McDaniel v. Short

• Decision Date: 09 January 1922
• Docket Number: 22239 1/2
• Citation: 127 Miss. 520,90 So. 186
• Court: Mississippi Supreme Court
• Parties: MCDANIEL et al. v. SHORT

90 So. 186

127 Miss. 520

MCDANIEL et al. v. SHORT

No. 22239 1/2

Supreme Court of Mississippi

January 9, 1922

1. LIMITATION OF ACTIONS. When secured debt is barred both the right and remedy are extinguished.

Where a secured debt is barred by the statute of limitation, both the right and the remedy are thereby extinguished, and no title is obtained by foreclosure thereunder, nor can the barred lien be revived by the mortgagee who obtained possession after the lien was extinguished. Sections 3093 and 3115, Code 1906 (sections 2457 and 2479, Hemingway's Code).

2. VENDOR AND PURCHASER. Where mortgagee takes possession after mortgage is extinguished, he has no rights against purchaser without notice.

Where possession of the land is taken by the mortgagee after the mortgage is extinguished, the rights of a mortgagee in possession are not acquired, and the mortgagee thus in possession cannot prevail against the title of subsequent grantees without notice.

HON. A J. MCINTYRE, Chancellor.

APPEAL from chancery court of Pontotoc county, HON. A. J. MCINTYRE Chancellor.

Bill in chancery by John T. Short against T. L. McDaniel and others to cancel certain deeds, remove clouds, and validate title under deed of trust foreclosure. Decree for the plaintiff and the defendants appeal. Reversed and remanded.

Decree reversed, and cause remanded.

Mitchell & Mitchel, for appellant.

There are two distinct questions presented by this record to which we desire to call the attention of the court, and they are as follows: First. Is appellee a mortgagee in possession under the facts in this case, having taken possession under a sale made after the debt was barred by the statute of limitations? Second. Even if he could be termed a mortgagee in possession with the rights incident thereto as to the mortgagor, T. L McDaniel, will these rights prevail against appellants, Talmadge and Estes McDaniel, and especially against appellant, Mrs. P. E. McDaniel? We shall argue these questions in the order in which we have named them.

The statutes of limitations are very familiar statutes often relied on and presented to our court of last resort. We call the court's attention to the two statutes that are involved in this case as the basis of our contention. Section 2457 Hemingway's Code provides that the remedy on a mortgage is barred when the debt which it secures is barred and further provides that upon the completion of the period of limitation both the remedy and the right are extinguished. In discussing this latter statute in the case of Proctor v. Hart, 72 Miss. 288, 16 So. 595, the court says that the debt and the security--in that case a vendor's lien are extinguished and absolutely dead. Quoting further on in the opinion the court uses these words: "Not only the remedy is denied, the action barred, but the right itself is extinguished upon the completion of the period of limitation. The remedy and the right, whatever it was, are alike destroyed. There remains nothing to revive . . . The extinguished right the original debt, and all its incidents, as well as the lost remedy, are all destroyed upon the completion of the period of limitation, under our present statute. It will be noted that the statute then under consideration by the court is identical with the present statute.

Therefore under these statutes as construed by the court, this mortgage and the debt which it secured, in so far as they constituted any valid and subsisting lien against this land, had become extinguished and destroyed and the land stood as if the mortgage had never been given. Any attempted sale under such conditions was a vain thing, conferred no title, whatever, upon the purchaser, and any entry upon said land or the taking possession thereof by such purchaser would be a trespass; such entry and possession could not revive the lien of the mortgages because as the court said in the case of Proctor v. Hart, supra, there was nothing to revive. The appellee had no more legal right to take possession of said lands than any stranger would have had, and therefore his entry and possession was unlawful; and his possession being obtained unlawfully he can not have the rights of a mortgagee in possession. Russell v. Ely, 2 Black, 575, 17 Law Ed. 258 (N. S.); Barson v. Mullingan, 191 N.Y. 306, 16 L. R. A. 151.

The precise question involved here was decided by the supreme court of California in the case of Faxon v. All Persons etc., 166 Cal. 707.

