion Mortgage Company), dated *Page 424 July 1, 1924, securing the payment of the seven hundred and twenty-seven bonds, authorizing the Trustee to sell the property, or in the event of foreclosure to purchase it at judicial sale as Trustee and then to encumber the acquired property by a mortgage to raise funds to pay court costs, solicitors' fees in the foreclosure proceeding, accrued and accruing taxes and necessary repairs, not to continue the business of the Cortez Hotel Company, nor to dispose of the property as acquired.
If the power was not contained in the original trust deed what power had the court to create a new trust vesting in the Trustee the power to create such a burden upon the original bondholders, now become the cestuis que trustent of a new trust and equitable owners of the property? It exists only in the conception of those who because of the so-called emergencies arising after the original transaction conceive that a gap exists between the original purpose of the contract and the practical application of that purpose to present conditions, which requires the ingenuity of the Court to provide the material to fill it. In such case is not there danger of the suggestion that such gap-filling process is formulated for the purpose of the concrete judicial decision? The law is not a body of acts. It is a body of rules. It is a rational, not an empirical science.
The case of Flagler Finance Corporation, v. Therrell, not yet reported, in which a petition for a rehearing has been filed, is authority for the proposition that the Trustee's powers are defined and limited by the terms: of the trust deed. See also Snyder v. Collier, 85 Neb. 552, 123 N.W. Rep. 1023, text 1025; Sampson v. Mitchell, 125 Mo. 217, 28 S.W. Rep. 768; Griffin v. Blanchar, 17 Cal. 71; Owen v. Reed, 27 Ark. 122; also Haimovitz v. Hawk, 80 Fla. 272, 85 So.2d Rep. 668; Marx v. Clisb,126 Ala. 107, 28 So.2d Rep. 388, 65 C. J. 785, 786; 20 R. C. L. 1303. *Page 425
The above authorities are cited in the excellent brief by appellant's solicitor but are not regarded by the majority opinion as persuasive of appellant's contention, on the ground that some of them related to testamentary trusts, as if there is one law for testamentary trusts and another for express trusts created by deed. The opinion states that the "trust involved in this case undoubtedly began as an express trust under the trust deed or mortgage securing a bond issue on the Cortez Hotel property" and then proceeds to decide that the "trust deed did not give the trustee express power to execute a mortgage on the trust property, as we have seen, but did give the trustee the power to foreclose the mortgage upon default."
It also holds that the trust deed gave the Trustee power as such to purchase at foreclosure sale, which is a mere construction of the terms in which the power is supposed to be contained and to which construction I do not agree. The opinion then holds that not the powers contained in the trust deed but the "facts and circumstances shown by the answer" and the "trustee's motion for confirmation of foreclosure sale" created an implied power to execute the mortgage. Thus conditions subsequently happening to the execution of the trust deed bring into existence a power not conferred by the creator of the trust.
Thus a new trust is established created by the Court which deems the "facts and circumstances" sufficient to fill the gap between the absence of the power to mortgage and the execution of a mortgage to effect the legal transmutation of bondholders from creditors to debtors, from the holder of a bond secured by a mortgage to tenants in common of the equitable estate of the mortgaged property.
I am unable to follow the reasoning of the majority or to concur in such application of the doctrine of free law. *Page 426