Cowling v. Britt

• Decision Date: 13 July 1914
• Docket Number: 116
• Parties: COWLING v. BRITT
• Court: Arkansas Supreme Court

169 S.W. 783

114 Ark. 175

COWLING v. BRITT

No. 116

Supreme Court of Arkansas

July 13, 1914

Appeal from Columbia Chancery Court; James M. Barker, Chancellor reversed in part, affirmed in part.

STATEMENT BY THE COURT.

J. T Cowling instituted an action in ejectment in the circuit court against W. W. Britt, Cleveland Britt and E. N. Payne to recover possession of a certain tract of land in Columbia County, Arkansas.

W. W Britt and Cleveland Britt filed an answer in which they denied that W. W. Britt was in possession of the tract of land in controversy, and said that Cleveland Britt was in possession of the same as a tenant of the defendant, E. N Payne. They denied that either of them claimed any right or title to the land, and also denied that the plaintiff is entitled to possession of the same.

E. N Payne filed a separate answer in which he denied that he was in the unlawful possession of the tract of land in controversy, but stated that he was in possession of the same as the rightful owner thereof.

On motion, the case was transferred to equity and was heard and determined there. The facts are as follows:

Both parties claim from a common source of title. R. J. Stanley recovered judgment in the Supreme Court against W. W. Britt in the sum of $ 613, with interest thereon from January 21, 1908, until paid, and also for the sum of $ 153.30, as his costs in that suit expended. On the 10th day of August, 1909, Stanley ordered an execution to be issued upon said judgment by the clerk of the Supreme Court. The execution was directed to the sheriff of Columbia County and came into his hands on the 14th day of August, 1909. The sheriff levied the execution on the lands in controversy, and on the 22d day of September, 1909, duly advertised them for sale on the 15th day of October, 1909. On the latter day the land was sold by the sheriff to J. T. Cowling for the sum of $ 760.30, he being the highest and best bidder therefor.

After twelve months had elapsed, viz., on the 13th day of March, 1911, the sheriff executed to J. T. Cowling a sheriff's deed for said land, in which the above facts were recited.

On the part of the defendant Payne, it was shown that on the 12th day of April, 1909, W. W. Britt and his wife executed a deed of trust to him on said land to secure the sum of $ 500, evidenced by the note of W. W. Britt of that date, due and payable on the 1st day of January, 1910, with 10 per cent interest from date until paid. The deed of trust was duly filed for record on the 13th day of April, 1909.

On the 9th day of September, 1910, W. W. Britt and his wife executed a deed to said land to the defendant Payne. The consideration recited in the deed was $ 800, and consisted of the debt secured by the deed of trust and an additional indebtedness of Britt to Payne.

The chancellor found that the defendant Payne had a lien on the lands in controversy to secure the indebtedness of $ 500, and the accrued interest recited in the deed of trust given by Britt to him on the lands in controversy, and that the plaintiff, Cowling, was the owner of the lands, and was entitled to immediate possession thereof upon the satisfaction of Payne's lien. It was, therefore, decreed by the court that the plaintiff, Cowling, have and recover from the defendants the lands in controversy, and that said plaintiff have a writ of possession directing the defendants to deliver to him possession of the aforesaid lands upon his payment to the defendant Payne the amount of his lien as above stated.

Both the plaintiff and the defendant Payne prayed an appeal to the Supreme Court, which was granted by the chancery court.

Decree reversed.

C. W. McKay, for appellant.

1. The cross-appeal should be dismissed. 86 Ark. 561; Kirby's Dig., §§ 1194-1225; 71 Ark. 318; 86 Id. 530.

2. The court did not err in decreeing the title to the lands to be in appellant. He paid the full price in cash and no motion was made by Britt to set aside the sale or return of the sheriff, as was done in 27 Ark. 20. Appellee received the benefit of the purchase price of the land without objection, and thus validated the sale, even if made after the return day of the execution. 47 Ark. 226; 1 Rawle 174; 2 Pa.St. 479; 53 Id. 348; 38 N.Y. 266; 21 Iowa 488; Freeman on Ex., §§ 340, 286; 31 Ark. 260; 41 Id. 372; 106 Id. 344.

3. Payne never obtained his deed in satisfaction of any lien. No debt existed. 106 Ark. 344. Britt had neither a legal nor equitable title when the deed was made to Payne. The deed would not amount to a foreclosure of the deed of trust nor a satisfaction of it. 31 Ark. 429.