Mr. Pomeroy in his work on 3 Equity Jurisprudence (2 Ed.), sec. 1189, thus states the doctrine:

While the mortgagee is declared to have no legal estate, and is unable to recover possession of the land against an unwilling mortgagor or owner of the fee subject to the mortgage, yet if the mortgagee, while the mortgage is still subsisting does in any lawful manner obtain the possession, the courts have established the doctrine that his interest under the mortgage enables him to retain such possession, and to defend it against the mortgagor or those succeeding to his title his right to retain possession does not depend upon an estate held by him; his possession is protected by his lien.

The case of Banning v. Sabin, 45 Minn. 431, seems to be exactly in point. We do not have the case before us, but quoting from a note in Cyc. Vol. 27, pages 1237-8, the language is as follows: "After the expiration of time within which a mortgage may be enforced by foreclosure, the mere entering into possession by the mortgagee, without objection from the mortgagor, does not restore the mortgage to efficacy nor entitle the mortgagee to the rights of a mortgagee in possession.

We have not been able to find any authorities that conflict with the authorities cited, and we therefore respectfully submit that upon both reason and authority the appellee in this cause can not have the rights of a mortgagee in possession.

Upon the second question involved as above stated we submit that if, even though it might be held that the sale and possession thereunder after the bar of the statute had attached, might possibly by some sort of reasoning make the appellee a mortgagee in possession as against the mortgagor, yet we insist that he could have no such rights as against the other appellants, in this cause.

It will be remembered that the deeds to Talmadge and Estes McDaniel and to Mrs. P. E. McDaniel were placed of record long before the deed of trust of appellee, and that appellee's deed of trust was not placed of record until after it appeared on its face to be barred by the statute of limitations. Therefore, when appellee's lien under his deed of trust was extinguished by the statute, the title to the land became absolute in these other grantees of the mortgagor, and the only theory under which appellee could possibly obtain relief as against them, would be that the deeds were fraudulent, as to him, and he would be entitled to have them cancelled on that ground alone, and not by reason of any rights he might have as a mortgagee in possession.

But he can not have that relief, as a creditor whose claim is barred by the statute of limitations can not file a bill to set aside a fraudulent conveyance. Fox v. Wallace, 31 Miss. 660; Edwards v. McGee, 31 Miss. 143.

And while it might be held that the deed to Talmadge and Estes McDaniel was a voluntary conveyance and therefore fraudulent, yet this is not true of the deed to Mrs. P. E. McDaniel, as it was made upon the highest and most sacred consideration known to the law a promise of marriage; and while the conveyance to her might not avail her anything in a contest with Talmadge and Estes McDaniel, that fact can not avail appellee in this cause.

For these reasons we respectfully submit that this cause should be reversed and appellee's bill dismissed, and the prayer of appellants in the cross bill should be granted.

Fontaine & Fontaine, for appellee.

There was no error in the action of the court below in entering the decree in this cause. While it is true the debt was barred at the date of the trustee's sale under the deed of trust given to secure the debt, and appellee's purchase thereunder, said sale and purchase was made with full knowledge of appellant, T. L. McDaniel, and the actual occupancy and possession of said land by appellee, under said sale, was consented to by appellant, T. L. McDaniel.

That appellee is now in the quiet and peaceable occupancy and possession of said land, and has been continuously, since his said purchase at said trustee's sale thereof, with the assent of appellants. While it is true that appellants in their answer and cross bill plead the statute of limitations to said debt, and asked that appellee's title to said land be cancelled as a cloud upon their title thereto without paying, or offering to pay, said debt, but in his testimony says he wants the debt paid.

Appellee is rightfully in possession of said land, and it is held in the case of Tracy, Admr. etc. v. Henry O. Wheeler, et al. Admrs., 6 L. R. A. (N. S.) page 561: "That applying the maxim, that he who seeks equity must do equity, it is held that a court of equity will not cancel a real estate mortgage, securing a just debt, which confessedly has not been paid, at the suit of the mortgagor, or one standing in his shoes, where the only ground urged for such relief is that the statute of limitations is available as a defense against its foreclosure." To the same point see Booth v. Hoskins, 75 Cal. 275, 17 P. 225; Boyces v. Fisk, 110 Cal. 107.

Appellee is clearly a mortgagee in possession with the consent of appellant T. L. McDaniel, whether the sale of the land by the trustee is valid or invalid. The case of Faxon v. All Persons Claiming etc., L. R. A. 1916B., page 1209, 160 Cal. 707,...