Opinion · Supreme Court of North Carolina
Dem on Demise of Davis v. Evans
Dem on Demise of Davis v. Evans, 27 N.C. 525 (N.C. 1845)
- Type
- Opinion
- Court
- Supreme Court of North Carolina
- Jurisdiction
- North Carolina
- Date
- 1845-06-05
- Topic
- bankruptcy
Ruffin, C. J. The counsel for the plaintiff moved for a great number of instructions in succession, but all presenting different views of the position, that it was fraudulent against Campbell’s creditors in the Bank and Tuton to indulge Campbell so long for the debt,- so as to keep the mortgage on foot, to the hindrance of creditors: all of which we think his Hon- or properly refused, because the bona fides of the debt to the Bank was not contested and the delay of the mortgagee to enforce payment is not fraudulent, so as to make his mortgage void, but the creditor may have his remedy in equity or promptly at law by a sale of the equity of redemption. The counsel also moved the court to instruct the jury, that if the money paid to Tuton by Mary Ann Campbell was furnished by her father, then the transaction was fraudulent and she held the legal title in trust for him and the plaintiff might recover.— But the court refused so to instruct the jury; and very properly refused, inasmuch as that transaction occurred several years after this suit was brought. But upon the principal point in the case, that respecting the right of the defendant to shew, that John Campbell was but a mortgagor, in answer to this action, this court holds a different opinion from that of his Honor.
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DAVISv. EVANS,27 N.C. 525(1845)
DEN ON DEM. OF WILLIAM DAVIS v. ASA EVANS.
Supreme Court of North Carolina
(June Term, 1845.)
2. Whatever relation to the time of the sale a conveyance from the sheriff may have for some purposes, it cannot be used to prove title in an action brought after the deed was made.
3. A purchaser at a sheriff's sale of an equity of redemption may recover in an action of ejectment against the mortgagor who was in possession.
4. The mortgagee who is subsequently permitted to come in and defend the action can make no defense which the original defendant could not make, and is, therefore, like him, estopped from denying the plaintiff's right to recover.
5. The act of 1812, Rev. Stat., ch. 45, sec. 5, makes the equity of redemption, when sold under execution, a legal interest, to the extent, at least, of enforcing it by a recovery from the mortgagor himself.
6. The act of 1812, Rev. Stat., ch. 45, sec. 5, includes not only express mortgages, but also those that were intended to be securities in the nature of mortgages, and so held to be by construction of a court of equity.
On the trial the plaintiff showed, as his title, a judgment obtained by one Johnson and one Davis in September, 1833, against John Campbell for $780.26, and afieri faciasthereon and a sale of the premises to the lessor of the plaintiff by the sheriff in January, 1834, and a return on the execution of the sale of the legal and (526) equitable interest of John Campbell in the land. The plaintiff then showed two sheriff's deeds to the lessor of the plaintiff: The one, dated 26 May, 1834, which recites that under the execution the sheriff seized and took into his hands "a certain tract of land, thatPage 371is to say, the equitable interest of the said John Campbell in the same," etc., and then conveys the land in dispute: the other, dated 26 March, 1837, is in all respects like the former except that it does not refer to any equitable interest of Campbell in the premises, but purports merely to be a conveyance of the legal estate.
Counsel for the defendant then stated the defense to be that, before the judgment was rendered under which the lessor of the plaintiff purchased, the premises had beenbona fidesold under another judgment andfierifaciasand purchased by and conveyed to the State Bank of North Carolina, who held the same subject to an agreement for the redemption of the premises by the said John Campbell upon the payment of the sum of $144 and interest thereon and certain costs; that under said agreement, the said Campbell was permitted by the bank to remain in possession; that he had no other interest in the premises; that a part of the said sum of $144, namely, the sum of $88, remained due to the bank at the time of the sale to the lessor of the plaintiff, and still remained due and owing from the said John Campbell to the bank or its assignees. Counsel for the plaintiff insisted that he had shown conclusively a title against John Campbell and that it was not competent for him or the present defendant to deny it; and therefore he objected to any evidence in support of the defense, as stated. But the court overruled the objection and allowed the defendant to go into the evidence.
