Parker v. Banks

• Citation: 79 N.C. 480
• Court: United States State Supreme Court of North Carolina
• Decision Date: 30 June 1878
• Parties: JAMES PARKER and others v. MARY A. BANKS.

79 N.C. 480

JAMES PARKER and others

v.MARY A. BANKS.

Supreme Court of North Carolina.

June Term, 1878.

CIVIL ACTION, tried at Spring Term, 1878, of PERQUIMANS, Superior Court, before Furches, J.

This action was brought on the 2d of July, 1877, to recover possession of a tract of land, and the facts stated in the case agreed are as follows:--

Previous to 1868, T. F. Banks was seized in fee and in actual possession of a tract of land in Perquimans county containing 960 acres. On the 10th of January, 1868, David Parker became the owner of the same by purchase at execution sale and took a deed from the sheriff. On the 16th of December, 1868, Parker at the request of Banks sold the land to C. C. Pool, and took a deed of trust to secure the payment of the notes for the purchase money,--one for $600 and three for $1,000 each due severally on the first day of January, 1870,-' 71,-'72-'73, with power of sale in default of payment of either at maturity. Pool paid the first note in June, 1870, and the second, in December, 1871, and made no other payment, but conveyed to Banks 220 acres of the land by metes and bounds, of which conveyance Parker had notice. Banks remained in possession under Parker after the sheriff's deed and the trust deed of Pool were executed, and accepted said deed for 220 acres from Pool, the mortgagor, and lived thereon until his death in 1873.

In June, 1872, Pool made a second deed of trust to Parker by which he conveyed the larger part of said land (740 acres) to secure other debts; and also other real and personal property, with power of sale in default of payment of the debts secured.

On the 10th of February, 1875, Parker sold the whole tract (960 acres) after advertising as provided in the deeds, and Joseph Parker, one of his sons, bid off the land for the plaintiffs, who are also his sons. The sale was made by the attorney of Parker, and no money was paid to the attorney on the day of sale, but Parker directed him to prepare a deed for him to execute to the plaintiffs for the land; Parker died soon thereafter without having executed the deed, and upon proceedings instituted to which the defendant and Pool were parties, one White was appointed trustee under said deeds, and by a judgment of the Court therein, said trustee executed a deed to the plaintiffs, but no money was paid to the trustee. Neither the defendant nor Pool had actual notice of said sale. All of the land conveyed by the second deed has not been sold, and it is insufficient to pay the debts secured.

The plaintiffs are the devisees and legatees of said Parker, and brought this action to recover the said 220 acres, and the defendant is the widow of said Banks, and has been in possession of the same since her husband's death. His Honor upon the case agreed gave judgment for the defendant and the plaintiffs appealed. The case was argued in this Court by Messrs. Gilliam & Gatling for plaintiffs, and Mr. J. W. Albertson, for defendant .

BYNUM, J.

The mortgagor in possession sold and conveyed to his tenant, also in possession, the mortgage having been duly registered prior to the sale by the mortgagor. It is insisted that the purchaser having continued in possession for seven years after his purchase before the beginning of this action is protected by the statute of limitations against this action by the assignee of the mortgagee.

It is well settled that the mortgagor is the tenant of the mortgagee, and therefore that his possession is not hostile or adverse to the mortgagee; nor can the mortgagor make any lease or contract respecting the mortgaged premises effectual to bind the mortgagee or prejudicial to his title; neither can the assignee of the mortgagor hold possession adverse to the mortgagee, unless the assignee has taken a conveyance without notice.

But where a bona fide purchaser from the mortgagor entered without notice of the mortgage (which was not registered till after the commencement of the ejectment suit) and he and those claiming under him had been in the continual possession of the premises claiming under color of title for more than the time limited by statute, it was held in this State sufficient to bar the mortgagee or any claiming under him. Baker v. Evans, 2 Car. L. R. 614. And such is the general doctrine. Perkins v. Pitts, 11 Mass. 125; Newman v. Chapman, 2 Rand. (Va.) 93; Angel on Limitations, 554; Wellborn v. Finley, 7 Jones 228. Apply these principles to our case:--

It was virtually decided in Flemming v. Burgin, 2 Ire. Eq., 584, that a registered mortgage is notice to a subsequent purchaser from the mortgagor. This decision has been approved and affirmed in Leggett v. Bullock, Busb. 283, and in McLennan v. McLeod, 70 N. C. 364, and such being the obvious policy and purpose of our registration laws, as well as the convenience and good sense of the thing, it may now be considered as settled in this State, that the purchaser from the mortgagor or the mortgagee, after a mortgage duly registered, is a purchaser with notice. Adams Eq. 152; 2 Kent 172.

The intestate of the defendant, then, purchased with notice of the mortgage and took only such title as the mortgagor had, and subject to all the stipulations contained in the mortgage deed. He simply took the place of the mortgagor, and as the mortgagor can not claim adversely to the mortgagee, neither can his assignee with notice. The right of the purchaser can in no case go beyond his own title, and whatever appears in the registered mortgage is as much an integral part of his title as if it had been inserted in his deed from the mortgagor. Such notice therefore is of the most conclusive nature and is insusceptible of being rebutted or explained away. 2 White & Tudor's Eq. Cases, 21, LeNeve v. LeNeve, and notes.

The defendant acquired by the purchase only that which the mortgagor could rightfully convey, to wit, the equity of redemption in the land; and nothing short of the payment and discharge of the mortgage debt, will change his relations with the mortgagee. Adams Eq. 110. It follows that the deed from Pool to Banks, a purchaser with notice, conveyed the equity of redemption only, and that such title is not that colorable title, a possession under which for seven years will bar the mortgagee's right of action. The only limitation upon the mortgagee's right of action in this case is contained in C. C. P. § 31 (3) which prescribes that where the mortgagor has been in possession, the action for foreclosure or sale shall be brought by the mortgagee within ten years after forfeiture of the mortgage, or after the power of sale became absolute, or within ten years after the last payment on the debt. Such time has not elapsed in this case.

Take another view of this action: Even assuming that Pool's deed to Banks was a colorable title, it has been long settled that the possession under it, to bar an action under the statute, must be an adverse possession. The constructive possession was in the mortgagee, and that continued until an adverse possession commenced, and that adverse possession must have continued seven years before the right of possession of the first grantee could be lost. Slade v. Smith, 1 Hayw. 248. But the law never presumes a wrong; hence he who alleges an adverse possession against the better title, must show it, as well as allege it.

What is an adverse possession? The term ...