Box v. Early

• Decision Date: 14 February 1938
• Docket Number: 33036
• Citation: 181 Miss. 19,178 So. 793
• Court: Mississippi Supreme Court
• Parties: Box v. Early.

178 So. 793

181 Miss. 19

Box v. Early.

No. 33036

Supreme Court of Mississippi

February 14, 1938

(Division A.)

1. BILLS AND NOTES.

A note payable to a certain individual or bearer was negotiable by delivery.

2 SUBROGATION.

Where vendor deposited purchase-money note as collateral security to indebtedness owing by vendor to bank, bank agreed to credit vendor's indebtedness to bank with balance due on note, with understanding that new note should be executed by vendee and wife on which vendor would become indorser, vendee and wife signed new note, but only vendee and not wife signed trust deed, evidence warranted finding that it was the intention of all parties that bank should retain lien on land when original note and trust deed were surrendered for cancellation.

3 HOMESTEAD.

As against vendor or his equitable assignee, homestead rights could not exist in vendees as long as purchase price remained unpaid by them.

4 SUBROGATION.

The statute regarding the right of assignee of chose in action to sue in his own name is not applicable to suits in equity to enforce right of subrogation (Code 1930, section 505).

5 SUBROGATION.

The statute relied on as requiring a vendor's lien for purchase money of land to be assigned in writing to enable the transferee to enforce the lien is not applicable to suits in equity to enforce right of subrogation (Code 1930, section 2853).

6 SUBROGATION.

Where vendor deposited purchase-money note as collateral security to indebtedness to bank, bank agreed to credit vendor's indebtedness to bank with balance due on note with understanding that new note should be executed by vendee and wife on which vendor should become indorser, vendee and wife signed new note, but only vendee and not wife signed trust deed, the bank as holder of the original note was entitled to enforce right of an assignee including lien securing note, as against contention that vendor's lien for purchase price of land was required to be assigned in writing to enable the transferee to enforce the lien (Code 1930, sections 505, 2853).

7. MORTGAGES.

The presumption that a lien secured by trust deed is extinguished by cancellation thereof on record would not prevent equity court from reviving and enforcing a lien where there was no intervening equity, when necessary to do so in order that right and justice might prevail.

8. MORTGAGES.

The presumption of payment that arises from possession by makers of note and trust deed given to evidence a purchase money or other lien would not prevent equity court from reviving and enforcing the lien where there were no intervening equities, when necessary to do so in order that right and justice might prevail.

9. SUBROGATION.

When vendor deposited purchase-money note as collateral security to vendor's indebtedness to bank, bank agreed to credit vendor's indebtedness with balance due on purchase-money note with understanding that new note should be given by vendee and wife indorsed by vendor, vendee and wife signed new note, but only vendee and not wife signed trust deed securing new note, and all parties intended that bank should retain lien on land when original note and trust deed were surrendered for cancellation, bank was entitled to subrogation to lien rights originally held by vendor.

10. SUBROGATION.

The doctrine of subrogation is one of equity, its object being the prevention of injustice.

11. SUBROGATION.

The doctrine of subrogation rests on the principle of natural equity, and its basis is the doing of complete and essential justice between the parties without regard to form.

12. SUBROGATION.

Where evidence entitled plaintiff to relief of subrogation, relief could be granted under prayer of bill for general relief.

HON. JAMES A. FINLEY, Chancellor.

Suit by Thomas A. Earley, receiver of the First National Bank of Corinth, against V. M. Box and others, on a note and for sale of land to satisfy indebtedness under a vendor's lien therefor, wherein defendants filed a cross-bill. From an adverse decree, defendants appeal. Affirmed.

Ely B. Mitchell, of Corinth, for appellants.

Payment of the money secured by any mortgage or deed of trust shall extinguish it, and revest the title in the mortgagor as effectually as if reconveyed.

Section 2152, Code of 1930.

Payment extinguishes mortgages or deeds of trust under Code of 1906, section 2782 so providing.

Munn v. Potter, 111 Miss. 180, 71 So. 315.

Where, as in most jurisdictions, a mortgage is regarded merely as a lien or security for a debt, the general principle is well settled that the payment of the debt ipso facto et eo instanti extinguishes a mortgage, without any reconveyance.

