Smith v. Childress
| Citation | 119 Miss. 20,80 So. 345 |
| Decision Date | 13 January 1919 |
| Docket Number | 20475 |
| Court | Mississippi Supreme Court |
| Parties | SMITH ET AL. v. CHILDRESS ET AL |
1 MORTGAGE. Intervening purchaser. Second mortgage extending first. Statute.
Where a second mortgage, under which a foreclosure was had, was not taken as payment or cancellation of a first mortgage lien but was a renewal or extension of the first mortgage, all of which fullly and regularly appeared on its face and upon the registration record, the lien of the first mortgage was simply continued without interruption by and under the new mortgage. as against purchasers who bought with notice between the time of the execution and record of the two mortgages.
2 SAME.
In such case the new mortgage which was a renewal or substitute of the old, extended and continued all of the rights and remedies secured by the old mortgage.
3 SAME.
Section 2796 of the Code of 1906 (Hemingway's Code, section 2297), has reference only to the requirement of registration of renewals and extensions of mortgages, to prevent bar by limitation, and has no direct bearing on this case.
4. MORTGAGE. Foreclosure. Title of purchasers.
The fact alone that the proceeds of a sale under a mortgage amounted to more than the debt due by the mortgagors can have no effect upon the title of the purchaser at the foreclosure sale.
HON. O. B. TAYLOR, Chancellor.
APPEAL from the chancery court of Madison county, HON. O. B. TAYLOR, Chancellor.
Suit between G. E. Smith and others and R. H. Childress and others. From a judgment for the latter, the former appeals.
The facts are fully stated in the opinion of the court.
Judgment reversed.
H. B. Greaves, for appellant.
The question involved in this suit--viz: "Whether the title acquired by the appellant by his purchase from H. B. Greaves, Trustee, vested a title to them in the lands, free of appellees' claims," allows but little field for research, as it is strictly confined to the interpretation by this court of section 2796 of the Code of 1906. I suggest to the court the following:
1st--That appellees bought this land with full knowledge of the existence of Exhibit "A," which was duly recorded and showed that more that eighteen hundred dollars was still due on Exhibit "A" and a lien on the land, and had two years before the note which was extended and renewed, became due.
2nd--That the eighteen hundred dollar note was duly renewed and extended and the instrument which was duly executed as a renewal and extension of the same was dated the 19th day of December, 1911, and filed for record within less than thirty days after the maturity of the eighteen hundred dollar note; and
3rd--That the renewal deed of trust and notes had written in box-car letters in the face of the deed of trust that the new notes were the balance due under the first deed of trust recorded in A. G. page 185, dated Feb. 26, 1907, and "which is hereby renewed and extended," giving notice to the world that the first deed of trust was not intended to be cancelled and was not cancelled; and that it was merged in the second deed of trust under which the sale was made.
Section 2796 was enacted to protect creditors and purchasers for value without notice, neither of which Childress can claim to be. What harm could possibly come to him by a foreclosure under either instrument which could have been done?
The opinion of CALHOUN, Justice, in Klaus v. Moore, 77 Miss. 704, in that part of his opinion contained in the 4th paragraph near the bottom of page 704, is peculiarly applicable here. CALHOUN says, referring to the party who stood in the same condition there that Childress does here: "He took his junior trust conveyance before there was the appearance of any bar on record, and is neither creditor nor subsequent purchaser within the meaning of the statute."
Appellees in this case acquired their title in 1909 while Exhibit "A" was then a lien on the lands. They purchased from Hinton and their title was subordinate to the deed of trust given by Hinton, which deed of trust the law provided by section 2796, could be renewed and extended indefinitely, either by endorsement on the record, or by a new instrument duly executed and filed for record, which was done in this instant case.
A case very similar to the case at bar is Bank of Lexington v. Cooper, reported in 115 Miss. 782 (S. C., 76 So. 659). The equitable doctrine, which declares that where one or more innocent persons must suffer, the loss must fall on the person whose negligence occasioned the loss, is strongly applicable here against appellees, in favor of the appellants.
The opinion of Justice STEPHENS in the Bank of Lexington case, 115 Miss., supra, covers this case very accurately, especially in the language used on page 798.
W. H. & R. H. Powell, for appellees.
If C. L. Hinton had no title on December 19, 1911, the date of the deed of trust under which appellants purchased, and he had none because he conveyed any title he had on September 28, 1909, to the appellees, then, of course, appellees acquired no title from the trustees through the sale made by him. It cannot be said that the first deed of trust, February 26, 1907, can be enforced, because the land sold under the second deed of trust for more than was due, and besides, it is barred by limitation.
But if we are wrong in this, appellants cannot recover upon the facts admitted or not denied in the pleadings. It is elementary that when a fact is averred in the bill and denied by the answer that the complainant must prove the fact. No proof was introduced except the agreed state of facts, and this did not aid the averments denied by the answer to which we will now call your attention.
It was averred in the bill that the first deed of trust was never intended to be paid by the second deed of trust and that it was to be kept alive and renewed by the second deed of trust. Now let us see how appellants stand on this. On the first page of the answer to the bill, being on page 11 of the record, the appellees, (defendants below), stated: "They aver the truth to be that the deed of trust in Book A. G. page 185, was in fact paid and cancelled by the execution and delivery of said deed of trust recorded in Book A. Q. page 472 and they deny that there was no intention of cancelling same,"
This flat denial of the allegation of the bill put complainants upon proof and as no proof was offered, such denial stands as the truth and therefore, the first deed of trust, 1907, cannot be considered by the court at all. Therefore, further, as appellees become the owners of the land sued for by deed, truly recorded in 1909, between the execution of the ones in 1907 and 1911, Hinton had no title to convey in 1911, at the execution of the deed of trust under which the sale was made through which appellants claim and hence they acquired no title by such purchase and hence cannot maintain the bill filed in this cause.
Again on the second page of the answer, see page 12 of the record, appellees stated as follows: "They deny that there was never any intention of cancelling the first deed of trust (1907) and they deny that the whole purpose of said deed of trust was to renew and extend the eighteen hundred dollars...
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