Moody v. Haselden
| Decision Date | 08 May 1869 |
| Citation | 1 S.C. 129 |
| Parties | E. J. MOODY, ASSIGNEE, v. C. B. HASELDEN AND OTHERS. |
| Court | South Carolina Supreme Court |
On 2??st September, 1859, H. gave to E. two mortgages, one of land, and the other of slaves, to secure the payment of a debt due by notes. On 20th December, 1861, a considerable part of the debt being due and unpaid, E., by his agent seized the slaves under his mortgage, but allowed them to go into H.'s possession, on a bond for their forthcoming on sale-day in March, 1862, and they remained in his possession uncalled for, until they were lost by the general emancipation, in 1865. In January, 1860, H. sold and conveyed part of the mortgaged land to M., and in November, 1863, he sold and conveyed the other part to G. On bill, by the assignee of E, against H., M. and G, to foreclose the lien on the land: Held , That G. had an equity to require that the value of the slaves, at the time of the seizure should be applied to the mortgage debt, and that the lien on the land, purchased by him, should be foreclosed only for the balance, if any, after such application.
Where there are mortgages of land and chattels to secure the payment of the same debt, and the mortgagee seizes the chattels after condition broken, a subsequent purchaser of the land from the mortgagor has an equity to compel the mortgagee to apply the value of the chattels seized to the mortgage debt, or show that they had been lost without fault or legal responsibility, on his part.
Where the mortgagee, after seizure of the chattels, allows them to return into the possession of the mortgagor on a forthcoming bond, the legal possession is in the mortgagee-the mortgagor holding as his bailee.
BEFORE JOHNSON, CH., AT MARION, DECEMBER, 1868.
This case first came before his Honor Chancellor Johnson, at Marion, February, 1868, when he pronounced a decree therein as follows:
JOHNSON, Ch.
On the 21st day of September, 1859, the defendant, Cyrus B. Haselden, purchased from Richard P. Ellerbe a tract of land lying and being in Marion District, and containing three hundred and nineteen acres, more or less, for the sum of six thousand dollars, payable as follows, to-wit: three thousand dollars on the first of December, 1859; one thousand dollars on the 1st of December, 1860; one thousand dollars on the 1st of December, 1861; and the remaining one thousand dollars on the 1st of December, 1862; with interest on each of the said sums from the 1st of December, 1859; and, for the purpose of securing the payment of the said sums of money, he gave his four several promissory notes for the same to the said R. P. Ellerbe; and, for the purpose of the more effectually securing the payment of the sums, he gave to the said R. P. Ellerbe not only a mortgage on the said tract of land, but also a separate mortgage of seven negro slaves. Soon after the three thousand dollar note became due, it was paid by the mortgagor to the mortgagee. On the 20th day of December, 1861, William P. Campbell, the Sheriff of the said District, as agent of the said R. P. Ellerbe, seized upon the mortgaged negroes, with the intention of selling the same and extinguishing the mortgage debt, but the defendant, C. B. Haselden, in some way succeeded in getting their release upon entering into bond for their production at Marion C. H. on the first Monday in March, 1862. After which they remained in the possession of the said C. B. Haselden, without being sold, until they were emancipated.
On the 15th of January, 1860, the defendant, C. B. Haselden, sold and conveyed to William H. Moody eighty acres of the said tract of land, who is now in the possession of the same; and on the 20th of November, 1863, he sold and conveyed the balance of the said tract of land to Asa Godbold, Jr., who is now in the possession of the same.
The three remaining notes, and the mortgage, were transferred, by various assignments, until they passed into the possession of the complainant, who is now the legal owner of the same, and seeks, by his bill, to foreclose the mortgage on the land; but the defendants insist that the seven negro slaves were more than sufficient to extinguish the balance due on the mortgage debt, and that their seizure, after the condition of the same was broken, operated, in law, as a satisfaction of the mortgage debt; or, at least, that, upon condition of the mortgage being broken, the negro slaves became the property of the mortgagee, and that he must suffer the loss of their emancipation, and not the mortgagor.
Upon condition broken of a mortgage of personal property, the property becomes that of the mortgagee, to the extent that he is justified in seizing it and selling it, and applying the proceeds of the same to the payment of his debt; but he does not thereby become the absolute owner of the property, and is not subject to such a loss as that resulting from emancipation.
