dissenting.
The judgment of this court reverses the lower court’s confirmation of the sale held under a decree for foreclosure of a mortgage. I dissent.
“In case of default and failure of grantor to remedy the same as provided in Article VIII, it shall and may be latvful for said Trustee, it being hereby expressly covenanted and agreed that should the Trustee desire or require that the public trustee shall act herein with the same rights and powers of the Trustee, to sell and dispose of said premises and property herein described (en masse or in separate parcels, as said public trustee may think best) and all the right, title and interest of said grantor or his heirs or assigns therein, at public auction at the-Bast front door of the Court House, in the City of Denver, State of Colorado, or on said premises, or any part thereof, as may be specified in the notice of such sale, for the highest and best prices the same will bring in cash, four weeks’ public notice having been previously given of the time and place of such sale, by advertisement, weekly in some newspaper of general circulation at that time published in said City of Denver. ” (Italics are-mine.)
*73The above passage from the deed of trust involved in this foreclosure suit is obviously made the corner stone of the majority opinion.
In this, I think, the majority opinion errs. That passage is not involved here. The trustee did not resort to the power of sale therein contained. Instead, the trustee pursued the time-honored method of foreclosure in equity. The Colorado public trustee act, Compiled Laws, 1921, §§5044 et seq., would seem to forbid any other method where, as here, the public trustee is not named as trustee.
Foreclosure by ministerial sale under a power being thus out of the case, the foreclosure is wholly in equity. The established principles of equity jurisdiction—aud not the inapplicable and invalid mortgage provision above quoted—must therefore prevail.
The majority opinion ignores the fact that the sale was accordingly in equity, a judicial sale, and not under the supposed power.. It consequently falls into the error of talcing the “strict authority” principle discussed in 2 Perry, Trusts and Trustees (7th Ed.), page 1037, §602 q, which g'overns ministerial sales under express powers (where there is no judicial supervision, or any other supervision for that matter) and applying it to a judicial sale (where the court of equity directs and controls in the interest of all). The mortgage does not attempt to restrict a judicial foreclosure by any provision as to procedure or as to manner of sale. The sale was not by the trustee, but was by the court through its regular officer, the sheriff. Of course neither this court nor the lower court can lawfully make a new contract for the parties or inject into their contract new provisions by implication or indirection.
Now, since the matter rests entirely within the jurisdiction of equity, and is not controlled by any express agreement giving rise to a contractual right as to the manner of sale, it stands to reason that the whole fabric of the arguments advanced by the plaintiffs in error must fall if equitable principles have been properly *74applied. Whether this has occurred must be judged by the record. The majority opinion says, to be sure, that the lower court authorized the trustee “to bid at the sale, and in payment of its bid, if accepted, to employ the judgment given in the foreclosure suit based on all outstanding bonds, which, of course, included those of plaintiffs in error, and to tahe title in its name as trustee.” What the court authorized can best be shown by quoting the decree itself:
“That the ex-officio sheriff make the sale for not less than the minimum or upset price of $1,000,000- for all of said property, as an entirety, to be paid in cash, except as bonds and coupons, pro rata, and a credit on the judgment of the plaintiff, Trustee, *' * * shall be considered as cash * '* *; that any and all of the defendants to this cause, and the holders of bonds and coupons * * * may bid at the sale, and the said ex-officio sheriff shall sell to the person or persons so bidding the highest amount, provided such bid be for cash, and for not less than the said upset price, both as above stated; and in the event no bid equal to or in excess of the said upset price be made by others, then the plaintiff, Trustee, may bid, and the said ex-officio sheriff shall sell to the plaintiff, Trustee, for an amount not less than the said upset price, and not more than the amount of its said judgment, the said Tru,stees bid, if made, to be satisfied and paid by a credit on the said judgment.”
The record itself discloses certain facts which I believe are necessary to an understanding of this particular case, and I shall therefore recite them with the utmost brevity consistent with their importance.
The foreclosed mortgage is a deed of trust executed in December of 1924 on the property comprising the Cosmopolitan Hotel and the Broadway Theater in the heart of Denver. It constituted security for a bond issue.
Plaintiff in error Cosmopolitan Hotel, Inc., has acquired the original mortgagor’s title to the mortgaged premises and consequently is the owner of an equity of *75redemption. The other plaintiffs in error are holders of bonds aggregating in par value $34,000, of which more than a third was purchased after the decree for sale was entered and at a price amounting- to only a little over 20 per cent of the par value. The unpaid bonds total $1,480,-000, and the minority bondholders own less than one forty-third of the whole. The holders of 97.7 per cent in value of the bonds have raised no objection whatever, and the owners of between 70 per cent and 75 per cent of the total bond value have affirmatively authorized the acts complained of by the plaintiffs in error.