19 R. C. L. 439, sec. 224.

When a debt is paid, the right of the mortgagee is extinguished, and the land becomes free by operation of law. No conveyance from the mortgagee is necessary to perfect the mortgagor's estate. There is nothing in the mortgage to be reconveyed to the mortgagor. Whatever is done by way of discharge or release is done to furnish evidence of what has already been fully accomplished by the payment. Certainly if the debt is the principal, and the mortgage the incident, there can be no good reason why a discharge of the debt should not be held to be a discharge of the mortgage, and to put an end to the interest of the mortgagee in the land.

19 R. C. L. 441, sec. 225.

Where a mortgage is given to secure the payment of a specific debt, payment of such debt as a general rule, in the absence of a contrary intent, extinguishes or discharges the mortgage and the lien thereof, as, for example, where the debt is paid by the mortgagor, by a purchaser of the mortgaged premises, or by a third person who advances the money to pay off the mortgage without meaning to hold it as security for his reimbursement.

41 C. J., page 785, sec. 891, and page 786, secs. 892, 893.

The fact that the mortgage securities are in the possession of the mortgagor raises a presumption that the debt has been paid.

41 C. J., page 794, sec. 916.

Where the debtor and creditor, or those representing them, agree to a release of a deed of trust executed to secure the indebtedness, the fact that the evidences of the debt are not surrendered affords no reason for the refusal of the trustee to execute the release.

Pierce v. Bryant Coal Co., 121 Ill. 590.

Where a purchaser of part of the property conveyed by a mortgage pays the entire mortgage debt, it discharges the mortgage as to the entire property, saving only his right to enforce contribution.

41 C. J. 786, sec. 892.

Ordinarily the owner of a note, bond, or other evidence of indebtedness retains it until it is paid. Hence when it is found in the possession of the maker a presumption of payment arises, and it is evidence of satisfaction by the debtor himself, because in the usual course of commercial transaction men pay no debts but their own. But this is a presumption of fact, not of law, and may therefore be rebutted.

21 R. C. L. 127, sec. 142.

Where a written obligation providing for the payment of money is in the possession of the obligor or is found among his paper and effects after his death, this fact raises a rebuttable presumption that the indebtedness evidenced thereby has been paid.

48 C. J. 687, sec. 190; Johnson v. Nations, 26 Miss. 147; Witherspoon v. Cam, 1 Walker 407; Lindsay v. Goforth, 22 So. 828.

It is generally held that when an instrument calling for the payment of a sum of money is in the possession of the obligor or is found among his papers after his death, there is a presumption that the debt has been paid or discharged by the obligor, which presumption is one of fact and may be rebutted by other evidence.

Dencer v. Jory, 131 Ore. 653, 70 A. L. R. 855, Anno. 859.

Cancellation by the creditor of the evidence of indebtedness, by destruction, by mutilation, or otherwise, raises a presumption of payment.

The term "satisfied" has a distinctive significance in legal phraseology and imports a release and discharge of the obligation in reference to which it is given, so that a statement which was paid in satisfaction of all claims imports a release and discharge of not only the claim on which it is written, but every other claim which the creditor had against the debtor.

Jersey Island Drainage Co. v. Whitney, 86 P. 809, 149 Cal. 269.

A mortgage may be assigned by a separate written instrument, or by an endorsement on the mortgage; and generally a writing is necessary in order to pass the legal title to the security.

41 C. J. 662, sec. 655.

An assignment of the mortgage must be supported by good and valid consideration in order to be valid as between parties.

41 C. J. 667, sec. 673.

In the majority of jurisdictions the statutes either expressly or by implication authorize the recording of the assignment of a mortgage. Generally such record will serve as notice to all persons whose rights may be affected by the assignment.

41 C. J. 670, sec. 678.

The vendor's implied lien arises out of the contract to pay the purchase money, and so it is essential that there be a sale of realty, which is actual and bona fide, and a debt for the purchase money due the vendor, or his assigns, payable as purchase money, for which, it has been held, the purchaser is or was unconditionally liable as primary debtor.

66 C. J. 1220, sec. 1082.

No lien is created when none is intended, even though the form of the deed reserves a lien. Where there is no agreement for the retention of a lien at the time of the sale and conveyance of the land, a subsequent agreement therefor, made without consideration, is ineffectual to create a lien.

66 C. J. 1221, sec. 1085.

A person cannot acquire a lien on land purchased by another by...