Norton v. Lewis
| Decision Date | 29 August 1871 |
| Citation | 3 S.C. 25 |
| Parties | NORTON v. LEWIS. |
| Court | South Carolina Supreme Court |
The mere fact that a purchaser from the mortgagor of part of the mortgaged lands, has had actual possession, under his purchase, for a period of ten years after condition broken is no bar, so far as the purchaser is concerned, to a bill against the mortgagor and purchaser for foreclosure and sale of the mortgaged premises. The doctrine of Wright vs. Eaves , 5 Rich. Eq., 81, re-affirmed.
It is no objection to a decree for foreclosure against the mortgagor and purchasers from him that several parcels purchased by different purchasers, at different times, are directed to be sold in the inverse order of the dates of the purchases.
BEFORE GREEN, J., AT SUMTER, APRIL TERM, 1871.
On May 20, 1854, William Lewis gave to Jabez Norton his bond bearing that date, conditioned for the payment of $8,280 with interest, in five installments, the last of which fell due on January 1, 1859; and further to secure the payment of the said sum of money and interest, according to the terms of said bond, he gave to Norton his mortgage, bearing the same date, of a tract of 414 acres of land in the District (now County) of Sumter. The mortgage was duly recorded.
On May 26, 1855, a judgment by confession was entered on the bond by Norton against Lewis.
Lewis at various times, made conveyances of parts of the mortgaged premises, as follows: He conveyed to J. R. Kendrick, on October 24, 1854, a lot of 12 1/8 acres; to H. B. Holliday, on April 14, 1855, a lot of 3 acres; to Sarah Terry, on May 2, 1855, a lot of 6 acres; and to J. L. Bartlett, on February 28, 1856, 189 acres.
On October ___, 1856, J. D. Blanding became the purchaser, at Sheriff's sale, of Kendrick's lot. On October 20, 1857, he conveyed about 5 acres thereof to Elijah Pringle. Two other small parcels thereof he conveyed to different purchasers, and, a part remaining unsold, he made an agreement, in October, 1857, with J. P. Ard, to sell the same to him. Ard entered into possession, and continued in possession until the bill hereinafter mentioned was filed. Blanding was adjudged a bankrupt after the bill was filed, and D. J. Winn was appointed his assignee. Pringle conveyed away part of the lot he had purchased, but of the rest he retained the possession.
On August 1, 1855, H. B. Holliday conveyed his lot to W. M. Wilder, in trust for Susan Newman for life, and after her death for her children. She died living several children, one of whom, Hanson Newman, is a minor.
On January 6, 1861, Sarah Terry conveyed the lot she had purchased from Lewis to Esther Dinkins.
Bartlett made conveyances to different persons of portions, amounting in the whole to about 26 acres, of the 189 acres he had purchased. Among the persons to whom he conveyed was Thomas A. Pack, to whom, on July 26, 1860, he conveyed about 14 acres, in trust for Minerva Evans for life, with limitations over. The balance he retained.
Lewis made several payments on the bond, the latest of which was a payment of $500, on February 26, 1859, leaving a large balance due and unpaid.
On April 23, 1868, Norton filed this bill for foreclosure and sale of the mortgaged premises against Lewis, and some of the persons holding under him. The bill was afterwards amended, and persons holding portions of the mortgaged premises, whether immediately or mediately under Lewis, were made parties defendant.
The children of Susan Newman were absent from the State and were made parties by publication. For Hanson Newman, the minor, a guardian ad litem was appointed and a formal answer put in.
Lewis died, before the hearing, insolvent, and without any personal estate, and having no personal representative, the bill was revived against his heirs at law alone.
Bartlett and Pringle had been in the actual possession of the parcels purchased and retained by them for a period of ten years before the bill was filed, and Ard had also been in possession of the parcel he had bargained for. These defendants and Pack contested the plaintiffs' right of foreclosure and sale as against them, on the ground that the bill was barred by the statute of limitations.
So much of the decree of the Circuit Court as relates to the points on which the case was taken to this Court is as follows:
The protection of the statute of limitations is claimed by some of the defendants, Elijah Pringle, Julius L. Bartlett, Thomas A. Pack, trustee, and James P. Ard. And besides these, one of those entitled in remainder to the parcel of the mortgaged premises conveyed by William Lewis to H. B. Holliday, and by him to W. M. Wilder, in trust for Susannah Newman during her life, and at her death to her children, (the said Susannah Newman being now dead) is a minor, and the Court will protect his rights, whatever they may be.
