Fleming v. Borden

• Citation: 37 S.E. 219,127 N.C. 214
• Parties: FLEMING et al. v. BORDEN et al.
• Decision Date: 27 November 1900
• Court: United States State Supreme Court of North Carolina

37 S.E. 219

127 N.C. 214

FLEMING et al. v. BORDEN et al.

Supreme Court of North Carolina

November 27, 1900

On petition for rehearing. Dismissed.

For former opinion, see 36 S.E. 17.

The husband's procuring, without the wife's consent, an extension of time for the payment of his debt secured by his wife's mortgage of her property, discharges the mortgage and destroys the mortgagee's power of sale, and a purchaser at a sale by the mortgagee acquires no title either legal or equitable.

Where a wife executes a mortgage on her property to secure the husband's antecedent debt, and the husband procures an extension of time for payment without the wife's consent such extension discharges the mortgage, the wife occupying the position of surety, though the agreement for it was on a usurious consideration.

A. O Gaylord and Shepherd & Shepherd, for petitioners.

W. B Rodman, opposed.

DOUGLAS J.

This case is now before us on a petition to rehear, having been decided in 126 N.C. 450, 36 S.E. 17. The facts are sufficiently set forth in the former opinion, to which, after careful consideration we feel it our duty to adhere. The decisive question was whether the contract for the extension of payment operated as a discharge of the debt as far as Mrs. Brown was concerned. We think it did. In Hinton v. Greenleaf, 113 N.C. 6, 18 S.E. 56, this court says: "It is settled by abundant authority that, 'where a husband mortgages his property for his debt, and in the same mortgage the wife conveys her own separate property as security for the same debt, her property so conveyed will be treated in all respects as a surety, and will be discharged by anything that would discharge a surety or guarantor who was personally liable.' *** These contracts of forbearance were made without the knowledge or assent of Mrs. Greenleaf, and, in our opinion, resulted in a discharge of her property from all liability under the said deed of trust. This property occupied, as we have seen, the position of a surety, and it is common learning that 'time or forbearance given by the creditor to the principal debtor by a contract which binds him in law and would bar his action against the debtor will discharge the surety."' This case cites a large number of authorities, and is cited with approval in Weil v. Thomas, 114 N.C. 197, 201, 19 S.E. 103; Smith v. Association, 119 N.C. 257, 26 S.E. 40; Hedrick v. Byerly, 119 N.C. 420, 25 S.E. 1020; Shew v. Call, 119 N.C. 450, 455, 26 S.E. 33; Meares v. Butler, 123 N.C. 206, 208, 31 S.E. 477. It is needless here to recapitulate all the authorities cited in the above-named cases. It is contended in behalf of the defendant that, as the contract of forbearance was made upon a usurious consideration after the passage of the act of 1876-77, brought forward as section 3836 of the Code, the said contract was absolutely void and of no effect either as to binding the creditor or releasing the surety. We cannot adopt this view of the matter in the face of the repeated decisions of this court to the contrary. In Forbes v. Shepard, 98 N.C. 111, 3 S.E. 817, this court says on page 115, 98 N. C., page 819, 3 S. E.: "The exoneration of the surety is the same when the contract of forbearance is usurious in terms, and especially when the consideration has been paid;" citing Scott v. Harris, 76 N.C. 205; Bank v. Lineberger, 83 N.C. 454, modified in Carter v. Duncan, 84 N.C. 679; Brandt, Sur. § 304; Baylies, Sur. 251. In Hollingsworth v. Tomlinson, 108 N.C. 245, 12 S.E. 989, this court says: "So it is now well settled that 'the exoneration of the surety is the same when the contract of forbearance is usurious in terms, and especially when the consideration has been paid."' As far as the surety is concerned, his exoneration by the creditor's contract of forbearance with the principal has the same effect as if the debt had been paid; that is, the debt is canceled as to him. As the wife's land under mortgage for her husband's debt stands simply in the relation of surety, as to it the debt is extinguished. There is a clear distinction between the extinguishment of the debt and the bar to its collection raised by the statute of limitations. We are, therefore, brought to the question whether the extinguishment of the debt destroys the mortgagee's power of sale. We think it does. The mortgage is not the debt itself, but merely incidental thereto. It is intended merely to secure the payment of the debt, and when the debt is paid its object is fulfilled. It is true the legal title passes to the mortgagee, but only for the purposes of the mortgage as expressed upon its face. If the debt is paid before maturity, the title revests by the very terms of the mortgage, which thereupon becomes null and void. After default the debtor still retains his equity of redemption, and upon payment of the debt before foreclosure is entitled to a reconveyance of the legal title. If the mortgagee still retains the title, he holds it as a naked trustee for the mortgagor. Even while the mortgage is in full force and effect, the mortgagee with power of sale holds the land as trustee for the mortgagor as well as for himself. Bobbitt v. Blackwell, 120 N.C. 253, 26 S.E. 817...