Upon the evidence the case was thus: In 1821 the State Bank got a judgment against John Campbell, and the premises were sold upon an execution thereon and purchased by the bank and a sheriff's deed executed. The bank and Campbell then agreed that Campbell might redeem by paying the debt and costs, and that in the meantime he might retain the possession and use of the land. Campbell sold (527) several parcels of the land between 1821 and 1833 and the bank conveyed to the purchasers. In 1833 the debt had been reduced by Campbell to $88 — which was stated on the books of the bank to be "secured by mortgage of land"; and at that time one Tuton, at the request of Campbell, his wife and his said daughter, paid that sum to the bank upon an agreement that, when it should be repaid, the premises should be conveyed to the daughter, as they stated that Johnson Davis had their judgment against John Campbell, and therefore it would not do to have the conveyance made to him, John Campbell, as the land would be sold immediately for his debt. At that time Mary Ann Campbell was about sixteen years of age, lived with her father and had no property at all. In 1836 Mary Ann Campbell repaid to Tuton his debt and interest, and in 1837 a deed was made to her in fee. John Campbell continued to live on the premises and his daughter with him, until herPage 372marriage in 1841, when the father left the possession to her and her husband.
The presiding judge thereupon instructed the jury that there was nothing to be left to them, but that the questions in the case were all matters of law which it was his duty to decide; and that, although it was a general rule that a debtor whose land has been sold cannot, in an action of ejectment by the purchaser, dispute his title or show the title to be in a third person, yet in this case the debtor, John Campbell, had but an equitable right of redemption, which might lawfully be sold, and which was purchased by the lessor of the plaintiff; but that would not enable the plaintiff to maintain this action, which must be founded on a legal and not an equitable title. And his Honor proceeded to state to the jury, in an argument of considerable length, his reasons for thus laying down the law to them, and allowing the defendant to show that John Campbell had not the legal title at the time of the purchase by the lessor of the plaintiff; which reasons it is not material to state in order to a proper understanding of the points decided.
(528) In submission to the opinion of the court the plaintiff suffered a nonsuit, and appealed to the Supreme Court.
(531)Badger and Warren Winslow for defendant.
But upon the principal point in the case, that respecting the right of the defendant to show that John Campbell was but a mortgagor in answer to this action, this Court holds a different opinion from that of his Honor. We understand his Honor as not admitting the present defendantPage 373to any defense the original defendant could not make, according toGorhamv. Brenon,13 N.C. 174, andBalfour v. Davis,20 N.C. 443. But he ruled that Campbell himself might insist on that matter, and therefore the defendant might. Now, we think the point was not open to Campbell, and for that reason that the evidence was improperly received.
It is proper to make the preliminary admission that the second sheriff's deed to the lessor of the plaintiff can have no operation in this action. For, although it has been held that the provisions of the act of 1812, respecting the form of a sheriff's deed for an equity of redemption, are but directory, and although we have no (532) doubt that a sheriff may make a second deed if the first be not effectual to pass all he sold, this deed was not evidence in this suit, as it was made a year after the suit was brought. Whatever relation to the time of the sale a conveyance from the sheriff may have for some purposes, it cannot be carried to the unreasonable extreme of proving the title in an action that was brought before the deed was made.
