In Re Bondholders of York and Cumberland R. R. Co.
R. S. of 1857, e. 51, § 51, and the nine following sections, and statute of 1858, e. 30, relative"“to trustees of railroads,” and regulating the proceedings to he had when a railroad has been conveyed to trustees for the use of the bondholders, apply to cases where the trust, the trustee and the cestui que trust, are all created by one and the same deed, and not to a ease where a mortgage is made to an individual, to secure him and his assigns who may subsequently become holders of bonds to be issued by him.
Should such a mortgagee transfer any part of the bonds, he would, hold the mortgaged estate, as mortgagee for the part not transferred, and as trustee for the holders of the portion transferred, precisely as any mortgagee would do under similar circumstances. But neither before nor after such transfer, would.he he snch a trustee as the statutes referred to contemplated.
The statutes referred to contemplate a deed, of trust, and such a mortgage as has been described is not within the letter or the spirit of their provisions.
In such a case, the election of trustees in place of the original mortgagee, made at a meeting of the bondholders called for the purpose of foreclosing the mortgage, was unauthorized by the statutes.
On exceptions to the ruling of Davis, J.
This case came before the Court at Nisi Rrius, upon a motion that the proceedings of a meeting of bond holders of York and Cumberland Railroad Company, be ratified and confirmed.
It appeared that the company by their president and treasurer and with their corporate seal affixed, on Feb. 6,' 1851, in consideration of a contract made with them by John G. Myers of Portland, conveyed to "the said Myers and his assigns, who shall become the holders of the bonds, and coupons hereinafter mentioned, each in the ratio of the bonds so held by him, the franchise of said corporation, with all its privileges and immunities, as the same exists by virtue of said Act of incorporation and the laws of said State, together with all personal and real property, and rights of way of said corporation, however situated, and bounded, and as the same has been or may be purchased, within the counties of York and Cumberland, and for a more particular description of which, reference is hereby *553¿nade to the registry of deeds in said counties and the records of said corporation, together with all the buildings that are or may be situated on. said premises, excepting only the depot and lot of land whereon the same stands, situated in the city of Portland, but meaning to include herein all iron rails, road bed, track and other structures, of said corporation, now completed or in the process of being furnished smd constructed, or that may be acquired, and as the same shall bo when finished, be the same more or less, and throughout the whole line of said road, and including all cars, engines and furniture, that have been or may be purchased by said company.
”To have and to hold the aforegranted and bargained premises, with all the privileges and appurtenances thereof, to the said Myers, his heirs and assigns, and to the holders of said bonds and coupons, to their use and behoof forever. And we do covenant with the said Myers for and in behalf of said corporation, and by authority aforesaid, and with his heirs and assigns and the holders of said bonds, which are hereby recognized as transferable by delivery ofily, that said corporation is lawfully seized in fee of the premises, that they are free of all incumbrances, that it has good right to sell and convey the same to the said Myers and to the holders of said bonds in manner aforesaid, and by these presents and to hold as aforesaid, and that said corporation shall and will warrant and defend the same to the said grantees forever, against the lawful claims and demands of all persons.
"Provided nevertheless, that if said corporation or their agents or assigns, pay to the said Myers or his assigns, who shall become the holder or holders thereof, the amounts specified in the several bonds and coupons for interest pertaining thereto, that shall be issued concurrently with these presents, and such also as shall hereafter be issued by the directors of said corporation, according to and to satisfy the terms of the contract existing between said corporation and said Myers, bearing date the fifth day of August, A. D. *5541850, and as modified in writing on the sixth day of February, A. D. 1851, for the construction and equipment of said railroad, as by reference to said contract and the records of said company will fully appear; each of said bonds being numbered consecutively, from one to the sum total thereof, requisite' for the completion of said road, according to said contract, and each being issued only by the previous specific vote thereof of the said directors, at their meeting duly notified; and if said payments shall be made, as the same shall respectively become due, according to the terms of said bonds and coupons ; and if said contract shall also be fully performed by said corporation, in all other respects, then this deed shall be null and void thereafter, otherwise the same shall remain good and in full force.