4. Appellant had the legal right to possession under his purchase at sheriff's sale. 98 Ark. 30. It was error to require him to pay the $ 500.

Stevens & Stevens, for appellee.

1. The deed of trust introduced gave Payne a lien superior to Cowling's claim. 49 A. 45; 71 Me. 583; 3 Gray 517.

2. The most plaintiff could claim was the right to redeem. No fraud is shown. 63 Ark. 16. Appellee was in possession under a deed. If the deed were void, he would be a mortgagee in possession. 45 Ark. 376. But the deed was valid. 45 Ark. 376; 32 Ark. 488-9.

3. A sale after the return day of the execution is void. 56 Ark. 45; 23 S.W. 539; 54 Id. 1054; 15 Am. Dec. 519; 55 Id. 729; 27 Ark. 20.

4. After the date of the sheriff's deed, Payne obtained the legal title. This gave him a paramount title. 32 Ark. 488-9; 45 Ark. 376.

5. To redeem, appellant should have been required to pay the mortgage debt. 53 Ark. 71; 57 Id. 536; 84 Id. 527. He should be required to pay the $ 800 and interest. 53 Ark. 71.

6. Title shown in a third party defeats ejectment. 82 Ark. 262.

OPINION

HART, J., (after stating the facts).

The cause was heard and determined before the chancellor at the April term, 1913, of the Columbia Chancery Court. Neither the plaintiff Cowling, nor the defendant Payne, perfected the appeal granted to the Supreme Court by the chancery court. But on the 8th day of April, 1914, the plaintiff, Cowling, obtained an appeal from the clerk of the Supreme Court. Subsequently, the defendant Payne prayed a cross-appeal, which was granted.

When the plaintiff filed his transcript and obtained an appeal from the clerk of the Supreme Court, this brought the whole record before the court and the defendant, under our statute, had a right to pray and obtain a cross-appeal at any time before the cause was submitted to us for decision. Beidler v. Beidler, 71 Ark. 318, 74 S.W. 13; Howell v. Jackson, 86 Ark. 530, 111 S.W. 999.

It will be noted from the statement of facts, that the deed of trust from W. W. Britt and wife on the lands in controversy to secure the defendant E. N. Payne for an indebtedness of $ 500 and the accrued interest, owed him by Britt, was executed on the 12th day of April, 1909, and that the execution under which the plaintiff purchased was delivered to the sheriff of Columbia County on the 14th day of August, 1909. Subsequently, on the 9th day of September, 1910, Britt and wife conveyed the land to Payne in satisfaction of his indebtedness secured by the deed of trust, and for other indebtedness owed by Britt at that time to Payne.

It is conceded by counsel for plaintiff that the deed of trust gave Payne a prior lien on the land in controversy to the lien of the execution under which plaintiff purchased, but it is the contention of counsel for plaintiff that there was a merger when Britt conveyed the lands to Payne in September, 1910, and that this made the execution a prior lien on the land.

It will be remembered that the case was transferred to equity and tried there. "Where a mortgagee takes a conveyance of the land from the mortgagor or from a grantee of the mortgagor, if the transaction is fair, the presumption of an intention to keep the security alive is very strong. It is generally for the interests of the party in this position that the mortgage should not merge, but should be preserved to retain a priority over other encumbrances. As the mortgagee acquiring the land is not the debtor party bound to pay off either the mortgage or the other encumbrances on the land, there is nothing to prevent equity from carrying out his presumed intent, by decreeing against a merger." Pomeroy's Equity Jurisprudence (3 ed.), vol. 2, § 793.

In 27 Cyc., page 1381, the doctrine is stated as follows: "Where a mortgagee receives a conveyance of the equity of redemption, his estate under the mortgage will not merge, but will be kept alive to enable him to defend under it against all liens of third persons, whether by mortgage, judgment, or otherwise, attaching between the execution of the mortgage and the giving of the deed, if his intention to that effect is shown, or if there is nothing to rebut the presumption that his intention corresponded with his interest."

Many cases are cited in support of the rule, and among them is the case of Cohn v. Hoffman, 45 Ark. 376. In that case the court held: "The purchaser of mortgaged land at a sale under execution issued upon a judgment rendered against the mortgagor since the recording of the mortgage, acquires only the...