BEFORE WALKER, PRATHER AND ANDERSON
PRATHER, JUSTICE, FOR THE COURT:
This appeal questions the propriety of a trustee's actions in a foreclosure sale of realty under a deed of trust in which the purchase was made by the mortgagee at substantially less than the alleged value. The mortgagor, Lake Hillsdale Estates, Inc. filed suit in the Chancery Court of Pearl River County against Louisiana Savings Association, mortgagee, and Charles R. Galloway, individually and as trustee, to re-establish the fair market value to be the release fee agreed to in the deed of trust. By cross-bill Louisiana Savings sought and received a deficiency judgment for the amount allegedly still owed. From the granting of the deficiency judgment to Louisiana Savings, the appellant/mortgagor, Lake Hillsdale Estate, Inc. appeals assigning as error:
(1) The trial court erred in finding that the default and notice provisions of the deed of trust were not applicable.
(2) The trial court erred in refusing to set aside the foreclosure sale due to breach of duty by the trustee;
(3) The trial court erred in refusing to set aside the foreclosure sale for inadequacy of consideration;
(4) The trial court erred in granting a deficiency decree in favor of appellee.
Appellant Lake Hillsdale Estates, Inc. borrowed $198,301.40 from Louisiana Savings Association on November 30, 1978, the note being secured by a deed of trust on residential and commercial property being developed by appellant. The note, due and payable November 1, 1979, was not timely paid. The balance due was $186,584.60.
After default of the promissory note, the trustee initiated foreclosure proceedings. The property was sold on December 29, 1980, to Louisiana Savings, mortgagee, for a bid of $85,530.00. At the foreclosure sale, the representative of Lake Hillsdale Estates requested the trustee to offer the lots for sale individually, but the total of these individual bids was less than the total bid of Louisiana Savings Association.
On December 29, 1980, the same day as the foreclosure sale, Lake Hillsdale Estates filed a complaint against Charles R. Galloway, individually and as trustee in the trust deed, and Louisiana Savings Association alleging that the trustee breached his duty in selling the property for inadequate consideration, as the value of the property was in excess of the indebtedness as well as the sales price at the foreclosure sale. Lake Hillsdale asked that the eighty percent release fee set forth on the deed of trust be established by the court as the fair and reasonable value. Lake Hillsdale then requested that it be given credit for the amount of remaining indebtedness of $186,584.60 and that surplus monies be returned to Lake Hillsdale in the form of either property or cash.
Louisiana Savings Association denied that Lake Hillsdale was entitled to the relief requested and filed a cross-bill alleging that Lake Hillsdale was indebted to it in the amount of $186,584.60. On the other hand Lake Hillsdale contended at trial that the value of the property at the time of foreclosure was $392,897.00. This was based on the "market values" attached to the deed of trust. However, these "market values" were amounts set and agreed upon for release upon sale to a third party purchaser. A lot could be released by tender of eighty percent of the amount listed on this attachment, but the record does not clearly establish when these values were set.
At the conclusion of the Lake Hillsdale case, Louisiana Savings moved to exclude the evidence of the complainant and dismiss Lake Hillsdale's complaint. The trial court granted the motion finding that the foreclosure sale was valid and
complied with Mississippi law. The court made no finding as to the value of the property at the time of the foreclosure sale, but granted a deficiency judgment to Louisiana Savings ...