"And it is further provided and a condition of this deed, that the possession and uses of said premises shall at all times remain in the said grantors, so long as payment shall be made promptly and in good faith by said grantors, of said several bonds and of the coupons pertaining thereto as the same shall become due or payable, but upon failure thereof for the term of sixty days, the holder of said bonds or of any one or more thereof, shall be and hereby is authorized and empowered to take full and complete possession •of said premises and mortgaged property, personal and real, sights of way and corporate franchise, without hindrance or process of law, for the common and joint benefit and the use of the holders of all the bonds so previously issued and whether payment then be due or not, and in satisfaction thereof, and such holders shall share and share alike in the disposition and sale of the same for that purpose by public vendue, on reasonable public notice given thereof, to the grantors aforesaid, first deducting from such proceeds all costs and expenses incident to such possession and sale.”
On Dec. 29, 1860, notice was given by Myers, as trustee, named in the foregoing mortgage, for a meeting of the bondholders of said company, to be held in Portland, Jan. 22, 1861, for the purpose of a foreclosure of said mortgage for *555condition broken, and for electing by ballot one or more trustees, under the provisions of the Act of 1858, c. 30. This meeting was called in pursuance of a request of certain bondholders, and was held at the time and place appointed.
The resignation of J. G. Myers, as trustee, was presented.
It appeared that holders of bonds to the amount of §24,500 were represented, being entitled to 245 votes; and John W. Lane and Joseph Usley were unanimously elected trustees, and accepted the trust.
E. H. Daveis and others, representing $5000 bonds, protested against the proceedings of the meeting.
It was then voted that a certified copy of the proceedings of the meeting be presented to the S. J. Court then in session, for the purpose of having the same ratified and confirmed, and such proceedings had thereon as the Court may order.
At the trial E. II. Daveis and Evans & Putnam appeared in behalf of the holders of other bonds of the same company, and of other persons claiming to be trustees by deeds of trust duly appointed, and claiming to hold the railroad and all the property of the corporation, free from any lien, encumbrance or trust in favor of the proponents.
The contestants introduced a deed from the company to Toppan Robie and others, dated Nov. 1, 1851; a deed from Myers to Amos Finch, dated July 29, 1856 ; Finch to James Hayward and others, dated Jan. 1, 1857 ; Myers to same, same date j same to same, Jan. 28, 1857, together with other papers, all of which were received, subject to all legal objections.
The presiding Judge ordered that the election of Lane and Usley, in place of Myers, be ratified and confirmed, to which the contestants excepted.
Evans,
in support of the exceptions.
The proceedings of the meeting, presented to the Court below for ratification and confirmation, were not authorized *556by the Act of 1858, c. 30, by virtue of which they purport to have taken place, and consequently the Court had no jurisdiction in the matter.
The statute i’elates to "trustees of railroads.” None are such but those expressly created and appointed in that capacity, b.y deeds or instruments defining their powers and duties explicitly. Such appointments are not unusual in this State. They are well known, and to such only is the statute applicable.
In the case at bar, the deed to Myers of Feb. 6, 1851, under which these proceedings are attempted to be supported, was not a deed of trust. It created no trustees. It was simply a deed of mortgage, and is to be treated as such throughout. Myers is no where called a trustee, and no obligations are imposed upon him as such by the deed. He had the legal rights of a mortgagee, and was subject to the obligations which in law or equity other mortgagees are subject to, and no more.
Duties and obligations in the nature of trusts, though not properly and technically trusts, may grow. out of the contract of mortgage, as they may and do out of various other contracts and transactions — but it is not to these constructive and implied trusts, or obligations in the nature of trusts, that the statute regulating trustees can have reference.
That a mortgage deed is not a trust deed, except in a very limited and peculiar sense, though sometimes so denominated. See 2 Story’s Eq. Ju., § 1012, note 2 and quotations, and § 1015, ut seq.
The form of expression used to describe the interest of the mortgagee, is "in the nature of a trust” — "treated as a trustee,” <&c.
Now, when and under what circumstances, and for whom, may a mortgagee be treated as a trustee? When does he hold in the nature of a trust f The law is well settled. When a mortgagee takes possession, and before foreclosure, he holds for the benefit of the mortgager, and must account to him on redemption. Or, if a mortgagee assigns or trans*557fers tbe debt or any part of it secured by tbe mortgage, but does not assign the mortgage itself, equity will require him to bold the estate for the benefit of such assignee. In this State, this doctrine is recognized in Johnson v. Candage, '31 Maine, 30; Haynes v. Wellington, 25 Maine, 458.
The legal estate is in the mortgagee, and, in this State, can only pass from him by deed duly executed. Vose v. Handy, 2 Maine, 322; Prescott v. Mlingwood, 23 Maine, 345; Smith v. Kelley, 27 Maine, 237.
An assignment of the debt docs not here, as in some other States and in England, transfer the mortgage also.