It is ordered and decreed, that the above opinion be taken as the judgment of the Court.
And it is also ordered and decreed, that it be referred to the Commissioner to ascertain the amount still due on said notes, and that, upon the coming in of his report, either party may apply, at Chambers, for further orders, after giving ten days' notice thereof to the opposite party.
Asa Godbold appealed against the decree, and the Court of Appeals, at May Term, 1868, pronounced judgment on the appeal, as follows:
It is certainly true, at law , as is often affirmed in argument here, that a mortgage of personal chattels " conveys a legal estate to the mortgagee," which, subject originally to a condition of defeasance, becomes, upon non-performance of such condition, absolute.- Wolfe vs. Farrell , 3 Brev. 68; S. C., Tread., 151. Hence, without any judicial proceeding, the mortgagee may then seize and sell the property in satisfaction of the debt or duty- Johnson vs. Vernon , 1 Bail 527-and for this purpose may, even in the night time, enter upon the premises of the mortgagor, if he can do so without violating the criminal law.- Satterwhite vs. Kennedy , 3 Strob. 458. He may, by assignment of his mortgage, transfer the legal title.- Montgomery vs. Kerr , 1 Hill. 291. And he-or, after such assignment, his assignee-may, even before condition broken, maintain an action at law for recovery of damages for the conversion of the property, or a bill for its specific delivery, against a stranger-purchaser from the mortgagor or otherwise- who has it in possession.- Wolfe vs. Farrell , 3 Brev. 68; Montgomery vs. Kerr , 1 Hill 291; Spriggs vs. Camp , 2 Speer 181; Bellune vs. Wallace , 2 Rich. 80; Bryant vs. Robert , 2 Rich. Eq., 11. It is equally true, however, that, in equity , this legal estate is regarded as merely put in pledge in the hands of the mortgagee, as a means whereby he may, himself, promptly and effectually enforce the fulfillment of some duty on the part of the mortgagor; and that all which he is really entitled to is the performance of this duty. And hence, whenever, " within the known limits," this duty is fulfilled, though not at the day limited in the terms of the deed, the estate of the mortgagee is defeated, and the mortgagor holds the property disencumbered as before the execution of the mortgage.- Walling vs. Aiken , McMull. Eq., 13. This nature and purpose of the mortgagee's estate is recognized by the statute law, when, by its limitation, it concedes that, even though the mortgagee assert his legal title, upon condition broken, and seize the mortgaged chattels, yet the mortgagor may, at any time within two years after such seizure, by the fulfillment of the duty intended to be secured, redeem his property.-A. A. 1712, Sec. 15, 2 Stat. 587; Hogan vs. Hall , 1 Strob. Eq., 323.
Where, under a mortgage exclusively of personal chattels, the mortgagee, upon condition broken, seizes the mortgaged property, and, instead of converting it into money, and applying the proceeds to the satisfaction of the debt or duty intended to be secured-as, in the regard of equity, and, usually, by the express terms of the deed, he ought to do-chooses to retain the possession of the property, and appropriate it, in specie , to his own use, there may, perhaps, be ground to argue that this would operate as satisfaction of his secured demand, and that he ought to be precluded from any further or other remedy. There would be more apparent reason for such argument after the possession so acquired has continued throughout the statutory period. But upon these points this Court does not intend now to express any positive judgment. Certainly the mortgagee could not, in either of these cases, have such further or other remedy without first accounting for the true value of the property so seized, or showing its insufficiency.
Where the mortgage embraces both land and chattels, and, upon condition broken, the mortgagee elects to proceed, under the right conferred by the deed, to subject the chattels to the satisfaction of his demand-although the retention thereof by him, in specie , even throughout the full statutory period, would afford less ground to argue that such seizure and retention imported satisfaction ipso facto since, by the concurrence of the parties on both sides, as evinced in the deed, the whole of the property of both classes was deemed necessary for the security of such satisfaction-yet he would not afterwards be allowed to proceed against the mortgaged land without accounting for the chattels which he had seized, and showing that these had failed, or, at least, had proved inadequate to work complete satisfaction, without legal fault on his part. Upon familiar principles of equity, the obligation to exhaust or account for that portion of the mortgaged property which had been seized before alienation by the...
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