IN THE SUPREME COURT OF MISSISSIPPI
NO. 2003-CA-02321-SCT
FREDDIE DABNEY HATAWAY, CO-EXECUTOR OF
THE ESTATE OF ELOISE W. DABNEY
v.
ESTATE OF MARY DABNEY NICHOLLS,
DECEASED, DAVID H. DABNEY AND ELOISE
DABNEY LAUTIER
ON MOTION FOR REHEARING
DATE OF JUDGMENT: 09/10/2003
TRIAL JUDGE: HON. WILLIAM G. WILLARD, JR.
COURT FROM WHICH APPEALED: WARREN COUNTY CHANCERY COURT
ATTORNEY FOR APPELLANT: PRO SE
ATTORNEY FOR APPELLEES: WILLIAM M. BOST, JR.
NATURE OF THE CASE: CIVIL - WILLS, TRUSTS, AND ESTATES
DISPOSITION: AFFIRMED - 02/17/2005
MOTION FOR REHEARING FILED: 11/12/2004
MANDATE ISSUED:
EN BANC.
CARLSON, JUSTICE, FOR THE COURT:
¶1. The motion for rehearing is granted. The original opinion is withdrawn, and this opinion
is substituted therefor.
¶2. This dispute concerns the partition sale of four parcels of commercial land by heirs of
the Estate of Eloise W. Dabney. Three heirs (“Petitioners”) filed a Complaint for Partition
with the Chancery Court of Warren County. A consent judgment was reached with the fourth
heir, and a special master was appointed to conduct a sale to the highest bidder for cash. There
were two bidders at the sale: the fourth heir and an attorney representing a third-party buyer.
This same attorney also represented the three heirs. The fourth heir submitted a bid of
$72,000; however, the special master rejected this bid finding that the “letter of guarantee”
submitted by the fourth heir from Bancorp South was “not for cash.” The property was then
sold to the other bidder for $60,000 by way of the attorney’s trust account check. The
chancery court subsequently granted summary judgment and confirmed the sale.1 The fourth
heir has filed this appeal. For the reasons discussed below, we affirm the judgment of the
Chancery Court of Warren County.
FACTS AND PROCEEDINGS
¶3. The parties in the present case are the same parties identified in the will contest case
of In re Estate of Dabney, 740 So.2d 915 (Miss. 1999). In Dabney, this Court affirmed a
judgment finding invalid the 1996 Last Will and Testament of Eloise W. Dabney based on
misrepresentation, undue influence and fraud. The 1996 will excluded one of Mrs. Dabney’s
daughters, Freddie Dabney Hataway, the appellant in this case. Because the 1996 will was
invalidated, Mrs. Dabney’s 1987 will was admitted to probate. The 1987 will, among other
things, left four parcels of land to Mrs. Dabney’s four children: Hataway and the three
1
Although one of the chancellors in the Ninth Chancery Court District (of which Warren County is
a part) entered all necessary orders prior to the special master’s sale, these chancellors eventually recused
themselves and requested this Court to appoint a special judge to hear this case. By order dated April 17,
2003, the Chief Justice appointed the Honorable William G. Willard, Jr., a chancellor in the Seventh Chancery
Court District, to preside over the proceedings in this case, which included ruling on the motion for summary
judgment and confirming the special master’s sale.
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appellees – Mary Dabney Nicholls, David Hunt Dabney, and Eloise Dabney Lautier. Those four
parcels of land are the subject of this litigation.
¶4. The Complaint For Partition against Hataway was filed by Mary, David, and Eloise on
October 24, 2000. Hataway filed a pro se Answer, and then through counsel filed an Amended
Answer. Mary died during the course of the underlying proceedings, and Mary’s daughter, as
Administratrix of her Estate, was substituted as a party. Under the 1987 Will, Hataway was to
be appointed co-executor in the event that either David or Mary could not continue to serve
as executor. However, there is no indication that Hataway was appointed as co-executor.
David, as co-executor of Mrs. Dabney’s Estate, joined the litigation as a plaintiff.