An assignment of the mortgage, or' conveyance by the mortgagee, conveys all his interest of every description, and his grantees succeed to his rights, and, where notice of his tenure exists, to his liabilities. If he has held for the benefit of others, in the nature of a trust, they can hold in no other way. If he was trustee, or quasi trustee, they must occupy the same position. But, having parted with the title and conveyed the estate, he has no further interest in, and no more control over it, and can do nothing, and is liable to nothing, which legal ownership authorizes or imposes.
Now this was Myers’ condition. The case finds that ho conveyed all his interest by his deed to Einch, July 29, 1856, having the opinion of this Court that he might lawfully do so, Y. & G. H. 11. Co. v. Myers, 41 Maine, 109, and subsequently, Jan. 1, 1857, released to Churchill and others, to whom also Einch conveyed, Jan. 1, 1857. The legal title, then, which Myers held under his deed, is vested in Churchill and others, and they succeed to all bis rights and obligations.
Myers’ deed secured not only the bonds issued to him, but the performance in other respects of the company’s contract with him. Myers recovered judgment against them for breacn of that contract, and assigned that judgment also to Churchill and others, and they hold as the assignees of the mortgagee, not only the mortgage itself, but a large portion of the debt secured by it.
*558Myers, being no longer legal owner, could no longer be clothed with any implied or constructive trusts for those who had become holders of the bonds.
Of consequence he had no authority to call the meeting. That should have been done, if it could have been by anybody, by his successors in the trust, Churchill and others. Myers’ attempted resignation was nugatory, and left no vacancy to- be supplied. If there were ever any trustees under the Myers deed, they were still so, when the bondholders attempted to fill the supposed vacancy of Myers.
After a conveyance by a mortgagee, or an assignment, he can maintain no action to foreclose, Gould v. Newman, 6 Mass., 239, and, by parity of reasoning, resort to no other mode of accomplishing the same end.
2. The deed to Myers contains some provisions, anomalous and unusual, and is most loosely and inartificially drawn, obscure, uncertain, and incapable of being literally carried •into effect. These provisions, equity will not allow to stand. Notwithstanding these anomalies, the deed is still a mortgage only. No title passed to the bondholders as such, by the deed. Titles must go to persons named, or definitely described and known, and cannot be ambulatory, passing by the delivery of a note of hand, or bond, or bill of sale, to any person to whom it may be delivered.
3. But while it is denied that the deed to Myers can operate to convey any title to the holders of the bonds' named in it, or to give them any right of possession or control over the mortgaged property, it is admitted that they have a beneficial interest in it, a lien upon it, in whosesoever hands the legal title -may be.
The deed was intended, doubtless, to secure the bonds described in it. It ought to operate for the purpose designed, if a lawful .one. Security was intended. The exhibits filed by some of the bondholders show that they so regarded it. No claim of title or possession was asserted, but notice, accompanying the transfer, that the grantees may hold subject to their claim for security.
*5594. In giving a construction - to the Act of 1858, c. 30, to determine whether it authorized these proceedings, the Court will ascertain, if possible, what it may reasonably be supposed was intended.
The construction must be a reasonable one, and the object to be accomplished a reasonable one also. Would anything be more unreasonable than to suppose that the Legislature intended to authorize one class of creditors secured by mortgage, to have the entire control of the mortgaged property, to the exclusion of another class or creditor, equally secured by the same deed, and holding vastly greater interests? Can it be supposed the Legislature meant to authorize so gross inequity ? It these proceedings are sustained, what is to be the next step ? Is the Court to order conveyance to be made to these new trustees ? Myers has nothing to convey, and the Court will do no such absurd thing as to direct a perfectly useless act. Are Clapp and others, trustees under the deed to Robie and others of Nov. 1, 1851; or Churchill and others, trustees under the deed of Jan. 1, 1857, to convey? Certainly not. The new trustees do not assume to be their successors, but only Myers’.
Will the Court construe the statute so as to deprive trustees duly appointed of their property and legal rights ? Did the Legislature so intend? And, if so, is it constitutional?
Shepley & Dana, for the bondholders.
1. Exceptions do not lie in this case. The order of the Court, ratifying and confirming the election of Lane and Ilsley as trustees, was a mere exercise of discretion, and not a determination of any question of law, and not the subject of a bill of exceptions. It was a matter which might be presented in a summary manner to the Court at any term, or to any Judge at chambers, and such Court or Justice had power to ratify and confirm the election, and to make all orders and decrees for effectuating the same. Stat. 1858, c. 30, § 2. No right of exceptions is reserved. If heard before the Judge at chambers, manifestly there could be no exceptions.
