Nash v. Smith

• Decision Date: 14 May 1923
• Docket Number: 22631
• Citation: 133 Miss. 1,96 So. 516
• Court: Mississippi Supreme Court
• Parties: NASH v. SMITH

96 So. 516

133 Miss. 1

NASH v. SMITH

No. 22631

Supreme Court of Mississippi

May 14, 1923

(In Banc.) January 1, 1920

LIMITATION OF ACTIONS. Subrogation. Grantee of owner of land bringing suit to cancel void trustee's deed must place mortgagee in possession there-under in status quo; grantees of original owner and mortgagee in possession subrogated to their rights and remedies to extent of doing justice.

Where a person gives a deed of trust on real estate to secure a debt and makes default in paying the debt, and a foreclosure sale is made, but is void for failure to give proper notice, and the purchaser enters into possession of the said premises attempted to be sold, and the statute of limitations run against the debt, and thereafter the owner giving the deed of trust sells such land to a third person who brings suit to cancel the trustee's deed, such person in equity is required to do equity by paying the debt with interest, taxes and permanent improvements made by the mortgagee in possession or his vendee, less the rental value of the premises while the same is in possession of the mortgagee being used by him or his vendee. In such cases the grantees of the original owner and the mortgagee in possession stand in the places of their respective grantors and are subrogated to their respective rights and remedies to the extent of doing justice, and equity will not permit the statute of limitations to prevent the doing equity by the complainant.

HON. V J. STRICKER, Chancellor.

APPEAL from chancery court of Madison county, HON. V. J. STRICKER Chancellor.

Suit by Leon Nash against Maggie Smith. From a judgment for defendant, plaintiff appeals. Reversed and remanded, with instructions.

Judgment reversed, and cause remanded.

H. B. and J. M. Greaves, for appellant.

The appointment of substituted trustee is all right and we have no fault to find with that, but Mr. McCool did not advertise the land properly in that only eighteen days elapsed between the appearance of the first publication and the date of sale. At the sale, Silas W. Davis purchased the land for six hundred dollars cash, but Davis paid nothing. Thereafter Silas W. Davis conveyed the land to the Citizens Savings Bank and Trust Company for the consideration of six hundred dollars. The Citizens Savings Bank and Trust Company on November 30, 1918, executed a special warranty deed to Maggie Smith.

After hearing the testimony, the chancellor decided that Davis was acting for the bank and that his purchase was tantamount to a purchase by the bank, especially since he conveyed the land to the bank a short while afterwards, Davis having paid nothing for the land. This finding of fact seems to be in line with the holdings of this court in the case of Houston v. Building Association, reported in 80 Miss. 31.

We are unable to appreciate the equitable rule adopted by the chancellor which granted to the appellee all the rights which the bank, her vendor, who only made appellee a special warranty deed--no better than a quitclaim for the purposes of this suit--had, and yet, at the same time denied to appellant the rights which D. V. West and Francis West, appellants's vendors might have asserted. See Hinds v. B. & L. 80 Miss. 46; Watson v. Perkins, 88 Miss. 64, 92 Miss. 452.

Scott & Scott, for appellee.

In this case, the bank, acting through Davis, bought the property in itself and held the land, and even though it had not bid more than one hundred dollars at the sale, D. V. West, nor the person claiming through him, could not recover the land from the bank without paying the full amount of the debt, with interest, etc. This is fully established by the cases of Allen v. Trust Company, 84 Miss. 319, 36 So. 285, and Wall v. Harris, 90 Miss. 671, 44 So. 36. The question then, is whether or not the appellee is subrogated to the entire debt of the bank or to the entire amount that its debt would be if it still held the land, or is she subrogated only to the extent to which her purchase went to extinguish this debt; that is to one thousand dollars. It could really not make much difference in this case because, as shown above, the debt due the bank was one thousand and eighty-four dollars and fifty-five cents, while she paid one thousand dollars, which practically extinguished the debt, so there is no substantial difference in this case whether or not she is subrogated to the entire amount due the bank, or only to the amount paid to which her purchase extinguished the debt. The chancellor held that she was subrogated to the full debt of the bank. 37 Cyc. 454; Clark v. Wilson, 56 Miss. 753; Jordon v. Sayre (Fla), 10 So. 823; 37 Cyc. 453, 454, 455, 456, and 457, and notes. See also the case of Poole v. Mississippi, 1 So. 725; Short v. Porter, 44 Miss. 533.

OPINION

ETHRIDGE, J.

At the January term, 1921, of the circuit court of Madison county appellant, Leon Nash, filed an ejectment suit against the appellee, Maggie Smith, for forty acres of land, more or less, described in said declaration and demanded possession thereof, together with two hundred dollars for the use and occupation of said land. The defendant appeared and moved the court to transfer the cause to the chancery court, the motion to transfer not being contained in the record, but the order of the court transferring it to the chancery court appears of record. Thereupon Nash filed his bill in the chancery court setting out that he had acquired this property by conveyances through a chain of title from D. V. West, the former owner, setting forth the description of the property, and alleging: That D. V. West being the owner of said lands on March 19, 1909, and being indebted to the Citizens' Savings Bank & Trust Company of Jackson, Miss., did on said date execute and deliver to W. A. Kenon, trustee, for the use and benefit of said bank, a deed of trust covering the above-mentioned land, which deed of trust was duly recorded as set forth in said bill. That thereafter, default having been made in the payment of the indebtedness secured by the deed of trust, one McCool, acting as substituted trustee, sold said lands on April 24, 1913, to S.W. Davis for six hundred dollars, and executed to said Davis a deed conveying the property which deed was duly recorded. That on June 6, 1913, Davis conveyed said lands to the said bank for a recited consideration of six hundred dollars, cash, which deed was also duly recorded. That on November 30, 1919, said bank conveyed said lands to Maggie Smith, which deed was duly recorded as set forth in the bill. That thereafter on the 11th day of May, 1920, D. V. West conveyed his interest to Leon Nash, which deed was duly recorded as set forth in the bill. That thereafter on May 18, 1920, Frances West conveyed her...