Martin v. Kelly

• Decision Date: 10 May 1882
• Citation: 59 Miss. 652
• Court: Mississippi Supreme Court
• Parties: JACKSON MARTIN et al. v. C. D. KELLY

59 Miss. 652

JACKSON MARTIN et al. v. C. D. KELLY

Supreme Court of Mississippi

May 10, 1882

Appeal from the Chancery Court of Montgomery County, Hon. R. W Williamson, Chancellor.

In 1869, J. D. Butler contracted to buy land from Mrs. Legrand who executed a bond for title, but being unable to pay her all the purchase-money, he induced J. M. Doyle to advance one thousand four hundred dollars, on Jan. 23, 1871, and to take a deed from her, absolute in form. Doyle verbally agreed to convey the land to Butler, whenever the latter should repay the sum he had advanced, with fifteen per cent per annum interest. On Nov. 18, 1871, Doyle conveyed the land by absolute deed to Jackson Martin, who paid him one thousand five hundred dollars, the amount Butler then owed, and it was verbally agreed between Martin and Butler that whenever Butler should repay the amount advanced to pay Doyle, with twelve per cent per annum interest, Martin should convey the land to Butler. On April 12, 1873, Butler procured a deed absolute in form, of six acres of other land, to be made to Martin by James Armstrong, with whom he had months before verbally contracted for the land, at thirty dollars, but as Armstrong refused to make a deed unless Butler would pay him forty-four dollars more, and Butler wanted twenty-six dollars cash, the sum of one hundred dollars was advanced, and it was agreed that Martin should convey this land to Butler provided within twelve months he was repaid this one hundred dollars, with fifteen per cent per annum interest. On March 14, 1873, Butler who was in possession of the lands conveyed by Doyle and Armstrong to Martin, executed a deed of trust on the lands and the crops to be grown by him that year, and certain designated personal property, to secure eight hundred and fifty dollars then due by him to J. C. Kelly & Co., a firm composed of J. C. and C. D. Kelly, and for advances during that year. On Jan. 1, 1874, Butler negotiated a sale of one hundred and sixty acres to J. F. Shirley for twelve hundred and fifty dollars. Of this amount, Shirley paid Martin six hundred dollars cash, and gave him his note for six hundred and fifty dollars and interest, receiving from him a bond conditioned to make title upon payment of the note. Martin gave Butler credit for twelve hundred and fifty dollars. J. F. Shirley went into possession of this land, and Butler remained in possession of the balance. In 1874, 1875 and 1876, Martin advanced money and supplies to Butler, and was paid about eight hundred dollars in cotton raised on the land. The balance due on supply account amounted to five hundred and seventeen dollars and ninety-five cents, exclusive of interest. Butler claims that Martin agreed to apply the full proceeds of all the cotton delivered to the land debt, and Martin, denying this, insists that the land by contract was security for the advances. In 1873, 1874, 1875, and 1876, Martin paid the taxes on the land. On October 9, 1876, J. C. Kelly & Co. filed a bill to foreclose their trust deed, making Butler, only, a party defendant. On March 14, 1877, a decree was rendered in that case in favor of the complainants, under which, on May 7, 1877, three hundred and sixty-six acres of the land were sold. At this sale, C. D. Kelly, the active member of the firm, became the purchaser of the three hundred and sixty-six acres, which was sold in parcels, at the aggregate sum of fifty-four dollars. But it does not appear what he bid for each parcel, though some sold for two dollars. The commissioner executed to him a deed, but the sale was never confirmed. On Jan. 19, 1877, Martin, it appears, considered that, after deducting the credit for the Shirley land, Butler owed him one thousand eight hundred and ninety-two dollars and ninety cents; and Butler induced E. D. Brooks to pay Martin this amount. Martin then, at Butler's request, conveyed all but the Shirley land to Brooks, who was to hold the title as security for repayment of the amount advanced. Butler, then, being still in possession, received from Brooks a bond for title, conditioned to make a conveyance on payment of one thousand eight hundred and ninety-two dollars and ninety cents, with interest. Claiming under his purchase at the foreclosure sale, C. D. Kelly filed this bill on June 23, 1877, against Butler, Martin, Shirley, and Brooks, alleging that he was the legal and equitable owner of the land; that the conveyances from Doyle and Armstrong to Martin were simply mortgages, the equities of redemption being in Butler; that the trust deed to Kelly & Co. conveyed and bound this equitable title, that Shirley and Martin both purchased with notice of the trust deed and subject to the incumbrance; and that Martin had been fully paid the debt for which the land was held by him. A decree pro confesso was taken against Shirley, and all the other defendants answered. While this suit was pending, in 1878, the contract of sale between Shirley and Martin was rescinded. The former gave up the land, surrendered his bond for title, and the latter gave up his note of six hundred and fifty dollars, and paid him in addition four hundred and one dollars and twenty-five cents for improvements he had made on the tract. In this way, Martin came into possession of these one hundred and sixty acres, and, in order to get possession of the remaining land, Brooks paid four hundred and sixty-seven dollars to Butler, who thereupon gave up possession, surrendered his bond for title, and released all claim. Subsequently, Jackson Martin made an affidavit that C. D. Kelly was unable to answer for costs, and the latter, as required, on Oct. 18, 1879, gave D. L. Sweatman as surety. Much evidence was filed, and the case then set down for final hearing. Without a reference to a master to state an account, the Chancellor, on Aug. 6, 1881, decreed that Martin had been fully paid off, and directed that all the lands be sold, if necessary, to pay the amount due by Butler under the Kelly mortgage, but that the Shirley land now held by Martin should be first sold, and that, if the land should not bring the amount due Kelly and costs, that Martin pay the costs. From this decree Jackson Martin and E. D. Brooks appealed.