The defendant in error, the Colorado National Bank of Denver, was named in the mortgage as trustee for the bondholders, and upon default in the payment of bonds and interest it took possession of the property, pursuant to the express terms of the instrument, and with the express consent of said plaintiff in error Cosmopolitan Hotel, Inc. By that double authority the trustee is still in possession and operating- the property.
Proceedings of foreclosure, duly instituted by the trustee, resulted in a judgment for $1,683,214.67 in favor of the trustee, and in connection with the judgment a decree was entered providing- for a foreclosure sale. To that judgment and decree no objection was made before the entry thereof; but thereafter the plaintiff in error Schwartz, who acquired his bonds after the decree had been entered, made an objection in the form of an application to vacate the decree and order of sale. No further objections were made until after the sale itself, which was held on July 21, 1934, after the usual notice had been given. The plaintiffs in error, including Schwartz, then filed separate objections to confirmation of the sale. At the hearing on those objections there was no evidence tending to vitiate the proceedings except on the theory broached by the plaintiffs in error that the purchase of the property by the trustee in accordance with the decree was ipso facto illegal. There was no suggestion of fraud. No prospect of a cash purchase was indicated ex*76cept that after the sale Schwartz testified that he was willing to bid $500,000, or “might bid” $750,000. A.ctually, though he had advance knowledge of the impending-sale, he had bid nothing.
There is in the deed of trust no express provision by which the trustee is authorized to bid in the property, nor is there any provision forbidding it to do so. A provision authorizing the trustee to bid in the property appears, however, in the decree itself and will be hereinafter quoted. At the foreclosure sale no cash bidders appeared when the property was offered, and thereupon the trustee, in accordance with the terms of the aforesaid decree, and admittedly purporting to act on behalf of all the bondholders, bid in the entire property at $1,250,-075.04, or nearly-three-fourths of the judgment and approximately 25 per cent more than the “upset” price, hereafter referred to. Of this purchase price the trustee paid in cash $75.04, the amount of fees and expenses. The balance, $1,250,000, was paid by the trustee’s crediting this sum on the judgment, in compliance with the terms of the foreclosure decree.
It is not claimed that the trial court lacked the power it exercised in fixing an “upset” or minimum price of $1,000,000. This was in effect'a determination that, under the particular facts and circumstances shown, it would be inequitable to permit the property to be sold below the appointed minimum. No one assailed this limitation as unreasonable, or applied to the lower court for a modification in that regard. Indeed, counsel expressly conceded that the court had the right to fix the upset price. It was clearly beneficial to the mortgagor and to the minority bondholders.
The argument of plaintiffs in error seems to be that, if there is no cash bid at the first sale, the only alternative is to proceed to another sale, and another, and so on, until a cash bid is received. This course would in the present case contravene the fundamental ideas of equity and justice, as well as sound business principles. Courts *77may take judicial notice that, under present economic conditions, such a process may well be destined to destroy every vestige of material value. The trial judge had the preliminary advantage of taking- evidence and analyzing the whole matter, including the practical probabilities (which turned out to be actualities) in connection with the question of getting cash bidders at the sale and of the certainty that there would not be any. He, after hearing the witnesses before him, was in position to decide what would best protect and conserve the interests of all concerned. The evidence taken is before us, it is not even suggested that it is unreliable, and it seems amply sufficient to support the findings.
With the nonappearance of cash bidders the legitimate function of chancery came properly into play, in order that the property might be conserved—according to the stated purpose of the mortgage—“for the common and equal use, benefit and security of all” who hold the bonds.
It must be remembered that the trustee is not bound to see that the bondholders are paid in full according to their contract as stated in the bonds. Its duty is simply to apply the security equally and impartially toward payment of all alike. Contracts must yield when equity gets into action. The whole body of equitable remedies used in connection with receivers and trustees is the best proof thereof.
Trustees for bondholders are governed by the same equitable'principles as trustees of other trusts. 2 Perry, Trusts and Trustees (7th Ed.), pages 1292, 1302, §§749, 760.
The fundamental question then recurs whether the lower court properly dispensed equity in this case. There is no doubt in my mind that in view of the facts the lower court wisely worked out its problem and proceeded in conformity with recognized rules of equity.
