Wansley v. First National Bank of Vicksburg

Tom D. Wansley and Julian E. Wansley (plaintiffs) held as co-tenants 4,200 acres of farmland. The Wansleys received crop-production loans from the First National Bank of Vicksburg (the Bank) (defendant). In 1982, the Wansleys executed and delivered deeds of trust conveying their interests in the land to John C. Wheeless, Jr., as trustee, to secure their indebtedness to the Bank. The deeds of trust secured the Wansleys’ farm-related financing through the 1984 crop year. After the sale of the 1984 crops, the Wansleys were unable to pay a substantial portion of what they owed. The Bank directed Wheeless, as trustee, to foreclose and sell the land at public auction. At auction, the Bank bid $500,000 for each plaintiff’s interest in the land. Wheeless accepted the bids and conveyed the interests in the land to the Bank by trustee’s deeds. There was nothing in the record indicating that the sale prices were commercially unreasonable. The Wansleys filed a complaint in the Chancery Court of Sharkey County to cancel and set aside the trustee’s deeds. The Bank counterclaimed for confirmation of its titles in the land and for deficiency judgments for the amount of the Wansleys’ indebtedness over and above $500,000. The Chancery Court confirmed the Bank’s title, awarded the Bank deficiency judgments, and dismissed the Wansleys’ complaint. The Wansleys appealed to the Supreme Court of Mississippi, which held that the Bank’s failure to appoint a disinterested trustee rendered the sales voidable. The Bank petitioned for rehearing, and the Supreme Court of Mississippi granted the rehearing.