Comer & Trapp v. Constantine

McCLELLAN, J.

The distinction between a mortgage, or a deed of trust in the nature of a mortgage, to secure the of a particular debt or debts, and a deed of trust *493 of all tbe grantor’s property for tbe payment of all bis debts, commonly and properly known as a general assignment for the benefit of creditors, is well defined and radical. Tbe purpose of tbe class of instruments first named is to secure a particular indebtedness; tbe purpose of tbe latter is to pay all tbe indebtedness of tbe grantor. In tbe former, a defeasible title only passes, and tbe property reverts to tbe grantor upon tbe happening of certain stipulated conditions; in tbe latter, tbe entire, indefeasible title goes out of tbe grantor, and tbe property is vested absolutely in tbe assignee. In tbe one plass, equitably considered, a lien is created on tbe property, in favor of the creditors intended to be secured, and tbe property itself is still regarded as tbe grantor’s; in tbe other, there is an absolute appropriation of tbe property to tbe creditors, and both tbe legal and equitable title is passed beyond tbe control of tbe assignor. With respect to realty conveyed by mortgage, or deed of trust in tbe nature of a mortgage, an equity of redemption remains in tbe grantor until foreclosure by sale; as to land conveyed in trust for tbe benefit of all creditors, and to pay general indebtedness, there remains no equity of redemption, and tbe trust which results to tbe grantor, either expressly or by implication of law, in such of tbe property, or its proceeds, as is not absorbed in tbe payment of his indebtedness, is not such equity, nor any evidence of it — Burrill on Assignments, 10-18; State v. Benoist, 37 Mo. 500; Dunham v. Whitehead, 21 N. Y. 131; Crow v. Beardsley, 68 Mo. 438; Bartlett v. Teale, 1 McCrary, 176; McClelland v. Revesen, 3 Abb. Dec. (N. Y.) 74; State Bank v. Chaffelle, 40. Mich. 447; Briggs v. Davis, 21 N. Y. 576; Martin v. Hausman, 14 Fed. Rep. 160; Hoffman v. McKall, 5 Ohio St. 124; Woodruff v. Rabb, 19 Ohio St. 216.

In the case at bar, it is sought by judgment creditors of tbe grantors in a general assignment to redeem, under section 1883 of the Code, land which bad passed to tbe assignee, and bean sold and conveyed by him, in accordance with tbe terms of tbe assignment, for tbe benefit of creditors, among whom were tbe complainants. There are, to our mind, many reasons why this can not be done. As we have seen, every right and interest of tbe assignors in this land passed absolutely to tbe assignee, and was by him passed into tbe purchaser from whom this redemption is sought. Tbe title of tbe assignor was not incumbered with any equity or right of redemption whatever. This title passed through *494 the assignee into the purchaser, and manifestly he holds unimpaired the fee-simple absolute title to the property as it existed in the assignor. No act on the part of the grantor, subsequent to the assignment, could in any manner affect the estate of the assignee, or his grantee, in the property. No right, subsequently derived from him, could be set up against such estate. “Eor the purpose of sale in execution of the trust, the grantor of the trust, and those holding-derivative titles under him, are entirely disregarded”, and their only'interest in the premises relates to that part of the property which is not needed in the liquidation of his indebtedness. A subsequent judgment against the assignors, on this principle, would not constitute a lien on the land, and if on a debt existing at the time of assignment, could 'not, in the nature of things, attach to the trust to result to the assignors, since it would necessarily be paid off before there could be any property to revert to them. To decree the redemption prayed in this case, would be to charge the land, in the hands of the grantee of all right and title, legal and equitable,’of the assignors, with an interest or right derived from them after their estate had entirely determined. — Briggs v. Davis, 21 N. Y. 576; Martin v. Hausman, 14 Fed. Rep. 160; Sanborn v. Norton, 59 Tex. 308.

The purpose of the redemption statutes of Alabama, as expressed in the caption of the original act, is “To prevent the sacrifice of real estate”, and the rights given by them are held to be for the benefit of the debtor. — Acts 1841-42, p. 8; Posey v. Pressly, 60 Ala. 250. This legislation proceeds on the theory, that property, which, either at law or in equity, belongs to the debtor, will, when subjected to forced sales, be sacrificed, and that a certain period after such sale should be allowed to him, and to his creditors, for his benefit, to secure to him its fair value. It is not apparent how this purpose of the statute, and these reasons which are the foundation of the right it gives, can have any force or application with respect to property in which the debtor, at the time of the sale, has no legal or equitable interest. There is, we apprehend, no distinction, which in principle can be drawn, between a conveyance to one for the benefit of many, and a conveyance directly to the beneficiaries, so far as the rights of the grantors are concerned. Certainly, no equity or right of redemption would have remained in the assignors here, had the fee-simple absolute title in this land been passed directly to their creditors, and *495 the property had by them been sold to the appellee; and like considerations, it seems to us, deny the existence of such rights against the assignee or his grantee.

These considerations lead us to the conclusion, that the right of redemption given by the Code (§§ 1879-1891) does not attach to lands sold under an unconditional conveyance of the fee in trust for the payment of debts.

The decree of the chancellor, sustaining demurrers to the bill, is affirmed.