*5602. The proceedings were strictly in accordance with the statute. Those who met were " holders of bonds of a railroad corporation of this State.” The meeting was " called and held in pursuance of the provisions of the Act approved April 15, 1857.” R. S., c. 51, § 54. The call was by the trustee, and due notice given.
3. The statute was intended to apply, and does in terms apply, to those " who take and hold in trust any property embraced in the mortgage, for the benefit of the bondholders.” A trustee is one who takes or holds in trust.
The mortgage of Eeb. 6, 1851, is to Myers, "to have and to hold to the said Myers, his heirs and assigns and to the holders of said bonds and coupons, to their use and be-hoof forever.” The condition of the mortgage was the payment to the holders of the bonds " of the amounts specified in the several bonds and coupons for interest pertaining thereto.” Precisely such a mortgage is contemplated in the statute. R. S., c. 51, § 53.
At common law, if any instrument, operating as a legal disposition of propei’ty, contained a declaration or direction that the party taking under it should hold for the benefit of another, he took the legal estate as a trustee for the beneficial owner. Hill on Trustees, 63*. ,
Since the statute of uses, it has been laid down that there are three direct modes of creating a trust of lands, notwithstanding the statute : — 1st. Where a use is limited upon a use; i. e., conveyance to the use of A, and his heirs, to the use of B, and his heirs: — 2d. Where copyhold or leasehold estates are limited by deed or will to any person, upon any use or trust; and, 3d. Where the donee to uses has certain trusts or duties to perform which require that he should have the legal estate. In all these cases, however, the question is not, whether the first taker shall hold' beneficially or as trustee,.but, whether he takes any legal estate at all under the limitation to him. Hill on 'Trustees, 63*, 64*, 229*, 230*.
That this was a conveyance in trust and not a use execut*561ed, seo Williams’ Saunders, 11, note 17; Sylvester v. Wilson, 2 T. R., 444; JSTewhall v. Wheeler, 7 Mass., 189; Norton v. Leonard, 12 Pick., 156.
It is contended, however, that Myers, by a conveyance of the trust estate, has divested himself of the character of trustee. This he cannot do until he has discharged himself of the trust.
If a trustee, with or without a power of sale, or authority to sell, convey the trust estate, is he not a trustee for the consideration received? He may not hold the particular property in trust after the sale, and, in one sense, may cease to be the trustee of that particular property, but he is no less a trustee, and bound to account as a trustee.
If persons who are trustees for bondholders could, by a mere alienation of the trust property, divest themselves of the relation of trustees, and cease to be accountable to the cestuis que trust, then the position of the counsel would be a correct one, and the bondholders would be remediless.
The opinion of the Court was drawn up by
Appleton, J.
By R. S., c. 51, § 53, it is enacted that " when a railroad corporation shall have mortgaged its railroad and franchise to secure the payment of any of its bonds and coupons, whether such mortgage was made directly to the holders of such obligations, or to trustees for their use, the refusal or neglect to pay any such bond or coupon, within ninety days after its presentment, (subsequent to its pay day,) to the treasurer or president for payment, shall be deemed a breach of the condition of the mortgage.”
The section in terms explicitly refers to two classes of mortgages — one directly to the bondholders — the other "to trustees for their use.”
When the mortgage is made directly to the bondholders, they have the rights and privileges of mortgagees.
If the mortgage is to trustees, for the use of the bondholders, the 54th and the eight following sections of c. 51, define the rights, duties and powers of such trustees and pro*562vide for the foreclosure of the mortgage by them, in their trust capacity, and for the creation of a new corporation composed of the bondholders, for whose use the franchise of the railroad had been conveyed to them in trust.
The Act of 1858, c. 80, under which the proceedings in question were had, relates " to trustees of railroads.” It provides for the meetings of the bondholders, the removal of trustees, and the election of new ones, and for the transfer of the estate mortgaged from the old to the new trustees.
It is claimed, that the deed of the York and Cumberland Railroad Company to John Gr. Myers, of the date of Eeb. 6, 1851, is to be regarded as a deed of trust within the intent and meaning of the statutes to which reference has been made.
