Parker v. Beasley

• Decision Date: 12 March 1895
• Citation: 21 S.E. 955,116 N.C. 1
• Parties: PARKER v. BEASLEY et ux.
• Court: North Carolina Supreme Court

21 S.E. 955

116 N.C. 1

PARKER v. BEASLEY et ux.

Supreme Court of North Carolina

March 12, 1895

Appeal from superior court, Hertford county; Armfield, Judge.

Action by A. D. Parker against J. N. Beasley and wife. From a judgment for plaintiff, defendants appeal. Affirmed.

The tender by a mortgagor of the amount due upon a mortgage after maturity, without payment into court, stops interest and costs after tender, but does not discharge the lien of the mortgage.

The defendants, J. N. Beasley and wife, Mary A. Beasley, borrowed money, and gave their promissory note for the same, payable to R. E. Beale, on January 1, 1890, and executed a mortgage duly probated and recorded, on a certain tract of land belonging to said Mary, to said R. E. Beale, to secure the payment of their said note, with the usual power of sale in case of default in such payment; and on the 14th of April 1891, said Beale assigned the note to the plaintiff. On the 28th of October, 1891, Beale, the mortgagee, offered said land for sale under the power and according to the provisions of said mortgage, when the plaintiff bid it off, and offered to pay by surrendering his note and mortgage. The mortgagee declined to make a deed, and the defendants did not pay the money. The defendants, on the 27th of October, 1891, or on the day of said sale, tendered to the plaintiff's authorized attorney the amount of principal, interest, and cost then due, which was refused by said attorney. It was found by the jury that there was no sale under the power in said mortgage, and that the tender was made as stated. On the 30th of September, 1892, the plaintiff instituted this action (1) for possession of the land; (2) for judgment against defendants for the amount of said note, "to be discharged upon the surrender of the said land or the sale thereof under an order of the court, and for costs and any other necessary relief." The defendants filed an answer, averring, among other things, that on the said 27th of October, 1891, the defendants legally tendered the amount then due the plaintiff to his attorney, which was refused. The defendants prayed: First, that plaintiff recover judgment only against the defendant J. N. Beasley, and for the amount due on October 27, 1891, the date of said tender; second, that said land be discharged from any liability for the payment of said note, and that said mortgage be declared satisfied. At the trial the plaintiff had judgment for the amount of his note, with interest and costs which were due on the said day of tender, and declaring said judgment to be a lien upon said mortgaged land, with an order that after 90 days the said land be sold to satisfy said judgment, and to pay over any balance to defendants. To this judgment the defendants excepted, "because the court declined to hold that the tender discharged the lien of the mortgage on the land," and appealed.

B. B. Winborne, for appellants.

L. L. Smith, for appellee.

FAIRCLOTH C.J.

A. makes a promissory note to B. for borrowed money payable on a day certain, and, to secure it, he and his wife gave B. a mortgage on land, duly registered, and the money is used in improving the mortgaged premises. After maturity of the debt, and before any sale or foreclosure proceedings begun, the mortgagor tenders to the mortgagee the amount then due, principal, interest, and costs then incurred, and the mortgagee refuses to accept the tender and surrender his note and mortgage. Does this tender discharge the lien on the mortgaged land? The above statement discloses the only question presented in the record in the present action. It does not appear that the money tendered was deposited anywhere, nor that it was kept ready for the plaintiff in case of demand, nor that it was tendered at the trial. The plaintiff instituted this action for possession of the land, and to recover a judgment on the note, and for a decree condemning and ordering said land to be sold to satisfy his judgment. The defendants pleaded their tender, among other things, and relied on it as a discharge of the mortgage lien. At the trial the plaintiff had judgment for the principal money and interest and cost prior to the day of tender, and also an order to sell the land to satisfy the judgment. The defendant Beasley excepted, "because the court declined to hold that the tender discharged the lien of the mortgage on the land," and appealed. The effect of a legal tender in case the security had been wholly personal is not presented, and we express no opinion on that question; nor is the effect of a tender made before or at maturity (called the "law day" in case of a mortgage security) presented.

We are not aware that the question now before us has ever been directly presented to this court. In some of our sister states, either by statute or judicial ruling, the mortgage lien is held to be only a mere security or pledge, with the title remaining in the mortgagor, and that a tender kept intact discharges the lien, and in some that the debt is discharged because the condition of the mortgage contract is performed, and that the title of the mortgagor is complete without reconveyance or other equivalent act. This is the result of the harsh rule of the common law. But in those states, if the mortgagor should call on the court of chancery to remove the cloud on his title, or to work out any other object, he is required to pay the debt, on the principle that he must do equity if he asks for it. In the state of New York, after several cases much considered, it was finally settled by a divided court in Kortright v. Cady, 21 N.Y. 343, that a tender, although not kept good, made after the law day, at any time before foreclosure, discharges the lien. In a few other states the same doctrine prevails, but they all rest on the holding that the mortgage is a mere security or pledge, without any legal title in the mortgagee. The several decisions in such states present various phases of the question. In New York, in Tuthill v. Morris, 81 N.Y. 99, which was an action to restrain a sale and to have the mortgage canceled of record, on the ground that the amount of the mortgage had been duly tendered and refused, the court say: "A party coming into equity for affirmative relief must himself do equity, and this would require that he pay the debt secured by the mortgage and the costs and interest, at least up to the time of the tender. The most that could be equitably claimed would be to relieve the debtor from the payment of interest and cost subsequently accruing, and, to entitle him to this relief, he should have kept his tender good from the time it was made." And there are many similar decisions in those states.

But it is claimed that the present action is not one for equitable relief. We think this is a misapprehension. It is true that it is an action for possession, for judgment for the amount of the debt, "to be discharged upon the surrender of the said land, or the sale thereof under an order of the court and for costs and any other necessary relief"; and the defendants, after pleading tender and refusal, pray the court "that said land be discharged from any liability for the payment of said note, and that said mortgage be declared satisfied." Here both parties are asking the court to do things which a court of law could not do. Before the constitution of 1868, neither party could get any equitable relief except by a bill in equity, but under that constitution and the Code either party can assert and obtain his equitable relief in any action at law by the other party, thus expediting business and saving costs; and the moment either party, by his pleadings, sets out and asks equitable relief, the court of equity acquires jurisdiction, clears the debt, and adjusts all equities between the parties; and this view clearly embraces the present case. In a much larger number of the states we think the rule is different from that in New York. In North Carolina the mortgagee has the legal estate, and the mortgagor is the equitable owner. Until the day of redemption is past, he may pay the money according to the proviso in the contract, and avoid the conveyance at law, and this is termed his legal right of redemption. After the day of redemption is past, he has still an equity of redemption, which is a continuance of his old estate. Hemphill v. Ross, 66 N.C. 477; Coleb. Coll. Secur. § 157, says there are few states where the mortgage is regarded as merely subsidiary to the debt, an incident to the principal, the shadow which follows and depends upon the substance. "This is not the view taken in this state of these relations, nor is it in harmony with the general course of adjudications elsewhere. The note is the personal obligation of the debtor. The mortgage is a direct appropriation of property to its security and payment." Capehart v. Dettrick, 91 N.C. 344, 353. The mortgagee may at any time take or recover possession of the mortgaged land, unless expressly forbidden by the terms of the deed...