¶5. The Petitioners filed a Limited Appraisal/Summary Report of Land and Improvements,
performed by Bottin Consulting Group. This appraisal opined that the two parcels must be sold
together since one parcel had a building with no available parking and the other parcel was a
vacant lot. The value of both parcels was placed at $65,000. A consent judgment was reached
by the parties, and the trial court appointed a special master to conduct a partition sale of the
properties. The order provided that the property was to be auctioned to the highest bidder for
cash. The order also permitted Hataway to have an independent appraisal performed. James
E. Craig reviewed Bottin’s appraisal and disagreed as to the need to sell the parcels together
and as to fair market value. Craig valued both parcels at $90,000, or if immediate liquidation
were required, $72,000.
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¶6. After notice as provided by law, the sale of the first two parcels was conducted on
November 7, 2002. At the sale, Hataway submitted a “letter of guarantee” from BancorpSouth
(Bank) addressed to the special master, which provided, in part:
Our customer, Ms. Freddie Hataway, has requested this letter of guarantee from
BancorpSouth in order to support her bid for the above referenced auction.
The bid is not to exceed $72,000 and we guarantee that the good funds will be
made available upon receiving clear title to the above referenced parcels.
The letter was signed by Mark T. Buys, the Bank’s Executive Vice President. The second
bidder, William L. Shappley, demanded to see the letter. Shappley was the attorney
representing the Estate and the petitioners, and was also bidding as an agent for the ultimate
purchaser, Jamal Khouri. The special master found that the letter was not the equivalent of
cash and refused to accept Hataway’s bid. Shappley, as agent for a then-undisclosed buyer,
purchased the property for $60,000. Payment was made by an un-certified trust account check
from Shappley’s law firm. Hataway objected to the sale, but did not post the bond pursuant to
Miss. Code Ann. § 11-5-109.
¶7. The trial court then granted the Petitioners’ motion for summary judgment and
confirmed the partition sale. Hataway filed her response to the summary judgment four days
after the order was filed. The cover letter from the attorney explained that there was “some
misunderstanding as to the briefing schedule we agreed upon” and requested that the trial court
alternatively consider the response as a motion to amend the judgment pursuant to Miss. R.
Civ. P. 59. This response included an affidavit from Hataway, a copy of a contract for the sale
of the two parcels for $65,000 between David and Jamal Khouri dated May 10, 2002, and
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addenda dated May 15 and 20, 2002, reducing the price to $60,000. Hataway’s Rule 59 motion
was denied, and this appeal followed.
ANALYSIS
¶8. Hataway raises three issues: (1) Whether Dabney, as co-executor of the Estate, had
lawful authority to act for the Estate to the exclusion and over the objection of Hataway; (2)
whether Hataway’s bid was for cash; and (3) whether the trial court erred in granting summary
judgment confirming the partition sale. Additionally, in her argument discussing the
appropriateness of summary judgment, Hataway discusses the propriety of Shappley appearing
at the auction in a dual capacity, that is as the attorney for the sellers and as agent for the buyer.
Because the first issue and the issue of Shappley appearing at the auction in a dual capacity
were not raised before the chancery court, they will not be addressed here on appeal. Ellis v.
Ellis, 651 So.2d 1068, 1073 (Miss. 1995); Bender v. North Meridian Mobile Home Park,
636 So.2d 385, 389 (Miss. 1994); Parker v. Miss. Game & Fish Comm’n, 555 So.2d 725,
730 (Miss. 1989).
¶9. This Court employs a de novo standard in reviewing a trial court's grant of summary
judgment. Stewart v. Hoover, 815 So.2d 1157, 1159 ¶ 6 (Miss. 2002) (citing O'Neal Steel,
Inc. v. Millette, 797 So.2d 869, 872 (Miss. 2001)). In conducting a de novo review, we look
at all evidentiary matters before us, including admissions in pleadings, answers to
interrogatories, depositions, and affidavits. Id. (citing Lee v. Golden Triangle Planning &
Dev. Dist., Inc., 797 So.2d 845, 847 (Miss. 2001) and Aetna Cas. & Sur. Co. v. Berry, 669
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So.2d 56, 70 (Miss. 1996)). This evidence must be viewed in the light most favorable to the
party against whom the motion for summary judgment has been made. Id. (citing Leslie v. City
of Biloxi, 758 So.2d 430, 431 (Miss. 2000)).
