Lewis v. Simpson

• Decision Date: 04 May 1936
• Docket Number: 32217
• Citation: 176 Miss. 123,167 So. 780
• Court: Mississippi Supreme Court
• Parties: LEWIS v. SIMPSON et ux

167 So. 780

176 Miss. 123

LEWIS v. SIMPSON et ux

No. 32217

Supreme Court of Mississippi

May 4, 1936

Division B

Suggestion Of Error Overruled May 18, 1936.

APPEAL from circuit court of Hinds county HON. J. P. ALEXANDER Judge.

Action by Mrs. Eva Hart Lewis against E. H Simpson and another. From the judgment, the plaintiff appeals. Reversed and rendered.

Reversed, and judgment here for appellant.

Barron C. Ricketts and M. A. Lewis, Jr., both of Jackson, for appellant.

The only question in issue upon this appeal is whether or not Chapter 251, Mississippi Laws of 1934, applies to suits upon promissory notes secured by a second deed of trust where the first deed of trust was foreclosed more than a year prior to the filing of such suit; or where, as in this case, suit was not brought within one year after the date of the approval of the act.

An examination of the language of the act itself does not disclose whether or not the Legislature intended it to apply to notes secured by a second mortgage, or deed of trust where the first deed of trust has been foreclosed. It could reasonably be presumed from the language of the act that it was intended to apply only to notes secured by the deed of trust under which sale of the security was actually made.

Certainly, in the absence of any express language in the act itself to the effect, that this period of limitation shah apply to the notes secured by any and all junior deeds of trust when the first deed of trust has been foreclosed, there is created a reasonable doubt as to whether it was actually intended that the act should be applicable to such cases.

There is no ambiguity in the title to this act. Its meaning is clear. Its language indicates positively that this is an act to fix the period of limitation for suits upon notes where the mortgages or deeds of trust securing the very notes upon which suit is brought have been foreclosed.

Section 71, Constitution of Mississippi; 59 C. J. 1005, sec. 599; 25 R. C. L. 1031, sec. 267; 37 A. L. R. 927.

It has long been a well settled rule of law in this state that the intention of the Legislature shall control any construction of an act of that body and that it will be presumed that the Legislature did not intend any manifest injustice to result from the operation or administration of its acts.

Pattison v. Clingan, 47 So. 503; Canal Bank & Trust Co. v. Brewer, 114 So. 127; Gunter v. City of Jackson, 94 So. 844, 130 Miss. 637; Robertson v. Texas Oil Co., 106 So. 449, 141 Miss. 356; Huber v. Freret, 103 So. 3, 138 Miss. 238.

To adopt the construction placed upon this act by the trial court would be to place a junior mortgagee in a worse position than the holder of an unsecured note. The holder of an unsecured note does not run against the bar of the statute of limitations until six years after the maturity of the note. To adopt the construction placed upon this act by the trial court would result in a junior mortgagee being barred of suit upon promissory notes held by him within one year from the date of foreclosure or sale of the property by a senior mortgagee. Such a situation is unjust to a junior mortgagee and clearly outside the intention of the Legislature when this act was passed.

W. H. Cox, of Jackson, for appellees.

It is the appellees' position in this case that Chapter 251, Laws of 1934, applies to the suit of a second mortgagee on one or more of a series of promissory notes secured by a second mortgage, where suit thereon is not brought within one year after the foreclosure of the first mortgage on the same property, or within one year after the passage of this act in this case on April 4, 1934.

The court will notice the language of the act to be very broad and sweeping in its application to all foreclosures. The act provides that in all cases of foreclosure of any deed of trust, whether a first, second or third lien on the property, that such foreclosure of such security for any such lienholder was to set in operation the said period of limitations.

In Nelson Smith v. W. H. Shelton, 1 Miss. Dec. 78, this court held that a foreclosure sale under a prior deed of trust cut off any rights or interest in the trust property under a junior mortgage.

In Weir v. Jones, 84 Miss. 602, it was held that a sale under a senior mortgage vests title in the purchaser to the exclusion of all junior encumbrances. To the same effect see Bainbridge v. Woodburn, 52 Miss. 95.

The vendee of a trustee in a mortgage gets the title to the property as it stood when such mortgage was executed, unaffected by any subsequent encumbrances or liens. Brown v. Bartee, 10 S. & M. 268.

It is therefore apparent that a foreclosure of the first mortgage was for all intents and purposes actually in effect a foreclosure of the second mortgage of the appellant, secured by the notes in suit.

It is the foreclosure which the Legislature has designated as setting in motion the said one year statute of limitations.

Inasmuch as it was the mortgagor whom the Legislature desired to protect in such case, it is not apparent that any protection would have been afforded him at all by such legislation, if the appellant's conception thereof be correct. Appellant contends that the Legislature intended said act to apply only to the indebtedness secured by the mortgage actually foreclosed, and not to a second mortgage who did not actually offer the property for sale under her own deed of trust.

Such an enactment would be most beneficial to the mortgagees holding second and third mortgages on properties foreclosed by the senior mortgagee, but would afford little, if any, consolation to the debt-ridden and discouraged mortgagor whose morale the Legislature proposed by such series of enactments to rejuvenate.

A consideration of this statute in connection with the moratorium act unmistakably and clearly demonstrates the fact that Chapter 251, Laws of 1934, is an inseparable part of a scheme provided by the Legislature for the relief of mortgagors whose property had been taken away from them during a financial panic and under the circumstances and conditions of which the Legislature took note and declared to be unfair and contrary to the announced public policy of this state. It was, therefore, provided within constitutional lines that all of these outstanding deficiency obligations held by mortgagees should be sued on within one year, or thereafter be treated as barred and extinguished.

The Legislature was privileged to enact that even though the appellant may have had six years within which to bring her...