The deed from the corporation is signed by its president and treasurer, and sealed with its seal. It recites that, in consideration of the sum of one dollar, paid by John Gr. Myers, of Portland, &c., "the receipt whereof we do hereby for and in behalf of said corporation acknowledge, and in consideration of the stipulations contained in the contract of said Myers, hereinafter mentioned, do hereby give, grant, bargain, sell and convey, for and in the name and behalf of said corporation, unto the said Myers and his assigns, who shall become holders of the bonds and coupons hereinafter mentioned, each in the ratio of the bonds so held by him, the franchise of said corporation, with all its privileges and immunities, &c., &c., * * * to have and to hold the aforegranted and bargained premises, with all the privileges and appurtenances thereof, to the said Myers, his heirs and assigns, and to the holders of said bonds and coupons, to their use and behoof forever.” * * * "Provided nevertheless, that if said corporation, their agents, or assigns, pay to the said Myers or 'his assigns, who shall become the holder or holders thereof, the amounts specified in the several bonds and coupons for interest pertaining thereto, that shall be issued concurrently with these presents and also such as shall hereafter be issued by the directors of said corpora*563tion, according to, and to satisfy the terms of the contract existing between said corporation and said Myers, bearing date the fifth of August, A. D., 1850, and as modified in writing on the sixth of February, 1851, for the construction and equipment of said railroad, as by reference to said contract and the records of the company will fully appear; each of said bonds being numbered consecutively -from one to the sum total thereof, requisite for the completion of said road according to said contract, and each being issued only by the previous specific vote therefor of'the said directors at their meeting duly notified; and if the said payments shall bo made, as the same shall respectively become due, according to the terms of said bonds and coupons; and if said contracts shall also be fully performed by said corporation in all other respects, then this deed shall be null and void thereafter, otherwise the same shall remain good and in full force.”
There is a further condition, that if the bonds and coupons should not be paid within sixty days from maturity, that the holder or holders of such unpaid bonds may take possession of the mortgaged premises for the common benefit of the holders of all the bonds and may sell the same, &c., &c.
By the statute in question, the deed of mortgage is to be made "to trustees for their (the bondholders’) use” — to trustees "of the holders or owners of bonds secured by the deed creating said trust.” The trustees are authorized "when not inconsistent with any of the provisions of the deed creating the trust,” &c., to take possession of the road on certain contingencies’ expressed in the statute. The trustees are authorized " as fully as a board of directors of said road for the time being to take charge of and manage said road,” &c., and to do all things in the management of said road that a board of directors might lawfully do, with the right to prosecute and defend suits in their names as trustees, and to do all other things, which the corporation itself might legitimately do.” " When the dishonored bonds and coupons secured by the deed in which the trust is created, shall have *564been paid, said trustees shall surrender said road,” &e. The bondholders are "to vote such instruction to the trustees as they may deem advisable, and if not inconsistent with the duties prescribed in the deed of trust,” &c., and to "prescribe the compensation of the trustees.” When the mortgage is foreclosed, the foreclosure is to " enure to the benefit of all the holders of the bonds and coupons provided for in its condition,” who are constituted a new corporation. Provision is made for the appointment of new trustees in case of death or resignation or removal of those first appointed, and for the election of new ones in their place, "who shall take and. hold in trust the property embraced in the mortgage according to the terms thereof.” R. S., 1857, c. 51, §§ 53, 54, 55, 56, 57, and stat. 1858, c. 30, § § 1 and 2, &c.
The statute most manifestly relates to "trustees of railroads” created by deeds of trust, in which the trusts are set forth, and the powers and duties of the trustees are defined. It refers to trusts created by deed in contradistinction to trusts incidentally arising under a mortgage by and from the transfer of the claims secured by the mortgage. It treats mortgages and trusts as distinct. It recognizes their diversity. It negatives their identity.
The relations between Myers and the Y. & C. Railroad are apparent from and are disclosed by the mortgage. Myers was the party contracting with them. The contract was thereby secured. Bonds were to be issued to him under the contract, according to its terms and conditions. It was the expectation of the parties that they' would be assigned, and it was their intention that when assigned, they should still be secured- by the mortgage, as they were before such assignment. The mortgage expresses, in terms, the rights of the parties as they would be regarded in a Court of equity, after the mortgagee has transferred the debt secured in whole or in part without transferring the mortgage. In such case, he holds the estate in the nature of a trust for the holders of the demands assigned,, and the mortgagee is to *565be treated as a trustee. Johnson v. Candage, 31 Maine, 30; Moore v. Ware, 38 Maine, 496. The mortgage deed expresses in words what a court of equity would imply without such words.