Before determining which, if any, of the defendants can be protected by the statute, I will consider the question whether a mortgagee can be barred by the possession during the statutory period, after condition broken, of a purchaser from the mortgagor of the mortgaged premises, or a part thereof, the mortgage having been duly recorded.
In the Courts of this State there have been three decisions upon this question, (Nixon vs. Bynum , 1 McC. 148; Thayer vs. Cramer , 1 McC. Ch., 395; Smith and Cuttino vs. Osborne , 1 Hill Ch., 340,) and the reasons given by the Court for disallowing the plea of the statute were, that by the Act of 1791 the legal estate remains in the mortgagor, who must therefore be held to be a trustee for the mortgagee; and as the trustee cannot plead the statute against his cestui que trust , neither can a purchaser from him with notice of the mortgage, who must be held to be a trustee also.
The expressions of opinion in Wright vs. Eaves , 5 Rich. Eq., 81, were simply founded on the earlier cases, and must stand or fall with them.
In all these cases there existed one of these conditions, which, according to the decisions in Durand vs. Isaacs , 4 McC. 54; Stoney vs. Schultz , 1 Hill Ch., 497, and Mitchell vs. Bogan , 11 Rich. Law, 686, rendered the Act of 1791, by its own provisions, inapplicable. The mortgagor was out of possession. But this fact with its consequences seems to have escaped the notice of the Court in the previous cases.
In the case of Smith and Cuttino vs. Osborne , the Court declares that under the Act of 1791, " as mortgagees, the legal estate in the lands never has been, and is not now, in the complainants or their intestates," and that " neither the plaintiffs or their intestates could have at any time heretofore made claim to these lands by an action at law." " How, then," it asks, " can it be said that the statute of limitations operates as a bar?" From this decision Harper, J., dissented.
In Stoney vs. Schultz , the same Judge (Johnson) uses the strongest terms to show that when a mortgagor is out of possession the Act of 1791 is inoperative, and the rights of the mortgagee must be determined according to the rules of the Common Law, by which (p. 491) " there is no question that the mortgagee was entitled to the possession of the land after condition broken, or might have maintained a possessory action against the mortgagor, or any one else in possession."
The inconsistency between these two decisions which were heard by the same Judge, at an interval between them of only seven months, is inexplicable.
Until the decision in Stoney vs. Schultz , the Equity Court overlooked the proviso to the Act of 1791, and adjudicating those cases as if there had been no such proviso, refused to allow the plea of the statute of limitations.
In Stoney vs. Schultz , the main fact was the same as in the previous cases; the mortgagor had sold and the purchasers were in possession of various parcels of the mortgaged premises, and it was determined that the mortgagor was out of possession, and that the proviso rendered the Act of 1791 inapplicable.
Thayer vs. Cramer , and the kindred cases, were based solely on the Act of 1791, as if that Act had no proviso. No other reasons for the inapplicability of the statute of limitations are given than such as are deduced from that Act severed from the proviso.
But having, in their subsequent decisions, given construction to that proviso, and having held that the mortgagor being out of possession by a sale of the mortgaged premises, or of part thereof, to a purchaser who has entered, the condition existed which by the proviso rendered the Act of 1791 inapplicable, and therefore that the legal estate vests in the mortgagee, who can claim the rents and the profits ( Stoney vs. Schultz , 1 Hill Ch., 500,) or bring his action of trespass to try title, ( Mitchell vs. Bogan , 11 Rich. 686,) against a purchaser from the mortgagor who has entered under his purchase, (which doctrine has been recognized by the present Supreme Court in the case of Williams vs. Beard .)
It must be held that the case of Nixon vs. Bynum, Thayer vs. Cramer, Smith and Cuttino vs. Osborne , and Wright vs. Eaves , have ceased to be authority upon this point, because the premises and reasoning upon which they were based are untenable.
A purchaser from a mortgagor, after condition broken, who has entered under his purchase, is now held to be a trespasser. No fiduciary relations exist between them, and the mortgagee the legal owner, can at once by his action at law evict such purchaser and recover the possession. He has a plain legal right entirely adequate for his protection. Having gained possession of the premises he can exercise his discretion as to his subsequent course, whether he shall hold the land until the rents and profits satisfy his debt, or whether he shall apply to have the purchaser's...
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