Decree reversed and cause remanded.

T. C. Catchings, for the appellant, Jackson Martin, filed a brief and made an oral argument.

1. C. D. Kelly does not allege in his bill that he is the owner of the mortgage, and there is no proof that he is. Yet the Chancellor treats him as the assignee of J. C. Kelly & Co. The decree must, therefore, be reversed. If we regard him as the assignee of the mortgage, and treat the bill as filed for its foreclosure, the decree is still wrong. It is predicated on the erroneous idea that Butler had paid off the whole debt originally due to Martin, leaving his equity of redemption unincumbered, and his right to a reconveyance from Martin perfect and absolute, whereas he paid nothing except by sale of part of the land. If the proceeding is considered as a bill by C. D. Kelly to redeem, based upon his purchase under the decree in favor of Kelly & Co. against Butler, it cannot be maintained as to the Shirley land, because he got no title to that land by his purchase, it being at that time the property of Shirley, who was a bona fide purchaser for value, and who was no party to the foreclosure. A decree of foreclosure, if the bill is one to redeem, is certainly wrong. It should have directed a conveyance of the title upon payment by Kelly of the land debt. Besides, as the sale to Kelly was never confirmed by the Chancery Court, he is in no position entitling him to redeem. In no view of the case can the land sold to Shirley, and in 1878 taken back by Martin, be held.

2. If we concede that all the land is subject to Kelly & Co.'s mortgage, the decree is wrong, because it makes that deed prior in lien to the land debt originally due Martin. In such case, Martin should be allowed a prior lien, on the part held by him, for twelve, hundred and fifty dollars with interest and taxes, and Brooks a prior lien for so much of the land debt as was due Martin when he bought. Nor was there any authority for the effort by the Chancellor to adjust so-called equities between Brooks and Martin, by having Martin's land first sold. The state of the pleadings neither requires nor justifies it. Besides, it is impossible to know what those equities are. There may be none. If there are any, Brooks may perhaps proceed upon Martin's warranty, but that is not necessary to be decided.

L. Brame, for the appellant, E. D. Brooks, argued orally and in writing.

1. The fundamental error in the decree is, that the Chancellor held that the transactions, by means of which Martin became possessed of the Shirley land and Brooks of the balance, were sales by Martin as a trustee, resulting in payments on the two lien debts of twelve hundred and fifty dollars and eighteen hundred and ninety-two dollars and ninety cents respectively, and, at the same time, decreed that the land thus sold was all liable to be again sold to satisfy a lien in favor of the complainant, for the full amount of the debt with interest. If Martin was a trustee, his sales were valid and the land cannot be resold. But he was not a trustee, and he never sold the land. His transaction with Brooks was merely the assignment of the mortgage, which is not extinguished, and is prior to the Kelly & Co. trust deed. The same reasoning applies to the Shirley land Both Martin and Brooks have priority over J. C. Kelly & Co.

2. C D. Kelly filed this bill, alleging that he was owner of the land by virtue of his purchase under the foreclosure suit brought against Butler. That sale was not confirmed. The Chancellor decreed that the complainant was not the holder of...