¶10. The Petitioners argue that Hataway failed to preserve her objection to the confirmation
of the sale by failing to post the statutorily required bond under Miss. Code Ann. § 11-5-109
(Rev. 2002) which states:
The party who objects to a sale under a decree because of the inadequacy of the
bid, or any person interested therein, may prevent the confirmation thereof by
entering into a bond in a penalty equal to double the amount of the bid, with
sufficient sureties, to be approved by the court or clerk, payable to the opposite
party, conditioned to pay all costs of a resale, and that the property shall bring
thereat an advance of not less than twenty per centum upon the bid, exclusive of
the cost of resale.
Hataway counters that this statute applies only to an objection regarding “the inadequacy of the
bid” and not the unlawful handling of the bid process. Hataway argues that she is challenging
the process of the sale and the fact that her “bid” was rejected. The trial court did not require
Hataway to post bond in support of her objection or even address this issue. The adequacy of
the bids is not at issue. Instead, the issue is whether the letter constitutes an acceptable bid.
¶11. In deciding whether the summary judgment confirming the partition sale was proper,
we must first review Hataway’s letter from the Bank. The parties had entered into a consent
judgment as to the sale of parcels 1 and 2 “to the highest bidder for cash.” Hataway contends
that her “letter of guarantee” was sufficient under Miss. Code Ann. §§ 75-5-101 to -118 (Rev.
2002) and that it was “no less ‘cash’ than the $60,000 uncertified trust account check
submitted by Shappley.”
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¶12. A letter of credit is defined as “a definite undertaking that satisfies the requirements of
Section 75-5-104 by an issuer to a beneficiary at the request or for the account of an applicant
or, in the case of a financial institution, to itself or for its own account, to honor a
documentary presentation by payment or delivery of an item of value.” Miss. Code Ann. §
75-5-102(10). The “standard practice of financial institutions” that issue letters of credit
shall be observed. Miss. Code Ann. § 75-5-108(e).2 Hataway argues that the Bank’s letter
clearly meets the requirements of the Uniform Commercial Code and that upon receipt of the
deed, the Bank would have been required to pay up to $72,000. Hataway also argues that this
raises an issue of material fact sufficient to defeat summary judgment, relying on Lyle v.
Mladinich, 584 So.2d 397, 398 (Miss. 1991) (holding that a “trial judge's decision is reversed
if a triable issue of fact exists.”).
¶13. The Petitioners rely on Hendry Construction Co. v. Bank of Hattiesburg, 562 So.2d
100 (Miss. 1990), to argue that the letter presented by Hataway was not the same as cash. In
Hendry, a construction company brought an action against the Bank of Hattiesburg for alleged
wrongful refusal to recognize an alleged letter of credit from Deposit Guaranty National Bank.
The president of Hendry Construction received a letter addressed solely to him from Deposit
Guaranty National Bank, and he assumed it was a letter of credit. The letter provided that
2
Miss. Code Ann. § 75-5-108(e) states in full:
An issuer shall observe standard practice of financial institutions that regularly issue letters
of credit. Determination of the issuer's observance of the standard practice is a matter of
interpretation for the court. The court shall offer the parties a reasonable opportunity to
present evidence of the standard practice.
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Farmers Home Association had approved a loan to the party contracted to do the construction
work for Hendry and that “subject to certain conditions that [the construction company] must
meet in order for the loan to be funded” and a “loan closing”, then when “all conditions have
been met . . . a check in the amount of $275,000 will be made payable to Hendry Construction
Company.” Hendry delivered the letter to the Bank of Hattiesburg to borrow money to
complete the construction. The Bank loaned $138,543 but then refused to advance additional
funds. Hendry sued the Bank of Hattiesburg for refusal to recognize the letter of credit and
loan additional funds. This Court found that the letter was not a “letter of credit” and further
that it was not even addressed to the Bank. Id. at 101-02. Thus, the Petitioners argue that the
letter in the instant case is analogous to the Hendry letter.
¶14. We find that Hendry is distinguishable from today’s case. First, the Hendry letter
was not a direct promise to pay the addressee. Second, the addressee of that letter was Hendry
himself, not the bank. Here, the letter specifically stated that the Bank “guarantee[d] that the
good funds will be made available upon receiving clear title to the above referenced parcels.”