By the terms of the deed, Myers is simply mortgagee. He is not named as trustee. He is not trustee in fact, though he may by his own act thereafter become one. The contract secured is with him. It is his contract. The bonds to be issued under it are his. If he keeps the contract and bonds without transferring any, he remains simply a mortgagee. The deed to him on its face and at its inception is not a trust deed within the statute, for that contemplates a deed, where the trust, the trustee and the cestui que trust are all created by one and the same instrument. But here, until Myers makes a transfer, he is mortgagee and that alone. It would be absurd to say that he holds the mortgage in trust for himself, before he has assigned any of the bonds of the corporation, and that he is both trustee and cestui que trust.
If Myers should transfer the bonds or a portion of them, then, undoubtedly, according to the decisions of this Court, he holds the estate as mortgagee for so much of the mortgage debt as is not transferred, and in trust for the holders of the portion transferred. But the trust in such case arises not because the mortgage was originally one of trust, but from the transfer and by operation of law. Whether any trust relations shall ever exist, will depend upon the will of the mortgagee. But in such case there would be no "deed of trust” "to trustees for their (the bondholders’) use.” The trust would spring into existence, when the transfer should be made, and not before. This is in no wise different from any mortgage deed. In all mortgages, the mortgagee may assign a part of demands secured, and he is deemed in equity as holding the title in the nature of a trust for all parties secured by the mortgage. Yet the mortgagee, as such, and before he transfers, is not deemed a trustee — nor after *566such transfer, is he to be regarded as a trustee within the meaning of the Act.
The provisions of the statute, to which we have referred, are entirely inapplicable to an ordinary mortgage. They imply the whole estate as in the trustee and in him alone. But under the deed of mortgage, if Myers were to transfer a part of the bonds, retaining the residue, it has been seen that he would be mortgagee for such residue. But if the trust arising consequent upon the transfer and in virtue theréof were to be deemed a trust, such as the statute intends, then would Myers after such transfer be mortgagee and trustee — mortgagee for the remaining interest— trustee for whatever he may have transferred. The holders of the transferred bonds might meet, depose the mortgagee from his position as trustee, appoint a new trustee, and the legal title of the mortgage would be in Myers as mortgagee and in the new trustee. Indeed, they might proceed to form a new corporation, which would consist of but a portion of the bond holders. But such results are entirely inadmissible — and at variance with the purpose, object and intent of the Legislature.
Even if it were to be said that all the bonds were in fact transferred when the mortgage was made, (though it manifestly was not so,) still, such assumption would not alter the conclusion to which we must inevitably arrive. Myers would still remain mortgagee for his contract, and would be entitled to his rights as such. He might be treated as a trustee, holding the estate mortgaged in the nature of a trust for the bondholders in the ratio of and according to their interest, but the legal title would be in him, and though they might as cestuis que trust be entitled to the aid of a court of equity, to protect their rights, it is not perceived how they could divest Myers of such legal estate.
The statute most obviously does not contemplate one and the same person as trustee and mortgagee, with opposing and conflicting interests, as viewed in one or the other capacity. It does not contemplate the cotemporaneous existence *567of a mortgage and a trust as created by and derived from one and the same instrument. Yet it is apparent that such results would naturally flow, from the position that Myers, besides being mortgagee, was to be treated as trustee under the statute.
The conflict of interests and duties and rights which would exist, if the construction contended for was given to the mortgage to Myers, is most apparent. Myers, as mortgagee, might wish to foreclose. The bondholders might not desire a foreclosure. As trustee, he would be bound to obey their directions — as mortgagee, he is at liberty to follow his own preferences. The trustee may be compelled to transfer the estate at any time. The mortgagee is not obliged at all to transfer it. He may release and discharge the mortgage upon payment. The former is entitled to compensation, the latter is not. The one is a mere agent for the cestui que trust. The other is personally interested. The legal title is in the mortgagee — such is the rule of law. Does it change, as each bond is transferred — and a certain proportion of the title pass from Myers as mortgagee to Myers as trustee ?
But it is unnecessary further to examine the subject. The statute contemplates a deed of trust, and the mortgage to Myers was not one within its letter or its spirit.
It is not material to the present inquiry to determine whether the mortgage confers a power to sell, or whether, if it does, the power is, or is not well executed. The settlement of those questions, howsoever they may be decided, does not affect the subject matter of our present investigation.
The election of trustees was unauthorized by the statute, and the proceedings must bo dismissed.
Tenney, C. J., Cutting, Goodionow and Davis, JJ., concurred.