The question, then, is whether the purchaser at sheriff's sale of an equity of redemption may not recover in an action of ejectment against the debtor himself? We think he may. It seems to us to stand on the same reason with the other cases in which is held that the debtor in execution cannot set up a want of title, legal or equitable, in himself. That has long been settled as the law in numerous cases.Thompson v. Hodges,7 N.C. 546;Gorham v. Brenon,13 N.C. 174;Duncan v. Duncan,25 N.C. 317. The grounds on which the doctrine rests are that, as he has had the benefit of the sale in the payment of his debts, he ought not to say that he had nothing in the premises, and that he cannot with truth say so, as he had, at least, the possession and enjoyment of the land, and those he ought to give up, and to recover them is the object of the ejectment. Now, it would seem that precisely the same principle applies equally to a case in which the debtor has, in fact, no title — nothing but the possession — and to one in which he has nothing more at law, but has also an equitable interest. Why should his real ownership of the land in equity defeat a recovery from him at law, when without such equitable ownership the recovery could not be resisted? There might be some reason in the defense, perhaps, if the debtor's equitable interest was not subject to be sold under execution. But when the act of 1812 authorized the sale of an equity of redemption under afieri facias, it added tenfold to the reason for holding that the mortgagor and debtor should immediately surrender the possession to the purchaser, and that the courts of law should uphold the sale, made under their process, in an action against the debtor (533) himself. Why should the mortgagor be allowed to resist thePage 374recovery of the purchaser and retain the possession? Although, while he was a mortgagor he was not bound to pay rent or account for the profits to the mortgagee (who is only entitled to his interest), yet undoubtedly, as between the purchaser and the debtor in execution, the latter is bound to pay the profits to the former from the time of the sale. Then, why allow him to continue a possession, which must be wrongful, and cannot be otherwise? If it be said that the plaintiff cannot recover because upon his own deed he appears to have only an equitable title, the answer is that it is idle to make a distinction which may be so readily rendered nugatory by the purchaser taking a deed containing no admission of the mortgage. If there really be a mortgage nothing more in fact passes than the equity of redemption, whatever may be the form of the deed, and, therefore, the form ought not to change the respective rights of the parties. We consider that the act of 1812 makes the equity of redemption, when sold under execution a legal interest to the extent at least of enforcing it by the recovery of possession from the mortgagor himself. It may be admitted that, if the mortgagor were to assign his equity of redemption, the assignee could not recover from the assignor in ejectment because at law the equity of redemption is not known as an interest which may be the subject of a conveyance, but the assignment operates only in equity. But suppose a statute to be passed expressly recognizing that interest as the subject of conveyance by the mortgagor and authorizing him to sell and convey it by deed of bargain and sale, could there be any doubt that, as against him, the assignee would have the right, and that it would be upheld in a court of law? Now, that is the substance and effect of the act of 1812, in its operation upon a sale of an equity of redemption by the sheriff, and therefore we perceive no real difference between the application to this and all other cases, alike, of the rule which concludes the debtor in execution from disputing the (534) purchaser's title, and his right to recover the possession from him. It is true the purchaser is obliged to resort to a court of equity to obtain redemption from the mortgagee, as, against the mortgagee, he is but the assignee of the mortgagor. But if he be obliged also to go into equity for redress against the mortgagor and to gain the possession from him, the act of 1812, instead of facilitating the redress of the creditors of mortgagors, will embarrass them, for it were better not to allow the sale at law at all, and require the creditor to apply to equity in the first instance. But it is no concern of the mortgagor how the purchaser and the mortgagee arrange their business. His interest has been terminated by the sale of it under execution, and he is bound in honesty to yield the possession to the purchaser. In New York it is a settled rule, that the mortgagor cannot set up the mortgage againstPage 375a purchaser under execution against him; andJackson v. Davis, 18 Johns, 7, resembles the present exactly as the mortgagee was there also admitted to defend the action which was originally brought against the mortgagor, then in possession.
We have assumed all along that John Campbell had an equity of redemption, subject to be sold, because it was so considered in the Superior Court, and because we think that such was the truth of the case. If he had not that equity, but was a trespasser, the defense on this point fails altogether. But, as we held inThorpe v. Ricks,21 N.C. 613, the act of 1812 includes not only express mortgages, but also those that were intended to be securities in the nature of mortgages, and are so held to be by construction of a court of equity. The judgment against the plaintiff was, therefore, erroneous.
PER CURIAM. New trial.Cited: Wise v. Wheeler,28 N.C. 199;Lee v. Flannagan,29 N.C. 477;Presnell v. Ramsour,30 N.C. 507;Hunsucker v. Tipton,35 N.C. 483;Anderson v. Holloman,46 N.C. 170;Richardson v. Thornton,52 N.C. 460;Young v. Griffith,84 N.C. 721;Black v. Justice,86 N.C. 512;Reevesv. Haynes,88 N.C. 311;Parrott v. Hardesty,169 N.C. 669.
(535)