Additionally, the letter was specifically addressed to the special master. Had the special
master accepted the letter and delivered clear title, the Bank would have been required to
make payment in an amount up to $72,000. Miss. Code Ann. § 75-5-103(a). The payment of
any commitment fee is of no consequence as “consideration is not required to issue, amend,
transfer or cancel a letter of credit, advice or confirmation.” Miss. Code Ann. § 75-5-105.
¶15. However, while we agree that under certain circumstances, the Bank’s letter would as
a matter of fact and law be considered a bid for cash, the special master was not required to
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accept the letter since the letter contained a condition which could not be met. In a typical
unforced real estate transaction with a willing buyer and seller, it would be expected that a
letter of credit from a lender would contain a condition at least similar to the letter before us
so as assure the lender that it received a first deed of trust on the subject property. However,
when trustees or special commissioners or masters are conducting public sales, they may
convey only such title as is vested in them in that capacity. 3 That power and authority quite
often will render them incapable of conveying “clear title,” whatever that means. For example,
a trustee who is foreclosing on a second deed of trust, is most assuredly going to be legally
incapable of conveying “clear title” to the purchaser at the foreclosure sale since the trustee
would be conveying title to the purchaser subject to the first deed of trust.
¶16. Additionally, a special commissioner or master conducting a judicially ordered sale
must do so in accordance with the judge’s order. The trial court may order that the subject real
estate be sold subject to or free of existing encumbrances. O’Neill v. O’Neill, 551 So.2d 228,
232 (Miss. 1989). In its judgment appointing a special master and directing a partition sale,
the chancery court ordered, inter alia, that the special master deliver a special master’s deed
to the “highest bidder for cash.” Nowhere in this judgment or any other order did the chancery
court direct the special master to deliver “clear title” to the successful bidder.4 The special
master dutifully performed her duties pursuant to the chancery court order. She published the
3
See Wansley v. First Nat’l Bank of Vicksburg, 566 So.2d 1218 (Miss. 1990); Peoples Bank &
Trust Co. v. L & T Developers, Inc., 434 So.2d 699, 708 (Miss. 1983).
4
We will assume here arguendo that “clear title” means “free of encumbrances.”
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“Special Master’s Notice of Sale,” which stated inter alia that she would “[convey] only such
title with which I am empowered by the [chancery court].” She conducted the sale. She filed
her Report of Special Master. She delivered her Special Master’s Deed.
¶17. It is interesting to note that included in the exhibits attached to the motion for summary
judgment was a sworn affidavit from the Bank’s vice president who had submitted the “letter
of guarantee” for Hataway. In this affidavit, he stated, inter alia:
That letter was an expression that [the Bank] had made a conditional loan
commitment to Mrs. Hataway, although no commitment fee was paid and [the
Bank] was not bound to make the loan. If the conditions had been met, that is
clear title had been assured, we would have probably made a secured loan up
to the amount stated in the letter. The letter was not a letter of credit or other
cash equivalent.
(emphasis added).
¶18. A chancellor is afforded “wide discretion” in fact finding in determining whether to
confirm the special commissioner’s report and to authorize the special commissioner’s deed.
Griffin v. Campbell, 741 So.2d 936, 938 (Miss. 1999). From the record before us, it is
abundantly clear that the chancellor quite appropriately granted summary judgment, which had
the practical effect of confirming the special master’s sale which was conducted consistent
with the chancellor’s order. Without doubt, there was no disputed fact issue, and the
chancellor properly applied the appropriate law to the facts of the case.
CONCLUSION
¶19. Hataway’s letter from BancorpSouth stated that the bank would make available funds not
to exceed $72,000 “upon receiving clear title” to the subject property – a condition which the
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special master could not meet and a condition which was not required by the chancellor in this
judicially ordered sale. Thus, for the reasons stated, the chancellor did not err in confirming
the sale of the subject property to the Petitioners for the sum of $60,000. Therefore, the
judgment of the Chancery Court of Warren County is affirmed.
¶20. AFFIRMED.
SMITH, C.J., WALLER AND COBB, P.JJ., EASLEY, DICKINSON AND
RANDOLPH, JJ., CONCUR. DIAZ AND GRAVES, JJ., NOT PARTICIPATING.
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