Strongly supporting this conclusion are the following eases: Hoffman v. First Bond & Mortgage Co. Inc., (February, 1933), 116 Conn. 320, 164 Atl. 656; First Nat. Bank *78v. Neil (April, 1933), 137 Kans. 436, 20 P. (2d) 528; Nay Aug Lumber Co. v. Scranton Trust Co. (1913) 240 Pa. St. 500, 87 Atl. 843; Central T. & S. Co. v. Chester County Co. (1910), 9 Del. Ch. 123, 77 Atl. 771; Sturges v. Knapp, (1858), 31 Vt. 1.
The doctrine of those cases has apparently been approved in Illinois, Iowa, Maryland, Nebraska, New York and other jurisdictions. An able and interesting* discussion, wherein that doctrine is approved—though a decision thereon was not necessary inasmuch as the mortgage there contained express authority for a bid by the trustee —is found in Straus v. Chicago Title & Trust Co. (December, 1933), 273 Ill. App. 63. See also Silver v. Wickfield Farms (1929) 209 Ia. 856, 227 N. W. 97; Kitchen Bros. Hotel Co. v. Omaha Safe Deposit Co. (April, 1934), 126 Neb. 744, 254 N. W. 507.
These cases seem amply sufficient to justify the statement in 42 C. J., page 206, §1833. ‘ ‘ The trustee in a deed of trust in the nature of a mortgage may purchase at the foreclosure sale when this is done in the discharg*e of his duties as trustee; and where authority to purchase is not explicitly conferred in the instrument, it may very well be implied. ’ ’
In the case at bar this right was expressly conferred upon the trustee by the foreclosure decree under particularly careful safeguards which were duly observed. In no other way could the interests of all the bondholders have reasonably been protected.
Even the case of Beckman v. Emery-Thompson Co., 9 Ohio App. 275, cited in the majority opinion, is in accord with the general doctrine and affirmed the sale there involved, the only point creating difficulty being one that arose after confirmation as to the right of the minority bondholder to receive cash for his security.
Many questions may arise after confirmation. Some would arise in the present case if judgment were affirmed, as I think it should be.
By affirming judgment herein this court would not vest *79title in the trustee and so (in the words of the majority opinion) “involve them in joint ownership of property against their will.” The very fact that the suit is now in equity would protect the security of the bondholders. Whether there should be an attempt at effecting a satisfactory exchange of securities by incorporation or reorganization with equal rights to both majority and minority bondholders, or otherwise; whether, in the event of the dissenting bondholders’ refusal to enter into such an arrangement, they should be paid the value of their bonds in cash, or how that value shall be determined; whether there should be a sale by the trustee or whether it should be public or private; all these questions are in my opinion questions for the trial court to determine after confirmation of sale.
I believe that this court should therefore affirm the judgment and let those and other questions be dealt with hereafter by the trial court in regular order.
Detroit Trust Co. v. Stormfeltz-Loveley Co., 257 Mich. 655, 242 N. W. 227, is cited by the plaintiffs in error. However it involved a proceeding under a special statute which required a certain notice that was omitted, and the court said [at page 662] : “While no notice is necessary with respect to proceedings incident to the usual foreclosure sale, notice was necessary under the special type of proceeding provided by the act,” and apparently for that reason set the sale aside. At page 663 the court touched upon a principle that has frequently resulted in substantial equitable remedies for harsh legal claims, namely the deviation from an express trust where an exigency has arisen not contemplated by the parties, or where by reason of an exigency a security may be much impaired or entirely lost through unusual conditions. This, I think, is the situation here.
But thé main reliance of the plaintiffs in error seems to be placed upon Werner, Harris & Buck v. Equitable Trust Co., 35 F. (2d) 513. The facts there utterly differ from those in the case at bar. The bid of the trustee was *80in actual and immediate competition with a substantial cash bid by' a bidder (who actively opposed confirmation of the sale to the trustee). Furthermore there was no upset or minimum price fixed, and a protective bid on behalf of the bondholders was not provided for in the foreclosure decree as in the one before us. Moreover, the court there undertook to give the trustee the right to make a competitive bid as against any and all cash bidders, and did so by an ex parte order made after entry of the foreclosure decree. The case is in no sense an authority for the situation-that confronts us here.
The recent case of Colorado Investment and Realty Co. v. Newkirk, 95 Colo. 71, 32 P. (2d) 830, is cited by counsel for the defendant in error as good authority for affirming the judgment herein. In view of the duties expressly imposed upon the trustee by the mortgage I think the contention is correct and the doctrine of the case mentioned is applicable in this.
The above are my reasons for dissent.
Mr. Justice Campbell concurs in this opinion.